November 05, 2014 Bloomberg News
The Golden Eagle plant near Martinez, California, has been cleaning out the reformer as San Antonio, Texas-based Tesoro decides whether to bring the unit back into service to supply feedstock to chemical plants in markets including Asia, said one of the people, who asked not to be identified because the information isn’t public.
Reformate, traditionally blended by refiners to boost the octane level of gasoline, can also be used as a chemical feedstock because it contains high benzene, toluene and xylene levels.
Tina Barbee, a spokeswoman for Tesoro in San Antonio, declined by e-mail to comment.
Tesoro is considering the return of the Golden Eagle reformer at the same time that it’s developing a $400 million chemical plant at the Anacortes refinery in Washington state to produce mixed xylene for export to Asia. The boost in petrochemical production comes as drillers pull record volumes of oil out of U.S. shale formations that tends to be lighter, yielding more chemicals.
Greg Goff, Tesoro’s chief executive officer, said in a call with analysts Oct. 31 that the xylene plant in Washington would be supplied primarily with reformate from the Golden Eagle and Anacortes refineries. The company plans to make a final investment decision on the complex, designed to recover as many as 15,000 barrels a day of mixed xylene, in early 2015 and start service in 2017, he said.
“There’s a huge amount of condensate, a lot of lighter fractions, from shale oil that companies are expecting to drive the cost down for chemicals like xylene,” Jason Miner, a senior chemicals analyst with Bloomberg Intelligence, said by telephone from Princeton, New Jersey.
The global market for xylene, used to make polyester fibers and films for clothing, food packaging and beverage containers, is growing by as much as 7 percent a year, Tesoro said in July.
Contract prices for mixed xylene in South Korea have almost doubled since the fourth quarter of 2008, data compiled by the San Francisco-based energy consulting company Nexant Inc. show. Prices averaged $1,295.50 a metric ton last year, according to Nexant.
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