Any rumors as to who is buying Convent?
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Word?
I imagine no one at this moment. Due to Covid Airline travel is down and all of the refiners have switched from jet fuel to more diesel further depressing refining margins.
PBF bought Martinez since they wanted two refineries in California to capitalize on the California gas market and they already own the old ExxonMobil refinery in Chalmette.
Saudi bought out Port Arthur after RDS fluffed the pooch on the startup after the expansion and had a oh well it happens attitude about it.
Good question.
1) Shell recent track record for selling Refineries is so-so. Sold Martinez to PBF for a $1B. Shell could not sell Sarnia refinery in Canada and is turning Tobangao into a terminal and has not been able to sell Puget or Mobile and has had trouble selling Fredericia in Denmark.
2) Convent produces about half gasoline and half distillates. Distillates market has tanked due to no jet demand and diesel market flooded as all refineries try to produce more diesel from excess jet molecules.
3) Are there any buyers with deep enough pockets to keep investing in Convent to keep it safe? Philadelphia Energy Solutions 330 kbpd refinery completely shut down after a serious process safety incident last year.
4) Refinery utilization in the US is around 70% so what is the value of Convent if you could shut it down and still have more than enough production capacity to meet demand?
5) Electric vehicles and work-from-home forecasts will further erode gasoline demand.
Unless Shell is willing to give Convent away, I cannot imagine anyone interested in taking on the risk of an investment on a refinery at this time.