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Friday, May 10, 2013
Tesoro Bidder: Dismantle Refinery, Ship it to China
By Selected News Articles @ 1:20 PM :: 4608 Views :: Energy, Jones Act

Making money in Hawaii’s oil market is like pushing a boulder up a volcano

by Jeffrey Bair, Platts, May 10, 2013 (excerpts)

…consider how fuel economics are affecting a real-live island right now: Oahu.

Platts vessel-tracking software CTrack shows the Honolulu harbors were ports of call for the Silver Express from Japan and several other ships that have been in motion to meet rising demand for gasoline, diesel, fuel oil and jet fuel. The Seavoyager from China is due to arrive at 10 p.m. EDT tonight (Friday) with refined fuels.

It all follows Tesoro’s decision to halt production at its refinery in Kapolei outside Honolulu, a fairly important story that nonetheless has been trying to compete for attention recently with Hawaii getting its first Olive Garden.

“Tesoro will have to meet its commitments, and it will have to import various cargoes to do that,” one West Coast shipping agent said….

The planes that put all those butts on the beaches need a lot of fuel, and one senior Hawaii harbor pilot, Capt. Tom Heberle, has seen more jet cargoes in the harbors recently. Aloha Petroleum…is also looking at making its first imports of refined fuels since the late 1990s.

The situation leaves a lot of anglers casting lines for a little fish. Hawaii ranks 48th in the US in energy consumption per person, leading only New York and Rhode Island, mostly due to the youngest state’s stress-free winters.

It is still to be seen how Hawaii will deal with extra ocean traffic. The main harbors at Honolulu and Barbers Point ... are 10 to 15 feet shallower than major ports such as Galveston and Los Angeles.

“It’s not the easiest place in the world to do business,” one market source said of Hawaii.

Tesoro is fielding offers if anyone wants to get into the refining business, an option that is considered the longest of longshots. One market source said a buyer considered dismantling the facility and shipping it to China, but that plan never was realized.

Some of the incoming fuel could, coincidentally, end up back at Tesoro if it converts the refinery to storage…..

So “aloha” is perfect for its situation. (It means both “goodbye” and “hello” in Hawaiian. Please check in with us if you know how to say “struggle,” because that’s what the Hawaii fuel business seems like from here.)

read … Platts

VIDEO: Platts’ Jeffrey Bair discusses Hawaii’s fuel economics

HNN 5-12-2013: With refinery closed, tankers abound


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