Hess Corp. will exit refining by closing its 70,000-b/d fluid catalytic cracking unit at Port Reading, NJ, as part of a strategy to concentrate on exploration and production.
Earlier this month, the company announced a $6.7 billion budget for 2013, of which 40% will be for work in unconventional oil and gas plays (OGJ Online, Jan. 11, 2013).
In addition to closing the Port Reading FCCU, Hess will try to sell its 19 US terminals, which have total storage capacity of 28 million bbl. In a statement, it said the terminals haven’t been central to its strategy since last year’s closure of the 500,000 b/d Hovensa LLC refinery, in which it was a partner with Petroleos de Venezuela SA (OGJ Online, Jan. 18, 2012).
It said the Port Reading FCCU, which is 10 miles from New York City, hasn’t been profitable for two of the past three years.
“The financial outlook for the facility is expected to remain challenged due to the requirement for future expenditures to comply with environmental regulations for low-sulfur heating oil and the weak forecast for gasoline refining margins,” it said.
It expects sale of the terminals to release about $1 billion of working capital beyond sale proceeds. It also hopes to sell oil and gas assets in Russia and the Eagle Ford play of Texas.
Hess said divestitures of nonstrategic assets it has announced during the past several months are worth an estimated $2.4 billion.
