PBF Energy to reconfigure US East Coast refining system

Nov. 9, 2020

PBF Energy Inc. is undertaking a reconfiguration of its US East Coast (USEC) refining system, including the indefinite idling of certain processing units, as a result ongoing impacts to demand caused by the coronavirus (COVID-19) pandemic.

As part of the operational reconfiguration of USEC refining system—which is comprised of the 190,000-b/d  refinery in Delaware City, Del., and 180,000-b/d refinery in Paulsboro, NJ—PBF Energy will be idling the smaller of two crude units, the coker, the FCC, and several smaller, unidentified units at the Paulsboro refinery, the operator said on Oct. 29 in its third-quarter 2020 earnings report to investors.

Depending on market conditions, PBF Energy said it expects combined throughout of the USEC refining system to average 260,000 b/d, or 110,000-b/d lower from the system’s overall nameplate capacity of 370,000 b/d.

Unidentified units at the Paulsboro and Delaware City refineries, however, will operate at higher utilization and efficiency as part of the reconfiguration program, which PBF Energy anticipates will result in annual operating and capital expenditures savings of about $100 million and $50 million, respectively.

The reconfigured USEC refining system—which will retain its capability to process varied crudes as well as gain increased flexibility to respond to changing market conditions—is scheduled to be completed by yearend 2020, PBF Energy said.

“With this reconfiguration, we will operate the most profitable components of our [USEC] refining system at lower cost,” said Tom Nimbley, PBF Energy’s chairman and chief executive officer. “This is another step in our broader strategic process aimed at increasing the competitive position of our entire refining portfolio.”

During third-quarter 2020, PBF Energy operated its refineries at reduced rates and—based on current market conditions—plans to continue doing so until such time that sustained product demand justifies higher production, the company said.

PBF Energy—which remains committed to executing its cost-reduction initiatives and continuing review of its entire portfolio—expects demand to remain depressed until there is a widely available medical solution for the COVID-19 virus that will allow everyone to return to their normal routines, Nimbley said.

The operator said it expects combined near-term throughput of its entire refining system—which, in addition to the two USEC refineries, also includes the 170,000-b/d refinery in Toledo, Ohio; 189,000-b/d Chalmette refinery outside of New Orleans; 155,000-b/d refinery in Torrance, Calif.; and 157,000-b/d refinery in Martinez, Calif.—to be in the 700,000-800,000-b/d range.

Despite challenging market conditions brought on by the global pandemic and government measures taken to mitigate its spread during third-quarter 2020, PBF Energy said its refining capital spending guidance program likely will meet its previously revised guidance of about $360 million for 2020, with the bulk of the spending already having occurred during the first and second quarters.