BP Shuts Down Pipestill 12 Unit at Whiting Refinery for Weeks
BP plc BP recently shut down its large crude distillation unit at the Whiting, IN, refinery due to pre-planned maintenance works, per Reuters. The crude distillation unit, Pipestill 12, having a 240,000-barrel per day (BPD) capacity, is expected to be closed through the end of October. The Whiting refinery has a processing capacity of 413,500 BPD.
The Whiting refinery is BP’s largest refinery in North America and is located on the Lake Michigan shoreline. The Pipestill 12 crude distillation unit is the biggest of the three units installed in the refinery. Seven weeks of work is required for the unit’s overhaul. Notably, this marks the first full renovation of the Pipestill 12 unit since 2013, which had enabled it to process Alberta, Canada's tar sands fields’ crudes. The crude distillation units, operated at atmospheric pressure, mainly refine oil to produce hydrocarbon feedstock.
Currently, many energy players are upgrading their refineries ahead of the IMO 2020. In 2016, the International Maritime Organization (IMO) announced its decision to curb the amount of sulfur in marine fuels to 0.5% from the current cap of 3.5% by 2020. IMO believes this move to significantly reduce greenhouse gas emissions.
With 15 months left for the new regulation to hit in, refineries are changing their configurations to abide by the new law. Distillate production, with low sulfur content, is expected to surge in the coming days. Refineries that have already started the process of changing configurations, around the globe, will witness significantly high demand for their fuels following IMO 2020, while the ill-equipped refineries are likely to experience plunging demand for their high-sulfur fuels.
Price Performance
BP has rallied 18.1% over the past year, outperforming the 10.5% collective growth of the industry it belongs to.
Zacks Rank and Stocks to Consider
Currently, BP carries a Zacks Rank #3 (Hold). Investors interested in the Oil and Gas sector can opt for some better-ranked stocks like Petroleo Brasileiro S.A. or Petrobras PBR, TC PipeLines, LP TCP and RGC Resources Inc. RGCO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Rio de Janeiro, Brazil-based Petrobras is an integrated energy company. The company’s top line for 2018 is likely to improve 7.5% year over year. In the last four reported quarters, it delivered an average positive earnings surprise of 10.4%.
Houston, TX-based TC PipeLines is a midstream energy firm. Its bottom line for 2018 is likely to improve 20.6% year over year. In the last four reported quarters, the partnership delivered an average positive earnings surprise of 3.7%.
Roanoke, VA-based RGC Resources’ full-year earnings are expected to grow 5.8%. In the last reported quarter, the company delivered an earnings surprise of 40%.
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