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PBF outlines 2019 investments 'to capture incremental benefits' of IMO 2020

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PBF outlines 2019 investments 'to capture incremental benefits' of IMO 2020

Despite a lighter planned maintenance schedule, PBF Energy Inc. expects to boost capital expenditures in 2019 in order "to capture incremental benefits" of tighter marine fuel sulfur standards known as IMO 2020.

In September 2018, the company reiterated total 2018 capex guidance of between $525 million and $550 million.

During a Jan. 8 investor presentation, the company said it would spend between $625 million and $675 million in 2019, of which $150 million would be devoted to strategic projects, including the restart of an idled 12,000 barrel-per-day coker unit at its Chalmette refinery to take advantage of expected discounts for high-sulfur feedstocks and investments to connect a hydrogen plant to the company's 190,000 bbl/d Delaware City refinery.

During a call discussing third-quarter 2018 earnings and prior to board approval of its 2019 capex plan, executives said the company would spend approximately $40 million in 2019 on the hydrogen project, which is being developed in partnership with U.K.-based Linde PLC, the industrial gas company that will build, own and operate the hydrogen plant.

The Delaware City refinery will use the hydrogen plant's production to upgrade heavy feedstock into higher-value products.

The company also said it plans to invest in east coast storage facilities in order to better handle high-sulfur residual fuel oil, separately outlining 2019 CapEx of $29 million for its master-limited partnership subsidiary PBF Logistics LP, up from between $17 million and $18 million in 2018.

In outlining its investment plans, PBF executives reiterated that the company has no required investments to prepare for IMO 2020.

Turning toward operations, the company increased throughput guidance while keeping 2019 cost guidance flat to the prior year at between $5.25 per barrel and $5.50/bbl.

Driven by its 189,000 bbl/d Chalmette refinery outside New Orleans, PBF boosted 2019 total throughput guidance to between 840,000 barrels per day and 890,000 bbl/d from 2018 guidance of between 820,000 bbl/d and 870,000 bbl/d.

During the first half of 2018, PBF performed planned maintenance on the facility's fluid catalytic cracking and alkylation units. For 2019, it is boosting Chalmette's throughput guidance to between 200,000 bbl/d and 210,000 bbl/d from 2018 guidance of between 180,000 bbl/d and 190,000 bbl/d.

Meanwhile, the company lowered its East Coast throughput guidance from between 340,000 bbl/d and 360,000 bbl/d in 2018 to between 330,000 bbl/d and 350,000 bbl/d, citing planned maintenance on its 190,000 bbl/d Delaware City refinery's coker and sulfur recovery units during the second quarter and its 180,000 bbl/d Paulsboro refinery's crude unit during the third quarter.

Despite planned maintenance on the company's 155,000 bbl/d Torrance, Calif., refinery's coker during the first quarter, the company kept 2019 West Coast throughput guidance flat at between 160,000 bbl/d and 170,000 bbl/d.

PBF boosted throughput guidance at its 170,000 bbl/d Toledo, Ohio, refinery from between 140,000 bbl/d and 150,000 bbl/d to between 150,000 bbl/d and 160,000 bbl/d.