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Analysis: USAC gasoline imports hit 4-year peak in 2019 on PES refinery fire: Customs data

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Analysis: USAC gasoline imports hit 4-year peak in 2019 on PES refinery fire: Customs data

Highlights

US Atlantic Coast imported 20% more gasoline in 2019, at 184 million barrels

About 55% came in usually calmer second half, after June PES refinery fire

Irving, ExxonMobil, Total, Shell, Valero and BP are top USAC gasoline importers

Houston — The US Atlantic Coast imported half a million barrels of gasoline a day in 2019, its highest total in at least four years as two other major supply methods are either maxed out or reduced.

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An analysis of US Customs data showed that the PADD 1 region from Florida to Maine brought in 184 million barrels of gasoline and premium gasoline cargoes last year, or 504,159 b/d. That 20% higher than the 153.5 million barrels registered in 2018. It also compares with 138 million in 2017 and 165 million in 2016, the first full-year S&P Global Platts started gathering US Customs data.

"Imports in general were higher into P1 in 2019. That's likely to do with PES just being down and multiple regions supplied that," an East Coast gasoline trader said. "The PES effect was opening that arb."

The majority of imports from 2016 to 2018 came in the first half of the year as companies stored up for the busy summer driving season. That changed in 2019 after a June 21 fire that shut down the 335,000 b/d PES refinery in Philadelphia, which had more than a fourth of USAC refinery capacity and supplied about 154,000 b/d of gasoline.

July was the biggest month for USAC imports, at 21.5 million barrels, while the second-half tally was 100 million barrels compared with 84.2 million in the first six month. December ended with 12.6 million in imports, 2.9 million more than 2018 and the highest total in five years. The sum could possibly increase with any lagging reporting to Customs.

IRVING OIL, EXXON, TOTAL LEAD IMPORTS LIST

The implied demand for US East Coast gasoline has leveled off at nearly 1.2 billion barrels a year, which comes to 100 million a month, or 3.2 million b/d, according to product supplied calculations from by the Energy Information Administration. It remains the largest demand center of the five PADD regions, with more than a third of US demand.

The Gulf Coast is the largest producer by far, and supplies about 2 million b/d to the USAC. But that figure has barely budged over the years as pipeline, tanker and barge delivery is generally maxed out, mostly on the 1.37 million b/d Colonial Pipeline from Houston to New York. Waterborne shipments from the Gulf Coast have grown 50% over five years, but have stabilized recently at 500,000 b/d, and nearly entirely to the lower Atlantic, mostly barges to Florida, indicating expensive Jones Act ships are not often used.

Some Midwest supply finds its way to the East Coast, but is severely limited by pipeline access. That leaves imports and storage as the more flexible supply sources.

Canada was the leading country to pull from, with 48.9 million barrels in 2019. About 36.9 million came from Saint John in New Brunswick, where Irving Oil is headquartered and runs the largest refinery in Canada. Including other sourcing, Irving Oil imported 40.2 million barrels of gasoline to New England and other parts of its US gas station system.

Other large companies listed as consignees included ExxonMobil at 23 million barrels, Total/ATMI at 17.2 million, Shell at 14.4 million, Valero at 12.8 million and BP at 12.1 million.

Other refiners, blenders and trading houses that imported more than 10 cargoes, or 3 million barrels, were Castleton, Equinor, GE Warren, Phillips 66, Neste and Vitol. ABN Amro was the only bank with a large consignment, at 11.5 million barrels, with Gunvor and Shell listed as the predominant shippers.

US Customs data lists shippers and consignees, but it is unlikely a bank would take possession of the gasoline in the end. Irving Oil was the biggest shipper at 38.8 million barrels. Total shipped 16.6 million, Shell had 16 million and Brazilian state-owned Petrobras was next at 14.4 million barrels. Customs data did not list a shipper on imports of nearly 9.6 million barrels.

CANADA, NETHERLANDS ARE BIGGEST DRAWS

Brazil supplied 8%, or 14.7 million barrels, of all US East Coast gasoline imports, although their Customs descriptions sometimes cited cat gasoline, which would likely need further blending. Canada was the source of 27% of USAC gasoline imports, followed by the Netherlands at 25%, or 45.4 million barrels, and the UK at 11%, or just shy of 20 million barrels.

Portugal sent 8.6 million barrels, France 7.6 million, Finland 7.4 million, Norway 6.1 million, Belgium 5.4 million and Spain 4.5 million, each making up 2% to 5% of US gasoline imports.

New Jersey was the main destination, unloading 58.4 million barrels, followed by 29.5 million in Massachusetts, 28.9 million in New York, 16.8 million in Rhode Island, 15 million in Maine, 13.2 million in Connecticut, 12.5 million in Florida, roughly 2.9 million each in South Carolina and Georgia, 1.6 million each in Pennsylvania and Maryland, and about 375,000 each in Delaware and Virginia.

About 53% of the gasoline grades, or 98.3 million barrels, was labeled RBOB, the required pre-ethanol grade used around high-population areas. About 32%, or 58.3 million, was simply labeled as gasoline, including cat gas, while 8%, or 15.2 million, was CBOB. About 12.2 million, or 7%, was listed as a premium gasoline grade. The East Coast has significant blending operations, so the label may not indicate the grade ultimately delivered at the pump. Customs data also showed significant imports of naphtha, alkylate, reformate and other blendstocks into the region.

-- Matthew Kohlman, matthew.kohlman@spglobal.com

-- Joshua Brown, joshua.brown1@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com