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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Snowshoe who wrote (9254)	9/13/2006 12:50:44 AM
From: Elroy Jetson	Respond to of 217617

What is the proposed Yuma refinery all about? . . . Las Vegas, and Phoenix. Las Vegas and Phoenix are supplied by the Refined Products Pipeline owned by Kinder Morgan and supplied by California refiners, such as Chevron. The pipeline is maxed-out and an expansion needs to be built. In April, Holly Partners proposed a new refined products pipeline from the Salt Lake City refinery (Chevron) to Las Vegas. Chevron gets this oil from the Midwest (Colorado, Wyoming etc.) So a Kinder-Morgan pipeline from Chevron in California, or a Holly pipeline from Chevron in Utah. Chevron wins both ways -- and both ways the Yuma refinery project becomes marginally economic. The Yuma refinery is designed to handle Mexican high-sulfur crude, thus raising the price received by Mexico. It is widely assumed that the undisclosed investors in this project are all Mexican or proxies for the Mexican government. Then why not build the refinery in Mexico? Political protection against possible tariffs on refined oil products. They couldn't sell this project, so now the Yuma refinery will supposedly use output of Canadian Tar Sands, a much longer pipeline and not too economic. Will they really build a pipeline from Yuma Arizona to Alberta Canada? No. They'll use high-sulfur Mexican crude. At least that's my guess, and I'd bet against this refinery ever being built. No oil companies want people crashing their party. During World War II, a major crude oil pipeline was built connecting Texas to New York to avoid U-Boats in the Gulf. Without the war, it is doubtful this right-of-way would have been acquired. There was no need for a similar pipeline to the West, as the West had sufficient crude supply. There are some pipelines and more on the way to bring gas from Texas to California. But no pipeline exists to bring liquid oil products into Chevron's market area in the West. Hawaii, where they own the only refinery is their most profitable market. .