Hess says Honvensa run cuts to remain in place
NEW YORK, Oct 28 (Reuters) - Run cuts at the giant 500,000 barrel-per-day Hovensa St. Croix refinery in the Caribbean will remain in place this quarter due to weak refining margins, part owner Hess Corp (HES.N) said on Wednesday.
"The reduction in rates, be it in the crude units or the coker, are purely a function of the poor refining economics that existed in the third quarter and continue to exist today," Hess Chairman and Chief Executive Officer John Hess said in a conference call.
"So no, we don't see a material change right now," Hess told the analysts, responding to a question on whether market conditions permit easing the run cuts.
The Hovensa refinery ran its crude units at 76.9 percent of capacity in the third quarter, down from 88.4 percent in the second quarter and off sharply from 91.3 percent in the year-ago period, Hess said in a regulatory filing.
Hovensa ran cokers at 78.9 percent, down from 91.2 percent in the second quarter and the gasoline-making fluid catalytic crackers at 82.9 percent, down from 71.2 percent in the April-June quarter.
On Monday, Hovensa LCC said that unplanned work on a 150,000 bpd fluid catalytic cracker at the St. Croix refinery may end near Nov. 6, barring any unexpected developments. [ID:nN2695580]
The St. Croix complex is one of the largest refineries in the Western hemisphere and a key supplier to the U.S. East Coast markets. The news of the idling of the FCC had sent gasoline cash and futures prices higher that day. [ID:nN26542074]
The refinery in the U.S. Virgin Islands is a joint venture between Hess and Venezuelan state oil company Petroleos de Venezuela SA (PDVSA).
Earlier on Wednesday, Hess reported a 56 percent drop in third-quarter profit to $341 million as the weak global economy knocked crude oil prices down from last year, but earnings topped analysts' forecasts.
It said refining operations generated a loss of $3 million in the third quarter compared with income of $46 million in last year's corresponding period, largely as "a result of lower refining margins." [ID:nN28299558]
Hess, which is based in New York, also operates the 65,000-bpd Port Reading refinery in New Jersey. (Reporting by Haitham Haddadin; additional reporting by Janet McGurty; Editing by Lisa Shumaker)
