Refinery News: Muted Impacts Noticed Till Now Due To Strikes in Europe

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Mfame Team
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According to an article published in Platts, some turnarounds are still continuing in Europe while news is emerging on newly planned works for 2020.

Collective labour agreement

Meanwhile, the impact of strikes has so far been muted. The potential industrial action at BP Rotterdam refinery has been called off after members of Dutch labor unions CNV and FNV at BP’s Rotterdam refinery accepted a new offer from the company for the collective labor agreement. The strikes at French refineries have continued on and off since December 5, with some refineries reducing runs and one having halted units. Meanwhile, a fire in mid-December led to an outage of the sole CDU at Total’s Gonfreville refinery, which will likely stay offline for weeks. The refinery was restarted at the end of November after undergoing maintenance for two months, beginning in September.

The secondary units however are operating, using stocks and imports. Operations and shipments of products were normal from Total’s Gonfreville, Feyzin and Donges refineries at the end of December. Shipments remained blocked from Total’s La Mede biofuel plant and Grandpuits, with units working at reduced rates due to diminished storage capacity, Total said. ExxonMobil said that operations were normal at its Fos-sur-Mer and Gravenchon refineries.

Blocking product deliveries

Staff at the Fos plant in the south have been joining the action on and off by temporarily blocking product deliveries whereas Gravenchon had continued operating and loading products normally. Meanwhile, according to union sources, staff at Petroineos’ Lavera refinery were halting units, marking an escalation of the impact from the rolling industrial action.

The CGT union has called for further escalation of the industrial action at all refineries over January 7-10, with no products leaving any of the eight plants in France for 96 hours. For the moment there have been no product shortages, according to the government and local media reports.

Retail station do not face supply problems

Product shipments were ongoing from most of the country’s 200 oil terminals, and more than 98% of its 11,000 fuel retail stations were not facing any supply problems.

Separately, Slovnaft said that the petrochemical part of its Bratislava refinery was operating again after the autumn turnarounds. The turnaround, which started in October, included “extensive maintenance and modernization of facilities“ as well as a project aimed at reducing nitrogen oxide emissions. The company completed a maintenance on 21 refinery units earlier in the year.

Situation around the world

In other news, Algeria’s state-owned Sonatrach agreed a $250 million loan facility with Arab Petroleum Investments Corporation, or Apicorp, to be used to fund its Augusta refinery complex in Sicily, Italy. The first loan, worth $100 million, will be used to fund the maintenance of the complex. The second loan, a $150 million syndicated letter of credit, will be for the purchase of Saudi crude to be processed at the Sicily plant.

Italy’s Sarroch refinery experienced a leak at a ship-loading pipeline on its northern jetty at the end of December, a source close to the refinery told Platts. The refinery, located on the island of Sardinia, halted loading operations and use of the pipeline in question, and it has been working on resolving the damage and cleaning up the water pollution that was caused, the source said. The incident didn’t affect refinery production, he added.

Meanwhile, PKN Orlen said that its Orlen Lietuva refinery in Lithuania has had its shortest railway connection with Latvia reinstated after the line, which was closed in 2008, was reopened by Lithuanian Railways. PKN Orlen “for almost 10 years unsuccessfully demanded the reconstruction” of the 19 km section between Mazeikui and Renge. The Orlen Lietuva refinery, formerly known as Mazeikui, can now ship products to the Latvian and Estonian markets “in a shorter way,” PKN said in a statement.

New and revised entries

There have been partial works at Poland’s Gdansk refinery in late December, the company said.

The works were planned to last several days, the company said, noting that one of the sulfur recovery units was down but declined further comments. The works have been scheduled “taking into account current market needs and the current margin and economic situation so as not to have any negative impact for our business,“ Lotos said.

Eni’s Sannazzaro de Burgondi refinery has completed works that were being carried out on its Eni slurry technology (EST) unit, which was placed offline after damage from a fire and will initiate restart proceedings imminently ahead of becoming fully operational in March, a source close to the refinery told S&P Global. Repair works on two EST plant units that were damaged by the fire have been ongoing since the fire in 2016 and have now been completed, the source said.

The next phases will involve the pre-heating process, restart activities and then the move to full production, the source added. This will occur in the coming months, with the refinery EST unit likely returning to full operations in March, he added.

Planned maintenance

Planned partial maintenance at UK’s 270,000 b/d Fawley refinery has been completed, the company said. It shut down some of its units and associated operations for planned maintenance that started September 24.

Repsol’s refinery at Puertollano in Spain has concluded early planned maintenance work that started in November. The work — affecting several distillation and conversion units — was concluded December 13, after a 30-day halt, according to a note on the refinery website. The outage was shorter than the one-and-a-half months the company had previously earmarked for the work.

The work cost Eur20 million, of which 40% was for CO2 reduction projects, including in the distillation area, where the objective is increased energy efficiency. This included a new air-heating system for the crude furnace and the substitution of the insulation of the catalytic reformer with ceramic fiber, which will aid in reducing heat loss through the sides of the furnace.

Italy’s Sarroch refinery on the island of Sardinia has successfully completed maintenance work on its RT2, Vacuum V1, Visbreaking VSB planned for the fourth quarter, a source close to the refinery said in late December. Sarroch will carry out maintenance work on its T1 and FCC units in the spring, around March, a source close to the refinery said. Saras said earlier the refinery was scheduled to carry out major maintenance in the first quarter including upgrades to its T2 and V2 units.

Existing entries

  • Shell has taken offline a unit at its Pernis refinery in the Netherlands following a spill of crude oil on December 8. According to traders, a CDU had been shut down, but was heard to be in the process of restart.
  • The FCC unit at Italy’s Milazzo is still offline, following works that started in October, a source close to the refinery told S&P Global Platts.
  • Gunvor has halted CDU1 at its Gunvor Petroleum Rotterdam refinery for economic reasons and also to prepare for an upcoming turnaround in March 2020. The shutdown of the unit will not affect other units at the plant. The refinery has a 38,000 b/d and 50,000 b/d CDU units. The company said that following the turnaround “we will be building on synergies between our Rotterdam and Antwerp refineries to produce LSVGO.”
  • Tupras said that two of its refineries are planning works in the fourth quarter — Izmir at a crude distillation unit, hydrocracker and vacuum unit, set to last 2-3 weeks, and Izmit at a CDU and vacuum units for 7-8 weeks and at an FCC for 5-6 weeks. The company said in an investor presentation that it plans revamp of a crude unit and FCC modernization as part of its ongoing projects, without specifying further details.
  • Lukoil’s ISAB refinery in Sicily is currently carrying out preparatory works at its Southern plant ahead of a planned turnaround. The works will last between six and seven weeks.
  • Maintenance works at the FCC unit at Norway’s Mongstad refinery is still ongoing, the company said. Planned maintenance at the plant has been ongoing since September.
  • The Canary Islands’ only refinery Tenerife will be permanently closed in the long term. There has been no production since 2014 at the site. Cepsa will install some logistics and storage facilities at the site, amid a wider regeneration project.
  • Galp CEO Carlos Gomes da Silva has said a shutdown may be necessary at the Porto, Matosinhos, plant at end 2019 or early 2020 for less than three weeks for the atmospheric distillation unit, where it needs to install heat exchanges.

Repsol’s Coruna announced a halt between January and the end of March which will include the finalization of three CO2 emission reduction projects at the Fluid Catalytic Cracker among other work. The work will mean halting six of the refinery’s conversion units, it said.

Future revised entires

The next major maintenance at Poland’s Gdansk is planned for the spring of 2021.

Existing entries

  • Repsol’s refinery at Puertollano in central Spain will carry out an upgrade of its olefins unit as part of a planned maintenance of the cracker and chemical derivative plants at the end of 2020.
  • Finland’s Neste will carry out a major turnaround in Porvoo in Q2 2020. The works are set to last approximately 11 weeks.
  • Total will invest Eur150 million at its Leuna refinery in Germany. The investment into an upgrade project aims to reduce the production of heavy products and increase the production of methanol, which is an important feedstock for the chemical industry. This will deepen the integration of the refinery and the petrochemical operations. Work will continue until 2021, with the major part done in the 2020 major shutdown of the refinery.
  • The next major turnaround at Preem’s Gothenburg refinery in Sweden will be in 2021.
  • Sarpom’s refinery in Trecate, Italy, is scheduled to undergo a large-scale, two-month general maintenance cycle in 2020 — of the type carried out at the plant every 3-4 years — a source close to the refinery said.
  • Rompetrol’s Petromidia refinery will have its next general maintenance in 2020.
  • The next major maintenance at the Netherlands’ Zeeland will be in 2020. The refinery started work in June 2018 on an expansion of the hydrocracker, by working to add the third reactor. The reactor will be connected to the existing installation in 2020.
  • Romania’s Petrobrazi will undergo its next big turnaround in 2022.

Upgrades

MOL said its Croatian affiliate INA has made a final investment decision to carry out a residue upgrade project at the Rijeka refinery. The project includes building the delayed coker, the renovation of existing refinery units, and the construction of a new port for the closed storage of petroleum coke. The project will be completed by 2023. INA will also go ahead with the conversion of the Sisak refinery into a bitumen production site and logistics hub, in line with a March 2019 decision. The facility may also produce lubricants and bio-fuel components too, subject to further investment decisions, MOL said.

  • Gunvor is studying the potential installation of an HVO (Hydrotreated Vegetable Oil) at the Rotterdam refinery.
  • Repsol’s Coruna will shut the calcination unit at the start of 2020 due to technological obsolescence. During the course of 2020, a new distillation unit will be installed to produce polymer grade propylene. The unit should come online by the end of 2020.
  • PKN has approved a Zloty 1 billion ($254.8 million) project to build a visbreaking unit at Plock. The company said the visbreaker will allow the refinery to reduce fuel oil output and increase its production of distillates. It has previously said it aims to complete the new visbreaker unit by the end of 2020.
  • Bosnia’s Brod refinery will start production from the middle of 2020 by which time its reconstruction will be completed. The refinery is currently being reconstructed. A pipeline, currently being built to supply it with natural gas to fuel its internal processes, is expected to be ready from Q3 2020. The refinery suspended its operations in 2019 for an upgrade and to prepare for the use of natural gas. The gas will replace fuel oil as a power source for the refinery processes.
  • Varo Energy’s Cressier refinery in Switzerland is currently installing a new column at the crude distillation unit which will allow it to reduce CO2 emissions but also to expand the scope of its light products yield. The column will start operations in the second quarter of 2020.
  • Poland’s Grupa Lotos said its EFRA modernization program was almost complete, with all units now commissioned apart from the delayed coking unit (DCU), which is undergoing testing. In September, the company introduced feedstock into the DCU and the unit was put into operation. The key elements of the EFRA project are the coking complex, comprising the DCU, coker naphtha hydrotreating unit, and coke storage and logistics facility. Other new units are the hydrogen generation unit, hydrowax vacuum distillation unit, and the oxygen generation unit.
  • Total will invest Eur150 million at its Leuna refinery in Germany. The investment into an upgrade project aims to reduce the production of heavy products and increase the production of methanol, which is an important feedstock for the chemical industry. This will deepen the integration of the refinery and the petrochemical operations and increase the competitiveness of the plant. Work will continue until 2021, with the major part done in the 2020 major shutdown of the refinery.
  • Upgrade work to increase San Roque’s refining margin, and construct a new hydrocracker, has been halted by local government, Cepsa said. The San Roque Council ordered earthworks at the site to be halted, affecting Cepsa’s work on its “Bottom of the Barrel” project. The company plans to construct a hydrocracker at the site. The upgrades are targeted for completion by 2022. Separately, Cepsa will revamp Isomax, fluid catalytic cracker, alkylation units at San Roque and will construct a methylene unit (Sorbex II).
  • Germany’s Schwedt is in the process of upgrading its aromatics complex. A second column has been delivered for the project which is planned to be carried out in the spring of 2020.
  • Construction of the delayed coker at the Pancevo refinery will be completed in 2019. The launch of the complex, which would increase the depth of processing above 99% and increase gasoline and diesel output, will help the refinery halt fuel oil output and hence help the country limit the use of HSFO especially in view of the IMO 2020 sulfur cap on marine fuel. The refinery will also produce coke for use in the metallurgy and construction industry. Currently Serbia imports coke but the Pancevo refinery output will cover domestic demand and also allow for some exports.
  • Repsol said that at the Cartagena refinery it will invest Eur300 million over the next four years on increasing the capacity of the lubricants unit and increasing production of second generation biofuels. The first phase, the lubricants, is scheduled to start in 2019 at the Ilboc plant alongside Korean partner SKSol. The biofuels upgrade would take place at the nearby Escombreras facility, and will result in production of 250,000 mt/year of second-gen biofuel from around 2022.
  • Greece’s Motor Oil Hellas has approved an investment project for the construction of a new naphtha treatment complex at its Corinth refinery, it said in its 2019 H1 report. The new complex, which will contribute to increased production of gasoline, kerosene and hydrogen, is scheduled for completion in 2021.

Swedish refiner Preem is “evaluating a potential investment in a residue hydrocracking plant” at the Lysekil refinery, it said. The investment would be aimed to “upgrade as much heavy oil as possible into sulfur-free gasoline and diesel fuels to help meet rising demand after IMO 2020,” a spokesman said.

  • The Netherlands’ Zeeland refinery has had the third reactor for the hydrocracker’s expansion delivered. The refinery started work in June 2018 on an expansion of the hydrocracker, by working to add the third reactor. The reactor will be connected to the existing installation in 2020.
  • Germany’s Rhineland has started the construction of a new hydrogen production plant, using electrolysis, at its Wesseling site. The Eur16 million investment project, due for completion in 2020, will generate hydrogen from electricity rather than natural gas, and thus also contribute to reduced CO2 emissions. It will produce up to 1,300 mt/year hydrogen when operating at peak rates. The 327,000 b/d refinery consists of the Wesseling (south) and Godorf (north) sites. Separately, the refinery has received permission to start construction of a new power plant at Godorf. The new plant is scheduled to go onstream in 2021. As part of the modernization, Shell is converting the power plant from oil to gas.
  • ExxonMobil said it has “made a final investment decision to expand“ the Fawley refinery in the UK to increase production of ULSD by 45%, or 38,000 b/d. The more than $1 billion investment includes a hydrotreater to remove sulfur from diesel, supported by a hydrogen plant. The construction, subject to a local planning approval, was set to begin in late 2019 with start-up expected in 2021.
  • McDermott International has been awarded a contract for engineering, procurement and construction management services for the upgrade of the hydrocracker at Czech Litvinov refinery. The completion is expected for Q2 2020.
  • Russian Lukoil plans to invest in its ISAB refinery in southern Italy and has also dropped plans announced in 2017 to sell the plant having not received suitable offers. Lukoil will invest $60 million in upgrades, including two hydrodesulfurization units.
  • Cepsa said it will carry out upgrades to its aromax and hydrocracker units at Huelva. It is also carrying out an aromatics optimization project at the refinery.
  • Total is considering building intermediate feedstock desulfurization units and a hydrogen unit at France’s Donges, but the investment depends on rerouting a railroad track that currently crosses the refinery.
  • Israel’s Haifa District Court has rejected an appeal by Haifa municipality along with six other neighboring communities and environmental groups against the proposed expansion of the Bazan refinery.
  • Total’s Feyzin is considering mothballing a visbreaker unit around 2021 as demand for heavy fuel is gradually declining and the unit currently works on average no more than three days a month.
  • As a result of the mothballing seven people would lose their jobs, but would be offered other jobs within the organization, the company said.

Launches

  • Preliminary work for Estonia’s new refinery has started, with an agreement signed between Eesti Energia and Viry Keemia Group with Italian company KT Kinetics Technology. The preliminary project is due to be completed in the summer of 2020, “after which the main project will be decided,“ according to Eesti Energia.
  • The refinery which will process 1.6 million mt/yr shale oil and produce 1.5 million mt/yr products will help Estonia “to export fuel with up to five times less sulfur content than is permitted in the world,“ Hando Sutter, Chairman of the Management Board of Eesti Energia, said in the statement. It is aimed to be completed in 2024 and produce naphtha, gasoil and ULSFO.
  • Turkey’s Ersan Petrol plans to start construction of its 1.4 million mt/year Nazli refinery at Kahramanmaras in southeast Turkey in mid-2020, with the plant expected to begin operations in less than four years, company owner Ecvet Sayer said.
  • Dutch Hes International (former Hestya Energy) aimed to start operations at a unit of the closed Wilhelmshaven refinery in Germany. The Netherlands-based company had previously said it would operate the unit, which it declined to name, under a tolling agreement. According to traders, it is the VDU that was likely to be restarted and used for producing low sulfur fuel oil to meet the 2020 IMO requirement for low sulfur bunker fuel.
  • Azerbaijani state oil company Socar is considering the development of a second refinery in Turkey, in addition to its existing 214,000 b/d Star refinery at Aliaga on Turkey’s central Aegean coast.

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Source: Platts