REFINERY NEWS ROUNDUP: Weak demand weighs on sentiment in Europe

Weak demand continues to mire prospects for European refiners.

ExxonMobil has decided to proceed with the closure of its Slagen refinery in Norway whereas France's Donges will remain offline until March 2022 as TotalEnergies brings forward its planned major maintenance. Despite the gradual recovery in Europe, demand still remains below pre COVID-19 levels, especially for jet fuel, TotalEnergies said May 27.

** ExxonMobil said it expects its Slagen refinery in Norway to cease operations during the summer of 2021. It has previously said it will convert it into a fuel import terminal. The company said at the end of April it has taken the decision for the conversion "after a thorough Information and Consultation process with employees and their representatives." "Slagen refinery operates in an increasingly challenging market, characterized by strong competition, evolving regulatory measures and falling demand leading to overcapacity in the market. In this environment the continued Slagen refinery operation is not economically viable over the long term," the company said late April.

** Gunvor's Rotterdam refinery has shuttered its two crude processing units, one in 2019 and the other one in 2020, and is developing new processes around hydrogen and the coprocessing of vegetable oil.

Gunvor's refinery in Antwerp is being mothballed with terminal activities continuing at the site. Future development opportunities are being assessed.

** In September 2020, TotalEnergies said it would convert the Grandpuits refinery into a biofuel and plastics recycling complex, ending crude refining at the site in early 2021. The refinery has been fully offline since late January.

** Eni is evaluating the conversion of its Livorno refinery in northwest Italy into a biorefinery, as part of the Italian company's wider strategy to make its activities more environmentally sustainable. Eni has already converted two of its Italian refineries and is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this by at least five times by 2050, as part of a pledge to achieve complete carbon neutrality by 2050.

** Portugal's Galp said in April that the last units at its Porto refinery should be stopped at the end of the month and decommissioning will then start, to be followed by decontamination. In a regulatory filing Dec. 21, 2020, the company said it will discontinue refining operations at the Porto refinery from 2021 and concentrate its core refining activities and future developments at the larger Sines refinery. At present, the site of Porto will remain a logistics hub, but the company will assess other ways to use the facility. The company intends to shift its entire refining operations to the larger 220,000 b/d Sines refinery, where it has an FCC and a hydrocracker. The company said it expects the utilization rate at Sines to reach 90% in 2021.

** Petroineos said April 26 its plan to transition the configuration of its UK Grangemouth refinery will be phased in over time and will take place during 2021. In January, the company concluded consultations with employees regarding its proposal to reconfigure the Grangemouth refinery in Scotland "to meet current and future anticipated demand of our fuels products," a process that started in November 2020. The company has said previously that it proposes a smaller refining operation at Grangemouth and plans to mothball the CDU1 and the FCC, two units that "have been closed throughout the COVID pandemic due to significantly reduced local and international demand for fuels."

** Finland's Neste said it had discontinued refining operations at its smaller Naantali refinery at the end of March. "Neste will continue port and distribution terminal operations in Naantali," it said April 14. The company had previously announced plans to close Naantali by the end of March and develop the Porvoo refinery "toward co-processing renewable and circular raw materials." As a result of the closure of Naantali, Neste's total refining capacity in Finland is now approximately 10.5 million mt/year (206,000 b/d). With Naantali shut down, the company will focus the site on terminal and harbor operations. Neste's total crude production in Q1 was 2.943 mt, down from 3.703 mt in Q1 2020.

** Spain's Bilbao had the smaller of its two CDUs offline since Nov. 20, 2020, and in the spring announced a temporary layoff of one-third of its staff. Petronor has been operating at 40% of capacity since the CDU in plant 2 of the refinery was halted.

** Repsol said it will lay off 590 of its staff at Puertollano, down from the initially planned 618 workers, for four months and 20 days, down from the initially announced six months, with workers returning thereafter. The company had already halted the refinery's CDU citing unfavorable market conditions on March 31. The lubricant and chemical units have remained operational, with the chemical units due to carry out a regular turnaround in May.

** At A Coruna refinery, Repsol intends to halt operations at the coker unit, with a capacity of 1.1 million mt/year, and vacuum unit 2, but keep other units in operation until a planned turnaround of the fuel units in May. The company is temporarily laying off 112 workers over May-July for a period of four months and 20 days, down from initially announced 212 layoffs for six months.

Meanwhile, Greek refiner Hellenic said May 27 that it maintained good refining utilization even as Greek fuels market demand in Q1 was "the lowest on record, as restrictions on traveling were in place throughout the quarter." It also said that it maintained good operating performance through supply optimization, "options on higher domestic market share and the introduction of new premium fuels in retail, as well as the highest profitability on record for Petchems," which partly offset the adverse business environment. Q1 domestic fuel demand was 14% lower on the year, while heating demand decreased by 10% due to mild weather. Bunkering demand was down 6.5% and aviation demand 69% lower. "The operating environment we faced in the last 14 months has been the most difficult for years," Andreas Shiamishis, Group CEO said in a statement, adding that "over the coming months, we expect a substantial improvement, as the progress in vaccinations will increase domestic traffic and air travel in an important period for tourism especially for our country."

Hellenic's three refineries ran at a 94% utilization rate in Q1, compared with 108% a year earlier. Aspropyrgos' throughput was 1.871 million mt in Q1, compared with 1.086 million mt at Elefsina and 760,000 mt at Thessaloniki.

Separately, Israel's Bazan expects utilization at its Haifa refinery of 75%-80% in Q2, "if refining margins remain at their current level" and following the CCR outage. The CCR was halted in early May following a breakdown.

The refinery operated at 79% utilization in Q1, down form 91% in the year-ago quarter. It processed 2.198 million mt of feedstock, including crude and heavy vacuum diesel, down from 2.434 million mt in Q1 2020.

The decrease in utilization was "mainly due to the adjustment of output to demand for distillates and to the refining margins that are still affected by the outcome of the COVID-19 crisis."

In Q1, the company's sales in Israel were down 18%, "partly due to the country going into the third shutdown."

The company said that in April and May it expected a 28% increase in sales in Israel, compared with last year, "mainly due to the lifting of travel restrictions." Most of the increase would come from gasoline sales.

NEW AND ONGOING MAINTENANCE:

FUTURE MAINTENANCE:

Near-term maintenance

New and revised entries

** Germany's Heide refinery will carry out scheduled maintenance between May 27-June 16. The works involve cleaning and inspection of the units to ensure safe and reliable operation.

** Croatia's Rijeka is back in operation, INA said May 26. It has completed its maintenance in March, the company said. It halted operations in November due to reduced demand and carried out maintenance during the shutdown.

** Finland's Porvoo refinery, which is currently undergoing maintenance, is expected to operate normally by the end of June, the company said. Traders expected the plant to commence restarting in May. The refinery has previously said it started a major turnaround in early April, scheduled to last for about 12 weeks. A major turnaround at Porvoo is performed about every five years. The maintenance work was originally planned for last year but was deferred due to COVID-19, with only the "most critical works" completed in spring 2020.

** The Milazzo refinery on the Southern Italian island of Sicily has completed its maintenance cycle and initiated restart operations, including that of its LC Finer unit, a source close to the refinery told S&P Global in late May. The maintenance and upgrade works started in the first quarter of 2021, though no information on the exact start date was available. The maintenance had been scheduled to be completed at the end of May. No information was available on which units aside from the LC Finer were involved in the maintenance and upgrade works, or if or how production output was affected. The maintenance cycle that included the LC Finer unit being placed offline for upgrades was originally scheduled for 2019 and postponed various times.

** The crude distillation unit at France's Gonfreville refinery in France, which was damaged after a fire at the pump feeding crude oil in December 2019, is due to restart shortly, a union source said May 24.

Existing entries

** The Scholven part of Germany's Gelsenkirchen refinery started major works from May 15, the company said May 11. Some units at the plant will be halted for about eight weeks. During the turnarounds, more than 50 columns, over 25 reactors and 12 furnaces will be checked, as well as heat exchangers, pipelines and valves. The refinery consists of the Horst and Scholven sites, with Horst representing around one-third of total capacity.

** Spain's Castellon will carry out maintenance in May, an industry source said May 18. The company declined to comment May 19, citing company policy. The refinery pushed back two maintenance works from 2020, without confirming dates -- the first covers the two distillation units, the powerformer 1 and the HVN, and the second, due to last two to three weeks, concerns one conversion unit (treatment plant) and the 1.4 million mt/year coker. The source did not say which units would be undergoing maintenance.

** Tupras announced in its Q1 that the revamp of the FCC unit at Izmit that started in Q1 and is planned to take 30 weeks was ongoing. Planned for Q4 this year is periodic maintenance on the vacuum unit and lubes unit at Izmir, both scheduled to take six weeks.

** MOL will continue with smaller shutdowns of various units at the Danube and Bratislava refineries throughout the second and third quarters of 2021, the company said in its Q1 earnings presentation on May 7. MOL said earlier it is planning a "more intense" maintenance schedule this year than in 2020, when such activities were kept to a minimum in an effort to control capital expenditures.

** The continuous catalytic reformer unit at Israel's Haifa refinery has been stopped following a breakdown, and the company is preparing to carry out repairs, the refinery said May 5. The repairs are expected to last several weeks. The Jerusalem Post reported that the CCR unit had been halted following a fire on May 1. The fire, which was contained by the refinery's emergency team, occurred after damage to one of the pipes in the CCR, the report said. The refinery also said it estimates a loss of $20 million-$30 million for the period in which the unit will be halted. Separately, an executive committee established by the government has recommended the cessation of refining and petrochemical activity in the Haifa Bay due to environmental pollution, according to media reports.

** Varo Energy's Cressier refinery in Switzerland has started works on May 10, due to last around seven weeks until the end of June, according to a local media report. The units are gradually being halted for the planned maintenance. Previously, market sources said the refinery was planning works in May.

** Germany's Leuna refinery has started its general maintenance, which will last around eight weeks, the company said May 6. The company previously said it would carry out works in May and June. The maintenance and an upgrade had been scheduled for last autumn but were postponed "due to the ongoing pandemic and the resulting restrictions on travel and transport of goods, as well as the impact on international supply chains," the company has said previously. Total is investing around Eur150 million ($166 million) in "safety and environmental standards for the next cycle period," the company said.

Planning for the general maintenance, the fourth in the refinery's history, has been underway since 2018.

Separately, another major investment entitled 'Leuna 2020+', which has been underway since before the shutdown, will be integrated during the shutdown, the company said, adding that it is investing a similar amount as the maintenance investment in modernizing and expanding the POX methanol plant and "another conversion plant" to adapt better to "the changing market situation." It has previously said it would reduce production of heavy products as demand decreases, and increase production of methanol -- a key feedstock for the chemical industry. The project will deepen the integration of refining and petrochemical operations and increase the competitiveness of the plant.

** The ISAB refinery in Sicily is carrying out maintenance on its CR40 Gofiner unit, which breaks up heavy hydrocarbon molecules into lighter fractions using heat and catalysts, as well as its PR1 cumene catalyst, according to sources close to the refinery. Both units are in the northern section of the refinery. The duration or start date of the works is unknown and the refinery is currently online, though it is unclear how the maintenance and upgrades are affecting output. ISAB had returned both its north and its south plants to full operations earlier this year following a wide scale maintenance cycle, which began in October and included upgrades to the refinery's IGCC Cogen unit. The IGCC unit is still offline and its restart date, which depends on market conditions, is currently unknown, sources close to the refinery said.

** Shell's Pernis refinery in the Netherlands said that works on one of its units will last until late May. The works on the unidentified unit started in late March.

** Italy's Sarroch refinery is undergoing partial works, according to market sources. The company declined to comment but in its latest financial report in November 2020 said that it would lower maintenance costs over the next two years as all but essential upgrades are delayed beyond 2022.

** All units at France's Grandpuits refinery are now fully offline. TotalEnergies halted the crude distillation unit at Grandpuits Nov. 16, 2020 but the other units at the refinery had remained in operation. All units are now halted and product deliveries have also stopped. Work to prepare the dismantling of the refinery has been halted.

** Eni's Sannazzaro de Burgondi refinery in northern Italy started another cycle of maintenance and upgrade works, even as a decision on when to reactivate its Eni slurry technology (EST) unit, which has been offline since a 2016 fire, is still outstanding. The works being carried out are not the series of works planned for the EST unit that had previously been suspended.

** The Canary Islands' only refinery on Tenerife will be permanently closed in the long term. There has been no production since 2014. Cepsa will install some logistics and storage facilities at the site, amid a wider regeneration project.

Future

New and revised entries

** Israel's Bazan said it has decided to delay the scheduled maintenance of the FCC at Haifa from Q2 2021 to the first half of 2022 when there will be also maintenance at all the Carmel Olefin facilities.

Existing entries

** Gunvor Group said that its Ingolstadt refinery in Germany will undertake projects focused on heating systems and exchangers "to continue improving its energy efficiency and reduce its emissions." A planned turnaround in 2023 will allow additional reductions, by carrying out projects on the FCC.

** Poland's second largest refiner Grupa Lotos will carry the second part of the maintenance at its Gdansk refinery in the spring of 2022.

** Lukoil's Neftochim refinery in Burgas, Bulgaria, which had scheduled out major works for this year, has postponed them, according to sources close to the matter. The refinery typically carries out works in February and March but has deferred them to later in 2021, possibly during the second half of the year. The works are expected to include atmospheric vacuum unit 1, atmospheric vacuum unit 2, atmospheric vacuum distillation 2, FCC, hydrotreatment, hydrocracker, according to company tender documents.

** France's Lavera refinery is planning works at its FCC unit in September.

** Austria's OMV said it will expand and modernize the cracker units and petrochemical cold section at its Burghausen refinery in Germany with the upgraded units planned to go live in Q3 2022, following a planned turnaround of the refinery.

** Czech Unipetrol said that following the turnaround at its Litvinov plant in Q2'20 the refinery has prepared production for a new four-year cycle. Thus the next turnaround is due in 2024.

** With its 2020 maintenance, Romania's Petromidia and the petrochemical division "will align with the new operating strategy, with a general turnaround scheduled for 4 years and technological shutdowns scheduled for 2 years," the company said.

** Two months of maintenance at the Sarpom refinery in Trecate, Italy, originally scheduled for October 2019 have been pushed back to 2021. Details on which units at the refinery will be upgraded as part of the maintenance -- of the kind needed every 3-4 years -- had yet to emerge.

** The Holborn refinery near Hamburg, northern Germany, plans its next turnaround in 2023. Its previous maintenance was in the autumn of 2018. The refinery carries out major works every five years.

** The next major turnaround at Preem's Gothenburg refinery in Sweden will be in 2021.

** Romania's Petrobrazi will undergo its next big turnaround in 2022.

** Total's Feyzin is considering mothballing a visbreaker unit around 2021 as demand for heavy fuel is gradually declining and the unit 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.