REFINERY NEWS ROUNDUP: Companies report lower throughput in Europe

London — Oil companies in Europe have reported lower throughput in the fourth quarter and 2020 as a whole, with many refineries continuing with run cuts in the first quarter of 2021.

** All units at Total's Grandpuits refinery in central France are now fully offline as a result of a strike called by staff to protest against job losses resulting from the conversion of the refinery into a biorefinery, a union source said. Total halted the crude distillation unit at Grandpuits Nov. 16 but the other units at the site had remained in operation. All units are now halted and product deliveries have also stopped, while work to prepare the conversion of the refinery has also been halted. Strikes started in October at the site.

** Eni is evaluating 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, a company spokesperson said. Eni has already converted two of its Italian refineries and said last October that it may speed up the conversion plan for its traditional refineries, with the aim to be producing 5 million mt/year of biofuels by 2050.

** Portugal's Galp said in a regulatory filing Dec. 21 it will discontinue refining operations at the Porto refinery from 2021 and concentrate its core refining activities and future developments at its larger Sines refinery. Galp said it will focus on enhancing the resilience and competitiveness of the Sines site, with a view to improving efficiency and to integrate the production of advanced biofuels and other cleaner as well as more valuable products. The Porto refinery, which came on stream in 1969, halted fuel production for a second time last year on Oct. 10 due to the impact of COVID-19 on fuel demand and high inventories.

** France's Donges refinery is not expected to restart before mid-March although with potential new lockdown in France the restart could be postponed further, a source from the CGT union said. Total said Nov. 24 it was to halt operations at Donges from Nov. 30 for the coming months for economic reasons, due to weak margins, in the wake of the demand slump caused by the coronavirus pandemic. The refinery has been operating at a loss, it said. At the time trading sources suggested that the refinery was likely to restart in January.

** Petroineos said that it was continuing consultations with employees, which started on Nov. 16, regarding its proposal to reconfigure the Grangemouth refinery in Scotland "to meet current and future anticipated demand" for fuels. The company proposes a smaller refining operation at Grangemouth and plans to mothball CDU1 and the FCC, two units that "have been closed throughout the COVID-19 pandemic due to significantly reduced local and international demand for fuels".

** One of the two distillation units at Cepsa's La Rabida is currently idled but set to quickly resume operations if demand improves, the company said Jan. 14. Fuel unit 1 and and Vacuum Unit 2 have been offline since they concluded maintenance in Q4 2020.

** Croatia's Rijeka refinery will optimize its operations from November "for a few months" and during that period will "perform regular technological activities at process units such as catalyst regeneration and preparation of these plants for the new processing cycle in 2021 through regular maintenance work." Local media reported that the refinery will temporarily halt production between November and January due to reduced demand.

** Finland's Neste said it will shut down its Naantali refinery by the end of March as part of its restructuring. Operations at its Porvoo refinery will be revamped to focus on co-processing renewable and circular raw materials. It will focus the Naantali site on terminal and harbor operations and in the second phase of restructuring will develop the Porvoo refinery "towards co-processing renewable and circular raw materials."

** Gunvor Group said it would mothball its Antwerp refinery, but "will continue terminal activities, as well as further assess future development opportunities for the land and existing units." The refinery stopped crude processing at the end of May.

** Shell has relaunched the sale of its Fredericia refinery in Denmark after suspending the sale in 2018.

** Total has agreed to sell its Lindsey refinery in the UK to fuel trading and marketing Prax Group, as the French oil major focuses on its integrated downstream assets and the coronavirus adds to the uncertainty over long-term demand for fuel.

** At Spain's Bilbao the FCC was taken offline in April, and the company has not commented on its restart. At Spain's Tarragona, the refinery is online with units adapted to market conditions. The smaller crude unit (Crude 2) has been used as a swing unit to allow more flexibility.

** Germany's Heide refinery will reduce its staff by 106 positions following "intensive and constructive negotiations" since the end of October, the refinery said Jan. 28. "The ongoing global expansion of renewable energy and the effects of the current coronavirus pandemic have led to a sharp drop in demand for mineral oil products," the refinery said, adding that it had faced decline of product sales "for almost a year", while "the ongoing energy transition is leading to major challenges for the company in future." It said however that it will be "well positioned for the future" with the agreed downsizing and "by changing its business model towards the future production of green hydrogen."

In other news, Lukoil reported lower throughput at its Russian and European refineries in 2020. Overall throughput was 58.6 million mt in 2020, down 14.7% on the year. The reduction was due to "optimization" of throughput at some plants against the background of lower oil products demand and refining margins caused by the Covid-19 pandemic and maintenance works.

Throughput in the fourth quarter was 13.1 million mt, 11.5% down quarter on quarter.

At its European refineries, throughput was 3.5 million mt in the fourth quarter, down 25.4% quarter on quarter, due to optimization and maintenance in Italy and Bulgaria. Lukoil's ISAB refinery in Italy carried out maintenance since mid October and has postponed the restart, initially scheduled for mid-December, to February, S&P Global Platts reported.

In 2020, Lukoil's European refiners processed 18.5 million mt, 24.8% down on the year, due to planned maintenance in Bulgaria, Italy and the Netherlands as well as optimization.

Lukoil's refineries in Bulgaria and the Netherlands -- Burgas and Zeeland -- had maintenance in the first half of the year, whereas Italy's ISAB carried out works in the fourth quarter.

France's Total reported 61% of utilization based on crude processing at all of its refineries in January-December 2020, down from 80% in 2019. Its French refineries processed 244,000 b/d in 2020, down 46% year on year.

In the fourth quarter, utilization was 60%, down from 71% in the previous year and up from 57% in the third quarter.

Throughput at Total's French refineries was 247,000 b/d in the fourth quarter, down 12% on the year, and down from the third quarter.

Refinery throughput decreased in the fourth quarter "mainly due to high inventories of refined products and the drop of demand which notably led to the economic shutdown of the Donges refinery," the French oil major said in its fourth-quarter report. The reduction was also attributed to the "prolonged shutdown of the distillation unit" at Gonfreville refinery in Normandy following an incident at the end of 2019. Total halted processing at Donges in November due to weak margins, and according to market sources the refinery is not expected back until mid-March. The Gonfreville refinery has been working at around 50% capacity after its CDU was damaged in December 2019, according to sources.

Overall sales of oil products were down 20% in 2020 and down 18% in the fourth quarter, "in response to the significant slowdown in global activity related to the Covid-19 pandemic," the company said, adding that aviation and marine activities "remain severely affected."

The company said that European refining margins "remain fragile, with low demand for jet fuel weighing on the recovery of distillates."

Turkish refiner Tupras said its total refinery output in 2020 was down 16.8% year on year at 23.389 million mt. Fourth quarter production was 6.085 million mt down 12.0% year on year, and down 4.2% quarter on quarter.

Tupras blamed the fall in production on the effects of the global pandemic which put pressure on demand for petroleum products throughout 2020.

The company specified the sharp decline in flight numbers as having caused jet fuel margins to fall to historically low levels, with negative margins recorded for the first time, and remaining below zero for six months before returning to positive in October. The company added that with producers reducing jet production in favour of diesel, diesel margins too fell to historically low levels due to oversupply.

Tupras said its capacity utilization for the year was 81.8%, down on the 97.8% reported in 2019. Capacity utilization during Q4 was 84%, down from the 87% reported in Q4 2019, and down on the 89% reported in Q3 but up on the 80.9% reported over the first nine months of 2020, and sharply up on the 69% reported in Q2.

Tupras said its average refining margin for the 2020 was $1.3/barrel, down from the $2/barrel the company averaged in 2019.

In its expectations for 2021 Tupras said it anticipated production of between 26-27 million mt at a capacity utilization rate of between 90%-95%, and sales also of 26-27 million mt, with a slight inventory gain.

Tupras said it was anticipating it would achieve a margin of between $2.5-$3.5/b, against a Med complex refining margin of between $0.0-$0.5/b.

The company anticipates achieving better mid distillate and gasoline cracks but weaker HSFO cracks, it said.

Norway's state-controlled Equinor has confirmed that a potential Feb. 16 strike by 12 members of the SAFE trade union could lead to the shutdown of flagship fields Troll and Johan Sverdrup, among other fields.

"The effect of a potential strike could reduce crude storage and harbor capacity at the terminal at... the Mongstad refinery, which could affect the production at several Equinor-operated fields on the Norwegian Continental Shelf, including Johan Sverdrup and Troll, and it could be necessary to shut down production there until further notice," Equinor said.

NEW AND ONGOING MAINTENANCE

FUTURE MAINTENANCE

Near-term maintenance

New and revised entries

** Tupras announced its maintenance programme for the first quarter. Work described as revamp and opportunity maintenance is ongoing on five units at the Izmir refinery during Q1. The company said work on the Crude and FCC units will take nine weeks, on the CCR and Isomerization units 10 weeks and on the desulphurizer 11 weeks. At the company's Batman refinery ongoing maintenance on the crude oil and vacuum unit which started in Q4 last year is expected to take seven weeks into Q1 of 2021, the company said. At the Izmit refinery planned periodic maintenance of the desulphurizer is expected to take four weeks during Q1 and planned revamp of the FCC unit for 30 weeks, but did not indicate when in Q1 work will commence.

** A diesel hydrocracker at Germany's Gelsenkirchen refinery is currently offline, trading sources said Feb. 8. The company declined to comment. The Scholven part of the refinery carried out maintenance into early January. The refinery consists of the Horst and Scholven sites, with Horst representing around one-third of total capacity.

** Shell's Pernis refinery in the Netherlands said in early February that flaring is possible during works on an unspecified unit in the coming weeks.

** General maintenance at Germany's Leuna will be carried out in May and June 2021, the company said. The maintenance and an upgrade had been scheduled originally for last autumn but have been 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 said previously. The maintenance had previously been planned to take place over six weeks. Total said in 2019 it would invest Eur150 million ($166 million) in the Leuna refinery over 2020-21 to 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, Total said at the time.

** Germany's Mineraloelraffinerie Oberrhein (Miro) will carry out a planned turnaround, starting in mid-February and lasting six weeks until the end of March, the refinery said. Previously trading sources said the maintenance would start in February and run until April. Last year the refinery said that it was planning major maintenance in 2021.

Existing entries

** In 2021, Neste plans to carry out around major maintenance in the second quarter at the Porvoo refinery lasting around 12 weeks. The maintenance work was originally scheduled for 2020 but was deferred due to COVID-19.

** API's refinery in the Italian coastal town of Falconara Marittima is currently offline for routine maintenance works, according to information provided by two sources Feb. 3. The exact date of the start of maintenance work was not given, though it began in the first half of January. There was no information given on the duration of the maintenance works either, or details on which units were affected.

** UK's Pembroke refinery is starting planned maintenance, according to market sources. The works are set to last until April.

** Spain's Petronor said it will halt its G4 diesel desulfurization unit from Feb. 13, alongside its Hydrogen unit (H4) and sulfur recovery plant (SR5) for maintenance. The restart of the units will be until March 15, it said. The refinery had halted its No. 2 crude distillation unit on Nov. 20, 2020, in reaction to weaker market conditions. The halt has affected 40% of the refinery's crude distillation and also includes the visbreaking unit. The FCC was taken offline in April, and the company has not yet confirmed its restart.

** France's Donges refinery is not expected to restart before mid-March although with potential new lockdown in France the restart could be postponed further, a source from the CGT union said. Total said Nov. 24 it was to halt operations at Donges from Nov. 30 for the coming months for economic reasons, due to weak margins, in the wake of the demand slump caused by the coronavirus pandemic. The refinery has been operating at a loss, it said. At the time trading sources suggested that the refinery was likely to restart in January.

** All units at France's Grandpuits refinery are now fully offline as a result of a strike called by staff against the loss of jobs following the conversion of the refinery, a union source from the CGT union said. Total halted the crude distillation unit at Grandpuits Nov. 16 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.

** The Milazzo refinery located on the Southern Italian island of Sicily is currently running maintenance on some units ahead of placing its LC Finer unit offline in scheduled wide-scale upgrade works at the plant in the first quarter of 2021, a source close to the refinery said. No information was available on which units were involved in the works, or if the production output was affected. There was also no information available on the duration of the maintenance. The upcoming wide-scale maintenance that included the LC Finer unit being placed offline was originally scheduled for 2019 and postponed various times.

** The ISAB refinery in Sicily, which postponed its Dec. 15, 2020 scheduled restart after the completion of a two-month maintenance cycle that began Oct. 15, may return most units to operation in February barring the integrated gasification combined cycle unit, which will likely be back online only in April, a person close to the company said. The situation may change depending on evolving market conditions, and the restart schedule will be reviewed on a monthly basis. ISAB is made up of two refineries connected by a pipeline. The north and south plants operate as a single refinery after the two separate units were integrated in 2007. The separate IGCC plant is connected to the north and south complexes as well.

** One of the two distillation units at Cepsa's La Rabida is currently idled but set to quickly resume operations in case of demand improvement, with Cepsa continuing to adapt the refinery utilization ratio to current demand, the company said Jan. 14. Fuel unit 1 and and Vacuum Unit 2 have been offline since they concluded their last maintenance in the fourth quarter.

** Croatia's Rijeka refinery will be optimizing its operations from November "for a few months" and during that period will "perform regular technological activities at process units such as catalyst regeneration and preparation of these plants for the new processing cycle in 2021 through regular maintenance work," the company said late Oct. 7. Earlier local media reported that the refinery will temporarily halt production between November and January due to reduced demand caused by the spring lockdown and a weak tourist season.

** Two planned maintenances at the Castellon refinery is eastern Spain have been pushed back, with no fixed date for when they will now go ahead. The first was previously scheduled for May and to last two to three weeks, affecting two distillation units, the powerformer 1 and the HVN. A second maintenance, initially due for November for two to three weeks, affecting one conversion unit (treatment plant) and the 1.4 million mt/year coker, has been pushed back into 2021.

** France's Gonfreville is working at around 50% capacity after its CDU was damaged in December 2019.

** 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

Existing entries

** 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 Bughausen 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.

** Lukoil's Neftochim refinery in Burgas, Bulgaria, will be carrying out major works in 2021, including atmospheric vacuum unit 1, atmospheric vacuum units 2, atmospheric vacuum distillation 2, FCC, hydrotreatment, hydrocracker, according to company tender documents. The refinery typically carries out works around February-March.

** 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 maintenance at Poland's Gdansk is planned for spring 2021.

** 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.