REFINERY NEWS ROUNDUP: European companies report lower 2020 runs, margins

London — European companies have been reporting lower throughput and margins for 2020 as a result of the pandemic.

Spain-based integrated energy group Cepsa's refinery throughput decreased 10% in 2020 at 19.3 million mt (387,000 b/d), or a 78% utilization rate, the company said. This contraction was accompanied by a 42% narrowing of the refining margin to $2.50/b, although this full-year average was much better than a decade-long low in the third quarter 2020 of 50 cents/b. Sales volume of refined products was resilient, dropping just 4% in the full year at 14.8 million mt, partly buoyed by chemical and asphalt sales.

Tupras said it processed 23.4 million mt of crude in 2020, down 16.7% year on year. White product yield for 2020 was 81.5%, up from 79% in 2019, due to changes in individual product yields made in response to market changes caused by the pandemic. Turkey's Tupras purchased 18 types of crude from 11 countries with specific gravities ranging from 20 API to 47 API, the company said in an investor presentation. According to the presentation, 64% of the crude came from the Middle East, 21% from the Commonwealth of Independent States, 12% from Africa and 3% from Europe, compared with 2019 when the company's imports were 55% Middle East, 34% CIS and 12% Africa.

Specifically, demand for jet fuel plummeted due to the cessation of tourist flights into and out of Turkey for part of the year, in response to which Tupras switched production to other products.

Italian refinery production last year fell 15.5% at 60.6 million mt, according to data from industry group Unione Energie per la Mobilita. Refining throughput of partially processed imported crude jumped 9.4% at 3.8 million mt, the data showed. Standard crude throughput plunged 17.5% to 55.2 million mt in 2020, Unem said. The average run rate in the full year was 67.5% of the 87.25 million mt/year capacity, down from 67.8% in the first 11 months of 2020 and 68.2% in the first 10 months.

European oil demand markers failed to show significant signs of recovery in the week to March 7, despite market watchers anticipating a mobility rebound as the pace of COVID-19 infections continues to fall in most of the region. Land-based mobility from Europe's five biggest economies was little changed in the week to March 7, according to Google data, after returning to levels last seen in late December despite the ongoing wave of economic lockdowns.

Oil product withdrawals from storage by the Spanish retail market in February fell 26% year on year to 2.3 million cu m, or about 1.8 million mt, in line with declines in both January and full year 2020, data published March 12 by national fuel distributor and storage operator Exolum showed.

** The strike at France's Grandpuits refinery was called off in mid-February but only temporarily, a source from the CGT labor union told S&P Global Platts. Strikes started in October when staff protested over the company's plans to convert the refinery into a bio plant and potentially cut jobs. The latest strike started in late December and was extended on Jan. 6 and subsequently until mid-February, even though Total has said there will be no compulsory redundancies, and that employees whose jobs disappear will be offered another role within the company in France. However, the CGT union said it had not signed the social plan due to lack of progress regarding the situation with employment and that it will continue to keep the company under pressure so that jobs are saved. In September, Total said it would convert the refinery into a biofuels and plastics recycling complex, ending crude refining at the site in early 2021. The refinery has been fully offline since late January. Total halted the crude distillation unit at Grandpuits Nov. 16 but the other units at the refinery had previously remained in operation. The refinery is unlikely to restart prior to being converted, the source said.

** 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 is looking to almost double its biorefining capacity to around 2 million mt/year by 2024, and expand this to at least five times by 2050, as part of its pledge to achieve complete carbon neutrality by 2050.

** Portugal's Galp said in a regulatory filing Dec. 21 that 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. At present, the site 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. Under normal market circumstances, the moving of operations to the larger refinery would be equivalent to about a $1/b increase in refining margin, according to CFO Filipe Silva. The company said it expects the utilization rate at Sines to reach 90% in 2021, which would mean 80.3 million mt processed. This would be a decrease of around 8% from the total 87.1 million mt processed in 2020, which include volume from Matosinhos.

** France's Donges refinery is not expected to restart before mid-March although with potential new lockdowns in the country, 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 has said the refinery was likely to restart in January.

** Petroineos said it was continuing consultations with employees, which started on Nov. 16, regarding a 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 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. 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."

** 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 coprocessing 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.

** 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, 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, PKN Orlen, Poland's largest refiner, said it had signed it first supply deal with ExxonMobil to receive around 1 million mt of WTI crude oil over the 12-month period of the contract for its refineries in Poland, Lithuania and the Czech Republic, as the company seeks to diversify away from Russian oil.

New and ongoing maintenance:

Future maintenance:

Near-term maintenance

New and revised entries

** Spain's Petronor said March 15 it is halting its boiler in plant 3, the plant which houses its conversion unit. The boiler was previously taken offline Jan. 24 for maintenance. Meanwhile, Petronor restarted March 12 the hydrodesulfurization unit HD3 at its plant 2. The unit was halted Feb. 19. The unit is in plant 2 where the crude distillation unit was taken offline Nov. 20, 2020, due to weaker market conditions, reducing crude distillation capacity by 40%. The halt also included the visbreaking unit. The HD3 unit installed a new pressure swing adsorption on Oct. 30, 2020, which is used to purify hydrogen before it is used in the refinery's H2 circuits. The company previously said it would halt the 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 from March 15. The FCC was taken offline in April, and the company has not confirmed its restart.

** A diesel hydrocracker at Germany's Gelsenkirchen refinery, which has been offline in February, is back up and running, trading sources said March 1. 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.

Existing entries

** Germany's Bayeroil is planning short maintenance at its Vohburg and Neustadt sites. At the Vohburg site works are lasting between Feb. 25-Mar. 14 and include one of the two crude distillation units, as well as a catalyst change at the gasoline and middle distillate hydrotreater. Separately, the Neustadt plant will carry out short works in March. Bayernoil consists of the Vohburg and Neustadt sites which are closely interconnected.

** Poland's second largest refiner Grupa Lotos said that it will partially shut its Gdansk refinery Feb. 26 to perform scheduled maintenance. "For the first time the maintenance project will be performed in the form of a partial shutdown (its second part will take place in spring 2022). In accordance with the plans, the shutdown in 2021 will not involve a stoppage of the entire refinery," the company said in a statement. Lotos said the refinery will continue to process crude oil and dispatch products throughout the maintenance period, which will be completed on May 1. Lotos said 19 of the refinery's more than 60 units will be shut in 2021, most of which will resume operation in early April. The last work will be performed on "three systems of the oil unit," starting April 7. Lotos said the maintenance will reduce the refinery's throughput capacity in 2021 by an estimated 5%.

** ExxonMobil's Rotterdam refinery is planning works in March, according to market sources. The duration or the extent of works was not confirmed.

** 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.

** The FCC unit at Portugal's Sines refinery is offline, which would reduce VGO imports, according to market sources.

** Turkey's Izmir refinery is expected back in March, according to market sources. In early December, Tupras said that it would halt production at Izmir between Jan. 1 and Feb. 28 for maintenance.

In its recent financial report the company said that a revamp and opportunity maintenance is ongoing on five units at the Izmir refinery during Q1. The company also said work on the Crude and FCC units will take nine weeks, on the CCR and isomerization units 10 weeks and on the desulfurizer 11 weeks.

** Hungary's MOL is planning a "more intense" maintenance schedule in 2021 than it carried out in 2020, the company said. That will include ongoing works at the Rijeka refinery that started in November, as well as smaller shutdowns of various units at the Bratislava and Danube refineries up to September.

Rijeka has previously said it would 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." ** API's refinery in the Italian coastal town of Falconara Marittima is fully operational after routine maintenance and upgrades have been completed, sources said in late February. The plant has been offline since mid-January when the works started, though it has still been shipping refined products from storage via tanker trucks, as well as refined products coming in via sea routes to the complex.

** All units at France's Grandpuits refinery are now fully offline as a result of a strike which has meanwhile been called off. 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.

** Italy's ISAB refinery is fully back online after a maintenance, a company spokesman confirmed Mar. 5. The refinery is now running at full capacity after running at lower rates in February, according to market sources. The ISAB refinery in Sicily returned in February its North plant fully online as well as part of its Southern plant following a maintenance cycle that began in October, S&P Global Platts has reported previously. ISAB was originally scheduled to return to operations on Dec. 15 when it was due to restart after the completion of a two-month maintenance cycle that began on Oct. 15. The restart was then postponed to February due to market conditions. The two months of maintenance and upgrade works carried out at the plant at the end of last year focused mostly on the southern section of the refinery. 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 CDU at France's Gonfreville, which was damaged in December 2019 following a fire at a pump feeding crude oil, remains offline and the restart is unclear, according to trading sources.

** 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.

** Tupras announced its maintenance programme for the first quarter. 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 desulfurizer 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.

** 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.

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

** 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.

** 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 widescale maintenance that included the LC Finer unit being placed offline was originally scheduled for 2019 and postponed various times.

** 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.

** 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.

** 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

** 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.