REFINERY NEWS ROUNDUP: Poor conditions in Europe amid expected improvement

London — European refineries have been looking to increase runs as they see better prospects for 2021, but conditions remain poor for the moment.

Spain's Repsol has halted the crude distillation unit at Puertollano due to unfavorable market conditions. In a presentation March 26 the company said its refining margin indicator has fallen to around $0.50/barrel during January and February this year, from an average of $2.20/b in the full year 2020 and $5.00/b in the full year 2019.

ExxonMobil's French downstream subsidiary Esso SAF said that globally refining margins fell to their lowest in 20 years. In France, refining margins were down to Eur2/mt between May and December 2020, against an average of Eur26/mt between 2011-2020. Margins improved in January and February this year but deteriorated again in March. Esso SAF said that its two refineries -- Port Jerome-Gravenchon and Fos-sur-Mer -- reduced throughput and utilization rates in 2020 due to the COVID-19 pandemic. Gravenchon and Fos processed a combined 15.2 million mt of crude oil in 2020, from 15.9 million mt in 2019. Esso said Fos processed 5.3 million mt in 2020, down from 5.8 million mt in 2019, while Gravenchon processed 9.9 million mt, down from 10.1 million mt. Fos ran at 76% utilization in 2020, from 84.2% in 2019, while utilization at Gravenchon was 73.6%, down from 76.1%. The refineries reduced rates to a minimum between mid-March and May 2020, whereas Gravenchon halted some units between mid-April and June. Apart from the partial maintenance at Fos in January and February this year, which involved some units including an FCC and CDU, and routine unit maintenance at Gravenchon, Esso does not plan major shutdowns in 2021.

Italy's Sarroch refinery posted a 10% year-on-year drop in crude runs in the fourth quarter to 22.2 million barrels, compared with 24.8 million barrels a year earlier, as overall runs fell 14% for the full year 2020, according to a company statement. In 2020, crude runs at the Sarroch refinery fell to 83 million barrels from 96.2 million barrels in 2019, according to the statement. The plant owned by Saras was running at around 80% of total capacity in the fourth quarter, the company said, up from 70%-75% in the third quarter. Saras had originally forecast a recovery in the fourth quarter amid expectations during the summer of 2020 that the pandemic was ending and that a rebound was on the horizon. "We were caught by surprise by the increase of sanitization issues, which delayed the recovery," CEO Dario Scaffardi said. The refinery is expecting an improvement in margins in 2021, with a rebound in the summer when the pandemic "should be under control," with a "return to normality to pre-COVID levels in the following years," Scaffardi said. "The situation has changed now, there are definite concrete signs of improvement going forward," he added.

The company expects a total of 14.2 million mt to be processed in 2021 compared with 11.4 million mt last year and estimates levels will rise further, nearing pre-COVID-19 pandemic levels of between 14 million mt and 14.5 million mt in the 2022-24 period.

Turkey's STAR refinery is planning to process 11 million mt of crude this year (221,000 b/d), a rise of 4.8% from 10.5 million mt in 2020, SOCAR Turkey Refinery and Petrochemicals Business Unit President Anar Mammadov said in an interview with Turkey's state news agency Anatolia on March 30. Mammadov gave no details as to how the increase would be achieved but confirmed that during 2020, in response to the constraints on air travel caused by the global COVID-19 pandemic, STAR had converted 100% of its jet production to diesel, raising diesel production for the year from 4.6 million mt to 6 million mt.

Meanwhile drives to reducing emissions and switching to renewables continue.

Oil trader Gunvor said March 30 it plans to invest at least $500 million under a new renewables energy and non-hydrocarbon technology unit as part of a push to slash its carbon emissions and trade more "sustainable commodities". The two most significant activities that generate greenhouse gas emissions are the refineries and its shipping fleet, it said in a statement. The company aims to decrease emissions from its refineries compared to 2019 "through efficiency projects and a switch to renewable and carbon neutral electricity."

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. The Rotterdam refinery has shuttered its two crude processing units in 2020 and is developing new processes around hydrogen and co processing of vegetable oil. The refinery in Antwerp is being mothballed with terminal activities continuing at the site. Future development opportunities are being assessed.

Gunvor also owns two biodiesel refineries in Spain which have been fully refurbished and operate at full capacity. "The fuels produced at these

plants enable greenhouse gas savings in the range of 85%" the company said. Furthermore 100% of its own ships and 75% of the time charterer fleet will be "eco-vessels" by 2022 and will reach 100% before 2027. It also aims to cooperate directly "with shipbuilders and owners to build ships running on low or zero emission fuels."

** 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 co processing of vegetable oil. The refinery in Antwerp is being mothballed with terminal activities continuing at the site. Future development opportunities are being assessed.

** The strike at France's Grandpuits refinery was called off in mid-February but only temporarily. 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.

** 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. The company said it expects the utilization rate at Sines to reach 90% in 2021.

** France's Donges refinery remains offline. 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.

** 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. 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."

** 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 2020, 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.

** Spain's Repsol has halted the crude distillation unit at Puertollano due to unfavorable market conditions, the company told S&P Global Platts March 31. The lubricant and chemical units will remain in operation. The restart of the crude units will depend on market conditions. According to a report in local daily Mi Ciudad Real, citing a company source, the outage will last the whole of April.

** 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. 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, French road fuel deliveries totaled 3.404 billion liters in February, which was up from 3.393 billion liters in January, according to industry group UFIP, citing data from the country's oil industry committee CPDP. Year on year, the total was down 10.8%, with a 10.5% drop in diesel consumption compounded by an 11.8% drop in gasoline. Diesel's share of the transport pool was up 0.2 percentage point year on year to 78.1% in February.

Poland's largest refiner PKN Orlen said March 16 it will receive 3.6 million mt/year of crude oil from Russia's Rosneft under a new two-year supply deal. Under the previous contract, which expired on Jan. 31, Rosneft delivered between 5.4 million-6.6 million mt/year of REBCO crude. "The limitation of crude oil supplies under the agreement with Rosneft does not change anything from the point of view of the stability of supplies to Orlen Group's refineries and fuels in the region," PKN CEO Daniel Obajtek said in a statement.

NEW AND ONGOING MAINTENANCE:

FUTURE MAINTENANCE:

Near-term maintenance

New and revised entries

** Spain's Petronor said March 29 it is restarting the fluid catalytic cracker at the refinery after it concluded a maintenance ahead of schedule. The unit was halted March 26 and seven days of work announced. The unit was previously halted in April 2020 for an undisclosed length of time. Bilbao halted its number 2 crude distilation on Nov. 20, 2020 in reaction to weaker market conditions. The halt has affected 40% of the refinery's crude distilation and includes the visbreaking unit. The company also took a boiler offline in plant 3 on March 28, without specifying the length of the work. Plant 3 is where most of the conversion units are located. The boiler has previously been taken offline between March 15-24. Spain's Petronor said March 18 that it is restarting its G4 diesel desulfurization unit and its H4 hydrogen unit that were halted Feb. 13, alongside the sulfur recovery plant (SR5), for routine maintenance.

** The maintenance at ExxonMobil's Rotterdam refinery, which started in March, has been extended into April, according to market sources.

** Turkey's Izmir refinery has restarted, as expected, according to market sources. Tupras declined to comment. In late February, the company said that they planned to gradually restart the units that had been closed from March 1. In early December, Tupras said 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 were 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, with work on the CCR and Isomerization units taking 10 weeks and on the desulfurizer 11 weeks.

** France's Gonfreville refinery will be halting its base oil production facility due to structurally low demand, the company said March 31. The closure will allow the Gonfreville complex to strengthen and improve its performance, it said. The management is working with unions to provide new employment to those affected by the shutdown. The base oil unit has been shut since December 2019 following a fire at the crude unit, a CGT union source said. Its restart would have required a major overhaul. The crude distillation unit, which was damaged after the fire at the pump feeding crude oil, remains offline. It is due to restart in May, according to CGT union sources.

** 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. The refinery performed works on another unit in February and March.

** Germany's Mineraloelraffinerie Oberrhein (Miro) is expected to ramp up throughput in April as its turnaround is coming to an end, according to traders. The plant carried out a planned turnaround, starting in mid-February and lasting six weeks until the end of March, the refinery said previously. It was not immediately available to comment. The maintenance is the largest in its history, it said on its website. Around two thirds of the facilities have been halted for major inspection, including 41 units in Plant 1 and three units in Plant 2. Last year the refinery said that it was planning major maintenance in 2021. It said at the time it would invest Eur300 million ($333 million), with two-thirds in new projects and one-third for upgrading existing units during the turnaround.

** Finland's Porvoo refinery is preparing for a "major turnaround starting in April," the company said March 31. The maintenance will last approximately 12 weeks. It is carried out approximately every five years. The shutdown of the units will begin in stages on April 5. The refinery is expected to be back to normal operations by the end of June. The company plans total investment around Eur 330 million in the turnaround. Platts reported previously that the turnaround, which has been scheduled for Q2, would start in April, citing trading sources. The maintenance was originally planned for last year but was deferred due to Covid-19 with only the "most critical works" completed in the spring of 2020. The Neste harbor and distribution terminal at Porvoo will be operating normally during the turnaround.

Existing entries

** 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%.

** 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.

** 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.

** 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.

** 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.

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

** France's Donges refinery remains offline. 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.

** 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

New and revised 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.

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.