REFINERY NEWS ROUNDUP: Plants in Asia-Pacific gradually back to normal

London — Refineries in the Asia-Pacific are gradually getting back to normal operations following run cuts in the wake of the coronavirus outbreak.

A number of refineries in India reduced rates to as low as 35%-40% in the first half of April, with some taking units such as CDUs offline. With the lockdown eased, some refineries have increased their run rates to 85%-90% in June as demand rises, said sources.

Average capacity utilization for all categories of refineries in India rose to 77% in May from 72% a month earlier, according to the latest survey by the oil ministry. The run rate was 101% in the year-ago month. India's gasoline production recovered from a nine-year low in May. Indian refiners produced a total of 2.367 million mt of gasoline in May, 13.93% higher than the previous month.

--Indian Oil Corp., the country's largest state-run refiner, has reached a run rate of 85-90% for most of its nine stand-alone refineries, amid a wider improvement in retail fuel demand due to the gradual withdrawal of the COVID-19 lockdowns, company officials said on June 24. Earlier in the month, IOC reported a run rate of 80% after India entered a phase of restricted lockdown on June 1. "We are expecting around 100% run rate by the end of July," said IOC's director of refineries, S.M. Vaidya.

--India's Reliance Industries Ltd reduced run rates at its two refineries in Jamnagar to 91.7% in May from 94.8% in April and 95.4% in March, oil ministry officials said June 30, reflecting the COVID-19 lockdown effect. The domestic-focused refinery registered a 99% run rate in May, down from 103% in April and 107.5% in March, while the export focused plant ran at 85% in May, compared with 87% in April and 84% in March. The near-normal run rates at the Jamnagar complex contrast with seriously scaled-down operations at state-run refineries such as IOC, BPCL, and HPCL during the two and half months of the lockdown since March 25.

--India's Chennai Petroleum Corp. has been operating its Manali refinery at a 60% rate as retail demand for refined products improved with the gradual lifting of the COVID-19 lockdown, company officials said June 18. The southern refiner slashed its run rate to 30%-35% during the lockdown period by shutting two of the three crude distillation units.

--India's Mangalore Refinery and Petrochemicals Ltd. is running at 50% as diesel demand in the South Indian retail markets shows signs of picking up, company officials said June 17. During the lockdown period, MRPL shut its smallest 60,000 b/d capacity crude distillation unit, but operated the other two, with a combined capacity of 240,000 b/d, at reduced rates. "Demand for diesel has shown a pick-up in southern markets as the unlocking phase gathers momentum," said a refinery official. The refiner is currently producing 52,776 b/d of diesel. That compares with 87,960 b/d in the peak period before the lockdown.

--India's Hindustan Petroleum Corp. has been running its Mumbai refinery at an 85% run rate despite the nationwide lockdown. The company has been running its Vizag refinery at full capacity.

--India's Bharat Petroleum Corp. Ltd raised the operating rate at its Mumbai refinery to around 90% of capacity, from 75% end-May. In the initial phase of the lockdown, BPCL's average run rate was reduced to 65% of normal capacity. BPCL's portfolio of refineries includes two standalone refineries at Mumbai and Kochi, both on the country's west coast. It also runs two facilities at Bina in central India and Numaligarh in the northeast of the country as joint ventures. BPCL is tentatively aiming to start maintenance at a few units at the Mumbai refinery from July 11 for 25 to 30 days, after repeatedly postponing it since April 6. The delays were due to repeated extensions of the lockdown in Mumbai amid the spread of the coronavirus, which affected manpower for the work at the refinery.

--New Zealand's Refining NZ has shifted maintenance works at Marsden Point to March 2021, deferring the turnaround at the plant's crude distillation and gasoline producing units. The units were initially scheduled to shut some time in the second half of 2020.

--Caltex Australia's 109,000 b/d Lytton Refinery has shifted forward its scheduled turnaround.

--PetroVietnam's Binh Son Refining and Petrochemical has postponed maintenance at its refinery at Dung Quat for a second time, to August 12, that was originally scheduled to start June 12 and earlier postponed to July 27, due to the global COVID-19 pandemic delaying the arrival of expert workers and parts, BSR said.

--Pilipinas Shell Petroleum Corporation (PSPC) said it is extending the temporary shutdown at the Tabangao refinery in the Philippines "beyond the original advice of one month." The shutdown, which started from mid-May, was due to "the significant decline in demand for oil products and the significant deterioration of regional refining margins" following the COVID-19 pandemic, the company said in May. "We will continue to monitor the market conditions and will restart refinery operations as soon as it is economically viable," it said June 18.

--Sri Lankan state-owned Ceylon Petroleum Corporation has laid out forecasts for its refinery output for 2020 to 2022, with the company's 50,000 b/d Sapugaskanda refinery being expected to produce 1.72 million mt of oil products in 2020, 1.46 million mt in 2021 and 1.651 million mt in 2022, the company said in a statement. In 2021, the refinery is slated to undergo "a predicted full shutdown [that] is scheduled every two years generally," the company said in the statement. The exact period and duration of the turnaround has yet to be announced.

Meanwhile, Asian air passenger traffic faltered for the fourth consecutive month in May as air travel demand buckled under the pressure of the coronavirus pandemic, preliminary data released by the Association of Asia Pacific Airlines showed June 25. Asia Pacific airlines carried 785,000 international passengers in May, marking a 97.5% plunge year on year. The slump in demand, combined with a 92.5% fall in available seat capacity, led to a decline in the average international passenger load factor to just 28.40% in May from 78.80% a year earlier, AAPA added.

New and ongoing maintenance

New and revised entries

Asia-Pacific

-Sri Lankan Ceylon Petroleum Corporation's Sapugaskanda refinery in 2021 is slated to undergo "a predicted full shutdown [that] is scheduled every two years generally," the company said in the statement. The exact period and duration of the turnaround has yet to be announced.

--Petron Philippines has shut its Bataan refinery for around two months from the start of May, as the refiner grapples with poor refining margins brought about by tepid demand for refined oil products, industry sources told S&P Global Platts in the week started June 28. "[The refinery] is still in turnaround currently...it will be for approximately 2 months as they do maintenance work," said a source with direct knowledge of the plant's operations. "Petron was still buying for early July. Which makes it doubtful that the company had brought the refinery back thus far," one Singapore-based source said.

--In the Philippines, Pilipinas Shell Petroleum Corp. announced in a statement on June 18 that it was extending the temporary shutdown at the 110,000 b/d Tabangao refinery in the Philippines "beyond the original advice of one month."

--Australia's second largest refiner, Viva Energy, revised plans to start major maintenance work at a residual catalytic cracking unit at its Geelong refinery from early July, earlier and over a longer period to better manage COVID-19 risks, according to a statement. Preparations are underway for maintenance work to begin in early July, with completion targeted for November, the refiner said. It was initially slated to start maintenance in August, but a sharp fall in domestic demand for refined oil products as a result of the coronavirus pandemic, and subsequent movement restrictions, had prompted the company to review maintenance plans. "We have decided to commence our major maintenance program while units are already shutdown and refining conditions are weak, and carry out the works over a longer period of time so that we can better manage the COVID-19 risks," CEO Scott Wyatt said in the statement. At the end of April, the refiner had idled its RCCU unit together with the smaller of the crude distillation units, leaving the refinery to operate in "hydroskimming mode," S&P Global Platts reported earlier.

--Shell's Pulau Bukom refinery has restarted after completing a scheduled maintenance, market sources with knowledge of the matter said June 17. Current operating rates at the refinery could not be confirmed. The turnaround was said to have lasted from mid-April through May.

India

--India's Bharat Petroleum Corp. Ltd. is tentatively aiming to start maintenance at a few units at the Mumbai refinery from July 11 for 25 to 30 days, after repeatedly postponing it since April 6. The delays were due to repeated extensions of the lockdown in Mumbai. The units involved in the turnaround are a 10,000 mt/day diesel hydrotreater, 1,500 mt/day isomerization unit and 5,000 mt/day aromatics extraction unit.

--India's Bharat Petroleum Corp. Ltd. Kochi refinery's FCC was shut for maintenance the week ended June 19, with more units like the 10 million mt/year crude distillation unit also likely to go into turnaround in the first week of July, for about 20 days.

--India's IOC's Paradip refinery plans to start a total two-week shutdown around the third week of August for maintenance. Originally, the maintenance shutdown was scheduled to start at the end of July and last 15 days. This will be a regular maintenance shutdown for routine inspection that is due every three years. Paradip has a single crude distillation unit. The rescheduling factored in the level of lockdown imposed to counter the coronavirus pandemic.

--India's Bharat Oman Refineries Limited plans to shut its 17,000 b/d continuous catalytic reformer at Bina at the end of June or in July, company officials said. A partial shutdown has been planned for two to three weeks for maintenance. The crude units and hydrotreaters would be shut down to meet statutory inspection requirements, an official said. The shutdown of the CCR unit will disrupt operations at the plant's crude distillation unit and prevent the refinery from raising run rates over the turnaround period. The refinery is now running at 75%-80% as economic activity picks up as the lockdown is gradually eased.

Existing entries

Asia-Pacific

--South Korean refiner SK Energy plans to restart its 70,000 b/d RFCC at Ulsan refinery early-July after the unit was shut in mid-May due to turnaround. The restart will enable the company to capitalize on improved gasoil margins.

--Vietnam's Nghi Son is carrying out maintenance at its residue hydrodesulphurization (RHDS) units, a source with operator Nghi Son Refinery and Petrochemical said June 12. Production at other units of the refinery is not affected. The maintenance, including changing catalyst at the RHDS units, began with the first unit in early May. The maintenance work at the unit has already completed after about four weeks. After the first unit could operate as normal, the second unit was shut down for maintenance. Work is now under way at the second unit with an aim to complete in July, the source said.

--South Korea's S-Oil Corp shut its 76,000 b/d residue fluid catalytic cracker June 4 for two months of planned maintenance, a company source said. The high-severity residue fluid catalytic cracker (HS-RFCC) has a propylene output capacity of 660,000 mt/year. S-Oil Corp plans to shut its 90,000 b/d No. 1 CDU for several weeks of maintenance in the second and third quarter of this year.

--New Zealand's Refining NZ has shifted maintenance works at Marsden Point to March 2021, deferring the turnaround at the plant's crude distillation and gasoline producing units. The units were initially scheduled to shut some time in the second half of 2020, but restrictions on movement to contain the coronavirus pandemic have forced the company to review turnaround plans. In addition to postponing its major turnaround, the refinery also intends to place several processing units on standby in July and August to enable its domestic inventories to rebalance.

--South Korea's SK Energy shut its 260,000 b/d No. 5 crude distillation unit and 64,000 b/d No. 1 residue fluid catalytic cracker for maintenance for several weeks over May-June, an official said, adding: "With the shutdown of No. 5 CDU we will cut 150,000 b/d of crude runs in the second quarter compared with the first quarter, to cope with the falling refining margins." SK Energy has delayed full operation at its newly built 40,000 b/d desulfurization unit due to "deterioration in market conditions" in the wake of the coronavirus pandemic. The refiner completed mechanical construction of the vacuum residue desulfurization, or VRDS, unit on January 31, three months ahead of original schedule, to supply IMO 2020 low sulfur marine fuels to the market. The company previously aimed to start commercial production by the end of March.

--Taiwan's CPC corporation idled its 200,000 b/d crude distillation unit and 70,000 b/d residue desulfurization unit at the Taoyuan refinery from end-May to early July for annual maintenance.

--Caltex Australia has commenced extended scheduled works at its Lytton Refinery in mid-May. The turnaround was originally scheduled for an August start-date, but due to "weak refiner margins [that] are creating operating cash flow challenges at Lytton," works at the plant was brought forward, the company said in a statement previously. The company had also decided to extend works at the Lytton plant until a time when "when margin conditions have sufficiently recovered."

--PetroVietnam's Binh Son Refining and Petrochemical has postponed maintenance at its refinery at Dung Quat for a second time, to August 12, that was originally scheduled to start June 12 and earlier postposed to July 27, due to the global COVID-19 pandemic delaying the arrival of expert workers and parts, BSR said.

Upgrades

Existing entries

--Indonesia's Pertamina is planning to build a petrochemical plant at its Balongan refinery in West Java and will cooperate in the project with Taiwan's CPC. The project is expected to be completed in 2026 and once it is on stream Indonesia will reduce imports of petrochemical products. Pertamina will build the project in three phases. The first phase is to increase refining capacity from to 150,000 b/d by 2022 from 125,000 b/d currently. The second and third phase will increase the product yield from the refinery, including from the new petrochemical plant. Under the plan, Pertamina and CPC will build a naphtha cracker that is expected to substitute imports. The naphtha cracker will produce at least 1 million mt/year of ethylene. Pertamina is also cooperating with Abu Dhabi National Oil Company (ADNOC) in the Balongan refinery project.

--Indonesia's Pertamina will go ahead and revamp its Cilacap refinery without Saudi Aramco, raising capacity from 348,000 b/d to 370,000 b/d, a company spokesperson said. The company had signed a heads of agreement on the revamp project in November 2015 with the Saudi oil major, but Aramco did not accept the figure that Pertamina had given on asset valuation, S&P Global Platts has reported. Pertamina now plans to find other partners to work on the project, Fajriyah Usman said. Originally the project was expected to be completed in 2022 but now it may be delayed to 2023, she added. After the project is completed, Pertamina will be able to produce an additional 80,000 b/d of gasoline, 60,000 b/d of diesel and 40,000 b/d of jet fuel from Cilacap. The project includes increasing the crude distillation unit's capacity; raising the residual fluid catalytic cracking unit's capacity from 62,000 b/d to 81,000 b/d and adding a new 43,000 b/d hydro cracking unit.

--SK Energy has delayed full operation at its newly built 40,000 b/d desulfurization unit due to "deterioration in market conditions" in the wake of the coronavirus pandemic. The refiner completed mechanical construction of the vacuum residue desulfurization, or VRDS, unit on January 31, three months ahead of original schedule, to supply IMO 2020 low sulfur marine fuels to the market. The company previously aimed to start commercial production by the end of March.

--HPCL's $3.2 billion project to expand Vizag's capacity to 300,000 b/d is in advance stage of completion, company officials said. Originally, the expansion project was scheduled for completion in July 2020. But officials did not provide any specific timeframe for the completion of the project. The project aims to install primary processing units such as a CDU, replacing one of the three existing CDUs, a hydrocracker, and a naphtha isomerization unit.

--Pakistan's Byco Petroleum Pakistan on its website said it plans to build an aromatics plant with a capacity of 27,300 b/d to produce benzene, mixed xylene, paraxylene, orthoxylene, C9 and raffinate.

--Hyundai Engineering has won a $2.17 billion deal to upgrade the Balikpapan refinery in Indonesia. Hyundai Engineering will "be responsible for the engineering, procurement and construction for the facility upgrade", which would take 53 months for completion and increase the refinery's capacity from 260,000 b/d to 360,000 b/d. Completion was expected in 2023. Separately, Indonesia's Pertamina and Mubadala signed a Refinery Investment Principle Agreement to evaluate any possibility to cooperate in processing sector, including to accelerate Pertamina's Balikpapan project that is expected to require about $5.5 billion of investment.

--IOC's refinery in the western state Gujarat will have the largest capacity among its portfolio of refineries by 2022-23, company officials said. IOC plans to raise the capacity of the Gujarat refinery to 360,000 b/d by March 2023 from the current 275,000 b/d.

--IOC plans to expand the atmospheric and vacuum unit at its Barauni refinery to boost its overall capacity to 9 million mt/year by 2021.

--At Thailand's Bangchak Petroleum an expansion plan is under way to ramp up the 120,000 b/d refinery's production capacity to 140,000 b/d in 2020, through installation of a continuous catalyst regeneration unit. Under the expansion plan, the company will also debottleneck the hydrocracker, which could expand the refinery's production capacity by 10%.

--Saudi Aramco and S-Oil signed a memorandum of understanding to collaborate on a $6 billion steam cracker and olefin downstream project at Onsan due for completion in 2024, which will produce ethylene and other basic chemicals from naphtha and off-gas.

--ExxonMobil announced a final investment decision at its Singapore complex. The project includes an expansion aimed at converting "fuel oil and other bottom-of-the-barrel crude products into higher-value lube base stocks and distillates." Start-up is set for 2023. The expansion will add capacity to increase cleaner fuels output with lower sulfur content by 48,000 b/d.

--Reliance Industries Ltd. has received clearance to raise the capacity of its export-oriented Jamnagar refinery on the west coast of India by 17% to 41 million mt (820,000 b/d). By 2030, RIL aims to raise its total refining capacity -- including its domestic-focused refinery -- at Jamnagar to 98.2 million mt/year. Reliance currently is 1.37 million b/d, of it 707,000 b/d for the export and 660,000 b/d domestic. The export one will increase capacity to 820,000 b/d. By 2030, it aims to raise its overall capacity to 1.96 million b/d.

--India's IOC plans to raise the capacity of its Panipat refinery to 25 million mt/year by 2021 to meet growing demand for oil products. The refinery's capacity is 15 million mt/year.

--India's cabinet has approved a project to expand the capacity of the Numaligarh refinery to 9 million mt/year from 3 million mt/year.

--Nayara Energy is seeking the renewal of environmental approval to double capacity at its Vadinar refinery as the previous approval had been given to Essar Oil. It had planned to double the refining capacity at Vadinar to 40 million mt/year.

--Petron plans to expand and upgrade its Bataan refinery in Limay, increasing its capacity by 55% to produce 75,000 b/d of refined products and 1 million mt/year of aromatics. There was no timeline for when the expansion will take place. The refinery's capacity will be increased by 100,000 b/d of condensates and light crude oils, from current capacity of 180,000 b/d.

--IOC has signed up energy technology and infrastructure solutions provider CB&I for a residue upgrading unit at its Mathura refinery in north India.

--India's IOC is exploring an option to build a petroleum coke gasification plant at its Paradip refinery on India's east coast. IOC's $2.3 billion expansion project for the refinery to raise its overall capacity to 18 million mt/year from 13.7 million mt/year by 2020 is on schedule.

--The Philippines' Petron Corp. has been considering a plan to more than double capacity at its 88,000 b/d Port Dickson refinery in Malaysia by 2020 to 178,000 b/d.

Launches

Existing entries

--Indonesia's Pertamina decided to postpone the construction of a proposed 300,000 b/d Bontang refinery in East Kalimantan, a senior official said. "Bontang is still on the list, but currently we are focusing on the existing ones," Pertamina's mega project refinery and petrochemical director Ignatius Tallulembang said, adding that upgrading the existing refineries is "our priority". Ignatius Tallulembang said that the construction has been going on "but our partner stopped. So we hold the project while we are assessing more detail on oil supply and demand. If everything is clear, we will discuss again with our stake holders." The proposed refinery is targeted to produce at least 60,000 b/d of gasoline and 124,000 b/d of diesel and the products will meet Euro IV specifications, with Pertamina prioritizing domestic marketing first.

--Malaysia's Pengerang Refining and Petrochemical, also known as PRefChem or RAPID, plans to restart its fire-hit refinery in the southern state of Johor in September, following which, operations at the integrated petrochemical complex will resume, sources with direct knowledge of the matter told S&P Global Platts on June 1. The refinery was shut on March 15 due to an explosion at a diesel hydrotreater unit, which led to five fatalities, Platts earlier reported. The resulting feedstock disruption led to the shutdown of its naphtha-fed steam cracker and downstream petrochemical plants. This was the second major incident at the Pengerang Integrated Complex since it was started up last year. In April 2019, an explosion and fire occurred at the atmospheric residue desulfurization unit, when the refinery was in the commissioning stage. The refinery is integrated with a petrochemical complex.

--A Rosneft and Pertamina joint venture has signed a contract with Spanish Tecnicas Reunidas to design the construction of an oil refinery and petrochemical complex in Tuban, Indonesia, Rosneft said. Commissioning of the plant in East Java is expected within the next five years. Primary processing design capacity is planned at up to 15 million mt/year, planned capacity at the petrochemical complex includes more than 1 million mt/year for ethylene and 1.3 million mt/year for aromatic hydrocarbons.

--Sri Lanka has approved a $20 billion refinery project at the port town of Hambantota. The announcement follows the inauguration of a smaller refinery complex at the port, which has backing from the Oman Oil Company.

--Mongolia's first refinery is expected to reach full capacity by 2026, the facility's top official said, implying a lagged increase in the plant's run rate after completion of construction works in 2022. "We expect to achieve 70% of the installed capacity by 2024," Mongol Refinery Executive Director Altantsetseg Dashdavaa told S&P Global Platts.

--Iran remains open to investing in a planned expansion project by Chennai Petroleum Corp Ltd to set up a 180,000 b/d refinery at Cauvery Basin at Nagapattinam, in the southern Indian state of Tamil Nadhu, Indian oil ministry officials said. IOC holds a 51.9% share in CPCL, while NIOC holds 15.4% through Swiss subsidiary Naftiran Intertrade.

--India's proposed new 1.2 million b/d refinery on the west coast will be commissioned in 2025, oil ministry officials said. The refinery will now be built in the Raigad district, around 100 km from Mumbai. An official at Ratnagiri Refinery & Petrochemicals Ltd. (RRPCL) said construction of the refinery complex would start in 2020.

--Global trader Vitol is looking to build a 30,000 b/d refinery in southern Malaysia's Johor state. The project involves a simple refinery to be built at Tanjung Bin at VTTI's ATB tank farm. ATB, or ATT Tanjung Bin Sdn Bhd, is a terminal 100% owned by VTTI. Vitol co-owns VTTI.

--Haldia Petrochemicals Ltd's proposal to invest $4.05 billion in an integrated refinery and petrochemicals facility in Balasore, India, has been granted approval by the Odisha government.

--Pakistan and Saudi Arabia are in talks to develop a 200,000-300,000 b/d refinery in Balochistan's Gwadar district for $10 billion.

--A new HPCL project in Barmer, India, is due for completion by March 2023.

--India's big refinery project in Maharashtra, being developed by state-owned IOC, HPCL and BPCL, will start up around 2022-23.