REFINERY NEWS ROUNDUP: Closures remain on the cards in Asia-Pacific

Closures remain on the cards in Asia-Pacific as the conversion of New Zealand's Marsden Point refinery is approved by shareholders.

** New Zealand's Refining NZ is targeting transition of its Marsden Point refinery to a terminal by mid-2022 after 99% of shareholders voted in favor. The final investment decision will be taken by the board around the end of September. Marsden Point will be converted into an import-fuel terminal called Channel Infrastructure. The company said a change "from a refinery to an import-terminal comes in response to a significant decline in refining margins as a result of excess refining capacity in the Asian region".

** Shell was due to reduce the crude processing capacity at its Pulau Bukom refinery in Singapore by around 200,000 b/d in July. Last November, Shell said it was to nearly halve the capacity at Pulau Bukom as part of its initiative to reduce its CO2 emissions to net-zero by 2050. "Our Bukom refinery will move from a crude oil, fuels-based product slate towards new, low-carbon products," it said.

** Pilipinas Shell Petroleum Corp. said it has inaugurated "its world-class import terminal" in Tabangao after transforming the closed Tabangao refinery into a terminal. The refinery has been shut since May 2020, having been idled due to weak domestic product demand, and was permanently shut in August 2020.

** ExxonMobil Australia plans to shut its Altona refinery in Melbourne and convert it into a fuel import terminal. The refinery will remain in operation while transition work is undertaken.

** The Maritime Union of Australia said the federal government should nationalize BP's Kwinana oil refinery rather than allow it to be closed. BP Australia said last October it was planning to shut its Kwinana refinery and convert it into a fuel import terminal.

** Australia's Viva Energy welcomed the federal government's announcement of a Fuel Security Package and, as part of the package, would make a six-year commitment to maintain refining operations at Geelong through to June 2027 with a further three-year option to extend until June 2030. The company decided to avoid the closure of Geelong after taking up a payment lifeline extended by the government, which lasted from January-July. Refineries that took part in the grant, had to agree to maintain operations at least during the tenure of the program. The Fuel Security Service Payment started July 1 and will run until June 2027 by providing support at lower margins.

** Ampol, formally Caltex Australia, will continue refining operations at its Lytton refinery "subject to the government's refining support package being successfully legislated as proposed". However, Ampol also said it could convert the refinery to an import terminal "should the package not be successfully legislated or, in future, in the case of persistently low refinery margins or other adverse events".

Meanwhile, refineries in the region have started raising runs.

Indian Oil Corp., the country's largest state-run refiner, expects its refinery operations to run at full rates in November around the time of annual festival of lights, Diwali. The refiner moderated its overall run rate during the second wave of the coronavirus pandemic in the April-May period to adjust for the destruction of oil demand in the retail markets on partial lockdown measures. In early June, the refiner lowered its average run to around 85%. On July 31, the refiner operated at a run rate of around 90%, IOC Chairman Shrikant Madhav Vaidya said. Its nine refineries operated at 100% in March, 104% in April, 94% in May, and 94% in June.

South Korea's third-biggest refiner S-Oil Corp. raised its crude run rate at Onsan to an average 98.8% in the second quarter, compared with 94.4% in the previous quarter, a company official said July 27, noting the refiner will keep crude throughput high later this year to meet a potential rebound in demand for oil products. The Q2 crude run rate was lower than 99.8% in the same period in 2020. Its crude run rate averaged 96.1% for the full 2020 year, up from 95.4% in 2019, despite COVID-19. The refiner also raised the operating rate of residue fluid catalytic crackers to 103.9% in Q2, from 95.5% in Q1. "We have no plan for the maintenance of CDUs and upgraders in the second half as well and will keep crude throughput high to meet potential rebound," the company official said, noting spreads of both gasoline and diesel -- the company's main products -- have continued to rise thanks to the gradual recovery of demand amid the expansion of vaccinations. "S-Oil can maintain facilities' throughput up to maximum capacity and maximize profitability on the back of the newly-built residue upgrading complex to produce gasoline and propylene," the official said.

In other news, PetroVietnam's Binh Son Refining and Petrochemical (BSR) said it has tested two new crude grades for its refinery at Dung Quat -- Forcados from Nigeria and Bu Attifel from Libya -- as part of its strategy to diversify input and reduce dependence on the domestic Bach Ho field, which is aging. The latest testing, along with earlier tested crudes, will enable BSR to fulfill its target of raising the share of imported oil to 20% of the expected 7 million mt of crude for Dung Quat this year. In the first six months of the year, BSR has tested six new crude grades.

NEW AND ONGOING MAINTENANCE

UPGRADES

LAUNCHES

New and ongoing maintenance

New and revised entries

India

** India's Hindustan Petroleum Corp. Ltd.'s revamp plan for its Mumbai refinery is set to finish in August, a delay of over a month caused by the second wave of coronavirus pandemic in Asia's third-largest economy. The revamp will add 2 million mt/year (400,000 b/d) capacity, raising the total processing of the refinery on the west coast to 190,000 b/d. HPCL expected the start-up process to commence in the second half of August after the entire revamp program ends. Once the start-up process starts, the processing capacities would be gradually ramped up by synchronizing upgraded systems and wings of the refinery. "We expect a full run after two and a half months from the start-up process of the revamped units," HPCL managing director Mukesh Kumar Surana said. The revamp was originally scheduled for completion last year, but the plan has been a delayed by a year as a fall out of a national lockdown in 2020, coinciding the first wave of coronavirus pandemic.

Asia-Pacific

** Taiwan's Formosa Petrochemical has restarted its No. 2 residue desulfurization unit at the Mailiao refinery after one year of the unit having been shut. The RDS unit, which has a capacity of 80,500 b/d, began the process of restart in mid-July and is steadily ramping up operations. The restart had initially been slated for mid-June, but the company was awaiting the government's go-ahead following a safety inspection. The No. 2 RDS unit had been shut since July 15, 2020, due to a fire at the facility. Formosa operates two RDS units at its Mailiao refinery, both of which have a capacity of 80,500 b/d. The No. 1 RDS unit is scheduled to shut from Oct. 1 onward for a turnaround lasting 35 to 40 days.

** Vietnam's Nghi Son refinery will conduct maintenance at one of its two residue hydrodesulfurization units in August despite the ongoing coronavirus outbreak. Maintenance at the first RHDS unit, including changing the catalyst, was completed in April.

Existing entries

India

** India's Kochi refinery plans to carry out a maintenance shutdown program over September-October. There will be works at one of the crude distillation units and a continuous catalytic reforming unit. "The shutdown program is likely to be 3-4 weeks," one official said.

** Indian Oil Corp-owned refinery at Guwahati in the eastern state of Assam is undergoing a maintenance shutdown program. The shutdown, which started from the first week of May, was expected to continue until July.

Asia-Pacific

** Viva Energy, Australia's second-largest refiner, has delayed planned maintenance at its hydrofluoric acid alkylation unit at Geelong to 2021 from late 2020.

Upgrades

New and revised entries

** Pakistan Refinery Limited is considering two options to upgrade its refinery: either to acquire a pre-owned refinery or build a new refinery. The company had been in talks with the government about refinery policy, which will support upgrade projects and was expected to be announced soon. The company believes the new refinery policy will make the sector financially sustainable and the upgrades more economical. The company has to make commitments to the government by December for its upgrade plans and which option it will select. According to the company both options are possible, however acquiring a pre-owned refinery will be a cheaper option as it will cost 50% less than the cost of a new refinery. Tahir Abbas, head of research at Arif Habib Ltd., a Karachi based brokerage house, said that the if the company chooses to upgrade the current capacity of 50,000 b/d then the cost will be $800 million to $1 billion. Meanwhile, if the company increases the capacity to 100,000 b/d then cost would be around be $1.3 billion to $1.4 billion.

Existing entries

** Russian oil major Rosneft-owned Nayara Energy is moving ahead with an expansion plan for its Vadinar refinery in India after receiving environmental approval. Nayara's decision to more than double the capacity with a petrochemical complex will rest on prevailing market conditions even after approvals of the green authorities. It had planned to double the refining capacity at Vadinar to 40 million mt/y.

** Indian Oil Corp. is delaying a plan to expand capacity at its Panipat refinery in northern India from 300,000 b/d to 500,000 b/d until 2024. It had planned to carry out the expansion over 2020-21 but now expects to complete it by September 2024, amid the fallout from the coronavirus pandemic.

** India's HPCL aims to raise its existing capacity of 8.3 million mt/y at Vizag refinery to 15 million mt/y by fiscal year 2023-24 (April-March). The latest completion deadline for the expansion project has been delayed by at least four years, mainly due to the coronavirus pandemic. The expansion project involves installation of primary processing units such as a CDU, replacing one of the three existing CDUs, a hydrocracker, and a naphtha isomerization unit.

** Reliance Industries Ltd. has no investment commitment for any refinery capacity expansion plan at its Jamnagar integrated complex, company officials have said. Reliance has two refineries at the world's biggest refinery complex in Gujarat on India's west coast with a combined capacity of 68.2 million mt. "The board has not committed any funds for any refinery capacity expansion plan so far," one official said in June. Reliance has received environmental clearance for a capacity expansion proposal at its export-focused refinery from 35.2 million mt to 41 million mt. Reliance also applied for regulatory clearance for a capacity expansion proposal at its domestically focused refinery from a capacity of 33 million mt/y to 40.5 million mt. However, it aborted the proposal after marketing conditions changed.

** Petron Malaysia has been considering a plan to more than double capacity at its 88,000 b/d Port Dickson refinery in Malaysia to 178,000 b/d.

** Hengyi Industries has selected a flexicoking technology for a second time as part of its expansion project in Pulau Muara Besar. The Brunei refinery already started up a 1.1 million mt/y flexicoking unit at the end of 2019. Hengyi Industries has selected the technology for its new Phase II expansion project. The flexicoking unit, due for start-up in June 2024, will upgrade 2.1 million mt/y of vacuum residue, FCC slurry oil and steam cracker pyoil into valuable distillates and flexigas.

Separately, Hengyi Industries will use "advanced reforming and aromatics technologies" from Honeywell UOP for the integrated petrochemical complex in Puala Muara Besar, Brunei. The Brunei complex will include aromatics block consisting of CCR Platformer to convert naphtha into aromatics, as well as Light Desorbent Parex aromatics complex to recover high-purity paraxylene from mixed xylenes. The latter will produce up to 2.3 million mt/y of paraxylene. The complex will also include naphtha hydrotreater and Olefin Removal Process unit amid others. In addition, UOP is providing VGO Unicracking unit and Diesel Unicracking unit targeting maximum naphtha production. When the project is completed, Hengyi Industries will have the capacity to produce more 3.8 million mt/y of paraxylene. The first phase of the Pulau Muara Besar refinery envisages crude processing capacity of 8 million mt/y while in the second phase, the refinery will add 14 million mt/y of crude processing capacity, bringing overall capacity to 22 million mt/y.

** A $4-billion clean fuel project is being undertaken at Thailand's Sriracha refinery. The upgrade is slated to be completed in 2023 and will increase the refinery's capacity from 275,000 b/d to 400,000 b/d, boosting the yield of cleaner products.

** State-run Indian Oil Corp. has awarded an engineering, procurement, construction, and commissioning (EPCC) contract to Paris-based Technip for its expansion project at the Barauni refinery in the eastern state of Bihar. The contract involves the installation of a 1 million mt/y "once-through" hydrocracker unit (OHCU), a fuel gas treatment unit (FGTU) and associated facilities. The expansion project will increase its capacity by 50% to 180,000 b/d and add petrochemicals such as polypropylene to the product portfolio. The initial plan for the completion of the capacity project was scheduled for 2021. But the second wave of the coronavirus pandemic may result in this being rescheduled.

** India's Numaligarh Refinery Ltd., or NRL, will use global technology process supplier Honeywell's UOP technology to produce clean-burning diesel fuel in compliance with India's Euro 6 emissions standards and increase crude oil conversion. The refinery, located in the eastern state of Assam, is executing an expansion project to raise the processing capacity to 9 million mt by 2024.

Numaligarh Refinery Ltd. has also Axens to provide technical support and licensed technology for its planned expansion. Axens will provide technical support and license a naphtha hydrotreating unit, continuous catalytic reforming unit, isomerization, and fluid catalytic cracker. The company was aiming to complete the expansion project by 2025.

** The upgrade of Pakistan's Byco refinery (currently a process is underway to change its name to Cinergyco), which aims to enable it to convert fuel oil into gasoline and diesel meeting Euro 5 and Euro 6 specification, is planned to be completed in the next three years, the company said in a statement April 2021. The Upgrade-1 project consists of constructing 10 new units grouped into four categories. These include a vacuum distillation unit, a fluidized catalytic cracking unit, olefin-to-gasoline conversion units and hydro treating units and sulfur recovery units. Byco has started building the diesel hydro desulfurizing unit (DHDS) and the FCC.

** Pakistan's Attock Refinery has planned to install a hydrocracking facility. Attock Refinery is considering two upgrade projects, including the hydrocracker as well as a Continuous Catalyst Regeneration.

** Pakistan's National Refinery has issued shares to upgrade and expand the plant into a deep conversion refinery. The proceeds will be used to revamp units and increase the gasoline and diesel yield.

** Pertamina will start producing biodiesel at its Cilacap Refinery Unit IV in December. It will begin to produce around 3,000 b/d of D-100 bbm, with an increased production of an additional 6,000 b/d of combined D-100 bbm and B30 biodiesel blend set to come on stream from December 2022. Units are also being built at Plaju refinery for an additional 20,000 b/d in biofuel production. Pertamina will use Honeywell UOP technologies to produce advanced biofuels at Plaju and Cilacap.

** Indonesia's Pertamina started upgrade work at its Balongan refinery as part of Indonesia's Refinery Development Master Plan. The first phase of the RDMP project at the Balongan refinery kicked off with upgrade work at the facility's crude distillation unit, aimed at increasing the flexibility of the refinery's crude slate and raising the plant's refining capacity. The project is expected to be completed in 2026. 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. The RDMP project is also being carried out at other refineries across Indonesia, such as Pertamina's Cilacap, Balikpapan, Dumai and Plaju refineries. Works at the Balikpapan refinery have reached one third completion. Upon completion of the project, the Balikpapan facility's refining capacity will increase to 360,000 b/d from 260,000 b/d and it will be able to produce higher quality gasoline that meet Euro 5 standards. Completion was expected in 2023. Separately, Pertamina will go ahead and revamp its Cilacap refinery without Saudi Aramco, raising capacity from 348,000 b/d to 370,000 b/d. In May 2020, Pertamina and South Korean Consortium DH Global Holdings Co signed a memorandum of understanding for the upgrade of the Dumai refinery complex, with plans to increase the refinery's operating capacity.

** Indonesia's TPPI has laid out the next steps of its upgrading works at its Tuban refinery, setting 2024 as the target for the completion of its new Olefin Project. In addition, the Olefin project, TPPI will also continue its Aromatic Revamping project. The Olefin Project is slated for completion by 2024 while the Aromatic Revamping project will complete by 2022.

** Two separate consortiums have submitted bids for the engineering, procurement, and construction contract to build, upgrade and expand project of Dung Quat refinery in central Vietnam. The upgrade will raise the capacity of Dung Quat to 8.5 million mt/y from current 6.5 million mt/y.

** IOC-owned Bongaigaon refinery has plans to raise its annual capacity to 4.5 million mt.

** IOC's Haldia refinery will launch a second catalytic dew axing unit (CIDWU) with 270,000 mt/y capacity in 2023. The unit will produce advanced Group III Lubes Oil Base Stock (LOBS). The unit is expected to be commissioned in January 2023.

** IOC-owned Gujarat refinery's capacity expansion project is set to be over by Sept. 30, 2024, a delay of one-and-a-half years from the previous deadline. The delay is primarily a result of the coronavirus pandemic. The initial deadline was contemplated for 2020. The existing smaller capacity atmospheric unit and vacuum units will be replaced by a large atmospheric vacuum unit (AVU). The project also involves a revamp of the existing hydrogen generation unit, a new n-butanol processing unit and a revamp of the linear alkylbenzenes (LAB) unit. 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-owned Paradip refinery will install the first stage of a Grassroot Needle Coker Unit by using its own in-house technology. The proposed unit will have a Calcined Needle Coke, or CNC, production capacity of 56 kilotons/y. The company does not plan any expansion for its Paradip refinery, whose overall capacity is 15 million mt/y.

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

** French company Axens has been selected to provide technological support to Chennai Petroleum's 9 million mt/y Cauvery Basin Refinery project at Nagapattinam in Tamil Nadu. IOC approved a proposal for a grassroots refinery project of its subsidiary Chennai Petroleum Corp. Ltd., or CPCL, at Cauvery basin, known as the Cauvery Basin Refinery, or CBR. CPCL initially set up a refinery at the Cauvery basin in south India with a capacity of 500,000 mt/y in 1993, and later expanded the capacity to 1 million mt/y in 2002. Now, CPCL is expanding the capacity of CBR and as part of that, Axens will provide technologies for a Naphtha Hydrotreating Unit, Reforming unit (OctanizingTM), C5-C6 isomerization unit, and VGO (Vacuum Gasoil) Hydrotreater incorporating ZPJE spiraled tube heat exchangers technology.

** 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.

** 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." Startup is set for 2023.

** Petron plans to expand and upgrade its Bataan refinery in Limay. 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.

Launches

New and revised entries

** Malaysia's Pengerang Refining and Petrochemical (PRefChem) is planning to resume operations at its 750,000 mt/y MTBE plant at the RAPID refinery in August, according to sources. The refinery is gearing for a "full start-up in the second half of 2021", Petronas has said. The refinery, also known as RAPID, had delayed its restart several times, following a fire that broke out at the diesel unit in March 2020. The plant, part of the Pengerang Integrated Petroleum Complex at Johor in the south of the Malay peninsula, was launched in late 2019.

** Global trader Vitol's refinery in southern Malaysia's Johor state is in the final stage of construction. The refinery, whose construction started in 2019, is likely to be operational in Q4 2021.

Existing entries

** Flow Petroleum Ltd. (FPPL), a Pakistan-based oil marketing company, has signed an agreement with Al Ghurair Investments, a large investment group in UAE for the 100% ownership of a 120,000 b/day of refinery named Trans Asia Refinery. It will be set up on 200 acres of land leased from Port Qasim Authority, Karachi, Pakistan.

** India is committed to timely completion of Mongolia's maiden refinery project in Dornogobi (Dornogovi), oil ministry officials said. India has given a $1 billion loan towards construction of the project, with state-owned Mongol Refinery scheduled for completion in 2022. The refinery was expected to reach 70% of installed capacity by 2024 and run at maximum by 2026. It is operated by the state owned Mongolian Oil Refinery.

** India's proposed new 1.2 million b/d Ratnagiri refinery on the west coast is still facing delay due to "local issues". Construction at the site was expected to start in 2020 but there have been issues relating to land acquisition which had stalled the project. The location of the project has already moved once, from Ratnagiri district to Raigad district. The refinery is now expected to be commissioned in 2025, according to industry sources.

** Pak-Arab Oil Refinery Limited will start physical works on its coastal refinery in 2021, after almost 13 years of delays to the project. Following the start of the works, the refinery is expected to come online in 2025-2026.

** Indonesia's Pertamina decided to postpone the construction of a proposed 300,000 b/d Bontang refinery in East Kalimantan.

** 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. Primary processing design capacity is planned at up to 15 million mt/y, planned capacity at the petrochemical complex includes more than 1 million mt/y for ethylene and 1.3 million mt/y 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.

** 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.