REFINERY NEWS ROUNDUP: Some plants in Asia-Pacific considering halts

London — A number of refineries in Asia-Pacific are either halting operations or considering shutdowns given the uncertain outlook, including the Philippines' Tabangao, Australia's Geelong and New Zealand's Marsden Point.

Meanwhile some refineries in India reduced runs as lockdowns were reimposed but others are ramping up throughput.

** Indian Oil Corp., the country's largest state-run refiner, reduced the run rate to 75% at its nine refineries as many states reimposed lockdowns to combat the spread of the coronavirus pandemic, company officials said July 31.

** BPCL is currently running its Mumbai refinery at 60%-70% of capacity, and plans to keep operations steady at this level through August. Operations are steady to slightly lower by 5%-10% from July, when the refinery was running at around 70% of capacity.

** India's Bharat Petroleum Corp. plans to gradually raise operations at Kochi to 80% of capacity later in August to maximize gasoline production, in a bid to meet strong domestic gasoline demand.

** Chennai Petroleum Corporation Ltd is running its Manali refinery at 75% as retail demand for oil products has improved with the unlocking of the local economy in and around the southern state of Tamil Nadu, company officials said Aug. 18. In April-June, the first quarter of the current fiscal year, the refinery ran at half of its capacity to adjust to lower retail demand for oil products due to the lockdown. The refinery has been gradually raising its runs as the economy unlocks.

** Numaligarh Refinery Ltd was operating at 90% as retail fuel demand has picked up with the unlocking of the economy in Northeast India, company officials said Aug. 19.

** India's MRPL was running at 70% as diesel demand in south Indian retail markets has picked up with the unlocking of the economy, company officials said Aug 19. The refinery's run was halved in the lockdown period of 2-1/2 months from March 25. During the lockdown period, MRPL shut its smallest 60,000 b/d capacity Crude Distillation Unit, and operated the other two units, with a combined capacity of 240,000 b/d, at reduced rates. The status of CDUs remained almost the same, an official said.

** South Korea's SK Energy's Ulsan crude run rate fell to 77% in Q2, the lowest on record and down from 90% a year earlier and 92% in Q1. "The company plans to raise crude throughput in a gradual manner in the third and fourth quarters as refining margins are likely to improve," an official said. "We expect the company's crude run rate in Q3 to be around 80-85%," he added.

** SK Energy's refining affiliate SK Incheon Petroleum, which runs two CDUs with a combined 275,000 b/d of capacity and a 100,000 b/d condensate splitter at Incheon on the west coast, will not reduce its run rate in Q3 because it is already low, the official said. SK Incheon's crude run rate averaged at 76% in Q2, down from 84% a year earlier and 80% in Q1.

** Ampol, formerly Caltex Australia, is eyeing end-August as the potential restart of its Lytton Refinery, after the facility was idled for scheduled maintenance in mid-May, industry sources with close knowledge of the matter told S&P Global Platts. A restart at end-August will bring to close four months of maintenance, which had been brought forward from the original August restart date, due to poor operating conditions earlier in the year, Platts previously reported.

** Pilipinas Shell Petroleum Corporation (PSPC) said July 29 its Tabangao refinery in the Philippines remains in "economic shutdown" and the company continues "to monitor the market conditions and will restart refinery operations as soon as it is economically viable." 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.

** Pilipinas Shell Petroleum Corp. will be shutting down its Tabangao refinery, transforming the facility into an import terminal, the company said in a statement released on its website Aug. 13. The refinery has been shut since May 24, having been idled due to weak domestic product demand.

** New Zealand's Refining NZ is committed to transitioning its Marsden Point refinery into an oil product import terminal and will maintain low operating rates throughout 2020 in anticipation of prolonged weak refining margins, the company said in an first half-year earnings release Aug. 17. "The company is now developing plans to simplify refinery operations and structurally reduce operating costs, making the business robust to an extended period of low-margins," the company said in a statement. "Simplification of our refinery creates the time and optionality to continue refining operations in the near term while we assess the potential option to transition to an import terminal in the future," Refining NZ's CEO Naomi James said in the statement. The move comes amid persistently low oil product demand. The Marsden Point refinery's throughput was down 27% year on year in H1, with 15.4 million barrels of crude processed. New Zealand's Refining NZ has lowered crude throughput at Marsden Point to around 55% and is expected to keep run rates at lowered levels until October, the company said previously. Reduction of refining output also comes as some processing units were put on standby in early July, and will remain shut until mid-August, to allow for the company to "balance fuel supply across the country."

** Future operations at Australia's Geelong refinery have been questioned, as the long term viability of the plant's operations continues to remain uncertain amid prolonged pressure stemming from the coronavirus. The large loss made by the refinery in H12020 came as the coronavirus pandemic swept across the world, with Australia having undergone lockdown measures in Q1 2020 to curb the spread the coronavirus. "Viva Energy is working closely with government... we acknowledge that these operating losses are unsustainable and we are continually assessing both the short and long term viability of this part of our business," Viva Energy CEO Scott Wyatt said in a statement Aug. 17.

** Vietnam's oil product imports rose 6.7% year on year to 1.11 million mt in July, but edged down 1.2% from June, preliminary Vietnam Customs data released Aug.12 showed. A surge in imports of gasoline and diesel on a year-on-year basis outpaced the decline in fuel oil and jet fuel imports in the month, the data showed. The overall increase in imports in July came ahead of planned maintenance at the country's 130,000 b/d refinery at Dung Quat over Aug. 12-Oct. 1.

** Indonesia's gasoline imports in June rebounded sharply by 25.88%, month on month, to total 7.464 million barrels as the easing of lockdown measures domestically helped to boost driving activity in Southeast Asia's largest buyer of gasoline, latest detailed figures from Statistics Indonesia showed. The bulk of the rebound was focused on gasoline of lower-octane grades, which jumped 45.19% from the previous month, while grades between 92 RON and 97 RON slid by a marginal 4.02% on month, the data also showed.

NEW AND ONGOING MAINTENANCE

UPGRADES

LAUNCHES

New and ongoing maintenance

New and revised entries

Asia-Pacific

** Taiwan's state-owned CPC will be restarting its 70,000 b/d residue desulfurization unit at Taoyuan around the fourth week of August, with the unit having been shut since end-May, sources with close knowledge of the refinery operations told S&P Global Platts. "The [RDS] unit will be up some time this week," one industry source said, further highlighting that operations at the 200,000 b/d plant is "as per normal" following the restart of the 200,000 b/d crude distillation unit in mid-July.

** South Korea's S-Oil Corp plans to shut its 57,000 b/d residue hydro-desulfurization unit at Onsan at the end of August until mid-September for turnaround. S-Oil Corp also plans to shut its 90,000 b/d No. 1 CDU at Onsan for several weeks of maintenance in the third quarter.

** Pilipinas Shell Petroleum Corp. will be shutting down its Tabangao refinery, transforming the facility into an import terminal, the company said in a statement released on its website Aug. 13. The refinery has been shut since May 24, having been idled due to weak domestic product demand.

** New Zealand's Refining NZ is committed to transitioning its Marsden Point refinery into an oil product import terminal and will maintain low operating rates throughout 2020 in anticipation of prolonged weak refining margins, the company said in an first half-year earnings release Aug. 17. "The company is now developing plans to simplify refinery operations and structurally reduce operating costs, making the business robust to an extended period of low-margins," the company said in a statement. "Simplification of our refinery creates the time and optionality to continue refining operations in the near term while we assess the potential option to transition to an import terminal in the future," Refining NZ's CEO Naomi James said in the statement. The move comes amid persistently low oil product demand. The Marsden Point refinery's throughput was down 27% year on year in H1, with 15.4 million barrels of crude processed. New Zealand's Refining NZ has lowered crude throughput at Marsden Point to around 55% and is expected to keep run rates at lowered levels until October, the company said previously. Reduction of refining output also comes as some processing units were put on standby in early July, and will remain shut until mid-August, to allow for the company to "balance fuel supply across the country."

** Future operations at Australia's Geelong refinery have been questioned, as the long term viability of the plant's operations continues to remain uncertain amid prolonged pressure stemming from the coronavirus. The large loss made by the refinery in H12020 came as the coronavirus pandemic swept across the world, with Australia having undergone lockdown measures in Q1 2020 to curb the spread the coronavirus. "Viva Energy is working closely with government... we acknowledge that these operating losses are unsustainable and we are continually assessing both the short and long term viability of this part of our business," Viva Energy CEO Scott Wyatt said in a statement Aug.17. 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 an earlier statement. Completion is targeted for November, the refiner said. It was initially slated to start maintenance in August.

** State-run PetroVietnam's Binh Son Refining and Petrochemical (BSR) on Aug. 12 began reducing capacity at the Dung Quat refinery for planned maintenance, a source at BSR said. Previously the shutdown process had been scheduled to begin on Aug. 10 but the plan has been adjusted due to human resource changes, the source said. Under the new plan, the entire refinery will be shut in two to three days so the maintenance work, which is scheduled to last until Oct. 1, can begin.

** Taiwan's Formosa Petrochemical's No. 2 residue desulfurization unit at Mailiao is unlikely to resume operations before year end after it was shut July 15 due to a fire, a company official said Aug. 12. "We have no clear idea when the unit will restart as the site is still closed by the government. We have not been able to identify how long it will take, but it is not within this year," the company official said. Following the shutdown of the RDS unit, the company also shut a nearby residual fluid catalytic cracking unit Aug. 10 for an extended period to undergo repair works, S&P Global Platts reported earlier.

Existing entries

India

** India's No. 2 refiner Bharat Petroleum Corp. has pushed the start date of its CCR maintenance at the Mumbai refinery to Aug. 8-10, from the original plan of the first week of August, a company source said.

** India's Reliance Industries Ltd. has taken one of its crude distillation unit at its integrated Jamnagar petrochemical complex offline for around one-month of maintenance works, according to industry sources with knowledge of the matter. The offline unit - which is one of the two CDUs at the export-oriented plant -- will undergo works from July 20 to August 18. The turnaround had initially been slated for October but has since been brought forward, said market sources.

Asia-Pacific

** South Korea's SK Energy plans to shut its 170,000 b/d No. 3 crude distillation at Ulsan for several weeks' maintenance in the fourth quarter, along with a 80,000 b/d No. 2 residue hydro-desulfurization unit, a company official said. SK Energy has five CDUs with a combined capacity of 840,000 b/d at its Ulsan complex.

** Ampol, formerly Caltex Australia, is eyeing end-August as the potential restart of its Lytton Refinery, after the facility was idled for scheduled maintenance in mid-May, industry sources with close knowledge of the matter told S&P Global Platts. A restart at end-August will bring to close four months of maintenance, which had been brought forward from the original August restart date, due to poor operating conditions earlier in the year, Platts previously reported. Australian demand for oil products has started to improve since these lockdown measures were eased in May.

** Sri Lankan Ceylon Petroleum Corp.'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 from the start of May, as the refiner grapples with poor refining margins brought about by tepid demand for refined oil products.

Upgrades

Existing entries

** Pakistan Refinery has issued shares in order to upgrade and expand the plant into a deep conversion refinery, according to market sources and company documents. The proceeds will be used to revamp units and increase the gasoline and diesel yield. Following the sale of shares, Pakistan State Oil, the state-run biggest retail supplier of motor gasoline and diesel, and the refinery's biggest shareholder, increased its share in the refinery to 63.56% from 60%, Pakistan State Oil said in a filing to Pakistan Stock Exchange on July 29. It bought 40% of the right shares that Pakistan Refinery issued. Banks, pension funds, the general public and Hascol Ltd. own the rest of the shares.

** 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, 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

New and revised entries

** Infrastructure for Mongolia's first refinery in Dornogobi (Dornogovi) has been completed with construction of the groundwork for the refinery's site underway, according to local media report. At a government meeting, the importance of completing the project on time has been highlighted. It is operated by the state owned Mongolian Oil Refinery. Negotiations with the company for an EPC contract have been completed and preparations are underway for signing the contract. A working group will be set to accelerate the completion of the project. Mongolia's first refinery is expected to reach full capacity by 2026, S&P Global Platts has previously reported.

Existing entries

** Malaysia's Pengerang Refining and Petrochemical, also known as PRefChem or RAPID, plans to delay the restart its fire-hit refinery in the southern state of Johor from September to early 2021, following which, operations at the integrated petrochemical complex will resume, sources with direct knowledge of the matter told S&P Global Platts. This was due to "economic reasons," a source close to the matter said. The restart had earlier been scheduled for September, with full commercial operations targeted for late 2020, Platts reported earlier. The refinery was shut March 15 due to an explosion at a diesel hydrotreater unit that led to five fatalities, Platts reported at the time. 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, which was started up in Q3 2019. In April 2019, there was an explosion and fire at the atmospheric residue desulfurization unit when the refinery was in the commissioning stage.

** 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.

** 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.

** 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.