REFINERY NEWS ROUNDUP: Maintenance under way in Europe, run cuts mulled

London — Seasonal refinery maintenance is under way in the Mediterranean and Northwest Europe, while refineries are either starting or considering run cuts as middle distillate margins sink to new record lows triggered by the demand threat of the COVID-19 virus.

Several trading sources told S&P Global Platts that refiners had no option but to cut runs to prepare for a sizeable loss in oil demand, notably in transport fuels like jet, bunker fuel and diesel. Demand destruction from the outbreak will be akin to the 2008-09 global financial crisis, and worse than the 2003 SARS epidemic, they said. Several European countries announced their first coronavirus cases, all of which were apparently linked to a growing outbreak in northern Italy. Austria, Croatia and Switzerland have all said their cases involved people who had been to Italy, which has become Europe's worst-affected country, with more than 500 cases and 14 deaths.

Meanwhile, Italian oil major Eni continues to operate its domestic refineries and power plants in northern Italy normally, a company spokesman said, despite sending home staff at its headquarters in Milan as local coronavirus cases mount. Eni operates two refineries in northern Italy, the Sannazzaro plant near Milan, and the Porto Marghera biorefinery near Venice.

Separately, Eni said in its Q4 results that refining throughput on its own account in Q4 was steady quarter-on-quarter at 5.5 million mt as "an upset at the Milazzo refinery, as well as the lower volumes processed at the Livorno refinery due to an unfavorable trading environment" were offset by the higher throughputs at Taranto and in Bayernoil following the restart of the topping unit at Vohburg. The restart of Milazzo units after maintenance during Q4 has been delayed, S&P Global Platts reported. According to sources, the units, which were taken offline in October, restarted around mid-January.

Hungary's MOL is planning to expand its petrochemical business as it looks to position itself for the energy transition, the company's executive vice president of downstream, Ferenc Horvath, told S&P Global Platts. "We do not see the double-digit increase every year in the fossil fuel demand like we have seen in the last 25-30 years and we are going into petrochemicals and chemicals where we were and we are in a very competitive position because besides our refineries we also have two petrochemical complexes," he said in an interview. Horvath said MOL is focused on expanding its petrochemical and chemical feedstock output and reducing its exposure to fossil fuels. The main priority for MOL's refining businesses is to convert more fossil fuels from its refineries into petrochemical feedstock, and take advantage of it being an integrated oil company. Horvath, however, said utilization rates at its refinery in Szazhalombatta, Hungary and its plant in Bratislava, Slovakia, will continue to be at maximum levels.

Greek refiner Hellenic said that its Q4 results were "satisfactory considering increased international refining environment volatility" which deteriorated significantly "for most" of Q4. Its results have also been impacted by a five-week turnaround at Elefsis for its regular three-year maintenance, which was completed in October. But "improved operation following start-up and better performance in other business units offset the negative impact of reduced production and sales during the turnaround period," Hellenic said in its Q4 report. At the end of November, Aspropyrgos "completed the transition to its new IMO operating model" by supplying the Greek bunkering hubs with "low sulfur high quality marine fuels." Sales of IMO compliant fuels amounted to 85,000 mt. VLSFO sales accounted for 55% of all marine sales in December.

Romania's Rompetrol processed 6.33 million mt in 2019, marking "a historical record," the company said in its Q4 results. It processed 5.925 million mt in 2018. Vega also processed a record amount of feedstock -- 436,000 mt, up from 406,000 mt in 2018. Rompetrol operates Petromidia, the specialty Vega site, a bitumen, hexane and solvents producer, and a petrochemical division, which is the only polypropylene and polyethylene producer in Romania.

PKN Orlen, Poland's largest refiner, said the European Commission has resumed formal negotiations over its planed acquisition of smaller domestic rival Grupa Lotos. Last September, the EC issued a "stop the clock" procedure, suspending negotiations to give PKN more time to gather additional documents to support its case for the merger. "We submitted all the documents the European Commission expected. We hope that, in line with our expectations, the final decision on the takeover of Lotos by PKN Orlen will be issued by the end of the first half of this year," PKN CEO Daniel Obajtek said in a statement.

NEW AND ONGOING MAINTENANCE, UPGRADES

FUTURE

UPGRADES

LAUNCHES

NEAR TERM

NEW AND REVISED ENTRIES

--Lukoil's Neftochim refinery in Burgas, Bulgaria, is planning partial works in March, according to trading sources and company tender documents. The refinery is planning a major turnaround in 2021. The refinery typically carries out works around February-March.

--Greek refiner Hellenic will carry out works on its Aspropyrgos refinery in 2020, it said during a conference call. In 2019, the Elefsis refinery completed five weeks of maintenance, which is carried out every three years. The refinery was back in early November.

--France's Donges is operating normally after restarting last week, a source close to the refinery said. The refinery reported the restart at the end of last week, without specifying the unit. A crude distillation unit had been offline since early February due to a fault, according to sources close to the plant.

--Germany's Ingolstadt started halting units gradually Saturday for maintenance planned from March 10-21, the company said. The main focus of the turnaround will be an inspection of the hydrogen system. Additional heat exchangers will also be installed as part of the district heating cooperation with an overall inspection of all units also planned.

--Turkey's Izmir refinery in Aliaga has reduced its buying of Siberian Light crude for March processing, trading sources said. The company declined to comment. In its latest financial report, Tupras said that work on the crude unit, which started late last year, was set to continue for six weeks into Q1.Separately, the refinery plans works on the continuous catalytic reformer for three weeks in Q1 and seven weeks in Q4, on the FCC unit for six weeks in Q1, on the isomerization unit for eight weeks in Q4 and on the MQD diesel desulfurization unit for seven weeks in Q4. Tupras said in an investor presentation that three of its four refineries are planning works over the course of 2020. Work on the crude oil and vacuum unit at Batman is set to last five weeks over Q1 and Q2 and work on the desulfurizer at Izmit will last seven weeks over the fourth quarter.

--The Falconara refinery, located in the Adriatic coastal town of Falconara Marittima, will restart next week after a more than 40-day maintenance outage, a source close to the refinery said. There has been no impact from the spread of COVID-19 on the plant's turnaround program, the source added. The maintenance involved work on all of the refinery's main units as part of the facility's usual five-year turnaround plan. Falconara Marittima, API's core asset, is a small-scale thermal cracking refinery with some hydrocracking capacity.

--Italy's Sarroch refinery in Sardinia will carry out heavy maintenance in March which will last at least a month and involve the fluid catalytic cracker and the topping unit. Exports of ultra low sulfur diesel will be little impacted thanks to the use of the desulfurization unit. The refinery had been planning large-scale works in early 2020 including upgrades to its T2 and V2 units, sources had said previously.

EXISTING ENTRIES

--Petroineos' Lavera refinery in France will undergo maintenance in March, trading sources said.

--French Feyzin started works for seven weeks from February 14, according to a company statement. All units were set to be cleaned and inspected.

--Petronor said it was taking its 2 million mt/year CK6 coker and associated units at its Bilbao refinery in Spain offline for maintenance in late February. It did not provide a restart date.

--Croatia's Rijeka refinery is currently undergoing partial works, according to market sources. As a result the refinery has not been issuing tenders recently, said sources. The plant's operator, Hungary's MOL, said in its fourth-quarter earnings presentation it was planning only small-scale maintenance across its refineries in the rest of 2020, once an ongoing turnaround at its Rijeka refinery is completed before the end of the first quarter.

--The hydrocracker at France's Gonfreville was halted, resulting in lower demand for VGO, according to traders. Meanwhile, the CDU at the plant, near Le Havre, is likely to remain offline for at least two months following a fire at a pump feeding crude into the distillation unit in mid-December, according to sources.

--Shell's Pernis refinery in the Netherlands is preparing for a major turnaround that will include several units. Works will start May 4 and last through May and June. The works, preparation for which has taken a year, will mean the site will not to have to undergo maintenance for another three to six years. Pernis -- the largest refinery in Europe, with around 60 units including two CDUs -- carried out major works on 13 units last February and March.

--Germany's Bayernoil will carry out works at its Neustadt site in March. The works are set to last between March 2 and April 6, the company said. Gradual shutdown is due to start from February 25. Start-up operations are planned to start from March 26. Bayernoil consists of the Vohburg and Neustadt sites, which are closely interconnected. The refinery was taken offline for several months following an explosion at a unit at the Vohburg site and a subsequent fire on September 1, 2018. The Vohburg plant restart lasted between May and November 2019.

--Portugal's Galp Energia has started work on its Sines refinery aimed at helping the company reach its target of $1/b in extra margin by the end of the first half of 2020 when work is concluded, CEO Carlos Gomes da Silva said. The Sines refinery has scheduled regular maintenance activity for the first half of 2020 at its 43,000 b/d hydrocracker unit, which should last for 40-50 days, the company previously said.

--Planned maintenance is currently underway on several units at the Fawley refinery and the petrochemical site near Southampton, the company said. Works began on February 8 and are due to be completed in March.

--Finland's Neste will carry out a major turnaround in Porvoo in the second quarter set to last approximately 11 weeks. The maintenance "is estimated to have a negative impact on comparable operating profit", it said.

--Italy's Sannazzaro was expected to carry out works on an FCC unit in March, according to sources. Also in March the refinery EST unit is likely to return to full operations. The refinery has completed works that were being carried out on its Eni slurry technology unit, which was placed offline after damage. Repair works on two EST plant units that were damaged by the fire have been ongoing since the fire in 2016 and have now been completed, a source said.

--Russian energy group Lukoil's ISAB refinery in Sicily will carry out maintenance in the March-April period, a source said. ISAB has in recent months been undergoing preparatory works at its Southern plant ahead of a planned turnaround that had been expected to start towards the end of 2019. The planned work was scheduled to last 6-7 weeks, and would involve a series of activities including testing and upgrade of the refinery control and management instruments and the substitution of damaged or obsolete equipment and pipelines. The ISAB plant is made up of two refineries connected by a pipeline. The north and south plants operate as a single refinery after the two separate units were integrated in 2007.

--Spain's Castellon has two planned maintenance periods during 2020. The first, scheduled for May will last two to three weeks and affect two distillation units, the Powerformer 1 and the HVN, the company said. In November, a second maintenance is scheduled for two to three weeks, affecting one conversion unit (treatment plant) and the 1.4 million mt/year coker. A decarbonization program through to 2022 should see a reduction in carbon intensity of 25% compared with 2013 levels.

--Repsol's Coruna started a programmed halt in early January that will run to the end of March and will include the finalization of three CO2 emission reduction projects at the 1.7 million cu m/yr fluid catalytic cracker, among other work. Repsol will invest Eur64 million in the work. The work will mean halting six of the refinery's conversion units one by one. The projects will allow fuel savings and a CO2 reduction of 18,000 mt per year, Repsol said. Project G-52 will be directed towards energy efficiency and CO2 reduction, while G-53 will reduce the atmospheric particle emissions from the unit. At the same time, project G-54 will involve the installation of a new compressor in the gas recovery unit and the substitution of steam turbines for electric motors in both that unit and the FCC.

--Gunvor has halted CDU1 at its Gunvor Petroleum Rotterdam refinery for economic reasons and also to prepare for an upcoming turnaround in March. The shutdown of the unit will not affect other units at the plant. The refinery has a 38,000 b/d and 50,000 b/d CDU units. The company said that following the turnaround "we will be building on synergies between our Rotterdam and Antwerp refineries to produce LSVGO."

--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

--Germany's Mineraloelraffinerie Oberrhein (Miro) will carry out a major turnaround in 2021. It will invest Eur300 million ($332.6 million), with two-thirds going on new projects and a third for upgrading the existing plants during the turnaround. Last year, the refinery ran at 81.5% utilization due to planned and unplanned maintenance.

EXISTING ENTRIES

--Lukoil's Neftochim refinery in Burgas, Bulgaria, is planning a major turnaround in 2021, according to tender documents issued by the company. The refinery typically carries out works around February-March.

--Two months of maintenance at the Sarpom refinery in Trecate, Italy, originally scheduled for October have been pushed back to 2021, a source close to refinery operations said. 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, according to the source.

--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 maintenance at Poland's Gdansk is planned for spring 2021.

--Repsol's refinery at Puertollano in central Spain will carry out an upgrade of its olefins unit as part of planned maintenance of the cracker and chemical derivative plants at the end of 2020.

--Total will invest Eur150 million ($164 million) at its Leuna refinery in Germany. The investment into an upgrade project aims to reduce the production of heavy products and increase the production of methanol, which is an important feedstock for the chemical industry. This will deepen the integration of the refinery and the petrochemical operations. Work will continue until 2021, with the major part done in the 2020 major shutdown of the refinery.

--The next major turnaround at Preem's Gothenburg refinery in Sweden will be in 2021.

--Rompetrol's Petromidia refinery will have its next general maintenance in 2020.

--The next major maintenance at the Netherlands' Zeeland will be in 2020. The refinery started work in June 2018 on an expansion of the hydrocracker, by working to add the third reactor. The reactor will be connected to the existing installation in 2020.

--Romania's Petrobrazi will undergo its next big turnaround in 2022.

UPGRADES

NEW AND REVISED ENTRIES

--Hungary's MOL is looking to integrate and centralize its refining assets in Croatia, the company's vice president of downstream, Ferenc Horvath, said. In an interview with S&P Global Platts, Horvath said MOL's refining business in Croatia had been struggling due to overcapacity but ruled out a divestment of assets in the country, saying the focus will instead be on the "integration or centralization" of its Rijeka and Sisak plants. The Rijeka plant will be developed into an efficient and complex refinery while in the Sisak plant will concentrate on making specialty industrial products like lube oils, LPG and biofuels. In December, MOL's Croatian affiliate INA made a final investment decision to carry out a residue upgrade project at the Rijeka refinery. The project includes building a delayed coker, renovation of existing refinery units, and the construction of a new port for the closed storage of petroleum coke. Last year, MOL said the Sisak refinery will be converted into a bitumen production site and logistics hub. The facility may also produce lubricants and bio-fuel components too, subject to further investment decisions.

EXISTING ENTRIES

--PKN had signed an agreement with KTI Poland and IDS-BUD for the design, delivery and building of a visbreaker at its Plock refinery. The project, set to be completed by the end of 2022, will increase "the yield of high-margin products as a result of in-depth conversion of vacuum residue" from the CDU, the company said. It had said previously the visbreaker will allow the refinery to reduce fuel oil output and increase its production of distillates. The unit will have a capacity to produce 200,000 mt/year of diesel, CEO Daniel Obajtek said. Obajtek said PKN's ongoing modernization of the hydrocracking and diesel hydrodesulfurization units at Plock will also increase the refinery's diesel production capacity by 250,000 mt/year. The modernization was expected to be completed by the end of this year.

--Germany's Burghausen refinery is planning to commission a new ISO C4 system for the production of high purity isobutane in September, the company told S&P Global Platts. The delivery of the first column for the complex, which has been under construction since the summer of 2019, is due this month. The Eur64 million project is aimed at expanding the petrochemical part of the refinery in order to "secure the future of the site", Burghausen said.

--Serbia's Pancevo will upgrade the catalytic cracker, Gazprom Neft said. NIS, a subsidiary of Gazprom Neft, has signed a contract for developing the project with Lummus Technology, part of McDermott Group. The completion is earmarked for 2024. It is part of the refinery's modernization, ongoing since 2009. Within the same project a unit will be built for the production of high octane gasoline components. NIS has already worked with Lummus on the mild hydrocracker and hydrotreater complex, which was part of the first stage of modernization. The deep processing complex, part of the second modernization phase, also under Lummus project, is in the final stages of construction. The launch of the complex, which includes a delayed coker and will increase the depth of processing to 99.2% and increase gasoline and diesel output, will help the refinery halt fuel oil output. The refinery will also produce coke for use in the metallurgy and construction industry. Currently, Serbia imports coke but the Pancevo refinery output will cover domestic demand and also allow for some exports.

--Repsol has not yet confirmed if it had started work on a lubricants unit at the Cartagena refinery Ilboc plant alongside South Korean partner SKSol, after the environmental go-ahead was received at the end of November from the regional government. It will invest Eur300 million over the next four years increasing the capacity of the lubricants unit and increasing production of second generation biofuels. The first phase, the lubricants, is scheduled to start in 2019 at the Ilboc plant alongside Korean partner SKSol. The biofuels upgrade would take place at the nearby Escombreras facility, and will result in production of 250,000 mt/year of second-gen biofuel from around 2022.

--Greece's Motor Oil Hellas has awarded an EPC contract to TechnipFMC for the construction of a new naphtha treatment complex at its Corinth refinery, according to a TechnipFMC statement. Motor Oil Hellas said in 2019 that the new complex, which will contribute to increased production of gasoline, kerosene and hydrogen, is scheduled for completion in 2021. The complex with 22,000 b/d capacity will include three units: naphtha hydrotreater, platformer and isomerization, the statement said. It will allow the refinery to increase its production of Euro 5 gasoline.

--Gunvor is studying the potential installation of an HVO (hydrotreated vegetable oil) at the Rotterdam refinery.

--Repsol's Coruna will shut the calcination unit at the start of 2020 due to technological obsolescence. During the course of 2020, a new distillation unit will be installed to produce polymer grade propylene. The unit should come online by the end of 2020.

--Bosnia's Brod refinery will start production from the middle of 2020 by which time its reconstruction will be completed. The refinery is currently being reconstructed. A pipeline, currently being built to supply it with natural gas to fuel its internal processes, is expected to be ready from Q3 2020. The refinery suspended its operations in 2019 for an upgrade and to prepare for the use of natural gas. The gas will replace fuel oil as a power source for the refinery processes.

--Varo Energy's Cressier refinery in Switzerland is currently installing a new column at the crude distillation unit which will allow it to reduce CO2 emissions but also to expand the scope of its light products yield. The column will start operations in the second quarter of 2020.

--Poland's Grupa Lotos said its EFRA modernization program was almost complete, with all units now commissioned apart from the delayed coking unit (DCU), which is undergoing testing. In September, the company introduced feedstock into the DCU and the unit was put into operation. The key elements of the EFRA project are the coking complex, comprising the DCU, coker naphtha hydrotreating unit, and coke storage and logistics facility. Other new units are the hydrogen generation unit, hydrowax vacuum distillation unit, and the oxygen generation unit.

--Upgrade work to increase San Roque's refining margin, and construct a new hydrocracker, has been halted by local government, Cepsa said. The San Roque Council ordered earthworks at the site to be halted, affecting Cepsa's work on its "Bottom of the Barrel" project. The company plans to construct a hydrocracker at the site. The upgrades are targeted for completion by 2022. Separately, Cepsa will revamp Isomax, fluid catalytic cracker, alkylation units at San Roque and will construct a methylene unit (Sorbex II).

--Germany's Schwedt is upgrading its aromatics complex. A second column has been delivered for the project which is planned to be carried out this spring.

--Swedish refiner Preem is "evaluating a potential investment in a residue hydrocracking plant" at the Lysekil refinery, it said. The investment would be aimed to "upgrade as much heavy oil as possible into sulfur-free gasoline and diesel fuels to help meet rising demand after IMO 2020," a spokesman said.

--The Netherlands' Zeeland refinery has had the third reactor for the hydrocracker's expansion delivered. The refinery started work mid-2018 on an expansion of the hydrocracker, by working to add the third reactor. The reactor will be connected to the existing installation in 2020.

--Germany's Rhineland has started the construction of a new hydrogen production plant, using electrolysis, at its Wesseling site. The Eur16 million investment project, due for completion in 2020, will generate hydrogen from electricity rather than natural gas, and thus also contribute to reduced CO2 emissions. It will produce up to 1,300 mt/year hydrogen when operating at peak rates. The 327,000 b/d refinery consists of the Wesseling (south) and Godorf (north) sites. Separately, the refinery has received permission to start construction of a new power plant at Godorf. The new plant is scheduled to go on stream in 2021. As part of the modernization, Shell is converting the power plant from oil to gas.

--ExxonMobil said it has "made a final investment decision to expand" the Fawley refinery in the UK to increase production of ULSD by 45%, or 38,000 b/d. The more than $1 billion investment includes a hydrotreater to remove sulfur from diesel, supported by a hydrogen plant. The construction, subject to a local planning approval, was set to begin in late 2019 with start-up expected in 2021.

--McDermott International has been awarded a contract for engineering, procurement and construction management services for the upgrade of the hydrocracker at Czech Litvinov refinery. The completion is expected for Q2 2020.

--Russian Lukoil plans to invest in its ISAB refinery in southern Italy and has also dropped plans announced in 2017 to sell the plant having not received suitable offers. Lukoil will invest $60 million in upgrades, including two hydrodesulfurization units.

--Cepsa said it will carry out upgrades to its aromax and hydrocracker units at Huelva. It is also carrying out an aromatics optimization project at the refinery.

--Total is considering building intermediate feedstock desulfurization units and a hydrogen unit at France's Donges, but the investment depends on rerouting a railroad track that currently crosses the refinery.

--Israel's Haifa District Court has rejected an appeal by Haifa municipality along with six other neighboring communities and environmental groups against the proposed expansion of the Bazan refinery.

--Total's Feyzin is considering mothballing a visbreaker unit around 2021 as demand for heavy fuel is gradually declining and the unit currently 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.

LAUNCHES

EXISTING ENTRIES

--Dutch Hes International (former Hestya Energy) aims to start operations at the LSFO plant at the currently closed Wilhelmshaven refinery in Germany in Q1 2020, it said. The Netherlands-based company had previously said it would operate the VDU unit under a tolling agreement. According to traders, the vacuum distillation unit will be used for producing low sulfur fuel oil to meet the 2020 International Maritime Organization requirement for low sulfur bunker fuel. ConocoPhillips sold the facility on Germany's North Sea coast to Hestya in 2011. The refinery has been idle since October 2009 when it was mothballed on poor margins after a maintenance program was completed on the site.

--Preliminary work for Estonia's new refinery has started, with an agreement signed between Eesti Energia and Viry Keemia Group with Italian company KT Kinetics Technology. The preliminary project is due to be completed in the summer of 2020, "after which the main project will be decided," according to Eesti Energia. The refinery which will process 1.6 million mt/year shale oil and produce 1.5 million mt/year products will help Estonia "to export fuel with up to five times less sulfur content than is permitted in the world," Hando Sutter, Chairman of the Management Board of Eesti Energia, said in the statement. It is aimed to be completed in 2024 and produce naphtha, gasoil and ULSFO.

--Turkey's Ersan Petrol plans to start construction of its 1.4 million mt/year Nazli refinery at Kahramanmaras in southeast Turkey in mid-2020, with the plant expected to begin operations in less than four years, company owner Ecvet Sayer said.

--Azerbaijani state oil company Socar is considering the development of a second refinery in Turkey, in addition to its existing 214,000 b/d Star refinery at Aliaga on Turkey's central Aegean coast.