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Refinery news roundup: Works, upgrades in focus in Europe as strikes loom

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Refinery news roundup: Works, upgrades in focus in Europe as strikes loom

London — Refinery maintenance works remain the focus in Europe, although attention has shifted to upgrades in preparations for the upcoming lower global marine fuel sulfur cap, and industrial action also threatens refinery operations.

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Under global IMO regulations, it will be mandatory to cut sulfur emissions from marine fuels used in international waters to 0.5% from next year, down from the current 3.5%.

Industrial action is increasingly in the spotlight in the refining sector.

The Unite union in the UK will ballot its members at the Essar Stanlow refinery for possible industrial action, including a strike, over potential job losses. The union said that up to 155 jobs are under threat following the decommissioning of the Shell Higher Olefins Plant (SHOP) and Alcohol units, and asked the company to "guarantee no compulsory redundancies and commit to continuity of employment."

Essar Oil UK said it was disappointed with the Unite statement.

"We have been working closely with them over the past months to try and find the best solution to a situation that was not of our making," the company said.

The closure decision, announced in December 2018, "was made by Shell Chemicals alone" and "Essar was not in any way involved with this decision," the company said.

Shell said that it has been informed by the unions at its Pernis refinery and Moerdijk petrochemical plant in the Netherlands that "a vast majority is willing to protest for a better wage offer," but that no strike has been called yet.

A strike is planned at Greek's Hellenic refineries at the end of the month, which could impact bunker fuel supplies, trading sources said Friday.

According to local media reports the strike is due to take place March 28-30.

Workers at Petrogal, the operator of Portugal's two refineries owned by Galp, started strike action at the Porto refinery in mid-March, a Fiequimetal union spokesman said. The strike is expected to last until March 31.

Workers at the Sines refinery remain on strike for the third consecutive month and are scheduled to continue strike action until March 31.

The strike at the Sines refinery and its associated units was originally scheduled to run until January 13.

In other news, Saras has now completed maintenance works at its Sarroch refinery in Sardinia, Italy. The plant's continuous catalytic reformer and gasifier are fully operational after restarting earlier this month.

ExxonMobil's French downstream subsidiary Esso SAF reported weaker 2018 results on deteriorated refining margins and the impact of the planned maintenance at its Gravenchon refinery. The company's two French refineries -- Port Jerome-Gravenchon and Fos-sur-Mer -- processed 15.3 million mt in 2018, down from 16.1 million mt in 2017. In the second half of the year they processed 8.6 million mt, down from 9 million mt in the year-ago period.

Gravenchon recorded 72.2% utilization rate in 2018, down from 83.6% in 2017, whereas Fos ran at 85.3% utilization, up from 73% in 2017 when it carried out a major turnaround. Fos processed almost 6 million mt of crude last year, its "best performance" since 2013.

Separately, Eni has started to carry out maintenance on many units at the Porto Marghera, Venice, biodiesel refinery including its catalyzers and gas turbine. The work is part of a scheduled general maintenance cycle from March 18 that will end on May 10.

NEAR-TERM

NEW AND REVISED ENTRIES

--Total's Antwerp refinery started works in mid-March, set to last until the end of the month, according to trading sources. The company declined to comment.

--Maintenance works at Shell's Wesseling plant in Germany in March have resulted in flaring and steam, which can occur during works and also unit restart. The 327,000 b/d refinery consists of the Wesseling (south) and Godorf (north) sites.

--The Scholven part of the Gelsenkirchen refinery in Germany was restarting on March 20 after a power cut that forced the company to halt some production facilities on March 9. The refinery consists of the Horst and Scholven sites, with Horst representing around one third of total capacity.

--Shell said that it has been informed by unions at its Pernis refinery and Moerdijk petrochemical site that "a vast majority is willing to protest for a better wage offer," but that no strike has been called yet. Talks between the unions and Shell have not resulted in a collective labor agreement, as the two sides remain apart on a proposed wage increase. The company expects that the unions will present "an ultimatum early next week" and in the meantime continues talks with workers and union leaders on the collective agreement. Some units at the refinery are restarting after maintenance which started on January 25. The turnaround, involving major works on 13 units, is scheduled to be completed by the end of March.

--Petronor has restarted the VB3 visbreaker on March 14 that had been halted on March 13, the company said. The unit had to be taken offline following a diesel leak inside one of its furnaces. Separately, Petronor has been restarting conversion units after maintenance that has been ongoing since mid-January.

--Germany's Schwedt refinery started a turnaround on March 18 and works will last until April 12. It will repair 25 units and integrate new unit components. The refinery said late last year it has been receiving equipment for the upgrade of CDU 3. The project is part of a major turnaround this year. During the turnaround, the CDU 3 will be taken out of service for four weeks.

--Repairs on the isocracker at Lysekil are complete and the company is in the process of refilling the catalyst. The unit -- which was shut down after a power failure on December 26, 2018, damaging one of its reactors -- is due to restart once the catalyst is refilled. "It is expected that we will have products to tank by April 1, 2019," the company said.

EXISTING ENTRIES

--Total's Grandpuits refinery near Paris has been in shutdown since late February due to a leak on the crude oil pipeline from Le Havre. The shutdown will last until the pipeline is repaired.

--Repsol will accelerate its refinery maintenance operations in 2019 in the run-up to the implementation of new IMO regulations for shipping fuel in 2020. Repsol early 2019 maintenance plans include April works on the FCC, VDU and coker at A Coruna.

--Sonatrach's Augusta refinery on the southern Italian island of Sicily will be offline intermittently from February 21 for two months, a source close to the refinery said. The works being carried out are part of a maintenance cycle at the plant every three to four years, the source said. A company source previously said the works will involve all areas of the refinery, including two crude distillation units, the reformer plant, the two vacuum distillation units, the fluid catalytic conversion unit, the alkylation plant, the hydrofiner and other plants such as the sulfur recovery units. The visbreaking unit and the desulfurization plant will also be affected by upgrade works, a union source said. Separately, Sonatrach and Saudi Aramco have signed an agreement for supply of Arab Light crude to the Augusta refinery.

--Hungarian oil company MOL said it was planning turnarounds at its Bratislava refinery in the second quarter, and at the Danube refinery in the third quarter on unspecified units.

--The Port Jerome-Gravenchon refinery in France began a planned partial shutdown February 25.

--Eni's Sannazzaro de Burgondi refinery in northern Italy is finishing repair and upgrade work at its Eni Slurry Technology (EST) unit, which was taken offline almost three years ago following a fire, a trade union source said. Repairs to the two EST plant units that were damaged by the fire are close to completion and they should restart in April and be fully operational by the end of the year, the source said. The EST unit was originally due to be restarted at the end of 2018, but the restart date was pushed back in November last year. The Sannazzaro refinery is also currently running maintenance on Line 1 of its plant, with the main focus on its vacuum and hydrocracking units in this phase of the works. The refinery will not be taken fully offline during the maintenance work, which is expected to finish in April or May.

--The CEO of Portugal's Galp, Carlos Gomes da Silva, said that a "recent operational upset" at the Porto refinery is causing "some constraints in the system," without elaborating. Gomes da Silva said that these are expected to cause "suboptimal operations during Q1."

--Poland's largest refiner PKN Orlen expects fewer maintenance shutdowns in 2019 than 2018. In the first half of 2019, PKN plans shutdowns in Plock of the fractional distillation DRW unit, the diesel hydrofining HON unit and polyethylene unit. In Orlen Lietuva the visbreaking unit will undergo maintenance, and the company will carry out work at the hydrocracking and visbreaking units in Unipetrol. In the second half of 2019, the company plans maintenance shutdowns on the hydrodesulfurisation HOG unit, the hydrogen recovery and PVC units in Plock and the visbreaking and DRW units in Unipetrol.

--Trading sources said that the Neftochim refinery in Burgas, Bulgaria entered its usual spring maintenance in mid-February, and work is ongoing. The Bulgarian refinery typically carries out maintenance in February and March.

--Tupras, Turkey's sole oil refiner, shut the fuel oil conversion unit at Izmit for routine maintenance for around 90 days from February 26. Commercial production from the unit is anticipated to restart at the end of May. Fuel oil from Izmir is usually transported to Izmit by rail for processing in the fuel oil conversion unit.

--Germany's Bayernoil, which has been offline following an incident on September 1, has been carrying out a turnaround and plans a restart in the spring. The refinery was halted following an explosion in a unit at the Vohburg site, and a subsequent fire in the early hours of September 1. Bayernoil consists of the Vohburg and Neustadt sites, which are interconnected. --Croatia's Rijeka has a scheduled maintenance in the first quarter of 2019. The company has informed local residents that due to the works there could be noise and flaring in the period late December to mid-April.

--Sweden's Gothenburg refinery is scheduling a turnaround in spring 2019 for regeneration of the reformer unit, inspection of the ISOGHT unit, decoking of CDU1, and a change of catalyst in the DHT 3, ISOM, GHT and ISOGHT. The next major turnaround at Gothenburg will be in 2021. FUTURE

NEW AND REVISED ENTRIES

--The ISAB refinery in southern Italy, which successfully resolved an issue with its sea jetty caused by bad weather, will carry out maintenance work in June, union sources told S&P Global Platts.

EXISTING ENTRIES

--Repsol 2019 maintenance plans include April works on the FCC, VDU and coker at A Coruna; June works on a crude unit at Petronor, Bilbao; hydrotreatment unit and hydrocracker at Cartagena in September; partial works at Puertollano in November; and petrochemical works at Tarragona in Q4.

--The Milazzo refinery, located on the Italian island of Sicily, is scheduled to carry out around 45 days of maintenance work on its FCC unit and ancillary plants starting mid-September. The refinery will not be offline in the period the works are carried out. Earlier reports in January indicated the refinery would carry out the next wide-scale maintenance works involving its FCC unit and ancillaries starting in October.

--Galp Energia CEO Carlos Gomes da Silva said that the company will carry out planned maintenance on the atmospheric distillation unit at its Sines refinery in Portugal in the second half of this year. The work is expected to last 40-50 days and "is not expected to compromise the operational ability of the conversion units, which should work at optimal capacity," he said. The company will use the stoppage to increase efficiency and conversion ability of the refinery and it will also carry out data-driven projects during the year to increase the refining margin of the refinery, he said.

--The next major turnaround at Sweden's Lysekil will be in autumn this year. After 2019, the company plans to run major turnarounds every six years but with a total refinery shutdown every three years to perform catalyst changes and cleaning/decoking of necessary units.

--The next major maintenance at France's Gonfreville is planned for 2019.

--Saras will carry out maintenance and upgrade works on the 90,000 b/d FCC plant at Sarroch in 2020.

--Saras' Sarroch refinery in Italy will carry out a full maintenance shutdown, carried out every 10 years, in 2021.

--Sarpom's refinery in Trecate, Italy, is scheduled to undergo a large-scale, two-month general maintenance cycle in 2020 -- of the type carried out at the plant every three to four years -- a source close to the refinery said.

--Finland's Neste is preparing for "the 2020 major turnaround in Porvoo."

--A shutdown may be carried out at Portugal's Porto at the end of 2019 or early 2020 for under three weeks for the atmospheric distillation unit, where it needs to install heat exchangers.

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

--Spain's Cepsa has moved a step closer to permanent closure of its refinery on Tenerife after signing an agreement with the regional authorities of Santa Cruz, Tenerife, to transform the site into a mixture of public space and real estate. The complex, which has been in operation for nearly 90 years, refined its last oil in 2014, having been previously idled in 2013 for "economic reasons."

--The next major maintenance at the Netherlands' Zeeland will be in 2020.

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

UPGRADES

--The new hydrogen production unit at the Gothenburg refinery started up on February 28 "on time and on budget," the company said. The unit is part of Preem's preparation for the International Maritime Organization's new shipping fuel regulation from 2020. Its vacuum distillation unit at Lysekil, also part of the IMO-oriented upgrades, is "in the final stages of preparation" for feeding with oil by the end of March.

--Russian energy giant 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, the company and union sources told S&P Global Platts. Lukoil will invest $60 million in upgrades, including two hydrodesulfurization units, which will allow the refinery to fully move to the production of Euro 5 diesel and halt output of Euro 3 and Euro 4 product.

--Cepsa is to revamp the Isomax unit, fluid catalytic cracker and alkylation units and construct a methylene unit (Sorbex II) at San Roque, which will double production capacity, investing Eur1 billion ($1.14 billion) through to the end of 2019 as it aims to boost conversion rates and improve technology and sustainability. Cepsa said it raised non-aromatic solvents output by 30,000 mt/year in 2018 and started work on a fixed bed alkylation plant, which is expected to start up in 2020. The company also announced investment of Eur1 billion in the refinery to construct a hydrocracker at the site to adapt it to producing lighter products by increasing the conversion factor and also to increase the output of gasoline blending components. The upgrades are expected to be concluded by 2022, adding $1.4/b to its refining margin and increasing refining capacity by 36,000 b/d. Output of diesel should increase to 55% from 40% once the project is concluded.

EXISTING ENTRIES

--Cepsa said it will carry out upgrades to its aromax and hydrocracker units at Huelva in 2019. It is also carrying out an aromatics optimization project at the refinery. The company completed a Eur30 million ($34 million) upgrade on the fluid catalytic cracker at La Rabida which took place during a maintenance halt at the end of 2018, which should add value to the olefins which the refinery feeds to the Palos chemical plant.

--Poland's Grupa Lotos said in early January it has commissioned a new hydrogen generation unit, or HGU, one of the three main components of its EFRA modernization program. The new HGU unit is the third at the refinery and has a capacity to produce 2.5 mt/hour of hydrogen, increasing its hydrogen production capacity by nearly 20%. In December, Lotos said it had agreed with the general contractor, Kinetics Technology, a new deadline of May 31 for the completion of the delayed coking unit (DCU) following delays. 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 units being built as part of the project are the HGU, hydrowax vacuum distillation unit, and an oxygen generation unit.

--Croatia's INA will concentrate its refining in Rijeka, which will also be upgraded, and convert the smaller Sisak facility into an industrial site as part of its Downstream 2023 New Course program and 2019 business plan, the company said. The company plans to invest more than HRK 4 billion ($615.3 million) in a delayed coker project at Rijeka, a new port with closed petcoke storage and increased overall complexity that will make Rijeka "a top level European refinery." A final investment decision on the delayed coker project will be taken this year, with commissioning earmarked for 2023 "given that all the prerequisites that will assure return on investment will be met."

--Germany's Schwedt has received the first new column for its CDU 3 as part of the unit's upgrade. The project is part of a major turnaround in 2019. During the turnaround, the CDU 3 will be taken out of service for four weeks when the new equipment will be integrated.

--The delayed coker at the Pancevo refinery, currently under construction, will be launched in third quarter of 2019, Kirill Tyurdenev, the managing director of NIS, said in Gazprom Neft's inhouse magazine. As a result the depth of processing will reach 99.2% and the refinery will produce 500,000 mt more light products. The Nelson index will increase to 9.6. The light products yield would increase to 85% from 75%. Gazprom Neft has previously said the delayed coker will have 2,000 mt/day capacity.

--ExxonMobil said it was considering "significant upgrades" at its Fawley plant aimed to meet the UK demand for high quality fuels. A final decision was not expected until the second quarter of 2019 and, if approved, the investment would reduce the need for diesel imports into the UK, the company said. The project involves construction of a new hydrotreater and a new hydrogen plant.

--The Netherlands' Zeeland started work in June 2018 on an expansion of the hydrocracker, by adding a third reactor, due for completion in mid 2020 after which the new reactor will be put in operation.

--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.

--Poland's Plock refinery aims to complete a new visbreaker unit by the end of 2020.

--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.

LAUNCHES

EXISTING ENTRIES

--Azerbaijani state oil company Socar's Star refinery is still in its "testing phase" and has yet to start commercial delivery of products. Star's parent company Socar Turkey confirmed in late February that the refinery was "at the start up term and testing phase was in progress." The refiner was originally scheduled to begin commercial production at the start of October 2018.

--Dutch Hes International (former Hestya Energy) aims to start operations at a unit of the currently closed Wilhelmshaven refinery in Germany "later this year," it said in early January. The Netherlands-based company had previously said it would operate the unit, which it declined to name, under a tolling agreement. According to traders, it is the VDU that is likely to be restarted in 2019 and used for producing low sulfur fuel oil ahead of the 2020 IMO requirement for low sulfur bunker fuel.

--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. Development of a second refinery would be necessary if the company decides to go ahead with plans for a second petrochemical plant at its existing Petkim facility. A final investment decision is expected in March.

--Turkey's Ersan Petrol plans to start construction of its 1.4 million mt/year Nazli refinery at Kahramanmaras in southeast Turkey by the end of 2018, with the plant expected to begin operations by the end of 2022.

--Elza Turner, elza.turner@spglobal.com

--Edited by James Burgess, james.burgess@spglobal.com