REFINERY NEWS ROUNDUP: Refineries raise runs, but other bring works forward
Some refineries in the Asia-Pacific are raising run rates as lockdown measures are eased but others have brought forward works due to weak demand .
Oil Corp. has raised crude throughput to 60% at its nine refineries with the restart of several process units that were suspended due to lockdown measures. After the lockdown came into force in March, the No. 1 state-run refiner cut its overall run rate by 25%-30% to adjust operations due to a slump in demand. At some refineries, throughput levels were brought down to 40%-45% during the first half of April. “We plan to raise crude throughput at our refineries to 80% levels by the end of May due to an improvement in retail demand for fuels amid a gradual relaxation of the lockdown,” a company official said.
–India’s Reliance Industries Ltd. has been running its two refineries almost uninterrupted at its integrated Jamnagar petrochemical complex despite the lockdown, company officials said. India’s No.1 private refiner operates two refineries at the Jamnagar complex — one focused on the domestic market and the second on export markets. “The combined run rate has been almost normal during the lockdown period,” one official said.
–India’s Chennai Petroleum Corp. has reduced the run rate at its Manali refinery to 30%-35%. It has shut two of the three crude distillation units, with only the largest currently running in addition to secondary units. “We plan to keep the run rate at 30%-35% until the end of the lockdown,” an official said.
–India’s Mangalore Refinery and Petrochemicals Ltd. has reduced its run rate to 50% in response to a slump in retail oil product sales.
–India’s Hindustan Petroleum Corp. has been running its Mumbai refinery at an 85% run rate despite the nationwide lockdown. The company has been running its Vizag refinery at full capacity.
–India’s Bharat Petroleum Corp. Ltd is planning to increase run rates to around 80% at its refineries as a gradual easing in lockdown measures has resulted in a slight increase in demand for refined oil products, a source close to the company said. BPCL’s portfolio of refineries includes two standalone refineries at Mumbai and Kochi, both on the west coast. It also runs two subsidiaries with partners at Bina in central India and Numaligarh in the northeast. “The four refineries are currently running at around 50%-60%, but in a week’s time we may move it up to 80% and see again how things go,” the source said. Elsewhere, the company raised the operating rate at its Mumbai refinery in mid-May to around 70% of capacity, from around 60% at the end of April, sources close to the matter said.
–Pakistan refineries are seeking a rescue package from the government to cushion their businesses as they try to cope with losses resulting from the lockdown and the sharp decline in crude oil prices, industry sources said. Refineries have been continuously holding meetings with the ministries of energy and finance, the sources said. Due to slower sales of petroleum products, refineries suffered inventory losses when the price of crude crashed in April. The lockdown in Pakistan started March 24, forcing a number of refineries to close their operations while others ran at capacities of 29%-50% as demand slumped, with only shipments of food, fruit and vegetables allowed.
–Pakistan’s Attock Refinery in Punjab has increased its run rate to 67% of capacity, due to higher demand.
–Pakistan’s Byco refinery has resumed operations.
–Pakistan’s National Refinery Ltd. resumed operations starting April 23. In an exchange filing to the Pakistan Stock Exchange, it said it is back in operation as a result of rising demand in late April and into May. The refinery temporarily closed all production on March 25.
–Karachi-based Pakistan Refinery Ltd. is currently running at 60% of capacity. It previously cut its utilization rate to 50%.
–Pakistan’s PARCO Mid-Country refinery is currently running at 30%-40% of capacity, a company source said.
–South Korea’s SK Energy in March reduced the crude run rate at Ulsan to 85%, from 95% a year earlier. It cut oil product output by 4.7% year on year to 71.71 million barrels in the first quarter after lowering its crude run rate in response to demand destruction caused by the coronavirus pandemic, a company official said. “The output decline was attributable to lower margins in the aftermath of the COVID-19 infections and the collapse of crude oil prices,” the official said. The official said SK Energy had further lowered its crude run ratios in Q2 in response to the pandemic. “Oil product demand is expected to remain sluggish due to COVID-19 and oversupply will keep refining margins weak in the second quarter,” he said. The company is “producing kerosene at the minimum level and blending kerosene with low sulfur fuel oil in response to market conditions,” the official added.
–SK Energy affiliate SK Incheon Petrochem had its crude run rate average 80% in the first quarter, down from 87% a year earlier but up from 50% in Q4 2019, when it underwent a 40-day full turnaround until early November. It did not reduce its run rate because it was already low at 80%, an official said.
–South Korea’s Hyundai Oilbank said it has lowered its crude run rate to 90% but declined to say whether it would cut rates further.
–South Korea’s S-Oil Corp. did not reduce its run rates for the first three months of the year despite the coronavirus fallout.
–Singapore Refining Company in April reduced the operating rate at its 290,000 b/d refinery on Jurong Island due to poor refining margins.
–New Zealand’s Refining NZ plans to extend the “reduced production mode” at its Marsden Point refinery for another two months until the end of August, “in response to the significant fuel demand reduction resulting from COVID-19 travel and transport restrictions,” the company said in a statement.
–Caltex Australia’s 109,000 b/d Lytton Refinery has shifted forward its scheduled turnaround.
–Australia’s Geelong prepared to shut the residual catalytic cracking unit and associated processing units, together with the smaller of the crude distillation units, from early May due to lower oil product demand. The “refinery’s main crude distillation unit and all other processing units will continue to operate,” and it is expected to process around 2.5 million barrels of crude per month, the company’also said. The RCCU was also slated to undergo major maintenance in late August, but as a result of the coronavirus pandemic, the dates for the turnaround are currently under review, the company said, adding that the review will be completed by end-June.
–Thai Oil has cut operating rates at Sriracha refinery by about 20% in response to falling demand.
–Taiwan’s Formosa Petrochemical is planning to reduce operating rates after units that underwent maintenance restart, an official said. “We are thinking of a 10% cut for now. We will review the situation again and then decide,” he said. During the turnaround, Formosa’s refinery has been running at two-thirds of capacity. The company has not reduced operating rates at its other two CDUs, which are running at near full capacity, the official said.
–PetroVietnam’s Binh Son Refining and Petrochemical has postponed maintenance at its refinery at Dung Quat for a second time, to August 12, that was originally scheduled to start June 12 and earlier postponed to July 27, due to the global COVID-19 pandemic delaying the arrival of expert workers and parts, BSR said.
–Indonesian Pertamina brought forward planned maintenance at its Balikpapan and Sungai Pakning refineries by shutting the CDUs due to lower fuel demand. The move will allow the refineries to operate optimally once conditions returns to normal, a company official said. Meanwhile, Plaju refinery reduced production. The company continued to operate its Balongan, Cilacap and Kasim refineries normally.
–Pilipinas Shell Petroleum Corporation (PSPC) will temporarily shut operations at the Tabangao refinery in the Philippines for approximately one month, Shell said. The shutdown, starting from mid-May, is due to “the significant decline in demand for oil products and the significant deterioration of regional refining margins” following the coronavirus pandemic. “The refinery will retain its flexibility to do an immediate startup should market and demand conditions improve or stabilize,” the company said.
Separately, Indian state refiner Hindustan Petroleum Corp Ltd has been running its Vizag refinery at full run rates despite Cyclone Amphan and the ongoing coronavirus lockdown, company officials said. Amphan made landfall on India’s east coast late Wednesday, according to the latest update from the Indian Meteorological Office. The cyclone is moving towards Bangladesh and India’s northeastern states. The eye of the severe storm along India’s east coast in the western Bay of Bengal.
India’s Paradip refinery has put all the precautionary measures in place for Cyclone Amphan, company officials said. Its run rate was 95% in March. The rate slumped in April due to the coronavirus lockdown. The refinery is running at around 70% of capacity as the lockdown is gradually eased. In 2019-20 (April-March), the rate was 100%. Separately, India’s Haldia refinery on the east coast is also well set to face a super cyclonic storm Amphan, company officials said. In March, the refinery’s run rate stood at 93%. For 2019-20 (April-March), the rate was 86%. Currently, it operates at a 70% run rate due to COVID-19 lockdown.
New and ongoing maintenance
–South Korea’s SK Energy plans to shut its 260,000 b/d No. 5 crude distillation unit and 64,000 b/d No. 1 residue fluid catalytic cracker for maintenance for several weeks over May-June, an official said, adding: “With the shutdown of No. 5 CDU we will cut 150,000 b/d of crude runs in the second quarter compared with the first quarter, to cope with the falling refining margins.” The 150,000 b/d reduction equates to 17.9% of the company’s total capacity of 840,000 b/d across five CDUs at its Ulsan complex in the country’s southeast. With the turnaround, SK Energy’s run rate will average 74% in Q2, its lowest on record; it is typically above 90% and averaged 92% in Q1, down from 95% a year earlier. 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.
–South Korea’s SK Incheon’s crude run rate averaged 80% in the first quarter, down from 87% a year earlier but up from 50% in Q4 2019, when the Incheon complex underwent a 40-day full turnaround until early November.
–South Korea’s Hyundai Oilbank plans to resume operations at residue desulfurization unit at its Daesan refinery after the refiner completed the expansion of the unit capacity to increase low sulfur fuel oil production, a company source said. The capacity will be raised to 130,000 b/d from 100,000 b/d. Separately, it shut its No. 2 CDU with a capacity of 360,000 for maintenance from April 8 to May 22, four months earlier than scheduled, due to sluggish demand of refined oil products in the wake of the coronavirus pandemic.
–South Korea’s S-Oil Corp plans to idle its 76,000 b/d residue fluid catalytic cracker at Onsan for about a month starting in early July, a source close to the matter said. It also plans to shut its 90,000 b/d No. 1 CDU and 76,000 b/d No. 2 residue fluid catalytic cracker for several weeks of maintenance.
–Taiwan’s CPC corporation plans to idle its 200,000 b/d crude distillation unit and 70,000 b/d residue desulfurization unit at the Taoyuan refinery from end-May to early July for annual maintenance, company sources said.
–Caltex Australia has commenced extended scheduled works at its Lytton Refinery in mid-May, ceasing “all feedstock input into the refinery,” during the duration of the turnaround, the company said in a statement late-last week. The turnaround was originally scheduled for an August start-date, but due to “weak refiner margins [that] are creating operating cash flow challenges at Lytton,” works at the plant was brought forward, the company said in a statement previously. The company had also decided to extend works at the Lytton plant until a time when “when margin conditions have sufficiently recovered.”
–Bharat Petroleum Corp. Ltd. was initially slated to shut a 210,000 b/d crude distillation unit and a vacuum gasoil hydro desulfurization unit at its Kochi refinery early April for maintenance, but following India’s lockdown, the turnaround of the VGO-HDS unit is delayed to May while plans for the CDU is unclear.
–India’s BPCL has postponed maintenance of Mumbai units. BPCL had initially planned for maintenance at its Mumbai refinery to start on April 6 before postponing the start to April 16. It postponed the start of the turnaround again to April 28 on manpower considerations following the spread of the coronavirus in India. It should last 25-30 days. The turnaround includes 10,000 mt/day Diesel hydrotreater (DHT) unit, 1,500 mt/day Isomerization unit and 5,000 mt/day Aromatics Extraction unit (ARU).
–ExxonMobil’s Singapore refinery, located across two sites at Jurong and on Pulau Ayer Chawan on Jurong Island, has idled one of its CDUs for maintenance, which is expected to last for about a month, Asian gasoil market participants said. The refinery was reported to be operating at a lower run rate of around 60%, sources said, but this could not be confirmed with the refiner.
–Australia’s Geelong refinery has begun preparations to shut the residual catalytic cracking unit and associated processing units, together with the smaller of the crude distillation units, from early May due to lower oil product demand, the company said in a statement. It is shutting down the units “in order to further reduce surplus production and continue operations during a period where fuel demand is lower than normal,” according to the statement on the website. The “refinery’s main crude distillation unit and all other processing units will continue to operate,” and it is expected to process around 2.5 million barrels of crude per month, the company’s statement also said. Since early March, the 120,000 b/d Geelong refinery has slashed run rates, in response to weakening domestic demand, which has been hard hit by the coronavirus pandemic. The RCCU was also slated to undergo major maintenance in late August, but as a result of the coronavirus pandemic, the dates for the turnaround are currently under review, the company said, adding that the review will be completed by end-June.
–PetroVietnam’s Binh Son Refining and Petrochemical has postponed maintenance at its refinery at Dung Quat for a second time, to August 12, that was originally scheduled to start June 12 and earlier postposed to July 27, due to the global COVID-19 pandemic delaying the arrival of expert workers and parts, BSR said.
–Shell’s Pulau Bukom refinery has been idled for scheduled maintenance which will end on May 27, market sources with knowledge of the matter said. The turnaround, which sources said began on April 18, had initially been planned for May, but was brought forward due to declining product margins.
–Taiwan’s Formosa Petrochemical planned to delay the restart of its No. 2 crude distillation unit at Mailiao refinery. The postponement of the CDU’s restart follows the delayed restart of the No. 1 residue desulfurization unit from April 20-25 to May 1 due to unexpected issues, the spokesman said. The CDU and RDS unit were both shut on March 10. Once the No. 2 CDU resumes operations, Formosa plans to operate its three CDUs at the Mailiao refinery at an average utilization rate of 440,000 b/d in May, or around 80% of capacity. This is up from the 330,000 b/d of crude throughput in April, the spokesman said. The restart of the No. 2 residue fluid catalytic cracking unit from a turnaround has also been delayed to May 20 from the previous plan of early May due to weak gasoline margins, the source said. The unit was shut on March 1 for a turnaround.
–Indonesian Pertamina brought forward planned maintenance at its Balikpapan and Sungai Pakning refineries by shutting the CDUs due to lower fuel demand. The move will allow the refineries to operate optimally once conditions returns to normal, a company official said. The company continued to operate its Balongan, Cilacap and Kasim refineries normally.
–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.
–South Korea’s Hyundai Oilbank will idle its residue desulfurization unit with a capacity of 100,000 b/d at its Daesan refinery in the country’s west as the refiner will revamp the unit to increase low sulfur fuel oil production, a company source said in March. The capacity will be raised to 130,000 b/d after the shutdown. The company will be able to produce up to 200,000 mt/month of LSFO after the completion, a trader said.
–Indonesia’s Pertamina is looking to upgrade the Balongan refinery in West Java. Two consortiums, REE and JSW, are competing to provide a front end engineering design (FEED). The first phase of the upgrade is expected to be completed in 2-1/2 years. Once upgraded, capacity will be increased to 150,000 b/d. Previously Pertamina was looking to launch Phase 1 in 2022, according to reports. Meanwhile, Pertamina had also signed a memorandum of understanding with ADNOC for potential development in the integrated Balongan petrochemical refinery.
–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.
–Malaysia’s PRefChem refinery, also known as RAPID, said that there was a fire and explosion in mid March at its diesel hydrotreating unit in the Pengerang Integrated Complex in Johor province. The fire caused five fatalities and one injury with 40% second degree burns, it added. PRefChem did not provide further details. Sources close to the company told S&P Global Platts Monday that the steam cracker at the complex had been closed. Any repairs could be delayed as parts needs to be procured from China, which is not so easy in the current environment, a Singapore-based trader said. The complex includes a 300,000 b/d refinery and an integrated steam cracker with a capacity of 1.3 million mt/year of ethylene, with associated propylene, butadiene, benzene, polyolefins and ethylene glycol facilities. It was launched in late 2019 and targets full commercial operations for the second half of 2020.
–A Rosneft and Pertamina joint venture has signed a contract with Spanish Tecnicas Reunidas to design the construction of an oil refinery and petrochemical complex in Tuban, Indonesia, Rosneft said. Commissioning of the plant in East Java is expected within the next five years. Primary processing design capacity is planned at up to 15 million mt/year, planned capacity at the petrochemical complex includes more than 1 million mt/year for ethylene and 1.3 million mt/year for aromatic hydrocarbons.
–Sri Lanka has approved a $20 billion refinery project at the port town of Hambantota. The announcement follows the inauguration of a smaller refinery complex at the port, which has backing from the Oman Oil Company.
–Mongolia’s first refinery is expected to reach full capacity by 2026, the facility’s top official said, implying a lagged increase in the plant’s run rate after completion of construction works in 2022. “We expect to achieve 70% of the installed capacity by 2024,” Mongol Refinery Executive Director Altantsetseg Dashdavaa told S&P Global Platts.
–Iran remains open to investing in a planned expansion project by Chennai Petroleum Corp Ltd to set up a 180,000 b/d refinery at Cauvery Basin at Nagapattinam, in the southern Indian state of Tamil Nadhu, Indian oil ministry officials said. IOC holds a 51.9% share in CPCL, while NIOC holds 15.4% through Swiss subsidiary Naftiran Intertrade.
–India’s proposed new 1.2 million b/d refinery on the west coast will be commissioned in 2025, oil ministry officials said. The refinery will now be built in the Raigad district, around 100 km from Mumbai. An official at Ratnagiri Refinery & Petrochemicals Ltd. (RRPCL) said construction of the refinery complex would start in 2020.
–Global trader Vitol is looking to build a 30,000 b/d refinery in southern Malaysia’s Johor state. The project involves a simple refinery to be built at Tanjung Bin at VTTI’s ATB tank farm. ATB, or ATT Tanjung Bin Sdn Bhd, is a terminal 100% owned by VTTI. Vitol co-owns VTTI.
–Haldia Petrochemicals Ltd’s proposal to invest $4.05 billion in an integrated refinery and petrochemicals facility in Balasore, India, has been granted approval by the Odisha government.
–Pakistan and Saudi Arabia are in talks to develop a 200,000-300,000 b/d refinery in Balochistan’s Gwadar district for $10 billion.
–A new HPCL project in Barmer, India, is due for completion by March 2023.
–India’s big refinery project in Maharashtra, being developed by state-owned IOC, HPCL and BPCL, will start up around 2022-23.