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REFINERY NEWS ROUNDUP: Mixed picture on runs in Asia-Pacific

Some refiners in the Middle East are reducing throughput while others, such as BPCL’s Mumbai, are raising runs.

Meanwhile, clouds are gathering around Australia’s Geelong refinery.

Runs fell in China and India in July, the International Energy Agency said in its latest report. Refineries in India reduced rates in July after many states reimposed lockdowns to combat the spread of the coronavirus pandemic, according to S&P Global Platts data.

** India’s Reliance Industries Ltd. cut the combined run rate for two of its refineries in July for the fifth month in a row, oil ministry officials said Aug. 28, as a result of the coronavirus lockdown’s effect on the Indian refining industry.

** 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.

** BPCL raised the operating rate of its Mumbai refinery to 80% of capacity in September, a company source said Sept. 15. The refinery was previously operating at 60%-70% of capacity through August, slightly lower than 70% in July, S&P Global Platts reported earlier.

** India’s Bharat Petroleum Corp Ltd. plans to gradually raise operations at Kochi to 80% of capacity 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.

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

** India’s MRPL was running at 70% as diesel demand in south Indian retail markets has picked up with the unlocking of the economy. The refinery’s run was halved in the lockdown period of 2-1/2 months from March 25.

** 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, an official said. SK Incheon’s crude run rate averaged at 76% in Q2, down from 84% a year earlier and 80% in Q1.

** 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.

** Australia’s second-largest refiner Viva Energy has again signaled the possible closure of its Geelong refinery amid thin margins and prolonged lackluster demand for refined oil products amid the extension of movement restrictions in the state of Victoria to contain a second wave of coronavirus infections. “The company is assessing other options to address operating losses, including the possibility of moving to a full shutdown of the facility,” Viva Energy said in a statement on its website.

** Thailand’s PTT Global Chemical plans to cut run rates at its refinery in Map Ta Phut to 80% in September, from 90% in August.

** Indonesia’s Pertamina plans to skip exports of low sulfur fuel oil cargoes from its Balikpapan refinery for loading in September as the company has been operating the refinery at reduced rates, trade sources said.

New and ongoing maintenance

New and revised entries

Asia-Pacific

**South Korea’s S-Oil Corp shut its 57,000 b/d residue hydro-desulfurization unit at the end of August for turnaround and plans to restart the unit by the end of September, a company source said. Despite the turnaround, S-Oil’s low sulfur bunker fuel supply volume will be steady in September from August at 80,000 mt/month. The company does not sell high sulfur bunker fuel.

** Australia’s second-largest refiner Viva Energy has again signaled the possible closure of its Geelong refinery amid thin margins and prolonged lackluster demand for refined oil products amid the extension of movement restrictions in the state of Victoria to contain a second wave of coronavirus infections. “The company is assessing other options to address operating losses, including the possibility of moving to a full shutdown of the facility,” Viva Energy said in a statement on its website.

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.

Asia-Pacific

** Thai oil and petrochemical company IRPC Public Co. Ltd has taken several refining units offline after a fire at its Rayong facility in early September, industry sources with knowledge of the matter said. The units shut include a atmospheric residue desulfurization unit and residual deep catalytic cracker, sources said, adding that it was not yet clear when the units would come back online. The refinery had also taken a 25,000 b/d atmospheric residue desulfurization unit offline for catalyst changing in Q1, the company said in a Q1 report in May.

** Taiwan’s Formosa Petrochemical expects to restart its fire-hit No. 2 residue desulfurization unit in Mailiao in April 2021 at the earliest, a company official said. The unit was shut on July 15 after a fire broke out. “It is still not clear, but we expect to restart the unit over April-September next 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.

** Ampol, formally known as Caltex Australia, has announced that it will begin the phased restart of its Lytton Refinery in September, following the end of maintenance works at the facility in end-August, according to a statement published on the company’s website. The end of the works will bring to close almost four months’ worth of turnaround, with the plant having been shut earlier than scheduled in mid-May due to poor operating conditions that came as a result of the coronavirus pandemic. “Ampol expects the refinery to be able to produce at full production by the beginning of October and will continue to evaluate make versus buy decisions based on prevailing market conditions,” the company said.

** 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. “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.

** 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.

** 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.

** 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.

Upgrades

Existing entries

** Indian Oil Corp. owned Paradip refinery will install the first stage of a Grassroot Needle Coker Unit by using its own in-house technology, company officials said Sept. 1. The proposed unit will have a Calcined Needle Coke, or CNC, production capacity of 56-kilo tonnes per annum, or KTPA. Currently, the entire Needle Coke requirement of the country (80-100 KTPA) is met via imports. IOC also has a $2.3 billion expansion project for the refinery to raise its overall capacity to 18 million mt/year from 13.7 million mt/year.

** 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.

** 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

** Pak-Arab Oil Refinery Limited will start physical works on its coastal refinery in H1 2021, after almost 13-years of consecutive delays to the project, industry sources with close knowledge of the matter said. Following the start of the works, the refinery is expected to come online in 2025-2026, and will increase the country’s refining capacity by 250,000 b/d. PARCO also operates the 100,000 b/d Mid-Country Refinery in Mahmoodkot. The project for the coastal refinery was approved in 2007, but construction was subsequently delayed due to issues regarding funding.

Existing 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.

** 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.
Source: Platts

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