More refiners are permanently shutting their facilities as demand recovery after the coronavirus pandemic remains uncertain. A global consulting firm conducted a study which covered refining facilities in the Netherlands, France, and Scotland and estimated about 1.4 million bpd or 9% of refining capacity in Europe is at risk of permanent closure by 2022-2023. The firm also said that about 1.5 million bpd refining capacity in Asia is at risk of being closed down.
Gunvor Group said it could mothball its 110,000 bpd plant in Antwerp, Belgium. Other European refineries which are facing a potential closure include Total’s 102,000 bpd Grandpuits refinery, BP’s 377,000-bpd facility in, and Petrineos’ 200,000 bpd plant in Grangemouth, Scotland.
Shell will permanently close down its 110,000-bpd Tabangao facility in Batangas province in the Philippines and turn it into an import terminal. The company blamed the coronavirus pandemic for a slump in the margin that led to the eventual closure of one of the country’s only two refineries. Japan’s JXTG Holdings also plans to shut its 115,000 bpd refinery in Osaka permanently.
Refining NZ in late June said it would reduce operations at New Zealand’s only oil refinery to cut costs and break-even into 2021. It is also considering closing the complex and reconfiguring it into a fuel import terminal in the long term. Australia’s Viva last week said that its 65-year-old Geelong refinery in the west of Melbourne incurred a $50 million loss in the first half of 2020. The 120,000 bpd refinery is now facing a growing threat of closure.
In the US, Marathon Petroleum plans to permanently end crude processing at its refineries in Martinez, California, and Gallup, New Mexico. It will convert the Martinez plant into an oil-storage facility and bio-based motor fuel production. Phillips 66 plans to convert its refinery in Rodeo, California, into a facility that produces bio-based motor fuels. The refiner will also close down its refinery in Arroyo Grande by 2023 and take pipelines supplying crude oil to those facilities out of service in phases beginning in that year.
Other US refiners such as CVR Energy, and HollyFrontier Corp, also announced plans to shut their crude refining facilities and turn it into biofuels production. A spokesperson for the American Fuel and Petrochemical Manufacturers said refiners are exploring projects to meet the rising demand for renewable fuels. California, the largest fuel market in the US, has been pursuing lower carbon emissions and petroleum use in transportation by enacting the low carbon fuel standard (LCFS), which can prompt other states to follow suit.
