• 4 mintues Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Forecasts for oil stocks.
  • 9 minutes Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 13 minutes European gas market to 2040 according to Platts Analitics
  • 2 hours U.S. Presidential Elections Status - Electoral Votes
  • 2 hours 1 in 5 electric vehicle owners in California switched back to gas because charging their cars is a hassle, new research shows
  • 4 hours *****5 STAR Article by Irina Slav - "The Ugly Truth About Renewable Power"
  • 1 day Americans are not agreement capable.
  • 8 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 2 hours How US Capitalism Uses Nationalism
  • 11 hours Joe Biden's Presidency
  • 3 days Battery storage 30% cheaper than new gas peaker plants, Australian study finds
  • 3 hours The Painful Death of Coal
  • 23 hours Сryptocurrency predictions
  • 3 days Forecasts for Natural Gas
The Mystery Of Dark Energy

The Mystery Of Dark Energy

More than two decades after…

Investors Skeptical of Big Oil’s Green Plans

Investors Skeptical of Big Oil’s Green Plans

Only a minority of institutional…

Viktor Katona

Viktor Katona

Viktor Katona is an Group Physical Trader at MOL Group and Expert at the Russian International Affairs Council, currently based in Budapest. Disclaimer: views set…

More Info

Premium Content

Many European Refiners May Not Survive COVID

The coronavirus pandemic has shortened Europe’s energy transition. What was initially perceived as a gradual movement towards fewer emissions and greener generation has now become an unprecedently ambitious endeavour – by the time Europe recovers from the COVID-triggered slump, its fuel demand will have already dropped to the point where some downstream assets are no longer needed. This process of refinery backsliding that ultimately leads to the closure of less-efficient assets, be it due to lower refining complexity, geographic remoteness or other institutional factors, has already started. In this article we will look at those refineries that have announced their shutting down in the upcoming years or are on the brink of doing so, providing an explanation as to what exactly has worn it away.

Antwerp Refinery, Belgium (108 kbpd)
Operator: Gunvor.
Future: Import terminal.

The Antwerp Refinery was at a competitive disadvantage compared to other assets in the region, being a relatively simply hydroskimming plant with no cracking capacity, wielding a Nelson complexity of 4.5. Being primarily configured for medium sour grades, Antwerp was also financially frustrated by the appreciation of heavier grades on the back of OPEC+ production cuts. As opposed to Gunvor’s other refinery in Ingolstadt, southern Germany, Antwerp is open to international competition from the seas and has seemingly lost that battle, amassing losses from year to another.  Not all of the Antwerp refinery shall be discontinued, availing itself of the robust trading market in the North Sea area, Gunvor intends to use the refinery’s 7 MMbbl storage capacity in the future, presumably for both own and third-party deals. The Belgian city of Antwerp will not be bereft of refineries, it will still have Total’s massive 360kbpd refinery, Europe’s second-largest. Related: Oil on Guard over Yemen as Saudi, Iran Meet in Secret

Grandpuits Refinery, France (101 kbpd)
Operator: Total.
Future: Conversion into Biorefinery.

The Grandpuits Refinery is not the largest in France, it is not the most sophisticated either, however throughout all these years it has played an important role, being the closest downstream asset to Paris and thus satiating its needs. Differing a bit from the usual COVID story, Grandpuits did not plunge into loss-making territory per se, however the refinery has been struggling to repair the Ile-de-France Pipeline (PLIF) that connects it to the Atlantic port of Le Havre. The pipeline has had several instances of leakage, the most recent in 2019 forced Total to shut down the refinery for 5 months. An internal audit found that in its current condition the pipeline could only be operated at reduced capacity or, alternatively, could be rebuilt for a whopping €600 million. Confronted with such a dilemma, Total decided that Grandpuits stop refining in Q1 2021 and will stop storing petroleum products by the end of 2023, paving the way for a biorefinery that would focus on renewable diesel and bioplastics.

Europoort Refinery, Netherlands (88 kbpd)
Operator: Gunvor.
Future: Permanent Closure / Import Terminal.

Gunvor happens to feature more prominently than other companies in our list of COVID-shattered refineries, announcing the closure of both its Antwerp and Rotterdam refineries. Despite it being the smallest refinery in the Netherlands, closing the Rotterdam Refinery is perhaps a less evident decision, considering that the Cyprus-based trading firm only bought in 2016 from Kuwait Petroleum International and has been entertaining ambitious plans to boost Europoort’s already existing units (Nelson complexity of 7.8) with a delayed coker unit. As the plans never really materialized, Gunvor struggled to keep the refinery competitive. In fact, Europoort’s first crude distillation unit went offstream even before the COVID pandemic in November 2019 – the second CDU first ceased operations for maintenance in March 2020 and was never brought back. As of today, there is no clear understanding of how Europoort would look in the mid-to-long term, with Gunvor stating that it would prefer to focus on sustainable fuels. Related: Get Ready For Big Oil’s Most Important Earnings Season Ever

Porto Refinery, Portugal (110 kbpd)
Operator: Galp.
Future: Permanent Closure / Import Terminal.

Portugal wielded two refineries in Porto (Matosinhos) and Sines, adequately located in the north and south so as to cover the totality of national demand. In the last days of 2020, the Portuguese national oil company Galp announced that it would shut down Porto in 2021, first the fuels production, to be followed subsequently by the bitumen, base oils and aromatics units at some point in the future. Galp stated that Porto’s closure was on the cards in the medium term, however it would be a wild overstatement to say that the Portuguese firm planned anything before the mid-2020s. Yet when the second wave of COVID hit Portugal again, Galp halted refining operations on October 10, as it turned out subsequently, for good. Interestingly, Matosinhos is much more complex than Sines (Nelson at 10.7 as opposed to 7.7), despite being a decade older. The closure of the Porto Refinery will mean that pre-2020 flows of Arab Light and Angolan grades like Clov or Girassol will cease.

Naantali Refinery, Finland (58 kbpd)
Operator: Neste.
Future: Import terminal.

Naantali, the smaller of Finland’s two refineries (Nelson complexity of 7.1), stopped refining in March 2021 and will now transition towards its future role as an import terminal, having some 50 MMbbls of aggregate storage capacity across the site. The future of Finland’s refining will thus hinge on the 197kbpd Porvoo Refinery which, however, will also see its fair share of transformation – it will co-process crude and renewable feedstocks. In Europe’s vanguard in terms of sustainable aviation fuel and sustainable diesel production, Neste is betting big on become the prime European pioneer of sustainable fuels. All the while cutting conventional downstream assets at home, Neste has bought Bunge’s Rotterdam-based specialty oil and fat-producing refinery in November 2020 and is actively looking into building another renewables refinery in Rotterdam.

By Viktor Katona for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News