February 1, 2008 at 12:38 pm #3814
<Here was another Partial Feb Update of EU Refinery Maintenance 2008 from Reuters – CER>
Europe Feb refinery maintenance to be light-survey
By Ikuko Kao
LONDON, Jan 31, 2008 (Reuters) – Europe’s oil refinery sector is expected to undergo relatively light planned maintenance shutdowns in February, a Reuters survey showed on Thursday. European refineries will shut at least 380,000 barrels per day of crude distillation capacity, or about 2.4 percent of Europe’s total 16 million bpd.
The extent of the February shutdowns so far is slightly less than the same month last year, when 425,000 bpd went offline. So far, reported March 2008 shutdowns are to take at least 118,000 bpd offline. In the same month last year, shutdowns came to about 391,000 bpd.
Maintenance in Europe during the first half of each year normally peaks in February and March — January 2008 maintenance shut only an estimated 19,300 bpd. The figures include capacity of crude distillation units closing for scheduled maintenance only, confirmed by refiners or provided by industry sources and traders by Jan. 31.
They exclude the fire-related outage at Norwegian Statoilhydro’s Mongstad and temporary run cuts at some plants due to poor margin They also exclude maintenance without specific dates and scale such as Hungary’s MOL and ConocoPhillips’ Wilhelmshaven in Germany.
Offline capacity of secondary units, such as a reformer at Total’s Grangemouth in Britain, are not converted to crude distillation capacity terms or included in the Reuters estimate, unless this is done by companies or industry sources. This is due to the complexity of calculation and different production methodologies depending on plant configurations
The European Union requires refineries in member nations to switch to diesel with sulphur content of 10 parts per million (ppm), or 0.001 percent, from January 2009. Industry analysts said many Northwest European refineries can already make ultra low sulphur diesel ahead of the regulation and this in part contributed to light maintenance this year.
But Mediterranean refineries may still carry out work on deslphurisation and diesel units. “Most Northwest European refineries are already producing 10ppm diesel,” said an analyst with a bank, who asked not to be named. “But some refineries in the Mediterranean are still producing 50ppm.”
Greece, where the four refineries have combined capacity of about 442,000 bpd, is likely to experience heavier maintenance than other European countries in the first half of the year. Hellenic Petroleum will shut its 100,000 bpd Elefsis refinery for 40 days in May and June, making it the largest shutdown in the Mediterranean reported so far. The company also plans to close its 67,000 bpd Thessaloniki plant for two weeks from March 1.
Works at Elefsis include a diesel unit. In the north, the biggest shutdowns in coming month are expected at LUKOIL’s 140,000 bpd Burgas in Bulgaria in February and Total’s 227,000 bpd Leuna in Germany in May and June. Germany may see the highest frequency of maintenance in Northwest Europe for the first half of the year.
INVENTORIES TO RISE?
Light maintenance may help oil product inventories to rise from current low levels as the market focus will shift from winter fuels to gasoline towards spring and summer. [O/EUROIL1]
The United States is also set to have relatively light maintenance in spring. That may signal that gasoline import demand from the U.S. east coast, the largest petrol export market for European oil companies, may slow this year. However, the potential increase in European fuel stocks may be offset by temporary run cuts at some plants to defend refining margins.
“Maintenance looks light. But I think it is refinery run cuts on top of maintenance and how it is going to be extended that really matters to the market now,” the analyst said. So far in Europe, Swedish Preem’s Gothenburg, ConocoPhillips Wilhelmshaven and Hellenic’s Elefsis have reduced crude refining volumes.
(Reporting by Ikuko Kao, editing by Anthony Barker)
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