Mediterranean refiners are bracing themselves for a possible repeat of the extreme weather conditions that hampered their operations last summer, but none will say if they have taken any action to be better prepared for potential heatwaves this year.
Six Mediterranean refineries are either undergoing maintenance or have work pending in the first half of the year. None of them would comment on specific measures to counter extreme heat at their refineries this year when approached by Argus, although Spain's Repsol is installing additional heat exchangers at its 150,000 b/d Puertollano refinery as part of a wider maintenance programme.
Spanish refineries appear most at risk from extreme heat, based on last summer's events. Refinery output in Spain was reduced by 5-10pc during July-August last year as a result of the hot weather, according to an industry source in the country. Italian refinery output dropped by up to 5pc last summer, but overheating at Spanish refineries was comparatively worse, according to a local market source.
The EU's climate change monitoring service Copernicus noted temperatures above 45°C across Spain, Italy and Greece in late July last year. The 2023-24 El Nino weather pattern is one of the five strongest on record, the World Meteorological Organisation said this month. El Nino typically results in higher global temperatures and "has the greatest impact on the global climate in the second year of its development", the organisation said.
Refineries rely on heat exchangers to moderate temperatures, while certain product runs need to be cooled by air or sea water, according to one refinery source. Higher temperatures put pressure on these processes and force refiners to limit activity. Operators are going to need to invest in better heat exchangers, the source said.
Italian refineries are already facing the prospect of curbs in water supply due to droughts and some are currently drawing on underground water reserves, which are also a source of clean drinking water, according to a refinery manager in the country. In Spain, Repsol's 180,000 b/d Tarragona and Cepsa's 244,000 b/d Algeciras refineries could also face curbs in water consumption, with a drought declared in the Andalucia and Catalonia regions in February, far outside the extreme heat season.
In contrast, in the eastern Mediterranean, Turkey's Tupras is not expecting any disruptions linked to extreme heat this year and is not planning to cut runs, said an industry source in the country.
Any significant and protracted impact on Mediterranean refinery operations risks tightening supply at a time when volumes arriving in the region from east of Suez are being constrained by ongoing attacks by Yemen's Houthi rebels on shipping in the Red Sea.
Heatwaves could also tighten product markets in the wider Atlantic basin if the key US Gulf coast refining hub — which according to Vortexa accounted for 14pc of diesel exports to Europe last year — is affected. US Gulf coast refineries were disrupted for at least a week in July last year, according to one US market participant, as Texan heatwaves put pressure on the state grid during July-August, triggering power outages to refineries. High water temperatures also hampered refinery cooling processes in the region.
US Gulf coast (PADD3) refinery utilisation rates averaged 93.2pc in July-August last year, according to US EIA data, down by 3.3 percentage points on the year.
