Generic Hero BannerGeneric Hero Banner
Latest market news

ExxonMobil plans $1bn upgrade at Antwerp: Update

  • Märkte: Crude oil, Oil products, Petrochemicals
  • 02.07.14

Update adds context.

ExxonMobil will invest $1bn at its 320,000 b/d Antwerp refinery in Belgium, adding a delayed coker unit to process high-sulphur residual oils into diesel, marine gasoil and other transportation fuels.

The upgrade comes on the heels of more than $2bn in other capital projects at the refinery in the past decade, including a recently completed 130MW cogeneration unit and a diesel hydrotreater, ExxonMobil said today.

The US oil major is expanding the 61-year-old plant even as the European refining industry is hit by falling fuel demand and increasing competition from cost-advantaged producers in the US, Latin America and Russia. Plants with combined capacity of 1.7mn b/d have been shut down since 2008, with European refiners such as Total and Italy's Eni plan additional reductions amid narrowing profit margins. Total's benchmark margin fell to $6.60/t in the first quarter from $26.90/t a year earlier.

ExxonMobil said it is "investing for the long term" and the new coker will address an industry shortage of capacity to convert fuel oil to diesel and other products. The Antwerp project also is the first of several investments that the company is evaluating to strengthen its top European refineries.

Rising diesel imports from the US have exacerbated the European refining glut, but ExxonMobil said it expects strong demand for the fuel on the continent for decades, particularly in the heavy truck sector.

The new coker at Antwerp may help the company take advantage of increasing European imports of sour crudes from Latin America, such as Mexican Maya. More Latin American crudes are flowing to Europe as rising onshore oil output in the US shifts more cargoes away from North America.

Exxon's Antwerp delayed coker joins a series of projects in and around Europe to add new units allowing the use of heavier and sourer crudes and increased production of middle distillates at the expense of fuel oil. Lukoil plans to start up a new 2.5mn t/yr vacuum residue hydrocracker at its 140,000 b/d Burgas refinery in Bulgaria in January 2015. Turkey's Tupras has a $2.7bn residuum upgrading project at the 227,000 b/d Izmit refinery, due to start production in November, that will include a vacuum distillation unit, a coker and a hydrocracker together with hydrogen and other auxiliary units. Israeli refiner ORL started up a new 25,000 b/d hydrocracker at the 197,000 b/d Haifa refinery in January 2013. The same month Portugal's Galp started up a new 43,000 b/d hydrocracker at its 220,000 b/d Sines refinery. And Algeria's Sonatrach expects the country's exports of low-sulphur straight-run fuel oil to drop by 80pc in the next three to four years after a cracking unit is installed at the 300,000 b/d Skikda refinery.

The upgrade comes ahead of major changes to fuel oil demand from next year as sulphur emission limits are tightened to 0.1pc in designated areas of Europe and north America As much as 18.8mn t of annual demand for low-sulphur fuel oil may shift into marine gasoil (MGO), Shell said at a marine fuels industry event in April. Current gasoil supplies will be sufficient to meet the increase in demand from the start of next year, the company said. But suppliers may struggle to meet distillate demand as a global 0.5pc sulphur cap is introduced in 2020 or 2025, depending on the uptake of alternative technologies such as scrubbers and LNG bunkering.

tc/rjd/jj/ts

Send comments to feedback@argusmedia.com





If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.

Copyright © 2014 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.


Teilen
Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more