Total to stop refining at Grandpuits in 1Q 2021: Update
Adds detail on new plant, sector throughout
Total said today it will cease conventional refining at its 93,000 b/d Grandpuits facility near Paris in the first quarter of 2021. The firm plans to invest more than €500mn ($574mn) to turn the site into a biorefinery, as repairing the pipeline linking it to Le Havre would be too costly.
The 400,000 t/yr biorefinery, scheduled to start up in 2024, will produce 170,000 t/yr of biojet, 120,000 t/yr of biodiesel, and 50,000 t/yr of naphtha for bioplastics, primarily processing animal fats (tallow) and used cooking oil (UCO), supplemented with vegetable oils like rapeseed (RSO) but excluding palm oil.
Grandpuits' future as a crude refinery had been in doubt because of long-standing problems with a pipeline that provides around 90pc of its feedstock. Total said its plan was influenced also by France's proposals for energy transition up to 2040.
The pipeline issues meant the refinery could only operate at 70pc of its capacity "threatening its long-term financial viability", it said, and the only solution was to replace the pipeline at a cost of around €600mn. Grandpuits was also due a costly full turnaround next year. Weaker demand and sustained negative margins as a result of the Covid-19 pandemic have also weighed on the plant's future — Total kept Grandpuits off line after maintenance earlier this year because of low demand.
Total said that it will use Grandpuits for storage of oil products until "late 2023", but said that road and aviation fuel supply for the Paris region will not be affected.
"They will be supplied by the refineries at Donges — currently undergoing a €450mn modernisation — and [Gonfreville]." Total plans to complete an upgrade at the 222,000 b/d Donges in 2023, instead of next year as previously scheduled. Modernisation work include a new vacuum gasoil hydrotreater and a steam methane reformer. The crude distillation unit (CDU) at the 240,000 b/d Gonfreville is offline following a fire in December, with company sources saying it is unlikely to restart before mid-2021.
Total has already converted one of its refineries into a biofuels plant. The 160,000 b/d La Mede refinery was closed in 2016 and was converted into a 500,000 t/yr HVO plant for an initial investment of €275mn. Its start-up faced some teething issues, and first production was pushed back to the first quarter of 2019 from the original summer-2017 target.
Although the firm had to contend with a change in French law removing palm oil from a list of approved biodiesel feedstock, it appears Total's investment has begun to pay off. Chief executive Patrick Pouyanne said in July that La Mede was the firm's only downstream facility to post a positive result during the second quarter.
Europe has been at the forefront of refinery rationalisation for decades given the maturity of its markets, but the effects of the pandemic and the prospect of an accelerated energy transition are propelling the need to act faster. Conversion to biofuels production increasingly offers an alternative to closure or divestment.
Total recently sold its 110,000 b/d Lindsey refinery in the UK, and its European peers plan to offload capacity globally. Shell is marketing five refineries to reduce its fleet to under 10. BP is looking to reduce refinery throughput globally to around 1.2mn b/d by 2030 from 1.5mn b/d as it ramps up its renewables and power business. Spain's Repsol is embarking on a decarbonisation project at its 240,000 b/d Bilbao refinery, to include a net-zero emissions synthetic fuels plant that will use CO2 from the refinery along with green hydrogen generated from renewable energy.
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Canadian rail workers vote to launch strike: Correction
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Shell's 1Q profit supported by LNG and refining
Shell's 1Q profit supported by LNG and refining
London, 2 May (Argus) — Shell delivered a better-than-expected profit for the first quarter of 2024, helped by a strong performance from its LNG and oil product businesses. The company reported profit of $7.4bn for January-March, up sharply from an impairment-hit $474mn in the previous three months but down from $8.7bn in the first quarter of 2023. Adjusted for inventory valuation effects and one-off items, Shell's profit came in at $7.7bn, 6pc ahead of the preceding three months and above analysts' estimates of $6.3bn-$6.5bn, although it was 20pc lower than the first quarter of 2023 when gas prices were higher. Shell's oil and gas production increased by 3pc on the quarter in January-March and was broadly flat compared with a year earlier at 2.91mn b/d of oil equivalent (boe/d). For the current quarter, Shell expects production in a range of 2.55mn-2.81mn boe/d, reflecting the effect of scheduled maintenance across its portfolio. The company's Integrated Gas segment delivered a profit of $2.76bn in the first quarter, up from $1.73bn in the previous three months and $2.41bn a year earlier. The segment benefited from increased LNG volumes — 7.58mn t compared to 7.06mn t in the previous quarter and 7.19mn t a year earlier — as well as favourable deferred tax movements and lower operating expenses. For the current quarter, Shell expects to produce 6.8mn-7.4mn t of LNG. In the downstream, the company's Chemicals and Products segment swung to a profit of $1.16bn during the quarter from an impairment-driven loss of $1.83bn in the previous three months, supported by a strong contribution from oil trading operations and higher refining margins driven by greater utilisation of its refineries and global supply disruptions. Shell's refinery throughput increased to 1.43mn b/d in the first quarter from 1.32mn b/d in fourth quarter of last year and 1.41mn b/d in January-March 2023. Shell has maintained its quarterly dividend at $0.344/share. It also said it has completed the $3.5bn programme of share repurchases that it announced at its previous set of results and plans to buy back another $3.5bn of its shares before the company's next quarterly results announcement. The company said it expects its capital spending for the year to be within a $22bn-$25bn range. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US southbound barge demand falls off earlier than usual
US southbound barge demand falls off earlier than usual
Houston, 1 May (Argus) — Southbound barge rates in the US have fallen on unseasonably low demand because of increased competition in the international grain market. Rates for voyages down river have deteriorated to "unsustainable" levels, said American Commercial Barge Line. Southbound rates declined in April to an average tariff of 284pc across all rivers this April, according to the US Department of Agriculture (USDA), which is below breakeven levels for many barge carriers. Rates typically do not fall below a 300pc tariff until May or June. Southbound freight values for May are expected to hold steady or move lower, said sources this week. Southbound activity has increased recently because of the low rates, but not enough to push prices up. The US has already sold 84pc of its forecast corn exports and 89pc of forecast soybean exports with only five months left until the end of the corn and soybean marketing year, according to the USDA. US corn and soybean prices have come down since the beginning of the year in order to stay competitive with other origins. The USDA lowered its forecast for US soybean exports by 545,000t in its April report as soybeans from Brazil and Argentina were more competitively priced. US farmers are holding onto more of their harvest from last year because of low crop prices, curbing exports. Prompt CBOT corn futures averaged $435/bushel in April, down 34pc from April 2023. Weak southbound demand could last until fall when the US enters harvest season and exports ramp up southbound barge demand. Major agriculture-producing countries such as Argentina and Brazil are expected to export their grain harvest before the US. Brazil has finished planting corn on time . unlike last year. The US may face less competition from Brazil in the fall as a result. Carriers are tying up barges earlier than usual to avoid losses on southbound barge voyages. Carriers that have already parked their barges will take their time re-entering the market unless tariffs become profitable again. The carriers who remain on the river will gain more southbound market share and possibly more northbound spot interest. By Meghan Yoyotte and Eduardo Gonzalez Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Norwegian Cruise swings to 1Q profit
Norwegian Cruise swings to 1Q profit
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