South Korean refiner S-Oil has extended the shutdown of its 76,000 b/d residue fluid catalytic cracker (RFCC) and 370,000 t/yr MTBE unit at its 580,000 b/d Onsan refinery to first-half May, although an exact restart date remains unknown.
S-Oil experienced an unplanned shutdown on 22 March and was initially expecting to restart the RFCC and MTBE unit on 6 April. But the shutdown has now been pushed back because of some technical issues, although further information could not be confirmed. S-Oil planned a maintenance turnaround on both units from May to June but the extension of the shutdown prompted it to bring forward the turnaround.
The shutdown of S-Oil's MTBE plant, along with fellow South Korean refiner LG Chem's earlier 230,000 t/yr MTBE unit turnaround, has spurred demand for the gasoline additive in the domestic market for the summer season. This prompted increased imports of MTBE cargoes from China into South Korea. A total of 15,000t of MTBE from east China has headed to South Korea in the past two weeks, although the details of the deals could not be confirmed.
The unplanned shutdown of S-Oil's RFCC during March also led to the export of approximately 160,000t of low-sulphur straight-run fuel oil (SRFO) for late March and early April loading from Onsan. The SRFO, which is typically used as feedstock for the RFCC, has a maximum sulphur content of 0.3pc. S-Oil issued a fresh tender this week offering another SRFO cargo for late April loading, although further details could not be confirmed. The extended disruption of the secondary unit might have led to the fresh exports from S-Oil, although this could not be confirmed with the refiner.
South Korea imported 146,000t of MTBE in 2018 mostly from Taiwan, followed by China. Taiwanese private-sector refiner Formosa was receiving enquiries from South Korea for spot MTBE cargoes but it had no prompt cargoes to offer.
The unplanned shutdown of Vietnam's 200,000 b/d Nghi Son's refinery has also contributed to higher demand for MTBE in South Korea. Vietnam has been a net importer of gasoline from South Korea before Nghi Son's commercial start-up in November last year. But Nghi Son's shutdown prompted Vietnam to take more spot gasoline cargoes from South Korea, which in turn resulted in reduced MTBE supplies in South Korea.
Producers have been offering gasoline amid higher gasoline's refining margins over the past two months. The extended shutdown of the S-Oil's MTBE unit is likely to cause reduced MTBE supplies in South Korea, sparking increased MTBE demand.
