ExxonMobil plans to 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.
tc/rjd
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