Neste confirms Naantali to stop refining by March 2021

Finnish refiner Neste has concluded negotiations over the future of its two refineries in Finland and has confirmed that the 55,000 b/d Naantali refinery will cease operating by March 2021.

Neste is transitioning to focus on terminal and port operations at the Naantali site. The second stage of the "transformation" will involve converting the 197,000 b/d Porvoo refinery to co-process crude oil and renewable feedstocks. The plans were first announced in September.

Neste says the conversion of the Porvoo refinery will allow it to save roughly €50mn ($59.7mn) a year in fixed costs. The planned changes will result in about 370 redundancies, but some new jobs will be created.

"The Covid-19 pandemic has accelerated the decline in demand for oil products, which is not expected to recover to previous levels," the company said in a statement. "Fundamental changes are therefore required to secure the competitiveness of Neste's oil products business."

Refiners across Europe are taking steps to reduce their crude processing capacity in light of falling products demand this year. Sweden's Preem has already begun converting its 220,000 b/d Lysekil refinery to co-process crude and renewables. Total will convert the 93,000 b/d Grandpuits refinery near Paris to process biofuels only. Trading firm Gunvor has mothballed its entire 115,000 b/d Antwerp refinery, while UK-Chinese joint venture Petroineos and Spain's Cepsa have done the same with individual distillation units.

By Benedict George