Italian integrated firm Eni expects to begin restarting its 88,400 b/d Livorno refinery on the Tuscan coast in the second half of July after taking it offline for maintenance in April, a company spokesperson told Argus.
The shutdown, which is limiting already tight supply of Group I base oils and bitumen in Europe, comes against the background of Livorno's potential conversion to a biofuels plant, on which Eni is expected to make a final decision later this year pending regulatory approval.
A sustainable aviation fuel (SAF) unit at Livorno "is already available", the spokesperson said. Maintenance at other units is ongoing but "from the second half of July, other units will start up", according to the spokesperson.
Estimates on a restart date vary among bitumen market participants, with some saying end of July, allowing for tanks to be replenished by the end August, and others not expecting it to resume operations until October. One source in the Mediterranean bitumen market suggests that Livorno may not restart at all, given Eni's biorefinery plans and the fact its margins are weaker than many other European refineries.
The maintenance follows a lengthy period of sporadic operations at Livorno after a fire in the lubricants plant area in November 2021 curbed the production of bitumen, base oils and paraffin wax until July 2022. The latest shutdown has further cut the availability of Group I base oils for domestic and export markets, as well as the availability of bitumen.
Although Italy is a significant net bitumen exporter, there is currently demand for import cargoes even though domestic road paving activity during the summer peak season is weaker than usual, according to a regional bitumen trader. Another bitumen trader said a restart of bitumen and base oils production at Livorno next month will depend on the wider refining margin environment remaining strong, led by diesel and gasoline.
Argus-assessed spot prices for Group I base oils SN 150 grade for the domestic market have been increasing steadily since April, rising by 7.5pc to $1,075/t on 16 June. Argus-assessed Italian fob prices for bitumen cargoes have risen to $418/t from $391/t on 5 May, although they remain well below this year's $444/t peak in early April.
