Gunvor confirms permanent closure of Europoort CDUs

Trading firm Gunvor has permanently shut the two crude distillation units (CDUs) at its 80,000 b/d Europoort refinery in Rotterdam, in anticipation of challenging European fuel markets even after the Covid-19 pandemic passes.

Both units have been offline for more than a year. A company spokesman in December indicated that they had restarted, but today clarified to Argus that they were left offline.

Gunvor had deemed one of the CDUs uneconomical to run as long ago as November 2019, even before the pandemic hit demand for refined oil products. The firm closed the other for maintenance work in March 2020, since when it has been offline.

Gunvor's chief executive Torbjorn Tornqvist said last October that the Europoort site would focus on desulphurisation, gasoline production and biofuels processing. Market participants said products have been loading at the Europoort site in recent weeks.

The closure is the latest in a number of recent European refinery shutdowns caused by reduced oil demand. Portugal's integrated Galp and Finland's Neste have permanently closed assets, while Spain's integrated Repsol and UK-Chinese Petroineos are each laying off hundreds of refinery staff to help them cope with the challenging economic climate.

Gunvor last year mothballed its 110,000 b/d Antwerp refinery, also reflecting its expectation of weak refining economics stretching beyond the lifting of European stay-at-home measures.

Tornqvist said in October that Gunvor's other European refinery, the 100,000 b/d Ingolstadt plant in Germany, benefits from a "location advantage". Unlike Antwerp or Europoort, Ingolstadt is inland, and this typically allows a refinery to turn a higher margin because it faces less competition from imported products.

Gunvor plans to undertake a turnaround at Ingolstadt in 2023, to improve energy efficiency and reduce carbon emissions.

By Benedict George