MOSCOW (MRC) -- Oil refiners are permanently closing processing plants in Asia and North America and facilities in Europe could be next as uncertain prospects for a recovery in fuel demand after the coronavirus pandemic triggered losses, according to Hydrocarbonprocessing.
The pandemic initially cut fuel demand 30% and refiners temporarily idled plants. But consumption has not returned to pre-pandemic levels and lower travel may be here to stay, leading to tough decisions for permanent shutdowns. Here are some of the plants involved:
Royal Dutch Shell will permanently shut its 110,000-barrel-per-day Tabangao facility in Philippines’ Batangas province, one of only two oil refineries in the country. Shell blamed a pandemic-led slump in margins for turning the plant into an import terminal.
There have been no permanent plant closures in Europe due to the virus. However, Gunvor Group said in June it was considering mothballing its 110,000 bpd refinery in Antwerp as COVID-19 hurt the plant’s economic viability.
Marathon Petroleum, the largest US refiner by volume, plans to permanently halt processing at refineries in Martinez, California, and Gallup, New Mexico. The larger plant in California will become an oil-storage facility and may convert to produce renewable diesel, a fuel made from industry waste and used cooking oil.
Other plants in Japan, Australia and New Zealand could be likely candidates for closure ahead, said Mi Gene, at consultancy FGE.
Energy consultancy Wood Mackenzie separately estimated 1.4 million barrels per day, about 9%, of refining capacity in Europe is at risk of shut-downs by 2022-2023. It put plants in Netherlands, France, and Scotland on a list of potential closures.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
MRC