Wave of refinery shutdowns may push India into importing fuel next year

MOSCOW (MRC) -- A wave of shutdowns will hit Indian state-owned refineries next year as the country prepares for cleaner fuels from April 2020, company officials said, in moves that could temporarily dent oil demand and push up imports of refined fuels, reported Reuters.

India, the world’s third-biggest oil importer and consumer, has surplus refining capacity and rarely imports gasoil and gasoline.

It also means that demand for fuel produced by India’s privately owned refiners will likely climb during the period, as state refiners seek to fill the gap.

State refiners - Indian Oil Corp, Bharat Petroleum, Hindustan Petroleum and Mangalore Refinery and Petrochemicals - account for about 60 percent of the country’s nearly 5 million barrels per day (bpd) capacity.

The refiners will have to shut gasoil- and gasoline-making units at their plants for 15 to 45 days to churn out Euro VI-compliant fuels from January 2020 to be able to sell them from April of that year.

"Next year will be challenging for us as I have to protect my crude throughput and finish the job at the refineries and get ready for Euro VI by April 2020," said B.V. Rama Gopal, head of refineries at IOC, the country’s top refiner.

IOC plans a roughly month-long shutdown of gasoline- and gasoil-producing units at all of its 11 refineries, he told Reuters.

Key parts of the refineries requiring a revamp include naphtha hydrotreaters, catalytic reforming units, isomerisation units, diesel sulphurisers and diesel hydrotreaters. In addition, some refiners have to revamp or set up new gasoline treaters, hydrogen production and sulfur recovery units.

India has been gradually reducing sulfur emissions from vehicles since 2000, when fuel sold in the country had 500 parts per million (ppm).

Motorists in Delhi, which faces major air pollution, moved in April this year to Euro-VI standards, which allow up to 10 ppm sulfur and are known locally as Bharat Stage-VI.

HPCL will shut its diesel and gasoline units while upgrading the crude units at its Vizag and Mumbai refineries for 30 to 45 days, its chairman M. K. Surana said.

He forecast a slight reduction in the company’s crude intake.

"We will take the shutdown in one shot so we don’t have multiple disruptions," Surana said.

Surana and MRPL managing director M. Venkatesh, who intends to shut some refinery units for up to a month, said they see no need to import fuel in 2019 given that state fuel retailers can access robust production at local private refiners.

Their view is challenged by analysts who estimate weaker gasoil and gasoline prices would prompt state refiners to import auto fuel instead of going to private peers who levy coastal freight charges on top of normal prices.

A similar phenomenon was witnessed when India migrated to Euro IV fuel in phases to April 2017, said Sri Paravaikkarasu, head of east of Suez oil for consultants FGE in Singapore.

"There is a high possibility that the lengthy shutdown period could result in a shortage of current Euro IV products in the domestic market. In such an event, Indian NOCs (national oil companies) should turn to the international market for product purchases," she said.

FGE expects India could import 40,000 bpd of gasoline and 70,000 bpd of gasoil for about one quarter in 2019 because of the shutdowns.

BPCL, India’s second-biggest state refiner, has upgraded two of its refineries to superior-grade fuels and is revamping the fire-hit hydrocracker at its Mumbai refinery so it can produce cleaner diesel, its head of refineries R. Ramachandran said.

BPCL plans to shut a crude unit and some other secondary units at the Mumbai refinery for maintenance and upgrades next year for 15-20 days to produce cleaner fuels.

Ramachandran said there could be a need to import "some additional cargoes but it will not be a major hiccup".

"The shutdowns will be spaced out in a manner to ensure there is enough product in the market. It will be a well-orchestrated exercise," he said.

As MRC informed earlier, in October 2018, India set up a panel of officials to suggest ways to settle land acquisition issues for a planned USD44 billion refinery on the west coast. Saudi Aramco and ADNOC will hold a 25 percent stake in the planned 1.2 million barrel per day refinery and petrochemical project while a consortium of Indian refiners led by IOC will together hold the remainder.
MRC

MOSCOW (MRC) -- French oil and energy company Total said it had started a process to suspend production at a refinery in Normandy due to a strike, reported Reuters.

Total added that deliveries of refined products from the Grandpuits and Feyzin sites had also been blocked due to strikes.

As MRC informed previously, in December 2017, Total inaugurated the new units at its Antwerp integrated refining & petrochemicals platform, which had progressively started up in the previous few months.

Total S.A. is a French multinational oil and gas company and one of the six "Supermajor" oil companies in the world with business in Europe, the United States, the Middle East and Asia. The company's petrochemical products cover two main groups: base chemicals and the consumer polymers (polyethylene, polypropylene and polystyrene) that are derived from them.
MRC

MOSCOW (MRC) -- The incoming Mexican government said on Monday that a weekend public consultation vote had approved 10 major policy proposals ranging from a new rail line connecting states in eastern Mexico and a new oil refinery in the Gulf of Mexico, reported Reuters.

Public referendums could be a mainstay of President-elect Andres Manuel Lopez Obrador administration’s six-year term after he takes office on Dec. 1 as he seeks a more participative democracy.

His incoming administration’s first consultation last month called for canceling the construction of a partially built USD13 billion airport for Mexico City, a referendum Lopez Obrador had vowed to hold during the campaign.

Lopez Obrador used the results of that consultation to halt the airport project, leaving the peso currency and stock market reeling as investors fretted over how he would manage the economy.

As MRC informed before, Mexico’s next government plans to build what could be the country’s largest oil refinery, with construction set to begin as soon as next year, said president-elect Andres Manuel Lopez Obrador in September 2018. The winner of July’s presidential election is seeking to end Mexico’s massive fuel imports, nearly all of which come from the United States, while boosting domestic refining during the first half of his six-year term.
MRC

MOSCOW (MRC) -- Becht Engineering has been awarded an Owner’s Engineering Quality Assurance Project for Inter Pipeline Heartland Petrochemical Complex in Alberta, Canada, as per Hydrocarbonprocessing.

The Heartland Petrochemical Complex is being designed to convert locally sourced, low-cost propane into 525,000 tonnes per year of polypropylene utilizing Propane Dehydrogenation (PDH), Polypropylene (PP) and Central Utilities Block (CUB) facilities.

Construction of the Heartland Petrochemical Complex is in progress with completion scheduled for late 2021. Becht Engineering will conduct a series of Cold Eye Reviews focused on the operability of the complex.

Becht Engineering provides a wide array of engineering services to the refining, petrochemical, and power industries - including continuing services to 90% of the refineries in the United States and Canada.

As MRC wrote before, in December 2017, Inter Pipeline Ltd. announced that its board of directors has authorized the construction of a world-scale integrated propane dehydrogenation (PDH) and polypropylene (PP) plant. The facilities, collectively referred to as the Heartland Petrochemical Complex, are estimated to cost USD3.5 B in aggregate and will be located in Strathcona County, Alberta near Inter Pipeline’s Redwater Olefinic Fractionator.
MRC

MOSCOW (MRC) -- Following a meeting of BCF’s Vehicle Refinish Committee, the BCF confirmed that it will still be illegal to sell solvent-based basecoats for accident repair in a post-Brexit Britain, as per Coatingsworld.

Non-compliance has increased significantly since the Brexit vote in 2016, with rumors that the EU law (the VOC Paint Product Directive) will no longer apply once the UK leaves the EU.

The BCF said it plans on raising this with Defra Secretary of State Michael Gove, whilst also drafting similar letters to 400 distributors, reminding them that they will still have to comply with the VOC regulations, even after Britain has officially left the EU.

The BCF has been proactive in raising awareness of the continued and growing sales of solvent-based basecoats – as much as 30 percent of basecoat sales in the UK are now solvent-based, per the BCF.

Distributors selling solvent-based basecoats are not only breaking the law, but they are also harming the environment and adding to VOC emissions, the BCF noted.

BCF Chief Executive Tom Bowtell said that 25 percent of the 100 distributors he visited sold solvent-based basecoats for use in general car repair. He said this is a direct contravention of the UK’s VOC Paint Product Regulations.

“The BCF will continue to fight to try to regain a level-playing field for BCF members who invested in water-based basecoats, and also help the UK Government achieve its VOC emissions targets," Bowtell added.
MRC