In the end of March, Unipetrol trusted its EPCM contract to McDermott International. The subject of the contract is the upgrade of a hydrocracking unit at the Litvinov refinery, Czech Republic. This news is a good reason to overview development projects that are announced or are under construction at the European refineries.
There is no doubt that the main event in the European refining of the last year can be considered the commissioning of the 214,000 bpsd STAR refinery, built by Azerbaijan’s state oil firm SOCAR in Turkey. It is the biggest new refinery to start up in Europe for decades, and Turkey’s first in 30 years. STAR is set to be a game changer for Mediterranean oil markets and will increase the country’s total refining capacity by just over a third. The refinery worth $6.3 billion, built in the Aliaga District of Izmir, will produce 1.6 MMtpa of naphtha, 1.6 MMtpa of jet fuel, 4.8 MMtpa of low-sulfur diesel, 700 ktpa of petroleum coke, 420 ktpa of mixed xylene and 160 ktpa of sulfur.
The opening ceremony of STAR took place on October 19, 2018, but by March 2019 the refinery reached just half of its planned processing capacity. Nevertheless, SOCAR plans STAR to reach full capacity soon, in the second quarter of 2019.
Presidents of Azerbaijan, Turkey attend opening ceremony of STAR Refinery
Source: Azernews.az
The core unit, that is responsible for residue upgrading at STAR, is a 40,000 bpsd delayed coker unit (DCU) using SYDEC technology licensed by Wood. Delayed coker units remains the most popular solutions for residue upgrading globally and Europe is not an exception.
The delayed coker at the Pancevo refinery in Serbia, currently under construction, is expected to be launched in the third quarter of 2019. Gazprom Neft has previously said the DCU will have 2,000 tons per day capacity and it uses Lummus Technology license (McDermott now). Its commissioning will allow to increase refinery’s conversion rate to 99% and increase production of high-quality diesel fuel by more than 38%.
Another DCU project in Balkans is a plan of Croatia’s INA Grupa to modernize its largest refinery, located in Rijeka. Total investments are worth more than 4 billion kuna ($616 million), which would represent the single largest investment project in the history of the company. The licensor of DCU is Bechtel, the FEED was developed by Spain’s Tecnicas Reunidas. The final investment decision is planned for 2019 and the modernized refinery should be ready to operate in 2023.
One more project including DCU is expected to be launched soon. Poland's second-largest refiner Grupa LOTOS said the delayed coker unit at its Gdansk refinery should reach ready-for-startup date by May 31. The announcement of the deadline follows the conclusion of negotiations with the general contractor, Kinetics Technology. This delayed coker with a capacity of 1.4 MMtpa is a part of the EFRA (Effective Refining) Project. Once completed, the project will help Grupa LOTOS to maximize conversion and increase its refining margin by approximately $ 2 per barrel. With the new units in place, the Gdansk refinery is expected to produce an additional 900 ktpa of high-margin fuels and 300 ktpa of coke.
Another Poland’s refiner, PKN Orlen is building a visbreaker unit at its Plock refinery. Commissioning of the unit will allow to fully exclude high-sulfur fuel oil production, will enable an additional product yield of 1,200 tons per day and will optimize operations of the power plant. The company aims to complete the project by the end of 2020.
Large investments are also announced by Spain’s CEPSA. In 2019 the company plans to upgrade its aromax, hydrocracker and FCC units at the Huelva refinery and to carry out an aromatics optimization project at the refinery. Also, the company is to revamp Isomax, fluid catalytic cracker, alkylation units and construct a methylene unit (Sorbex II) at the San Roque refinery, which will double production capacity, investing as much as 1 billion euros through to the end of 2019 as it aims to boost conversion rate and improve technology and sustainability.
The revamp of an alkylation unit at the San Roque site is of great interest. It was announced that CEPSA will convert a unit producing linear alkylbenzene (LAB) and using hydrofluoric acid to Honeywell UOP’s solid bed Detal-Plus technology. When completed in 2020, this project will mark the world’s first conversion of an HF alkylation unit to solid bed technology. With the conversion, the plant’s capacity will increase by 50 ktpa to 250 ktpa of LAB. The technology, which was co-developed with CEPSA, is the first solid bed technology with the flexibility to produce LAB for a variety of different detergent formulations. The heart of the process is Honeywell UOP’s new ZDA-30 series catalyst which features higher activity and selectivity, making it more energy efficient.
Several European refiners announced plans to improve quality of fuels produced. Indeed, ExxonMobil said it was considering "significant upgrades" at its Fawley refinery aimed to meet UK demand for high quality fuels. A final decision was not expected until the second quarter of 2019 and, if approved, the investment would reduce the need for diesel imports into the UK, the company said. The project involves construction of a new hydrotreater and a new hydrogen plant.
Lukoil said it plans to invest more than $60 million over the next three years in its ISAB refinery in Sicily. The project includes two hydrodesulfurization units, which will allow the refinery to fully move to the production of Euro 5 diesel and halt output of Euro 3 and Euro 4 product.
In August 2018, Wood secured two new strategic modifications contracts with Norway’s Equinor for the Mongstad refinery. The scope of the contracts includes FEED for a gas residue debottleneck project, and engineering and procurement services to reduce sulfur content in gasoline produced at the refinery. Earlier, Wood successfully completed FEED and analysis for modifications at the refinery’s naphtha hydrotreating and storage systems.
In recent years, European refiners have begun to pay more attention to increasing their feedstock flexibility. For this purpose, Hungary’s MOL Group is developing a new crude desalting system at the Duna refinery. It is part of the company group’s program of crude basket diversification, moving from the current alternative seaborne crude intake to above 33% and aiming for 50+ crude grades. Following an optimization study, the company opted to install a new two-stage Desalter system to broaden its crude diet. In March 2019, Dutch Frames was awarded a contract to supply two desalters (electrostatic coalescers) to MOL Group for the Duna refinery.
Everyone is used to closing refineries in Europe, however, in March 2019, Royal Dutch Shell struck a deal with Dutch tank terminal firm HES International to partially restart a German oil refinery suspended since 2011. HES Wilhelmshaven Tank Terminal is in the process of reinstalling the vacuum distillation unit (VDU) to produce low-sulfur bunker fuels ahead of the implementation of the IMO rules. However, the Wilhelmshaven VDU will not be running on residual fuel, HES said. One of the sources said the plan is to process heavy, low-sulfur crudes like Brazilian grades to produce a range of products, including maximum 0.5 % sulfur fuel oil or distillate marine fuels.
To find out more about the European refining industry and projects, please don't miss out on attending the 19th edition of IDW – International Downstream Week – organized by Euro Petroleum Consultants and taking place on 27-29 May 2019 in Sardinia.
Euro Petroleum Consultants is a technical oil and gas consultancy with offices in Dubai, London, Moscow, Sofia and Kuala Lumpur. Euro Petroleum Consultants also organises leading conferences and training courses worldwide. For further details please visit www.europetro.com.