Shell, BP to Shut Refineries for Repair, Cut Europe Fuel Supply

By Nidaa Bakhsh

Sept. 25 (Bloomberg) -- Royal Dutch Shell Plc, BP Plc and Total SA are leading oil companies that will shut at least 6 percent of Europe's refining for repairs next month, reducing inventories already diminished by U.S. demand after Hurricane Ike.

The outages from Rotterdam to Italy will idle at least 952,000 barrels of crude oil distillation a day in October, double the September figure, according to data compiled by Bloomberg. The total includes plants owned by Shell and BP in the Netherlands, representing a combined 400,000 barrels a day.

Refinery profits in western Europe fell to their lowest level since at least 2004 this year as record prices cut fuel demand. Gasoline inventories fell 18 percent to 612,000 metric tons in the Amsterdam-Rotterdam-Antwerp region last week, according to Dutch consultant PJK International BV, because of rising exports to the U.S. after Hurricane Ike shut Gulf Coast refineries.

``Over the last five years, planned crude distillation unit outages tended to average 600,000 to 800,000 barrels a day at this time of year,'' Harry Tchilinguirian, senior oil analyst at BNP Paribas SA, said in a telephone interview from London. In October 2007, refinery outages peaked at 1.2 million barrels a day.

Full shutdowns will occur during the next two months at StatoilHydro ASA's complex in Mongstad, Norway; Galp Energia SGPS SA's Sines refinery in Portugal; Exxon Mobil Corp.'s Trecate facility in Italy and Tamoil SA's plants in Cremona, Italy and Hamburg.

European refining margins, or the profit made from turning a barrel of crude into fuels, recovered to $4.13 a barrel last month from $1.39 a barrel in July after hurricanes Gustav and Ike.

Partial Outages

Aside from crude-processing units, shutdowns affecting other parts of refineries during this month and next, such as fluid catalytic crackers, will further reduce fuel production, with maintenance at Chevron Corp.'s Pembroke refinery in Wales and Neste Oil Oyj's Porvoo plant in Finland.

Shell was forced to shut a gasoline-making unit last night at Pernis, Europe's largest oil refinery, after a fault occurred, spokesman Wim van de Wiel said in a telephone interview today from The Hague. The refinery is located in the Netherlands.

Other plants in the Mediterranean region that have scheduled partial shutdowns include Total's French refinery in La Mede, Eni SpA's Gela plant in Italy and Repsol YPF SA's Spanish facilities in Bilbao and La Coruna.

Spain's Compania Espanola de Petroleos SA said yesterday it will start maintenance on a gasoline-making unit at its Gibraltar refinery next month.

Increased plant maintenance earlier this year coupled with rising crude oil costs caused a surge in fuel prices that led to European-wide protests by fishermen and truckers. New York crude oil futures rose to a record $147.27 a barrel on July 11 and were trading near $104 today. U.S. pump prices for gasoline rose to a record $4.114 a gallon in mid July, motoring group AAA said.

Wholeseale gasoline prices in the Amsterdam-Rotterdam-Antwerp region rose to a record $1,192 a ton July 11, according to data compiled by Bloomberg. The price has since dropped 24 percent. Diesel also peaked in July, at $1,346 a ton, before falling back.

The following table shows the owner, name, location, total processing capacity in barrels a day, shutdown dates and reason for halt. The information has been provided by refinery operators.

Neste Oil Oyj            Aug. 15 - Oct. 2         Fourth diesel
Porvoo, Finland                                   line closes for
196,000                                           repairs.

Tamoil SA                Sept.                    Full shutdown.
Hamburg, Germany
105,000

Tamoil SA                Sept.                    Full shutdown
Cremona, Italy                                    for two weeks.
95,000

Eni SpA                  Sept.                    CDU, coker runs
Gela, Italy                                       cut by 80
100,000                                           percent.

StatoilHydro ASA         Sept. 1 - Oct. 15        Crude unit
Mongstad, Norway                                  shuts for 2
189,000                                           weeks.

Chevron Corp.            Sept. 15 - Oct. 31       FCC shuts.
Pembroke, Wales
220,000

Repsol YPF SA            Sept. 15 - Oct. 15       FCC shuts.
La Coruna, Spain
120,000

Galp Energia SGPS SA     Sept. 16 - Oct. 26       Full shutdown.
Sines, Portugal
202,000

Royal Dutch Shell Plc    End Sept. - Mid. Nov.    CDU, capacity
Pernis, Netherlands                               200,000 b/d,
416,000                                           shuts.
                        Sept. 24                 FCC shuts on
                                                 fault.

Exxon Mobil Corp.        Oct.                     Full shutdown.
Trecate, Italy
230,000

BP Plc                   Early Oct. - Mid. Nov.   CDU, capacity
Rotterdam, Netherlands                            200,000 b/d,
400,000                                           shuts.

Royal Dutch Shell Plc    Oct. 2 - Nov. 2          One of two
Stanlow, U.K.                                     crude units
240,000                                           shuts.

Total SA                 Oct. 6 - Dec. 6          FCC,
La Mede, France                                   alkylation,
158,000                                           visbreaker
                                                 shuts.

Repsol YPF SA            Oct. 10 - Oct. 30        Visbreaker
Bilbao, Spain                                     shuts.
220,000

Hellenic Petroleum SA    Oct. 15 - Nov. 7         Partial
Elefsis, Greece                                   shutdown.
100,000

Cepsa                    Oct. 25 - Dec. 3         FCC shuts.
Gibraltar
223,000

Source: Refinery operators, industry officials.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net