Royal Dutch Shell has postponed a large turnaround that was scheduled to take place in 2021 at its 404,000-b/d Pernis refinery near Rotterdam, the Netherlands, in a bid to contain costs, OPIS has learned.
The refinery was planning to take both the hycon and solvent deasphalter (SDA) units offline next year in what represented Europe's largest refinery's biggest scheduled maintenance project in 2021, but the work has been pushed back a year, say Rotterdam-based sources.
"The hycon unit (maintenance work) will not take place next year, it will be the year after...The SDA (maintenance work) has been moved. Looking at the costs, it was easy and possible for them to move it," a source close to Shell's operations in the Netherlands told OPIS.
As a result, the maintenance work schedule at Pernis next year will be relatively light, local sources say, contributing to an attempt by Shell to reduce annual capital expenditure across its operations from its previous guidance of $24-29 billion to the $19-22 billion outlined in its third-quarter report.
"There are a few small maintenances, but not the big one (involving the hycon and SDA units). They did a check looking at the conditions of the units and (decided) that it would be possible to move the turnaround on," one Rotterdam-based source said. "The conditions of the units were good, better than expected."
The solvent deasphalter unit is the most recent unit to be constructed at the Pernis refinery, and came online for the first time in the fourth quarter of 2018. The SDA strips out asphalt from crude supplied to the refinery, allowing Pernis to produce cleaner fuels in greater quantity.
The construction of the unit was Shell's largest investment in the refinery since 2011 and was undertaken partly to benefit from IMO 2020 regulations introduced at the start of this year that boosted demand for low-sulfur shipping fuels.
Similarly, the hycon unit maximises clean fuel output at Pernis by taking residual fuel and stripping out metals and sulfur in order to produce lighter fuels.
Asked to confirm the postponement of the work, a spokesman for Shell said: "We don't provide this kind of information on individual assets."
Around 50% of the Pernis' refinery output comprises jet fuel and middle distillates, according to an IHS Markit refinery profile, while gasoline output is about 14%, the profile suggests.
Shell typically staggers maintenance work at Pernis, but the refinery undertook a full-scale turnaround earlier this year that lasted from mid-April until the start of July.
--Reporting by Anthony Lane, alane@opisnet.com
--Editing by Paddy Gourlay, patrick.gourlay@ihsmarkit.com
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