03 March 2009

Two of Singapore's three refineries are shutting down

The shutdowns - by ExxonMobil and Singapore Refining Company (SRC) - come as industry sources said that margins in the first two months of this year are 'still not exciting, and refineries continue to operate at reduced capacity'. Industry sources stress that the coming shutdowns are scheduled - and not related to the current downturn.
Public walk on Pulau Semakau
A public walk on the living shores of Pulau Semakau with Shell refineries on Pulau Bukom in the background.

Shell, with 500,000 bpd of refining capacity at its Pulau Bukom refinery, declined to comment on whether it too is conducting maintenance shutdowns in the next couple of months.

ExxonMobil, SRC refineries shutting for maintenance
Move not due to poor margins amid demand slump, say industry sources
Ronnie Lim, Business Times 3 Mar 09;
TWO of Singapore's three refineries are shutting down for six to eight weeks of maintenance, cutting the island's 1.4 million barrels per day (bpd) refining capacity amid continued slow demand for oil products.

The shutdowns - by ExxonMobil and Singapore Refining Company (SRC) - come as industry sources said that margins in the first two months of this year are 'still not exciting, and refineries continue to operate at reduced capacity'.

Local refining margins fell in the second half of 2008. Singapore Petroleum Company (SPC) - the only company to report its margins - said that they fell to US$1 a barrel in July-December 2008 from US$10 in the first half of the year. In Q4 2008, SPC's margins evaporated to minus-US$2 a barrel.

Still, industry sources stress that the coming shutdowns are scheduled - and not related to the current downturn. 'They are operational shutdowns for maintenance and inspection purposes,' an official said. 'We do them regardless of whether margins are up or down.'

ExxonMobil, the largest refiner here with capacity of 605,000 bpd, said yesterday that it had started shutting down several units for maintenance, with the overall shutdown expected to last about six weeks.

The work is understood to involve units at its 296,000 bpd Jurong Island refinery and its 309,000 bpd Jurong facility, the former Mobil refinery. ExxonMobil did not specify the actual capacity being shut down.

Maintenance work is also expected to be conducted at the aromatics unit of its US$2 billion, 900,000 tonne per annum (tpa) petrochemical complex. This is not related to the construction of ExxonMobil's second one million tpa petrochemical complex here - a US$5 billion-plus project expected to start operating in early 2011.

'We have communicated the shutdown to our regular customers and expect to be able to continue to meet their product needs during this brief period,' an ExxonMobil spokeswoman said.

SRC - the joint-venture 290,000 bpd refinery of Caltex and SPC - is understood to be shutting down a 135,000 bpd crude distillation unit from mid-March to mid-April for operational maintenance and to upgrade a 20,000 bpd hydro-sulphuriser unit to produce 'green' diesel.

The company is investing US$81 million in the ultra low-sulphur diesel project, which is scheduled to start production in the second half of this year. The 'green' diesel is expected to be exported to Europe and Australia.

Shell, with 500,000 bpd of refining capacity at its Pulau Bukom refinery, declined to comment on whether it too is conducting maintenance shutdowns in the next couple of months.
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