Refinery throughputs suffered a rapid decline throughout the third quarter of 2013, according to a report by consulting firm GlobalData.
Europe has suffered more than any other region, due to over capacity coupled with falling demand due to ongoing economic recession.
In addition, approximately 1.2 million bpd of the region’s atmospheric distillation unit capacity was removed for maintenance purposes in the third quarter of this year.
Many plant turnarounds are expected to extend into the fourth quarter. However, according to the GlobalData report there is little urgency to bring these plants back on stream even after planned work has been completed. Imports of gasoline, gasoil/diesel, jet kerosene and all other hydrocarbon products are readily available from the US, Middle East, India and Russia.
"Additionally, a number of Europe’s refineries are currently waiting on auction block, and those that remain unsold are under threat of being transformed into terminals by their owners, therefore taking this capacity off the market forever", said Jeffrey Kerr, GlobalData’s Managing Analyst for Downstream Oil & Gas.
Heavy maintenance has also been observed in North America, where approximately 1 million bpd of atmospheric distillation capacity was taken offline, as refiners changed over their equipment from gasoline production to heating oil production in preparation for winter.
Approximately 500,000 bpd of crude capacity was under maintenance in the Asia Pacific region in the third quarter of 2013. Some of this work is planned to continue into the fourth quarter.
Kerr commented that "Asia Pacific’s refining industry is also feeling the bite of reduced margins, as refiners are required to buy crude oil at international market rates and then sell their products at either government set or subsidized process in some of the larger countries, such as China. Either way, their profitability is, and will remain hampered".
"What’s more, a number of smaller refineries, such as those in Australia and Japan, are in danger of closing due to the high costs required to upgrade them, presenting us with a somewhat bleak outlook both for this region and the whole of Europe, as long as crude prices stay lofty".
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/10102013/europe%E2%80%99s_refinery_woes733/