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Refinery closures in progress

Hydrocarbon Engineering,

Royal Dutch Shell is pressing ahead with plans to close the Clyde refinery in Sydney, Australia's oldest oil refinery, despite continued consultation with the refinery’s workforce.

Shell said its April decision to close the refinery and turn it and the Gore Bay terminal on Sydney Harbour into an import business by mid-2013 remained. The 79 000 bpd complex is viewed as too small to compete with larger, newer and more capable Asian refineries.

The move is consistent with Shell’s policy to move out of refining in order to concentrate on upstream projects, which are viewed as more lucrative for the future.

Shell are yet to comment on the future status of their 130 000 bpd Geelong refinery, which has recently been the subject of maintenance investment totaling approximately AUS$ 120 million.

The news switched the focus on to Shell's rival refiners. Caltex refused to commit publicly to the future of its Kurnell refinery in Sydney, while ExxonMobil announced its ongoing commitment to the nation’s smallest refinery, the 75 000 bpd Altona complex in Melbourne.

Elsewhere, Lukoil’s Neftochim refinery in Bulgaria will cease operations and will no longer be able to refine and sell petrol after Bulgaria's Customs Agency withdrew the company's license to operate a tax warehouse.

The Customs Agency's decision to withdraw the ‘tax warehouse’ license, defined in EU regulations as ‘premises approved for the production, holding and movement of excise goods’, went into force as soon as it was issued on July 26.

Legislative amendments passed in 2010 required facilities that produce or store spirits and fuels should have meters that monitor the quantities, in order to calculate the exact amount of taxes and excise duties owed to the Budget.

The deadline for installing such meters was September 2010. Lukoil Neftochim asked for a further delay of implementation until the end of 2011, but it was denied.

The Bulgarian Finance Minister is due to meet with Lukoil management shortly in order to discuss a schedule according to which the refinery could meet the legislative requirements in two months.

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