28 May 2009
Global perspectives: Boosting crude processing in Serbia
By Cris Whetton
Serbian oil giant Naftna Industrija Srbije (NIS), majority owned by Russia's Gazprom Neft, wants to process more crude oil so it is looking to add a high pressure separator and a hydrotreater for the Pancevo refinery near Belgrade. The company requested bids for the equipment, saying “the procurement of new components will allow NIS to boost quality of its engine fuels to the Euro-5 standard.” Pancevo, the larger of the country’s two crude refineries, will start using the new plant by 2012.
Meanwhile, in Germany, Shell said it intends to sell its refinery in Heide-Hemmingstedt, Harburg, a suburb of Hamburg. The small 5.5 million metric ton per year refinery is profitable but no longer meets Shell’s requirements for high throughput. A Shell spokeswoman said the goal is to sell the refinery quickly. The spokeswoman said the sale would not affect the lubricant refinery in Grasbrook and the PAE Research Laboratory for fuels in Wilhelmsburg (Hohe Schaar).
Shell Harburg is not the only refinery up for sale. Eni SpA’s 84,000 bpd Livorno refinery in northern Italy and Petroplus Holdings AG’s 117,000 bpd Teesside plant in northern England are also on the block. Eni hopes to find a buyer or partner for Livorno in the next few months, an Eni spokesman said, adding a number of parties had indicated possible interest. Petroplus said it hoped to sell the refinery within six months. However, instead of selling or closing, there is a third option to turn the refinery into a storage site. The storage business has become more lucrative as oil producers and trading companies hedge their exposure to future oil prices. Europe remembers the example of Japan, where refining never recovered from the oil shock of the 1970s. Refiners there, heavily oriented toward the domestic market, had to shrink capacity. New and complex plants overseas also make matters worse for old, simple European ones. Reliance Industry’s export-oriented Jamnagar refinery in India is set to be the world’s largest when it fully comes online later this year.
Cris Whetton is InTech’s European correspondent.