By JENNY GROSS
BARCELONA -- Maintaining refineries across the globe will
become more expensive in the next few years as refineries have
to make costly changes to comply with new environmental
regulations, the global market manager for oil and gas refining of Tyco Flow Control, a
segment of Tyco International, said Monday.
Higher oil prices in recent months have strained profits in
the refining industry, particularly in
Increasingly costly maintenance periods for refineries
could further hurt profits in the industry, which has seen
seven refinery shutdowns since 2008.
From 2000 to 2008, the cost of refinery turnarounds has increased
by 15%, Tito Sequeira said, citing industry data and anecdotal
experience with customers.
"We don't see anything stopping this trend," he said on the
sidelines of the Global Refining Summit in Barcelona.
He said with the decline in the number of engineering
graduates, it is increasingly difficult to find talent trained
in refinery maintenance.
To make matters worse, some refineries are also located in
remote places with few technicians qualified there to service
refineries, he said.
"Much refinery maintenance is not done properly - something
breaks or doesn't work as there's less maintenance talent
available," he said.
Torrill Rod, Statoils operational engineer at the
Mongstad refinery in western Norway, said turnaround costs have
increased since she started working at the refinery 17 years
Parts of the refinery, which has capacity of 10
million tpy of crude oil, were built in the 1970s and have
needed significant upgrades during the maintenance periods, she
In addition to a push by the European Union to reduce carbon
emissions by 2013, a move that could make it more expensive for
European refineries to operate, refineries are increasingly
processing heavier grades of crude oil that require higher
temperatures and pressures.
This exerts more pressure on equipment such as valves, and
equipment used under these tougher circumstances requires more
maintenance, Sequeira said.
Dow Jones Newswires