Exxon: $1 B Antwerp clean fuels unit will be running by mid-2018
LONDON (Reuters) — ExxonMobil expects a new $1 B fuel upgrading unit at its Antwerp refinery to be fully operational in the first half of next year, the company said on Tuesday.
The delayed coker unit, part of a $1 B investment announced in 2014, will enable the 320,000 bpd refinery to upgrade high-sulfur fuel into various types of diesel, including the variant mandated by new laws governing shipping fuels.
The company announced the investment during a particularly tough period for European refining, when margins were near multi-year lows and demand in the region appeared to be in permanent decline. However, refining profits have since rebounded strongly.
An Exxon spokeswoman said the company plans to complete construction “towards early 2018.” Though she said the complex startup process can take several months, the company expects the unit to be fully operational in the first half of next year.
In addition to the current boom in fuel demand, spurred by low oil prices, traders and analysts say that any project to cut fuel oil production is key to refinery survival amid tightening rules over the level of sulfur that can be burned.
The switch to cleaner fuels in the world’s ships mandated by the International Maritime Organization will reduce the maximum level of sulfur that can be burned to 0.5% in 2020 from 3.5% now.
Analysts FGE estimate that the shipping rule alone could shift 700,000 bpd from fuel oil to distillates, while the International Energy Agency has put the figure as high as 2 MMbpd.
Reporting by Libby George and Ron Bousso; Editing by David Goodman
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