ADNOC's early restart of Ruwais refinery unit may add to Asia gasoline glut

Reuters News- SINGAPORE- The earlier-than-expected return of a gasoline-making unit at Abu Dhabi National Oil Company's (ADNOC) Ruwais oil refinery may add to a glut of the fuel in Asia, potentially weighing on prices, while fuel oil supplies could drop.

ADNOC shut the 127,000 barrels-per-day (bpd) residue fluid catalytic cracker (RFCC) in the western section of the 800,000-bpd Ruwais plant in January 2017 after a fire at a linked petrochemical unit. The RFCC mainly processed straight-run fuel oil (SRFO) from the refinery's crude distillation units into higher-value gasoline and diesel fuel.

That unit was not expected to be back online until the first quarter of 2019.

However, an ADNOC spokesman said on Monday, "We expect restoration work to be completed by the end of this year and start-up thereafter."

Market consultants Energy Aspects said in an Oct. 8 note that they expect repairs on the RFCC to be finished by the end of November with full operations restored by February. That would raise gasoline output from the UAE by 50,000 bpd.

"Ruwais's RFCC will join a list of other gasoline-producing units in the region that have returned to service recently following technical problems," said Energy Aspect Analyst Nevyn Nah in the note, referring to recent refinery outages in Saudi Arabia, Oman and India.

"With plenty of Middle Eastern gasoline supplies that were missing over August and September restored, and even more to return, Singapore gasoline time-spreads have collapsed at the front, with even October-November spreads looking shaky," said Nah.

The note also points out that three Long-Range 1 tankers carrying gasoline from Europe are set to arrive in Singapore in November.

The RFCC's outage at the start of last year had prompted ADNOC to temporarily ramp up gasoline imports to plug the supply gap while increasing exports of SRFO.

ADNOC's "gasoline production fell by almost 50,000 bpd in 2017, a fall we expect to be reversed once the RFCC restarts, while straight-run fuel oil (SRFO) exports, which grew by almost 70,000 bpd in 2017, will fall," said Nah.

(Reporting by Roslan Khasawneh, additional reporting by Rania El Gamal in DUBAI and Jane Chung in SEOUL; Editing by Christian Schmollinger) 

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