EMEA News
As HFO Demand Falls, European Refiners Resist Closures
As new emission rules reduce demand for heavy fuel oil (HFO) European refiners participating in an annual summit in Barcelona say they are reducing their throughputs rather than shuttering facilities, Platts reports.
Markets for HFO have been on the decline in recent years as power plants stopped using the fuel, and new restrictions on sulfur content in marine fuel will push the need for the product down even more.
Marcus Lippold, vice president of MOL group, said the industry should shut down 1 million barrels per day (bpd) immediately and another 1.5 to 2 million bpd by the end of 2017 to restore market balance, but "insufficient closures are on the agenda."
"Survival of refineries is dependent on adaptation to demand patterns," he said.
MOL is considering adding a hydrocracker at a refinery in Danube, Hungary and a delayed coker at another facility in Rijeka, Croatia, but Lippold said recent conversions investments by the industry resulted in "quite poor" returns, and no timeline is set for the potential investments.
Lippold said industry players in Central and Eastern Europe are looking at the possible need for alternative supplies of crude oil as Russia looks to expand its outlets for crude exports, but he said for now supply from Russian pipelines has been steady.
"There are no complaints," he said.
A Reuters report in November found that an overhaul of Russia's refineries would drop fuel oil exports to Europe.
