Matosinhos Refinery to close. File Image / Pixabay
Galp is to shutter the smaller of its two refineries, the Portuguese energy major has announced.
The 110 kbpd Matosinhos plant in Porto will close from 2021.
Production at Matosinhos has been suspended since October 10 following the drop in oil products demand as a result of measures taken in response to the coronavirus pandemic.
"The structural changes in oil products demand patterns, driven by the regulatory context in Europe and the effects caused by the COVID-19 pandemic, have led to a significant impact on Galp’s downstream industrial activities," the firm said in a statement Monday.
While COVID looks to have been the final straw, local media report the plant's future has been under scrutiny for some 20 years due to earlier question marks over its profitability.
Having adapted its refining system last year, the company counts 0.50% VLSFO marine fuel among the products it produces.
Moving forward, Galp says it will concentrate activity at its larger, and more modern, 220 kbpd Sines facility.
"Solutions are being analysed to improve Sines’ energy and process efficiency, and to integrate the production of advanced biofuels and other cleaner and more valuable products, with potential investments supported by the restructuring savings and energy transition support mechanisms," it added.