JAKARTA (TheInsiderStories) - While many refineries in the Asia-Pacific region have been ramping up runs, some, especially in Indonesian and India, are now reducing throughput on reimposed lockdowns, said S&P Global in the latest report.
The agency hopes that India’ oil demand will recover in the second half of the year are fading fast as some provinces implement partial lockdowns to battle the COVID-19, prompting refiners to start planning for lower crude runs in order to prevent a problem of plenty at home.
“India, one of the fasting growing oil markets in Asia in recent years, is expected to end 2020 with its oil demand slipping into the red, a trend not seen for nearly two decades, as per government officials and oil analysts. The last time India witnessed negative growth in oil demand was in 2001 when consumption fell marginally from 2000 levels,” said S&P Global.
PT Trans Pacific Petrochemical Indotama (TPPI)
Indonesia’ TPPI plans to operate its condensate splitter at Tuban, East Java, at 60 - 70 percent of capacity through August as gasoline demand remained weak, the company said on Aug. 7. Trans Pacific had reduced runs at the complex since April due to weak gasoline demand stemming from lockdown measures to control the spread of the coronavirus pandemic.
Indian Oil Corp (IOC)
The country’ largest state-run refiner, reduced the run rate to 75 percent at its nine refineries as many states reimposed lockdowns to combat the spread of the coronavirus pandemic, company officials said July 31. The producer’ average run rate at its refineries was 93 percent during the first week of July, when the second phase of the reopening of the Indian economy began.
In the three months that ended June 30, IOC posted a 74 percent capacity utilization rate, compared with 100 percent in the year-ago quarter, according to the country’ oil ministry. Indian Oil‘ run rate is expected to be 70 - 75 percent in 2020, said the chairman, Shrikant Madhav Vaidya.
He said, demand for refined products is unlikely to reach the pre-pandemic level during the company’s ongoing fiscal year. IOC’ fiscal year begins April 1. The refiner reduced the run rate at some of its refineries to as little as 40 - 45 percent during the initial lockdown to combat the pandemic, which began March 25.
Reliance Industries Ltd (RIL)
Reliance Industries cut the combined run rate for its Jamnagar refining complex for the fourth month in a row in June, oil ministry officials said July 29. RIL, India’ private refiner, has two refineries focused on the domestic market and export markets.
The company recorded a combined run rate of 83 percent in June, down from 91.7 percent in May, 94.8 percent in April, 95.4 percent in March and 105 percent in February. In the first quarter of the 2020, RIL’ combined run rate stood at 90 percent compared to 104 percent a year earlier.
BPCL
BCPL is currently running its Mumbai refinery at 60 - 70 percent of capacity, and plans to keep operations steady at this level through August. Operations are steady to slightly lower by 5 - 10 percent from July, when the refinery was running at around 70% of capacity.
Bharat Petroleum Corp
Bharat Petroleum Corp., plans to gradually raise operations at Kochi to 80 percent of capacity later in August to maximize gasoline production, in a bid to meet strong domestic gasoline demand. India’ gasoline exports in June slid 11.11 percent from May to a two-month low of 985,000 mt as refiners channeled cargoes to the domestic market to meet a rise in demand, amid a backdrop of a heavily supplied Asian market.
In addition to being last lower in April at 932,000 mt, June’ outflow represented the third consecutive month that Indian gasoline export volumes were lower than 2019′ monthly average of 1.08 million mt, according to the Petroleum Planning and Analysis Cell. The data also showed that Indian gasoline demand in June jumped 28.8 percent from May to 2.28 million mt, though it had dropped 13.6 percent year on year.
The decline in gasoline exports came despite higher Indian refinery run rates in June, which rose to 85 percent from 77 percentin May, oil ministry data showed. India’s top two refiners Indian Oil Corp. and Bharat Petroleum Corp. had ramped up June’s refinery throughput by 29.27 percent and 20.19 percent, respectively, from May, the data showed.
India’ gasoil production climbed for the second straight month in June as local refiners hiked run rates in line with emerging domestic demand as the country gradually eases coronavirus-induced restrictions. The refiners produced 8.01 million mt of gasoil in June, up 8.5 percent from 7.38 million mt registered in the previous month.
SK Energy
South Korea’ SK Energy‘ Ulsan crude run rate fell to 77 percent in second quarter (2Q), the lowest on record and down from 90 percent a year earlier and 92 percent in 1Q. The company plans to raise crude throughput in a gradual manner in the third and fourth quarters as refining margins are likely to improve. Its expect the company’ crude run rate in 3Q to be around 80 - 85 percent.
SK Energy’ refining affiliate SK Incheon Petroleum, which runs two CDUs with a combined 275,000 barrels per day (bpd) of capacity and a 100,000 bpd condensate splitter at Incheon on the west coast, will not reduce its run rate in 3Q because its already low. SK Incheon’ crude run rate averaged at 76 percent in 2Q, down from 84 percent a year earlier and 80 percent in 1Q.
Ampol
The company formerly Caltex Australia, is eyeing end-August as the potential restart of its Lytton Refinery, after the facility was idled for scheduled maintenance in mid-May. A restart at end-August will bring to close four months of maintenance, which had been brought forward from the original August restart date, due to poor operating conditions earlier in the year.
Australian demand for oil products has started to improve since these lockdown measures were eased in May. According to mobility data from Apple, driving activity throughout Australia has improved to 3 percent below the baseline, as compared with the near 75 percent fall in April.
Pilipinas Shell Petroleum Corporation (PSPC)
PSPC said its Tabangao refinery in the Philippines remains in “economic shutdown” and the company continues “to monitor the market conditions and will restart refinery operations as soon as it is economically viable.” The shutdown, which started from mid-May, was due to “the significant decline in demand for oil products and the significant deterioration of regional refining margins” following the COVID-19.
Binh Son Refining
Separately, PetroVietnam’ Binh Son Refining and Petrochemical has processed the first batch of Russian Sokol crude oil at its Dung Quat refinery, as part of its efforts to reduce dependence on local Bach Ho crude. The company bought 710,574 barrels of the Sokol crude in early July for a test run over July 13 - 18.
The Sokol crude accounted for 20 percent of the mix during the trial run, with Bach Ho accounting for 29 percent and the rest other crudes. The result of the test run has enabled BSR to consider gradually replacing Bach Ho with Sokol and other crudes since output of Bach Ho has been declining.
Edited by Editorial Staff, Email: theinsiderstories@gmail.com
