Petroplus Plans to Close French Refinery

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Researched by Industrial Info Resources (Sugar Land, Texas)--Petroplus Holdings AG (VTX:PPHN) (Zug, Switzerland) is planning to cease activities at its 85,000-barrel-per-day (BBL/d) Reichstett refinery in France.

Located in the Alsace region of northeast France, the Reichstett refinery is the smaller of the two refineries the group leads in the country, after the 154,000-BBL/d Petit Couronne refinery, which is in the Haute Normandie region. It specializes in a wide range of products such as bitumen, fuel, gas oil, kerosene, liquefied petroleum gas (LPG) and carburants, most of which supply the eastern part of the country; the rest are exported to Germany and Switzerland.

On April 1 2010, two years after the acquisition of the refinery from Royal Dutch Shell (NYSE:RDS.A) (The Hague, Netherlands), Petroplus had announced a strategy to evaluate activities for the site after a drop in refining profit margins that also affected Total S.A.'s (NYSE:TOT) (Paris, France) 137,000-BBL/d Flandres Refinery, which has been shut down since September 12, 2010, and the reconstruction of Total's 364,000-BBL/d Gonfreville Refinery. Several posibilities were considered, including selling, as well as converting the site into a terminal.

Six months later, after no offers were made for the acquisition of the refinery, Petroplus began to cease activities and convert the site into a terminal.

A series of shutdowns have been affecting the refinery since the last quarter of 2009. On September 28, 2009, a leakage at the Fos sur Mer Terminal that feeds six refineries in France and another in Switzerland forced the refinery to perform a 60-day turnaround. Authorities have used this downtime to perform regular inspection and maintenance, which is scheduled to begin during March 2010 in two of its three production areas, the Distillation Area and the Hydrogen Area.

On May 31, 2010, the conversion area of the refinery was shut down for maintenance and inspection. FCC and associated units remained offline for a non-production period of 50 days.

On October 30, 2010, the refinery resumed operations after a 15-day overhaul due to lack of incoming feed from the Fos sur Mer terminal, where employees had been on strike since September 27.

Though the company recently announced its intentions of converting the site into a terminal, a closure date remains uncertain.

Created in 1993, Petroplus Holdings AG is currently the largest independent refiner and wholesaler of petroleum products in Europe. The company runs seven refineries in Europe, most of which were incorporated into the company in the past eight years. In 2000, Petroplus AG incorporated two refineries in U.K.--the 172,000-BBL/d Coryton Refinery and the 117,000-BBL/d Teesside Refinery--as well as the Cressier Refinery in Switzerland. In 2006, the 110,000-BBL/d Belgium Refining Corporation's refinery in Antwerp, Belgium, was incorporated into the group. In 2007, Petroplus incorporated a 239,000-BBL/d refinery in Ingolstat, Germany. Finally, two French refineries, the 84,000-BBL/d Reichstett Refinery and the 154,000-BBL/d Petit Couronne Refinery, were purchased in March 2008.

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