Ipiranga Refinery in Brazil Reduces Processing Capacity

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Researched by Industrial Info Resources (Sugar Land, Texas)--In the first weekend of July, the Ipiranga refinery in Rio Grande do Sul, Brazil, began to decrease the refinery's processing capacity. The decision was made by the refinery's directors, who cited the high price of crude oil costs they have been facing for a while. In Brazil, the price of derivate products, such as diesel, naphtha, liquefied petroleum gas and fuel oil, are not keeping pace with the increasing price of crude oil, making it unprofitable for the Ipiranga refinery to commercialize derivate products. The refinery will only be able to sell petrochemical naphtha.

The 15,000-barrel-per-day (BBL/d) refinery will be processing at a lower capacity with only one processing unit online out of its 11 plants. The Atmospheric Distillation 1 (U-100) unit is the only active unit, processing 2,000 BBL/d. Atmospheric Distillation 2 (U-200), vacuum, fluid catalytic cracking unit (FCCU), sour water treatment, Merox sweetening, Merox extraction, gasoline stabilizer, diethanol amine, biologic treatment and refinery gas/light end were shut down on July 7. Refinery officials have said the majority of the units will remain offline until July 15, when they will receive new crude oil feed at the refinery. The amount of crude oil received will determine whether it will be possible for Ipiranga to restart the U-200.

The refinery's 3,170 BBL/d FCCU has been on standby since October 2007 because of high crude and gasoline prices in Brazil, as the rise in the price of crude has not been reflecting in gasoline prices. For details, view related April 15, 2008, article - Ipiranga Refinery to Restart Standby Fluid Catalytic Cracker.

Since Petrobras (NYSE:PBR), Ultra Petroleum Corporation (NYSE:UPL) (Houston, Texas) and Braskem S.A. (Camacari, Brazil) purchased Ipiranga assets in March 2007, they are still deciding which company will be in charge of the refinery. For details, view related April 3, 2007, article - Petrobras, Braskem and Ultrapar Acquire Ipiranga, Brazil's Second Largest Refining Company.

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