Italy's Refining Woes Continue with Planned API de Ancona Refinery Closure in 2013

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Researched by Industrial Info Resources (Cordoba, Argentina)--API Holding SpA (Rome, Italy), owner and operator of the 85,000-barrel-per-day (BBL/d) Ancona Refinery S.p.A in the city of Falconara Marittima, in the Ancona province of Italy, announced in July that the refinery will cease operations for 2013. The announcement confirms that rising costs and slowing profits are affecting the country's economy, specifically the refining market.

Located in the city of Falconara Marittima, the Ancona refinery is yet another refinery to be affected by declining refining market conditions.

Tamoil's (Geneva, Switzerland) 100,000-BBL/d Cremona refinery has been closed since July 2011, and Eni SpA's (NYSE:E) (Rome, Italy) 80,000-BBL/d Venezia Refinery has resumed activities in May after six months of inactivity. Half of the 130,000-BBL/d Gela refinery has been shut down, and it is expected to remain as such until May 2013. In addition, Total ERG, a joint venture between Total S.A. (NYSE:TOT) (Paris, France) (51%) and ERG SpA (Milan, Italy) (49%), announced on May 19, 2012 that it intended to close its 86,000-BBL/d Rome Refinery sometime during September 2012, and to convert the site into a storage terminal.

According to analysts, the main crisis today is related to the overproduction of finished products amid poor market demand. Moreover, large investments to meet European environmental requirements, in a small-profit context, causes refining companies to face big losses, accumulate debts until they are forced to close, or reduce production rates until market conditions become favorable.

The Api Ancona Refinery produces 85,000 BBL/d and has about 400 employees, who fear that this temporary shutdown is part of a strategy to permanently close the site.

According to a statement, the refinery will halt production on January 2, 2013. Only workers from administration and storage will remain at the site. There is no maintenance work planned in the near future; however, a major maintenance turnaround is scheduled to take place in 2014.

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