Preem Converting Sweden's Largest Refinery for Renewable Fuels

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Preem AB (Stockholm, Sweden), the largest refiner and fuel company in Sweden, has announced plans to convert its Lysekil oil refinery into Scandinavia's largest producer of renewable fuels.

Initially, the company aims to carry out a redevelopment of the existing Synsat plant, which today produces environmental Class 1 diesel. The redevelopment of the Synsat plant will boost Preem's renewable diesel production by 650,000-950,000 cubic meters annually. This is two to three times higher than today's renewable production capacity at its Gothenburg refinery.

The company operates two refineries in Sweden, located at Lysekil and Gothenburg, with a refining capacity of more than 18 million cubic meters (m3) of crude oil every year. Lysekil is the country's largest refinery. Preem is responsible for 80% of Swedish refining capacity and 30% of Nordic capacity.

The decision to repurpose the Lysekil refinery for renewable fuels comes a month after the company scrapped plans for a $1.65 billion expansion of the refinery. It said that the impact of the COVID-19 pandemic meant the project was no longer commercially viable. The project had also come under fierce criticism from environmental groups as it would have made the plant the largest polluter in the country.

"Preem's main priority is to begin large-scale renewable production at the refinery in Lysekil, and we are pleased to announce that we will now take the first, big step in the refinery's renewable conversion," said Magnus Heimburg, chief executive officer at Preem. The company said the conversion is estimated to reduce emissions "throughout the value chain" by between 1.2--1.7 million tons of carbon dioxide (CO2) each year, "of which the largest reduction will take place in road traffic".

Preem supplies more than half of Sweden's industrial companies and one-third of the small companies with heating and energy products. It also has a nationwide service network with some 570 fuel stations for private and commercial traffic. When the conversion is completed, the plant will have the capacity to process up to 40% renewable raw materials, with the aim of boosting that share in the long term.

"Focusing on renewable fuels is a cornerstone of Preem's overall and long-term business strategy," added Heimburg. "The project is a central part of Preem's goal to become the world's first climate-neutral petroleum and biofuel company throughout the entire value chain by 2045, while maintaining our competitiveness."

An application to change the existing environmental permit is planned to be submitted before the end of the year. Investment decisions are planned for the summer of 2021. The plant is expected to be operational by 2024 at the latest. Industrial Info is tracking a number of the company's other leading renewable energy projects, most notably its support for Northern Lights, Europe's largest planned carbon capture and storage (CCS) project. Northern Lights will transport liquid CO2 from capture facilities--including Brevik and Oslo--to a terminal at Øygarden in Vestland County, Norway. From there, CO2 will be pumped through pipelines to a reservoir beneath the sea floor. The company also has built its own CCS demonstration project in Lysekil with a view to designing a full-scale CCS facility there. For additional information, see September 18, 2019, article - Heavy Industry Giants Back Norway's Biggest Carbon Capture Project.

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