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Market surplus forces Total to shut down refinery

Doris Leblond
OGJ Correspondent

PARIS, Sept. 3 -- Total SA will shut down for a few weeks beginning mid-September its 137,000 b/d Flanders refinery near Dunkirk, France, because surplus supply has undercut refiners’ margins on products.

The refinery supplies northwestern Europe, including the UK, which has been particularly hard hit by the global economic downturn. The distillation unit of Total’s 343,000 b/d Gonfreville l'Orcher refinery in Normandy was shut down last month.

Olivier Jakob at Petromatrix, Zug, Switzerland, noted, “This follows Valero Energy Corp.’s cold shut down of Aruba’s 235,000 b/d refinery.” He said, “The expansion of refinery capacity in the Far East is forcing the shut down of refinery capacity in the Atlantic Basin, but this translates into a longer time chain for supply security in products and could start eating into the product stocks afloat on the water, which are still at hefty levels (OGJ Online, Sept. 3, 2009).”

Quantities of crude processed in Esso SAF's two French refineries fell by 8.5%, including planned turnarounds in the first quarter.

Lube oil production was reduced at Esso’s 270,000 b/d Port Jerome-Gravenchon refinery because of poor demand. Esso SAF’s first-half sales fell 6%, reflecting production drops and lower wholesale motor and heating fuels in an internal French products market that fell 3% over the period.

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