GERMAN REFINERY TO UNDERGO LARGE REVAMP

The new owners of what was the former East Germany's most modern refinery plan a major revamp and restructuring. On the occasion of the official takeover this month, Hubert Heneka, board chairman of Veba Oel AG, one of the new owners, said the new shareholders plan a major infusion of money into the plant and a drastic cut in the work force.

Aug. 5, 1991

3 min read

The new owners of what was the former East Germany's most modern refinery plan a major revamp and restructuring.

On the occasion of the official takeover this month, Hubert Heneka, board chairman of Veba Oel AG, one of the new owners, said the new shareholders plan a major infusion of money into the plant and a drastic cut in the work force.

The 11 millon ton/year (230,000 b/cd) PCK AG Schwedt refinery, Schwedt, Germany (OGJ, Dec. 24, 1990, p. 30) was acquired by Veba and DEA Mineraloel AG 37.5% each and a French-Italian group of Elf Aquitaine, Total, and Agip SpA with 25%. As a result of Petroleos de Venezuela's partnership with Veba, it holds a share in the Schwedt refinery.

In addition to the refinery, PCK owns a 45% interest in a crude oil supply pipeline that runs from the Polish border to Leuna, near Leipzig. PCK also owns a pipeline from Schwedt to Rostock on the Baltic, a tank farm there, a product pipeline from Schwedt to Seefeld near Berlin, and a tank farm there.

WHAT'S PLANNED

Heneka said the partners plan for the refinery to be a major factor in filling the growing oil needs of Berlin and the five new German federal states of eastern Germany. The partners plan to put 1.5 million deutschemarks, or about $835 million, into the operation, with $445 million for expansion and modernization of the refinery and the remainder for environmental protection and cleanup.

The modernization anticipates an increase in crude oil throughput to full utilization, an expansion of the fluid catalytic cracking unit, and construction of methyl tertiary butyl ether and isomerization units.

Environmental projects will include desulfurization units, site cleanup, unleaded and low sulfur fuels, and improved waste water systems.

A special problem, Henneka said, will be cutting the work force from the current 5,000 employee to about 2,500 by the end of 1993.

"A modern refinery," he said, "has relatively few jobs."

In contrast to the past, PCK Schwedt will be involved only in crude oil processing and petrochemical production. Crude oil supply and products marketing will be handled by the partners.

PCK Schwedt employees will not be involved in things such as construction. Outside firms will handle that.

Heneka expects oil product demand in the five new states and Berlin to climb from 16 million tons/year today to 25 million tons/year by 2,000. He expects the PCK refinery after the restructuring to supply 3.5 million tons/year of gasoline and 4.5 million tons/year of middle distillates.