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Shell May Shut Crude Unit at U.K.'s Stanlow Refinery Next Month

By Nidaa Bakhsh

Sept. 8 (Bloomberg) -- Royal Dutch Shell Plc may shut a crude unit at its Stanlow refinery in the U.K. next month, cutting fuel output at a time when Europe's biggest plants will also undergo maintenance, two people familiar with the work said.

Shell plans to shut Crude Distillation Unit 3 from Oct. 2 for just under four weeks, one of the people said, declining to be named because the information is not yet public. The plant in Cheshire, England, has two crude units.

The refinery has ``planned maintenance for October,'' Shell spokeswoman Sarah Smallhorn, based in London, said by phone today. She declined to say which parts of the refinery would be shut.

Europe's two largest refineries, both in Rotterdam, will carry out maintenance on crude units for up to six weeks starting in late September and early October. The closures may boost oil product prices when demand for heating fuels rises as the Northern Hemisphere's winter season approaches.

Stanlow's overall crude processing capacity is 240,000 barrels a day, making it the U.K.'s second-largest refinery after Exxon Mobil Corp.'s Fawley plant on the south coast. Stanlow uses mainly North Sea crude and produces about a sixth of the U.K.'s gasoline, according to Shell's Web site.

Shell, based in The Hague, will shut one of two crude units at its Pernis refinery, Europe's largest, in late September, two people familiar with the work said on Aug. 20. Each unit has a daily capacity of about 200,000 barrels.

In October, BP Plc will also idle one of two 200,000 barrel-a- day crude units at its Rotterdam plant, three people with knowledge of the plans said on July 21.

Busier-than-usual refinery maintenance work helped raise motor fuel prices earlier this year. Diesel in Northwest Europe reached a record $1,346.25 a metric ton in wholesale trading on July 11 while spot gasoline reached an all-time high of $1,192 a ton the same day, according to data compiled by Bloomberg. Those prices subsequently declined, following crude lower.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net;

Last Updated: September 8, 2008 06:05 EDT

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