Shell to Stop Fuel Output at Hamburg Refinery for Conversion to Terminal

Royal Dutch Shell Plc said it plans to stop fuel production at its refinery near Hamburg and turn it into a terminal after a two-year search failed to find a buyer.

The company is still looking to sell a lubricant production unit at the refinery at Harburg in Germany. It will maintain the refinery in its current form until the second quarter of 2012, The Hague-based company said today in a press release on its website.

Refiners including ConocoPhillips, Chevron Corp. and Total SA are selling, closing or converting plants amid falling European demand for oil products and declining profit margins. This is at least the fifth closure in the region in two years, while in the Middle East and Asia companies are looking to build capacity to meet growing demand.

“We will make every effort to minimize the effects on workers and to maintain the same good level of service and quality products for our customers,” said Peter Seifried, head of Shell’s German business.

The Harburg refinery can process 110,000 barrels a day, according to Bloomberg data. Shell decided in December to keep its Stanlow refinery in the U.K. running even if a sale to India’s Essar Oil Ltd. falls through. Shell has plans to dispose of 15 percent of its worldwide refining capacity.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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