Shell Aims to Restart Most Units at Pernis Before End-August

Updated on
  • Europe’s biggest oil refinery hobbled by fire in July
  • Shutdown to support diesel in coming months, Petromatrix says

The Royal Dutch Shell Pernis refinery in Rotterdam

Photographer: Simon Dawson/Bloomberg

Royal Dutch Shell Plc said it is aiming to restart most units at its Pernis refinery in Rotterdam by the end of this month, potentially helping to ease supply of fuels including diesel in the region’s main oil-trading hub.

The shutdown of the refinery in late July has contributed to a tighter fuel market in the Amsterdam-Rotterdam-Antwerp area, with researcher Energy Aspects dubbing Pernis as “one of Europe’s biggest diesel machines.” Inventories of diesel and gasoil and jet fuel in ARA dropped in the past week below the 5-year seasonal average for the first time this year, PJK International data showed Thursday.

“We hope to restart most of our units before the end of August,” Shell spokesman Thijs van Velzen said in a statement Thursday, confirming comments made late Wednesday by a local resident. “Shell Pernis is currently restarting a number of units as part of the phased restart of the entire plant.”

The halt of Pernis, Europe’s largest refinery, has also coincided with strong diesel demand in the region, according to Energy Aspects. ICE gasoil futures, the regional diesel benchmark, moved into backwardation following the July 29 fire at the refinery, a structure that signals near-term lack of supply.

“The strength in diesel is palpable in Europe,” Energy Aspects said in a report. A shutdown at Pernis would cut supply of distillates by up to 160,000 barrels a day, according to Energy Aspects. Middle distillates include gasoil, diesel and jet fuel.

While a restart would begin to ease fuel availability, the shutdown will continue to support distillate fuels in the coming months, Olivier Jakob, managing director at researcher Petromatrix GmbH, said Thursday by phone.

“The fact that Pernis was offline for more than a month will provide some underlying support for distillates in Europe because it has led to a reduction of stock,” Jakob said.

The refinery, which can process 404,000 barrels of crude a day, will attempt to restart one of its two crude distillation units on Friday, a person familiar with the matter said this week.

— With assistance by Rachel Graham

(Updates with Shell statement, inventory data.)
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