Shell may permanently shut Louisiana refinery next week: sources

[HOUSTON] Royal Dutch Shell may begin the permanent shutdown of its 211,146 barrel per day (bpd) Convent, Louisiana, refinery early next week, people familiar with plant operations said on Monday.

Shell announced on Nov 5 the refinery, located 57 miles (92 kilometres) west of New Orleans, was to close after the company failed to find a buyer amid the Covid-19 pandemic.

A Shell spokesperson did not reply to a request for comment.

The Convent refinery is the first US Gulf Coast refinery to permanently close because of the pandemic-related decline in demand for refined products. Eight other North American plants have been idled or targeted for shutdowns.

The coronavirus pandemic cut fuel demand by up to 30 per cent earlier this year, and even as economies recover the outbreak will likely reduce global demand by 4.7 million bpd over the next five years, analysts have said.

Three US oil refineries have shut already this year because of weak demand for jet fuel, diesel and petrol amid a slowing economy.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

In August, Calcasieu Refining idled its 135,500 bpd Lake Charles, Louisiana, facility, citing weak margins from falling demand. Marathon Petroleum has said it will not restart production at its refineries in Martinez, California, and Gallup, New Mexico.

Shell this month halved its crude processing capacity at its 500,000 bpd Pulau Bukom plant in Singapore. Plants in the US and Europe are considering converting some facilities to produce biofuels.

US refineries in August ran at 78.8 per cent of their 18.6 million bpd capacity, according to the US Energy Information Administration, down from 83.1 per cent in March.

REUTERS