Exxon to close Singapore refinery for a month

Exxon Mobil Corp will shut its 296,000 barrels per day (bpd) Singapore refinery, the smaller of its two facilities in the city state, for a month from May next year for routine maintenance, said industry sources.

The shutdown of the Jurong Island Singapore facility, planned since earlier this year, will last from early May till early June and includes taking down in stages both the plant's crude distillation units (CDUs), they added. When contacted, a company spokesman declined comment.

"This is a complete turnaround, which means they will take down both the CDUs in the plant," said an industry source. "The shutdown is not expected to have any major impact in the products market because it is long planned for and the other refinery is also running."

Together with Exxon's 309,000-bpd refinery on mainland Singapore, the facility is the world's fifth largest such complex. This is the first major shutdown since the oil major undertook a similar turnaround for the same refinery in 2006 and another round of maintenance for the mainland facility in mid-2007.

Industry sources said some other secondary units at the plant, which produces mainly middle distillates such as gas oil and jet fuel, will also be taken down in stages.

Traders said the turnaround is unlikely to impact the weak middle distillates market, which has been poor since the beginning of the year and has seen most refineries globally running at reduced rates of between 70 and 85 per cent.

The three refineries in Singapore – ExxonMobil, Shell and Singapore Refining Company – are running at 80 to 85 per cent, versus above 90 per cent of capacity over the last few years when the market was healthy, said traders.

"All Exxon needs to do is to increase the runs at its other plant, given how weak the market is right now," said a distillates trader. "But next May is quite far away and gas oil's dynamics could well change by then, especially if the winter is harsher than usual."

Gas oil cracks have stayed at weakened levels of below $8 (Dh29.38) a barrel for the past two weeks due to poor demand as reflected by the more than 70 million barrels of cargoes on floating storages globally.

Some traders are betting on a colder-than-usual winter and an improving world economy to help soak up the surplus barrels and force refiners, particularly in Europe to increase runs.

"There would be an impact if the distillates market suddenly turns strong at that time. But I would not bet on it," said another trader. Little external impact is also expected in the light-distillate market, as most of Exxon's petrol and naphtha barrels are moved within its own global system.

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