Essar Energy says Stanlow oil refinery will not close
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THE owner of the Stanlow oil refinery says it is not closing the giant loss-making facility, despite reports to the contrary.
The Cheshire facility, the second-largest oil refinery in Britain, said last month it would cut production by a third this year amid tough market conditions.
In a statement India-owned Essar Energy said: “With reference to recent press reports, Essar Energy plc denies that it has any plans to close its Stanlow refinery.
“The Stanlow refinery is well-positioned to supply UK fuel demand, given its advantageous location and following recent upgrading work to optimise product output. The refinery is supported by integration into extensive pipeline logistics and good road links to access local and regional markets.”
The company said it was working with the industry and the government to improve the resilience of UK refineries and importers.
It added: “Essar Energy has embarked on an estimated $100m cost improvement programme at Stanlow to ensure the business is able to weather this period of exceptionally poor refining margins. This programme has the support of Essar Energy plc, management and our employees.”
In February Essar said Stanlow would shrink its output capacity to around 195,000 barrels-per-day from 296,000 after it mothballs a crude distillation unit by October.
Stanlow,which supplies about 15% of Britain’s transport fuels, posted a loss of $287m last year. Essar paid Shell £312m for Stanlow in 2011.
Stanlow is the first European refinery to see capacity closures this year in the face of sinking regional refining margins in the past six months. The industry in Europe has been hammered by weak demand, over-capacity and huge flows of diesel from overseas competitors.
Essar said the $287m loss resulted from planned maintenance, a damaged furnace, and weak refining margins. Each barrel of crude the company processed in the fourth quarter lost an average of $2.61, compared with an average profit of $7.22 a barrel in the same quarter of 2012.