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EurOil INVESTMENT EurOil

Preem axes $1.65bn expansion

plan at Swedish refinery

SWEDEN SWEDEN’S Preem has drop plans for a $1.65bn Preem will shift its priority to projects that
expansion project at Scandinavia’s biggest oil increase renewable fuel production at the refinery,
Preem will focus refinery, saying weak economic conditions were it said. The company plans to submit a new appli-
instead on renewable behind its decision. cation during autumn to develop renewable fuels
fuel production. Preem was planning to invest SEK15bn at the site on a large scale. It is also prioritising an
($1.65bn) in the construction of a residue oil expansion in renewable fuels at its Gothenburg
conversion complex (ROCC) at the 220,000 refinery. An environmental permit application for
barrel per day (bpd) Lysekil refinery in Sweden. this project has already been filed with the Swedish
“The economic logic of investment in this Land and Environmental Court.
project no longer stands,” Preem said, because “Focus on renewable fuels is the cornerstone
of “the COVID-19 crisis’ effects on the energy of Preem’s overall and long-term business strat-
sector globally.” egy,” CEO Magnus Heimburg said. “In a situa-
Sweden’s government had not yet decided tion where tough decisions have to be made, it is
whether to give the project the greenlight, but crucial for Preem to allocate resources to those
Preem has now withdrawn its application any- projects that will accelerate our renewable pro-
way. The approval process was held up by oppo- duction fastest and most cost-effectively. I look
sition from climate activists. But a court ruled in forward to leading this major and important
June that the expansion could go ahead. transition.”
Although ROCC is innovative, Preem said Tests also began in May at a pilot carbon
it was technically difficult and costly to execute. capture plant at the Lysekil plant. The project
The project was designed to reduce output of involves Norway’s Aker Solutions and Equinor,
sulphur-rich heavy fuel oil at the refinery, pro- Norwegian research institute SINTEF and
ducing more diesel, gasoline and other lighter Sweden’s Chalmers University of Technology.
products instead. The plant will capture CO2 released from the
McDermott International was cleared to refinery’s hydrogen gas plant. The emissions
begin the front-end engineering design (FEED) will then be transported to Norway and stored
phase of the project earlier this year, although in offshore reservoirs, under the Northern
that work has been cancelled as well. Lights scheme.™

P16 www. NEWSBASE .com Week 39 01•October•2020