German refinery to be resurrected ahead of IMO sulfur rules

A German refinery which has been idle for several years has signed a deal with a customer to produce low sulfur fuel for the coming 2020 requirements. Sources tell Reuters that the customer is Shell.
Photo: Ritzau Scanpix/AP/Chuck Bennett
Photo: Ritzau Scanpix/AP/Chuck Bennett

The 2020 sulfur requirements have encouraged Royal Dutch Shell and Dutch port company HES International to partially power a German oil refinery which has lain idle since 2011, say sources to Reuters.

Under the new sulfur requirements, vessels must either sale on fuel with a maximum 0.5 percent sulfur content unless a scrubber is installed. Many consider it one of the biggest events in the oil industry for many years.

A spokesperson for HES International says that the German refinery HES Wilhelmshaven Tank Terminal is in the process of installing a vacuum distillation unit, VDU, to be able to produce the low sulfur fuel.

According to HES International, the company has entered a so-called tolling deal with a customer. Sources say the customer is Shell, which will deliver crude oil and trade the end product.

HES International acquired the refinery form ConocoPhillips in 2011, which has been idle for many years because it has struggled to compete with major refineries in the Middle East and Asia.

HES International is currently owned by investment company Riverstone and fund Carlyle, but last year infrastructure funds owned by Goldman Sachs and Macquarie entered a deal to buy HES International.

English Edit: Lena Rutkowski

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