LONDON (Reuters) - U.S. oil major Exxon Mobil (XOM.N) said on Thursday it will reconfigure its Fawley refinery, Britain’s largest, permanently decommissioning one crude distillation unit.
“The reconfiguration includes the decommissioning of one of Fawley’s three ‘pipestills’ -installations more commonly known as distillation towers, in which crude oil is boiled to separate it into its component parts,” Exxon said in an emailed response.
“This is scheduled to take place in September 2012. The pipestill that is being decommissioned produces fuel oil, of which there is excess supply in the UK, and gas oil, which is currently being exported to a declining West African market.”
The company said there would not be any job losses after the decommissioning.
Currently, the Fawley refinery, on England’s south coast, has a capacity to process 330,000 barrels of crude oil per day (bpd).
The company did not specify the capacity of the crude distillation unit to be decommissioned. Traders said the capacity was 80,000 bpd, leading to about a 24 percent cut to the total capacity.
ExxonMobil said that the decommissioning would not have any impact on auto fuel output, and that it would continue to assess the potential for additional investment to increase diesel production. The proportion of diesel in the UK auto fuel market has grown at the expense of gasoline.
The company did not specify the value of the potential investment and said it would not issue any further information about the decommissioning or the improvement of the refinery.
Traders said Fawley has shut a diesel making hydrotreater and it would shut a gasoline making fluid catalytic cracker for planned maintenance in September. Exxon declined to comment on its operation status.
European refineries have been suffering from the fall in fuel demand in the region since the economic crisis in 2008.
Although some refineries have been forced to shut permanently and take on a role as terminals, Exxon’s Fawley follows French Total’s (TOTF.PA) Gonfreville and Italian ERG’s (ERG.MI) Isab refineries, which have reduced total crude distillation capacity for survival.
In the UK, the Coryton refinery has been struggling to find a buyer since former operator Swiss based Petroplus PEPFF.PK filed insolvency in December.
Reporting by Ikuko Kurahone; additional reporting by Jessica Donati, editing by William Hardy