Combining operations for competitive edge

4th September 2015 By: Kimberley Smuts - Creamer Media Reporter

Combining  operations for competitive edge

COMPANY COMBINES OPERATIONS Oil refining and marketing company Neste announced its decision to invest about €60-million in the Naantali production line last month

Oil refining and marketing company Neste last month announced its decision to invest about €60-million in the Naantali production line.

The investment pertains to the programme that was announced in October 2014, through which Neste will develop the refineries in Porvoo, on the southern coast of Finland, and in Naantali, in south-western Finland, as a single unit to improve the competitiveness of its refinery operations. The new operating model will be in full operation by mid-2017.

With these investment decisions, Neste will simplify the refinery structure in Naantali and improve the process efficiency, which will lower the production costs and increase feedstock supply to Porvoo. Together with the investment programme implemented in Porvoo, the share of heavy fuel oils in Neste’s production will decline and the share of diesel will increase.

A stock exchange release in October 2014 indicated that the projects affected by the changes would result in an estimated 65 jobs being cut in Naantali, of which a significant number have already materialised.

The Naantali unit plays an important part in the combined refinery operations. Its production line will continue to produce diesel and special products such as solvents and bitumen. One important role of the unit is to produce feedstock, such as vacuum gas oil, for the production lines in Porvoo. The petrol components produced in Naantali will be transported to Porvoo for refinement into end-products. Naantali’s terminal capacity will be used to distribute petrol produced in Porvoo.

Further, besides other products, Neste produces diesel, solvents, bitumen and small-engine petrol at the Naantali production line. Its crude oil refining capacity is about 58 000 bbl/d, with production totalling three-million tons a year. The Naantali oil terminal is the fifth-largest port in Finland in terms of traffic volume. About 350 ships dock there a day, transporting about four-million tons of oil a year.

Meanwhile, in Porvoo, the crude oil refining capacity is about 10.50-million tons a year, or 206 000 bbl/d. In addition to crude oil, other feedstocks are also transported to Porvoo, resulting in a total production capacity of about 13.5-million tons a year.

The above-ground and underground tanks in Porvoo contain almost eight-million cubic metres of storage capacity for feedstocks and products. Porvoo is the largest port in Finland in terms of tonnage, with about 1 100 to 1 400 ships a year docking at the port.