* Maintenance work estimated at $150 mln
* Cost seen as important factor in sale process
By Zaida Espana and Emma Farge
LONDON/GENEVA, April 23 The UK administrator for
Petroplus' British refinery Coryton said on Monday the
plant will shut for around 6-8 weeks from late September for
major work expected to cost around $150 million.
The 175,000 barrel per day plant near London is on the
market after its Swiss-based owner filed for insolvency in
January, a victim of thin refining margins and high debt.
"This is a turnaround year at the refinery and there is a
closure of the refinery at the end September for a six-week to
two-month period," said Steven Pearson, joint administrator and
partner at PwC told Reuters.
"The total cost of the turnaround programme is around $150
million, some of which have been funded over the last 100 days
we've been in control," he added.
The expenses related to the planned maintenance are likely
to be an important consideration for potential buyers of the
plant. Administrator PwC said in February that Coryton requires
about $1 billion of working capital, including capital
expenditure needs and others.
"It's a stumbling block," said an oil industry source with a
firm eyeing a Coryton purchase who asked not to be named.
Still, Coryton is seen as the most attractive remaining
Petroplus asset because it can adapt its fuel production well to
The plant had a benchmark refining margin of $6.54 a barrel
in the first nine months of 2011. Richard Howitt, regional
member of the European parliament (MEP) said that the plant has
attracted dozens of enquiries.
Investors such as trading firm Vitol and private
Swiss-based investor Gary Klesch are among parties that have so
far expressed interest in the plant.
The UK plant is unique among the Petroplus assets as it has
kept refining without a break after signing a crude supply deal
penned with Morgan Stanley Capital Group Inc and private
equity investors KKR Asset Management LLC and
AtlastInvest in February.
Trading firm Gunvor, co-owned by a Russian tycoon, said it
was acquiring the Petroplus Antwerp plant, but the remaining
plants in the Petroplus fleet in Switzerland, Germany and France
are still on the market.