LONDON Dec 5 Portuguese oil company Galp
Energia began testing a new diesel producing unit this
week at its 220,000 barrel per day Sines refinery near Lisbon
and aims to start production before the end of the year, trading
The start up of this new unit will allow Portugal to become
a diesel exporter, reversing its current position of importer.
The installation at Sines of a new hydrocracking unit, which
produces middle distillates, is part of an overall conversion
project to maximise diesel production, which began in 2008.
The conversion will not significantly increase the
refinery's total capacity, as the rise in diesel output is at
the expense of other products. Fuel oil production at Sines will
fall by 1 million tonnes per year.
Although testing has begun it is still too soon for a spot
sale of diesel, one trading source said.
"They are already doing the testing so as to begin
production as soon as possible," a Portuguese industry source
A Galp spokesman said "all process units are in the final
stage of commissioning with the start of production forecast to
take place before the end of the year".
Portuguese diesel exports outside of Iberia are expected to
be around 1 million tonnes per year after the start up, said
another Portuguese industry source, with roughly the same amount
allocated to the Iberian market from the new production.
Galp's middle distillates output in 2011 was 4.5 million
tonnes and is expected to rise by 2.5 million tonnes with the
Sines conversion alone. Galp's second refinery, Matosinhos, is
also undergoing a conversion but on a much smaller scale.
Spain recently became a diesel exporter after multiple
refinery upgrades and a drop in domestic demand.
(Reporting by Julia Payne and Andrei Khalip; Editing by Anthony