Shell shelves plan to close Convent gasoline unit in 2018

HOUSTON (Reuters) - Royal Dutch Shell Plc has shelved a plan to permanently close the gasoline-producing unit at its 227,586-barrel-per-day Convent, Louisiana, oil refinery in early 2018, the company said on Thursday.

Filled oil drums are seen at Royal Dutch Shell Plc's lubricants blending plant in the town of Torzhok, north-west of Tver, November 7, 2014. REUTERS/Sergei Karpukhin/File Photo

Shell has decided to overhaul the 92,000-bpd gasoline-producing fluidic catalytic cracking unit (FCCU) next year, extending its production for at least four to five years, a company spokesman said.

“Shell re-evaluated the cat cracker end-to-end economics and determined that the business case was strong to run the FCCU for another cycle,” Shell spokesman Ray Fisher said.

Shell had planned to permanently decommission the FCCU in early 2018 as part of a plan to integrate the Convent plant with the company’s 225,800-bpd refinery in Norco, Louisiana. through a network of pipelines.

The plan to combine the two refineries originated in 2014 when they were owned by Motiva Enterprises [MOTIV.UL], which until May 1 was a 50-50 partnership between Shell and Saudi Aramco [IPO-ARMO.SE]. In the planned split of the partnership, Shell took ownership of the two Louisiana refineries.

It was unclear when in 2018 the FCCU would be overhauled, sources familiar with plant operations said. Shell has scheduled an overhaul of the unit’s heavy oil hydrocracking unit in the summer of 2018.

Plans were laid as early as 2014 to idle the FCCU at the Convent refinery because it was unprofitable, unlike the 45,000- bpd heavy-oil hydrocracker, which is called the H-Oil Unit.

Shell is still building the pipelines between the two refineries, the sources said.

Keeping the FCCU in operation is expected to prevent layoffs at the refinery, which is a major employer in St. James Parish, said Parish President Timmy Roussel, according to a report in the Baton Rouge Advocate. A Louisiana parish is the equivalent of a county in other states.

The sources said the refinery was seeking more workers and would be doing so even if the FCCU was decommissioned.

A cycle in refining terminology is the period between full-unit maintenance overhauls, called turnarounds, and is usually four to five years.

Reporting by Erwin Seba; Editing by Mark Potter and Peter Cooney