“The uncertainty over the return to mobility, basically arising from the current process of vaccination, make it impossible to predict when the refinery will return to normal,” Petronor said. The firm sees the refinery’s current economic challenges as “cyclical” but said it also faces “structural uncertainties” related to the energy transition and that large investment will be required to meet net-zero emissions targets and make the refinery’s survival possible.
Petronor ruled out layoffs when it first halted a 90,000 b/d crude unit at Bilbao in May last year in response to weak demand, saying at the time that it would increase employee training to offset work hours lost from the idling of the unit. “But this solution through training is not a situation that can be maintained over time,” the firm said, adding that the temporary layoffs are a socially responsible measure aimed at ensuring the “efficient reconversion of the refinery to 2025”.
Petronor has a series of initiatives to cut emissions at Bilbao, most of which are centred around plans to produce 20,000 t/yr of green hydrogen from a variety of technologies by 2025. As with most of the recent wave of European green hydrogen projects, these initiatives are dependent on future technological developments, as well as EU and Spanish funding that has yet to be allocated.
Like many European refineries, Bilbao is under pressure from weak demand for road fuels stemming from renewed lockdowns and a surge in Covid-19 cases on the continent. The EU’s sluggish vaccination programme has clouded the outlook. Despite a modest uptick on the month, last month’s combined Spanish deliveries of jet fuel, diesel and gasoline by logistics company Exolum were 25pc lower than a year earlier.
Repsol said last month that it was optimistic about a recovery in fuels demand in the second quarter. But by early March, peer Cepsa, which cut runs and laid off staff at its 240,000 b/d Algeciras refinery in Spain in November, was painting a more gloomy near-term picture of the outlook for Spanish demand.
A well as one of the crude units, Petronor has a visbreaker offline at Bilbao. Meanwhile, Repsol has been halting units intermittently down the coast at its 120,000 b/d La Coruna refinery to adjust production to demand.