French authorities break blockade at Total’s Grandpuits refinery

22 October 2010 12:13  [Source: ICIS news]

By Franco Capaldo

LONDON (ICIS)--French authorities forced demonstrators to clear the blockade at Total’s Grandpuits refinery on Friday and ordered striking workers back to work as nationwide industrial action over pension reforms continued to cripple fuel supplies, reports said.

Total’s Grandpuits 100,000 bbl/day refinery, the closest source of gasoline supplies to Paris, has been shut in protest over president Nicolas Sarkozy’s plans to increase France's retirement age from 60 to 62 and full pension entitlement from 65 to 67.

Workers at Grandpuits said they would challenge the order in court as unions called for further protests next week, media reports said. Two more protests have already been planned for 28 October and 2 November and sources said the earliest possible date for normal production to resume would not be before 6 November.

Total would not comment on the situation.

The industrial action, along with an unrelated strike at Marseille’s Fos-Lavera oil port, has forced all the country’s refineries to either operate at minimum levels or shut production altogether, causing massive supply disruptions and panic-buying at gasoline stations across France. As of Friday, about 20% of France's service stations were still empty.

Despite the demonstrations, Sarkozy has been determined to press on with the pension reforms and the French Senate was due to vote later on Friday. The bill has already been passed by the National Assembly.

Refineries including ExxonMobil's merged Port Jerome-Gravenchon plant, LyondellBasell’s refinery at Berre L'Etang, INEOS’s Lavera plant, Petroplus’s refineries at Petit Couronne and Reichstett, and Total’s plants at Donges, La Mede, Gonfreville and Feyzin, were all forced to begin production shutdowns last week due to crude supply issues and strike action taken by workers, which prevented the plants from operating within required safety standards.

Product dispatch from ExxonMobil's refinery at Fos-sur-Mer continued to be blocked, although the facility was still running at minimum throughput levels.

France is capable of processing about 1.87m bbl/day of crude, according to ICIS, excluding Total’s mothballed Dunkirk refinery which has not produced fuel products since 8 March.

The French Chemical Industry Union said in a statement it was losing €100m euros ($138m) a day because of the strikes.

The shutdowns have seriously affected downstream users, with a variety of chemical producers suffering from a lack of refined feedstock. Some producers have begun to cut chemical production or declared force majeure (FM) on products as availability diminishes.

Olefins players in Europe have been concerned that ethylene (C2) and propylene (C3) supplies were approaching a critical point as the continuing strikes in France could disrupt the restart schedules of crackers currently shut for maintenance.

There were reports from olefin sources that only the two steam crackers at Carling and Berre out of seven in France were now running: The remaining crackers either have no naphtha or were on strike, sources said.

On Thursday, SolVin, a joint venture between BASF and Solvay, declared FM on polyvinyl chloride (PVC) production from its 300,000 tonnes/year site in Tavaux, France, due to a lack of raw material ethylene as a result of ongoing strike action, while Total declared FM across all grades of polyethylene (PE), polypropylene (PP) and polystyrene (PS) on the same day because of issues surrounding the transportation and stock of products.

Earlier in the week INEOS Oxide declared FM on ethylene oxide (EO), ethylene glycols, glycol ethers (and their esters), ethanolamines, oxo-alcohols and butyl acetates originating from its Lavera site in France due to reduced output caused by the demonstrations.

Meanwhile, Arkema also declared FM on supplies of oxo-alcohols from its Lavera plant and also held FM on PVC from all four of its French sites due to restricted feedstock supply as it was unable to move PVC feedstock vinyl chloride monomer (VCM) between its facilities.

In addition, the demonstrations have also contributed to a further tightening in Europe’s butane market, resulting in higher prices.

The International Energy Agency (IEA) announced the strike action could result in a shortage of European gasoil supplies and higher spot prices, while on Monday, market sources said that prices of jet fuel in Europe were likely to rise as product supplies tightened.

US exports of refined products to Europe have increased following the ongoing strike action, according to a New York Harbour trader, easing a US supply glut and potentially pressuring prices higher.

In related news, Petroplus announced on Thursday that it would convert its 85,000 bbl/day Reichstett refinery in France into a terminal after finding no buyers for the plant.

The group said it had considered several options including a potential sale, further investments to improve its competitiveness as well as a shutdown of the refining operations, before it finally decided on the conversion to a terminal following a strategic review.

Additional reporting by Nel Weddle, Stephanie Wilson, Libby George, Sian Jones, Sarah Trinder, Heidi Finch and Giovanni Coiro

($1 = €0.72)

To discuss issues facing the chemical industry visit ICIS connect

By: Franco Capaldo
+44 (0)20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly