29 May 2012 12:43 [Source: ICIS news]
LONDON (ICIS)--Key European product markets have not yet been impacted by news that Petroplus will close its refinery at Coryton in the UK after failing to find a buyer, sources said on Tuesday.
“We have to wait and see, but we’re certainly feeling no impact on prices yet, and there is no panic,” a UK-based gasoline broker said.
A Netherlands-based naphtha/LPG trader believes the closure of Coryton might not have much impact on product prices or supplies as other refineries will increase operating rates to compensate for any loss of output.
“Gasoline should be impacted one way or another, as it [Coryton] was a gasoline making machine. However, other refineries will just ramp up [operating rates]. I guess quite a few will be happy to increase rates. There’ll be enough nap and components to make gasoline, I guess.”
The gasoline broker agreed that refineries elsewhere would likely boost production: “I guess we’re waiting for the dust to settle, but we should see a pickup in UK imports.”
It is suggested that while product markets might not suffer much impact from the closure of Coryton, there could be a greater political impact.
“Politically, I think it is [devastating],” the gasoline broker added. “The loss of a key refinery so close to London cannot be good. As for the market, I think it can cope.”
Across the product markets some participants feel that Coryton could yet survive. One option would be to convert it to a storage terminal.
“Until the curtain comes down there is always a chance,” the broker said. “However, it does need a lot of investment. It’s an old plant.”
If Coryton does indeed close, the outlook for other refineries is questionable.
“If no buyer is found, what are the implications for other refineries that are for sale, like Murco [in Milford Haven]?”, the broker said.
The Coryton plant supplies 20% of fuel in London and the UK's southeast.
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