Vopak, Shell, Greenergy to convert UK Coryton refinery to terminal

26 June 2012 20:08  [Source: ICIS news]

LONDON (ICIS)--Vopak, Shell and Greenergy have agreed to acquire the assets of the Coryton refinery in Essex near London for an undisclosed sum, they said in a joint statement on Tuesday.

The three companies will not continue operating the 220,000 bbl/day Coryton refinery but rather plan to convert the site into a fuel import and distribution terminal, they said.

Vopak, Shell and Greenergy bought the assets from the administrators of Petroplus, a Switzerland-based independent refiner that went insolvent earlier this year. The insolvency affected Petroplus's five refineries in Europe, including the one in the UK.

The Coryton terminal will be managed by Vopak. Initial storage capacity is about 500,000 cubic metres (cbm), with potential expansion to 1m cbm in later stages, the companies said.

Andrew Owens, CEO of UK-based petrol and diesel supplier Greenergy said that Coryton would be the UK’s first deep water fuel import terminal.

The terminal would target importing diesel from refineries around the world, Owens said.

“With diesel sales continuing to grow ahead of petrol sales in the UK, this [terminal] is a vital development to ensure a low-cost and reliable fuel supply for the British motorist in the years ahead,” he added.

The sale came after the administrators failed to find a buyer who would continue operating the refinery.

UK energy minister Charles Hendry said the closure of the refinery and the conversion of the site into a terminal was a disappointment for the around 500 refinery workers at Coryton.

However, to continue operating the refinery, hundreds of millions of pounds would have needed to be invested, Hendry said.

“Unfortunately, this has presented a huge barrier to potential new owners to invest because of the costs involved,” he added.

Richard Howitt, a British member of the European Parliament, called the closure of the refinery a devastating blow for the workers.

"Unlike in France, the [UK] government offered absolutely no support," Howitt added.

Howitt had been involved in efforts to find a buyer to continue operating the plant.

Petroplus's refineries in Switzerland, Belgium and Germany have been sold to oil trading firms.

In France, Petroplus's Petit Couronne near Rouen recently restarted operations after Shell agreed to supply the unit for a limited time. Industrial group Klesch has submitted a bid for the plant but a sale has not yet been finalised.

Additional reporting by Leigh Stringer and Graeme Paterson

By: Stefan Baumgarten
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