Argentina YPF to inaugurate upgrade of Lujan de Cuyo refinery

24 May 2013 23:39  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Argentina’s Yacimientos Petroliferos Fiscales (YPF) will inaugurate on Tuesday an upgrade to its 105,500 bbl/day Lujan de Cuyo oil refinery in the western province of Mendoza, the state-run oil company said on Friday.

The Argentine pesos (Ps) 2.6bn ($494m, €380m) upgrade, which YPF said was “the most important at the refinery in 30 years”, entailed the installation of two hydrotreatment plants – one for diesel and one for naphtha.

The diesel hydrotreatment unit will have a desulphurisation capacity of 2,640 cubic metres/day and will produce diesel with a sulphur content of less than 10 parts per million (ppm), while the naphtha unit will have a desulphurisation capacity of 1450 cubic metres/day, YPF said.

The project also included installation of a diesel oil blending unit and a flare relief system, the company said.

The upgraded refinery will produce cleaner and better-quality fuels with lower sulphur content, said YPFB, adding that the refinery’s production capacity will remain the same.

According to the company, the Lujan de Cuyo refinery manufactures every refined product sold in Argentina, including diesel, kerosene, two types of naphtha, propane, propylene, butane and other products.

Lujan de Cuyo is one of three refineries that YPF operates in Argentina. The company also owns La Plata in Buenos Aires province and Plaza Huincul in Neuquen province.

Since Argentine President Cristina Fernandez de Kirchner’s administration renationalised YPF in May 2012 following a dispute with parent company Repsol, Argentina has struggled to attract much-needed investment in its hydrocarbons sector and is forced to import large quantities of fuels to meet domestic demand.

According to national statistics institute Indec, fuel and lubricant imports in April increased by 23% year on year to $1.08bn, while imports in the first quarter of 2013 jumped 43% to $3.17bn compared to the prior year quarter.

The situation worsened in April after a fire at La Plata severely damaged a coking and distillation unit at the refinery, reducing production capacity from 188,000 bbl/day to 100,00 bbl/day.

In a conference call earlier this month, the company said that disruption to La Plata’s operations would reduce output in 2013 by approximately 1.4m cubic metres (mcm), adding that the shortfall would be made up by additional imports.

($1 = Ps5.27, $1 = €0.77)

By: Simon West

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