Shell makes FID on conversion of part of Wesseling, Germany refinery to base oils

Will Beacham

26-Jan-2024

BARCELONA (ICIS)–Shell has made a final investment decision to proceed with the conversion of part of its Wesseling crude oil refinery in Germany from production of transport fuels to base oils.

The hydrocracker at the site, located in the Energy and Chemicals Park Rheinland, will be converted for Group III base oils production, the energy and chemicals group said on Friday.

The new base oil plant is expected to start operations in the second half of this decade with production capacity of around 300,000 tonnes/year, equivalent to about 9% of current EU demand and 40% of Germany’s demand for base oils, according to Shell.

With the move, Shell re-enters base oils production in Europe. It announced the closure of base oils production at Pernis in the Netherlands in 2014.

Crude oil processing will end at the Wesseling site by 2025 but will continue at the Godorf site.

According to company estimates a high degree of electrification of the base oils plant, as well as the conclusion of crude oil processing into fuels at Wesseling, will cut Shell’s carbon emissions.

Scope 1 and 2 emissions  – referring to a company’s footprint from operations and from the energy it buys to run its operations – should fall by around 620,000 tonnes a year. Shell’s target is to become a net-zero emissions energy business by 2050.

Once it ceases processing of crude oil at the site Shell and other nearby companies will have to find new sources of naphtha and other petrochemical feedstocks, such as Shell’s nearby Gordorf refinery which will continue to operate.

According to the ICIS Supply & Demand database Shell has 315,000 tonnes/year cracker at Wesseling while LyondellBasell has two crackers with combined capacity of 1.04 million tonnes/year.

ICIS analysts estimate that three crackers in the Godorf/Wesseling area require around 3m tonnes/year of naphtha as feed, and the likely impact of a full closure of the Wesseling refinery site is estimated at a reduction of around 750,000- 1m tonnes/year light naphtha production.

Shell announced in 2021 that it would end crude oil processing at the site by 2025.

Huibert Vigeveno, Shell’s downstream and renewables director, said: “The repurposing of this European refinery is a significant step towards serving our growing lubricant customer base with premium base oils. This investment is part of Shell’s drive to create more value with less emissions.”

Additional reporting by Vicky Ellis

Thumbnail photo: Shell’s Rheinland, Germany, refinery. (Source: Shell)

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