(Clarifies Shell Pulau Bukom cuts to be phased in.)
By Erwin Seba
HOUSTON, Nov 23 (Reuters) - Royal Dutch Shell PLC
may begin the permanent shutdown of its 211,146 barrel-per-day
Convent, Louisiana, refinery early next week, people familiar
with plant operations said on Monday.
Shell announced on Nov. 5 the refinery, located 57 miles (92
km) west of New Orleans, was to close after the company failed
to find a buyer amid the COVID-19 pandemic.
A Shell spokesman did not reply to a request for comment.
The Convent refinery is first U.S. Gulf Coast refinery to
permanently close because of the pandemic-related decline in
demand for refined products. Eight other North American plants
have been idled or targeted for shutdowns.
The coronavirus pandemic cut fuel demand by up to 30%
earlier this year, and even as economies recover the outbreak
will likely reduce global demand by 4.7 million barrels per day
(bpd) over the next five years, analysts have said.
Three U.S. oil refineries have shut already this year
because of weak demand for jet fuel, diesel and gasoline amid a
slowing economy.
In August, Calcasieu Refining idled its 135,500-bpd Lake
Charles, Louisiana, facility, citing weak margins from falling
demand. Marathon Petroleum Corp has said it will not
restart production at its refineries in Martinez, California,
and Gallup, New Mexico.
Shell this month said it will halve its crude processing
capacity at its 500,000 bpd Pulau Bukom plant in Singapore over
the next three years. Plants in the U.S. and Europe are
considering converting some facilities to produce biofuels.
U.S. refineries in August ran at 78.8% of their 18.6 million
barrels per day (bpd) capacity, according to the U.S. Energy
Information Administration, down from 83.1% in March.
(Reporting by Erwin Seba; Editing by Chris Reese and Kenneth
Maxwell)
