Total Lindsey Oil Refinery has reported a £10 million loss for 2018 as it geared up for the largest turnaround and inspection ever completed
Major up-front costs were covered for the huge operation, undertaken earlier this year, with further funds drawn down from the wider group.
Normal activities have now resumed at the South Humber Bank refinery following the huge upgrade to produce higher quality low sulphur fuels and improve energy efficiency – with more than 1,500 contractors on site at peak.
Several units at the North Killingholme plant were involved as it works towards a strategy of producing cleaner and lighter fuels to meet market demand.
On the results, which followed profits of £97 million and £83 million in 2016 and 2017, Jean-Marc Durand, refinery general manager, said: “We have had a big turnaround, we stopped the unit for a long period, and during that time we don’t earn money, and in the mean time we are still spending a lot of money. It is not abnormal, it is traditional in the industry that during a major event like a big turnaround we have a drop in the finances.
“Operationally in 2018 we had fairly good results, now in 2019 we have had the plant stopped. It was budgeted and expected.”
Turnover was up from £2.7 billion to £3.2 billion, with production capacity down three per cent from 84 per cent to 81 per cent.
The turnaround was the first complete stop in the plant’s 51 year history, with previous events having taken place when it was a dual unit operation.
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It became single-stream three years ago in a huge reorganisation. Stored fuel and imports ensured it continued to deliver throughout the period.
Underlining the huge cost burden, a total of 130 contracts were placed for 267 pieces of equipment, with nearly 700 valves and 2.5km of pipework replaced.
The focal point was a 250-tonne fluid catalytic cracking unit regenerator head, which was built in Canada through 2018, arriving in North Killingholme in January.
Looking ahead in the report, Mr Durand said the company “is expected to continue to generate positive cash flows on its own account for the foreseeable future,” adding that an “action plan to mitigate the operation and financial risk associated with a no-deal withdrawal from the European Union” had been implemented.
The issue of the temporary tariff-regime for imports to come in without charge, and exports subject to 4.7 per cent levy, has also been laid out again, with Mr Durand describing it as a “risk to the economic sustainability of the 海角视频 refining industry and the company”.
He added that “directors have an expectation that tariffs will be revised or other mitigations will be put in place” after lobbying of government alongside the 海角视频 Petroleum Industry Association.