Citgo Petroleum Corp may postpone a planned overhaul at its Corpus Christi Refinery, the company said on Monday.
The overhaul was planned to happen in the fourth quarter of 2021, according to Reuters sources, but due to the covid19 pandemic and its effect upon the markets, it may be rescheduled.
It is unclear what kind of an overhaul was planned to happen and the Corpus Christi refinery of Citgo. According to a quoted email by the news agency, it was a plan for a “turnaround”.
The email said: “maintenance plans for our Corpus Christi refinery include a turnaround that is currently scheduled and budgeted for the fourth quarter of 2021.”
“However, it could be moved based on customary planning and technical analyses being advanced by our operations and reliability teams. We expect to make a final decision early next year,” Citgo concluded.
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Citgo to turn Corpus Christi refinery to renewable diesel?
The company didn’t identify the units in which it plans to work or modernize during the upcoming overhaul; still there has been a trend in the downstream sector to turn oil refineries into renewable diesel units.
As we reported previously, renewable diesel is “eating out” petroleum refining; refiners are closing down old petroleum refineries to turn them into renewable diesel production plants, as cleaner alternatives for fuel are gaining competitiveness.
In fact, this trend impacted the downstream sector hardly, by dropping its refining capacity to a low record of 18,4 million barrels per calendar day; a level not seen since 2016. According to the Energy Information Administration, this behavior is directly related to lower sub petroleum products demand.
This year, major refiners like PBF Energy, HollyFrontier and even Phillips66 announced the closing of their refining facilities, with the intent of converting them into renewable diesel plants.
As for Citgo, the decision to postpone the turnaround, “is motivated by the company’s desire to maximize profit from the plant during the coming year when a vaccine for COVID-19 is being widely deployed.”
This may suggest that, indeed, Citgo’s plans was to turn the Corpus Christi refinery into a renewable diesel unit; but, in the face of a demand recovery, boosted by the vaccine, the company wants to hold that and capitalize the recovery.