European refining networks rationalise

The Covid-19 outbreak continues to heap pressure on European refiners as further lockdown protocols and loss of liquid demand keep refining margins depressed. At the end of 2020, the pandemic started to take its toll. Both Neste and Galp announced that their respective hydroskimming refineries at Naantali and Porto were to cease refining operations from 2021. However, these refineries have been operating with a negative Net Cash Margin (NCM) even prior to the Covid-19 pandemic, as shown by our European 2019 NCM analysis. So, what has kept these poorer performing assets running until now? Using Wood Mackenzie’s Refinery Evaluation and PetroPlan models, we analyse the fundamentals behind these site closures as well as looking at who could be next...