Preem advances renewables conversion project for Lysekil refinery

Swedish refiner Preem AB, a wholly owned subsidiary of Corral Petroleum Holdings AB, Stockholm, is moving forward with a recently proposed project to convert its 220,000-b/d refinery in Lysekil, Sweden, into Scandinavia’s largest manufacturing site for renewable fuels (OGJ Online, Sept. 28, 2020).

With an application to amend the refinery’s existing environmental permit to enable large-scale production of renewable fuels planned for submission before yearend, Preem expects to reach final investment decisions on the project in summer 2021 for targeted startup of the new plant by 2024 at the latest, the operator said.

“Preem’s main priority is to begin large-scale renewable production at the refinery in Lysekil...we will now take the first, big step in the refinery’s renewable conversion,” said Magnus Heimburg, Preem’s chief executive officer.

As part of the project’s initial phase, Preem said it will carry out a redevelopment and rebuild of the refinery’s existing Synsat plant that currently produces Swedish Environmental Class 1 diesel with a maximum sulfur content of 10 ppm (wt) to increase Preem’s renewable diesel production by 650,000-950,000 cu m/year, which is as much as two to three times higher than present renewable production capacity at the operator’s 125,000-b/d refinery in Gothenburg, Sweden.

When the Lysekil conversion is completed, the reconfigured plant will have the capacity to process up to 40% renewable raw materials, with a goal of increasing that rate in the future to further phase out processing of fossil-based feedstock by the plant.

Lysekil’s increased renewable production will play a central role in helping Sweden to achieve its climate targets, with the conversion project estimated to reduce carbon dioxide (CO2) emissions throughout the value chain between 1.2–1.7 million tonnes/year, of which the largest reduction will take place in road traffic, according to Preem.

Gothenburg project

The operator is also undertaking a project to ramp up renewable fuels production at its Gothenburg refinery, at which the country’s largest production plant for renewable diesel and aviation fuel already is under development (OGJ Online, Mar. 12, 2020).

Scheduled for startup in 2024, the new 16,000-b/d renewables unit—which will be completely dedicated to producing renewable fuels from tall oil, tallow, and other renewable feedstocks—will produce about 1 million cu m/year of fuels, which corresponds to about 25% of Sweden’s estimated consumption of renewable fuels in 2030 and will enable reduced CO2 emissions from cars and planes by 2.5 million tpy.

The environmental permit process for the Gothenburg unit is now under way and under review in Sweden’s Land and Environmental Court.

The Gothenburg renewable fuels plant and reprioritization at Lysekil come as part of Preem’s broader plan to become the world’s first climate-neutral petroleum and biofuels company with net zero emissions across its entire value chain before 2045. The operator also previously said it plans to increase its renewable fuel production to 5 million tpy by 2030.

Preem also confirmed in 2019 that it intends to build a full-scale carbon capture plant at the Lysekil refinery to reduce CO2 emissions by one-third by 2025 following a demonstration project at the site that began in 2019 and will run to 2021 (OGJ Online, Mar. 4, 2019).

Preem said the Swedish government, which has decided on a more ambitious blending mandate in the country, also has announced a willingness to support investments in domestic production of renewable fuels, thereby improving the investment climate for renewables-based projects.