Portugal’s Galp to permanently close one of its two refineries

Galp Energia SGPS SA is permanently ceasing crude oil refining operations in 2021 at subsidiary Petróleos de Portugal SA’s (Petrogal) 110,000-b/d refinery in Matosinhos e Leça da Palmeira, Porto, on Portugal’s northwest coast.

The decision to shut down the Matosinhos refinery follows negative impacts to Galp’s downstream industrial activities precipitated by structural changes in demand for finished petroleum products resulting from the coronavirus (COVID-19) pandemic as well as the European regulatory environment, the operator said Dec. 21.

Galp said it expects the planned system reconfiguration—which includes the decommissioning of an estimated €200-million ($244-million) worth of Matosinhos assets—should reduce the company’s average fixed costs and recurrent capex by more than €90 million annually, as well as reduce overall carbon dioxide emissions by about 900,000 tonnes/year (tpy).

Discontinuation of refining activities at Matosinhos will not impact fuel distribution in Portugal, however, as Galp will continue supplying the regional market by maintaining all key import, storage, and distribution installations at the site.

The operator also plans to assess unidentified alternative uses for the refining site.

Alongside its primary distillation capacity, the Matosinhos complex also houses a 440,000-tpy aromatics plant, a 1.1-million tpy base oils plant, and an 80,000-tpy lubricants plant, according to Galp’s latest annual report to investors.

Future plans at Sines refinery

With the shuttering of the Matosinhos refinery, Galp said it will now concentrate on future developments to enhance the resilience and competitiveness of its 220,000-b/d refinery at the Port of Sines, in Setúbal.

Without disclosing specific details of proposed future projects at Sines, Galp did confirm it is evaluating works to improve the refinery’s energy and process efficiency, as well as potential projects to integrate the production of advanced biofuels and other cleaner products at the site.

Future potential investments at Sines will be supported by savings resulting from the downstream restructuring program and energy transition initiatives, according to the operator.