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Reuters: UPDATE 1-Shell delays restart of Singapore gasoline unit

Thu Jan 10, 2008 12:27am EST

By Yaw Yan Chong

SINGAPORE, Jan 10 (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile, Research) has delayed the restart of a 33,000 barrels per day (bpd) gasoline-making unit at its Singapore refinery by about two weeks, stretching the unplanned maintenance to over three months, industry sources said on Thursday.

The Long Residue Catalytic Cracker (LRCC) in the 500,000-bpd Bukom refinery, which had been shut following an outage in end-September, is now expected to restart by mid-January.

A Shell spokesman could be immediately reached for comment. The refiner does not normally comment on operational matters.

The delay in the restart of the LRCC, which had earlier been scheduled for end-December, was due to operational difficulties, the sources said.

“It’s not any major problem. Just nitty gritty stuff like replacement materials coming in late and some repair works taking longer than expected,” a refinery source said.

“It had been a huge operation to restart the unit and the outage that led to the shutdown was quite major, so it is understandable that the process would take a while.”

A mechanical component, known as the cyclone, in the unit, had melted due to excessive temperatures and needed to be replaced.

At the time, Shell’s fuel oil supplies were the most affected as most of the product is drawn from the LRCC’s residues as well as from another unit, the 66,000-bpd Thermal Gas Unit (TGU), which has been scheduled for a planned three-week maintenance in November. The TGU was restarted in early December.

In October, it bought 380,000 tonnes of bunkers grade fuel oil in an exercise, which traders said was to build up its inventories to meet its bunker commitments of 300,000-400,000 tonnes a month.

The oil major is also presently involved in another bull play that has seen it soak up 260,000 tonnes of fuel oil over the past five trading sessions, traders said.

“It would seem unlikely that the current play has anything to do with the lack of production from the LRCC. If anything, it probably has more to do with the fact that they have new tanks at Universal Terminal coming up,” a Singapore-based Asian trader said.

Shell has leased 300,000-350,000 cubic metres (cu m) of storage from Hin Leong’s 2.3 million cubic metres Universal Terminal that is expected to be fully operational by end-January. (Reporting by Yaw Yan Chong; Editing by Ramthan Hussain)

© Reuters 2008 All rights reserved

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