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Shell Slashes Refinery Output In EU As Drought Disrupts Transportation

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Shell Slashes Refinery Output In EU As Drought Disrupts Transportation

Shell slashed its refinery output at its Shell Energy and Chemicals Park Rheinland fuel-making facility as low Rhine River levels halted the flow of goods, Shell said on Thursday.

“Due to the low Rhine water level we have reduced the capacity of Shell Energy and Chemicals Park Rhineland. The situation regarding supply is challenging but carefully managed,” Shell said in an emailed statement to Reuters.

In November, Shell announced its plan to shift the refinery in Wesseling in Germany away from crude oil in favor of low or zero-carbon products starting in 2025, in line with its goal to have net zero emissions by 2050.

Shell did not reveal how much of the refinery’s capacity had been cut. It is capable of processing 345,000 barrels of crude oil per day.

The catastrophe from low water levels in Europe’s Rhine River has been brewing for more than a week as the key waterway for barge transportation threatened to choke off the flow of coal and petroleum products—and associated supplies.

The Rhine River, which runs northwest from Switzerland through Germany, France, and the Netherlands into the North Sea, is a major petroleum product transportation corridor in Europe. Due to heat waves and drought this summer in Europe, the levels on the river are low and have now become too shallow for many barges shipping petroleum products to pass. Barges are not being fully loaded to keep them lighter on the water, which lifts shipping costs and delays shipments of coal and fuels, affecting power generation in Germany during the heat wave.

The water level at the Kaub chokepoint near Koblenz was at just 34 centimeters on Thursday—well below the 1.5 meters required by vessels with full loads.

By Julianne Geiger for Oilprice.com

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