Puma moves into UK storage at Milford Haven refinery
The refinery, which was previously shut down, has been sold to the Singapore company
Sale of the shut-down Milford Haven refinery brings Singapore’s Puma Energy into the UK’s oil products market. The company - in which oil trader Trafigura and Angola’s state-owned Sonangol are the main shareholders - acquired the facility in March and is to develop it as an import and storage terminal.
US company Murphy closed the refinery, in Wales, in November after negotiations to sell it to Klesch Refining broke down. Puma is buying the site and three inland terminals at Westerleigh, Theale and Bedworth, all in England, together with Murphy’s wholesale and distribution businesses in the UK. Storage capacity at the facilities amounts to 1.4 million cubic metres (cm) at present.
Before the acquisition, Puma operated 5.6m cm of storage capacity worldwide, in 62 small terminals. Trafigura holds 48.79% of the company and Sonangol holds 30%. Puma names Cochan, an Angolan investment company with links to the country’s government, as another significant shareholder.
Replacement of a refinery by an import terminal follows the trend in UK, and elsewhere in Europe. Since 2009, the UK has seen the closure of refineries at Teesside, Coryton and Milford Haven, re-ducing the country’s capacity by almost 25%. Over the same period imports of refined products have increased by over 35%, to about 600,000 barrels a day (b/d) last year.
Meanwhile, the UK’s refined products consumption has been declining, losing 8% over the past six years to reach about 1.31m barrels a day (b/d) last year. This is at parity with refining capacity — the remain-ing six refineries, at Grangemouth (Ineos-PetroChina), Stanlow (Essar), Humberside (Phillips 66), Humberside (Total), Pembroke (Valero) and Fawley (ExxonMobil), have a combined crude capacity of 1.32m b/d.
However, refinery production is mismatched to market demand, so there are substantial imports - particularly of diesel (about 200,000 b/d) and jet fuel (about 160,000 b/d). Gasoline is in surplus, with about 200,000 b/d exported.
With substantial import and storage capacity in place, terminal operators say they can manage the increasing flow of imports. The UK’s independent storage operators have 5.2m cm of capacity and handle a yearly throughout of 150m barrels, according to their trade forum, the Tank Storage Association.
However, developing new storage installations does not always go to plan: a deep-water import terminal being constructed on the Thames estuary is extensively delayed and there is still no start-up target for the facility. Vopak, Shell and Greenergy, with equal shares, bought the site of the Cory-ton refinery in 2012, and had planned to start operations at the new terminal, Thames Oilport, in early 2014.
But the condition of the site was said to be poor and much remedial work is required. In September last year, when a contract to demolish the refinery was awarded, Greenergy said the design for the terminal was still under review. The facility was due to open with a capacity of 500,000 cm, with plans for expansion to 1m cm.