7-week turnaround in Singapore to lower Neste’s Q3 renewable diesel volumes
Renewable diesel producer Neste Corp. provided an outlook for later this year in its half-year and second-quarter financial results released in late July.
“Visibility in the global economic development still remains low due to the COVID-19 pandemic,” the company stated. “As a consequence, we expect volatility in the oil products and renewable feedstock markets to remain high. … Waste and residue markets are anticipated to remain tight as their demand continues to be robust.” The company reported that the share of waste and residue inputs increased to 93 percent in the second quarter.
Neste said its sales volumes of renewable diesel are expected to be lower in the third quarter compared to the second due to a scheduled seven-week maintenance turnaround at the Singapore biorefinery, which began this month and includes tie-in work with the new facility under construction—part of the major sustainable aviation fuel (SAF) production capacity expansion at the site. The move will increase the company’s SAF output tenfold compared to its current ability. Neste said the Singapore expansion is on track to be complete in the first quarter of 2023.
The company is also planning for a four-week catalyst change at the Rotterdam (the Netherlands) refinery in the fourth quarter. It said the Rotterdam SAF optionality project is also moving ahead, which is expected to increase the site’s SAF capability by half a-million tons by the end of 2023. Neste further said the company is in the “definition phase” in preparation for another biorefinery in Rotterdam. It plans to make an investment decision late this year or early next.
Neste estimates that the Singapore turnaround and the Rotterdam catalyst change will have a negative impact of roughly 90 million euros and 50 million euros (USD$106.3 million and USD$59.1 million) on the segment’s comparable operating profit, respectively.
The company’s renewable products division posted an operating profit of 287 million euros (USD$339 million) in the second quarter. In the same period, Neste said it reached a “healthy” sales margin of USD$700 per metric ton with 732,000 tons sold, a figure impacted by the scheduled Porvoo turnaround and resulting postponement of deliveries. The Porvoo maintenance negatively impacted the segment’s comparable operating profit by 40 million euros (USD$47.3 million).
For more information on the company’s half-year and second-quarter financials, click here.