A maintenance shutdown at Repsol’s 220,000 barrels per day (b/d) Bilbao refinery will significantly impact the company’s bitumen production, with no export volumes expected from the facility for the next 1-2 months. The refinery’s operator, Repsol’s Petronor subsidiary, has started a two-month turnaround by taking processing units offline in the conversion area, including the vacuum distillation unit (VDU), which directly affects bitumen production as the VDU supplies vacuum residue feedstocks.
Despite the domestic and inland focus of Bilbao’s bitumen supplies, Repsol recently loaded its first bitumen export cargo from Bilbao in several years, shipping it to French Atlantic bitumen import terminals at Bayonne and Nantes.
In contrast, Repsol has increased bitumen exports from its 120,000 b/d La Coruna refinery on the Spanish Atlantic coast. This year, La Coruna has exported around 42,000 tons of bitumen, driven partly by strong demand in northwest Europe following an unplanned shutdown at ExxonMobil’s 236,000 b/d Port Jerome refinery in France due to a fire in early March.
The export differentials for Spanish free-on-board (fob) bitumen cargoes relative to fob Mediterranean high-sulfur fuel oil (HSFO) have shifted to modest premiums after being at a discount until early May. This shift is due to strong HSFO values and increased bitumen export availability amid weak domestic road construction activity. However, demand for bitumen cargoes for the second half of May and June from Spanish Atlantic and Mediterranean export points is rising as European demand increases after a slow spring start.
Spanish road paving work and bitumen demand have dropped significantly since a surge in the first half of last year, driven by municipal elections in March and a general election in July. According to Spain’s state-owned petroleum reserves corporation Cores, domestic sales of asphalt products in March were 43,232 tons, down 55% from the same period last year. Total Spanish bitumen consumption in the first quarter of this year was 155,901 tons, 29% lower than a year earlier.
