Sold Coryton refinery to be turned into a fuel terminal

London – The Petroplus Coryton refinery site in Essex will be turned into a fuel storage facility after its sale to a joint venture, consisting of Royal Vopak, Greenergy and Shell UK Ltd.

The JV parties intend that the future use of the site is to be an import terminal, after significant reconfiguration of the existing site, said a statement from the joint administrators of Petroplus Refining & Marketing Ltd, which owned the site.

The administrators at PriceWaterhouseCoopers (PwC) are currently managing the safe closure of the refinery, including overseeing the removal of all crude oil and refined products from the site. Refining ceased at the 850-employee refinery plant in June.

The sale follows a five-month effort to find a buyer for the business as an operational refinery. About 180 people were made redundant in June, with further redundancies anticipated from late July onwards as the closure progresses.

The sale will be completed once the current refinery closure process has been concluded. This, said the administrators, is likely to take some months, as the various units are decommissioned and remaining crude and refined products are removed from the site.

“It is regretful that there were no credible offers for the business at Coryton as a going concern as it has been necessary to cease refining and make employees redundant,” said Steven Pearson, joint administrator and partner at PwC.

The administrators, he added, have a legal responsibility to achieve the best price possible for the assets and we have been able to obtain the highest price by selling the site for an alternative use.

“We now have to spend the coming weeks and months completing the removal of the remaining oil and ensuring that the closure programme is safely managed ahead of the sale of the assets to the joint venture partners.”

But the administrators’ announcement drew an angry response from trade unions, with Unite warning that the closure of Coryton oil refinery will have a devastating economic impact on the UK, and accusing the government of betraying the workforce.

Unite has repeatedly called on the coalition ministers to follow the lead of the French government which intervened with state aid to keep the Petroplus refinery in France going.

“Coryton workers will feel led up the garden path by the administrators and betrayed by the government that has done nothing to save the plant,” said Linda McCulloch, national officer for Unite.

“This will have a devastating impact on the community, draining over £100 million out of the regional and national economy and severely undermine the UK’s refining capability.”

For the new owners, though, Vopak said it and equal partners in the JV Greenergy and Shell UK were planning a “multi-million pound investment programme” to develop the Coryton site.

The planned import and distribution terminal is to be developed by Vopak, which will operate the terminal when the works have been completed. The initial storage capacity, it said, will be around 500,000 cubic meters (cbm), with potential to expand to up to 1 million cbm in later stages.

Greenergy and Shell are to sign long-term contracts with the JV, which expects the Essex deep-water import terminal to play an important role in ensuring a secure supply of oil products to the UK, enabling large import volumes.

“Following the developments in the refining industry in the current market, we look forward to ,,, developing this facility into a state-of-the-art import and distribution terminal at this strategic location,” said Eelco Hoekstra, Vopak’s chairman.

Greenergy chief executive Andrew Owens added: “This investment will create the UK’s first deep water fuel import terminal, making it possible to bring in diesel economically from the most modern refineries anywhere in the world.

“With diesel sales continuing to grow ahead of petrol sales in the UK, this is a vital development to ensure a low cost and reliable fuel supply for the British motorist in the years ahead.”