Insight

Ireland’s downstream oil infrastructure

The 22nd September 1959 was a red letter day in the annals of Irish refining, with the official inauguration of the country’s only refinery at Whitegate, near Cork city. Jointly owned by four major suppliers – BP, Esso, Shell and Texaco, and operated by Esso, it remained under their operation until 1981,when it was deemed to be no longer viable and was mothballed for a short period.
Crude oil processing was resumed with state ownership, under the aegis of the Irish National Petroleum Company. The facility was sold in 2001 to Tom O’Malley’s US Tosco Corporation which was then acquired by Phillips Petroleum. The company merged with Conoco in 2002, when it became a ConocoPhillips refinery. In 2007 the latter unsuccessfully attempted to sell the plant and, in May 2012, when the company split in to two separate, upstream and downstream, entities, it came under the ownership of Phillips 66.
With a distillation capacity of 71,000bpd and capable of accommodating crude carriers of up to 85,000dwt, the refinery exports approximately one third of its output. The balance of circa two million tonnes per year of white oil products, supplies just under 30% of the Republic’s oil market requirements, particularly to the province of Munster.
The remainder of the Republic’s oil requirements are satisfied by imports, 85% of which are supplied from the UK, principally from west coast refineries, with Valero’s Pembroke facility being the largest single source. Norway is the main non UK supply source of imports.
Oil is by far the principal energy source in the Republic, accounting for almost 60% of total energy consumption.
Apart from Whitegate, Ireland’s oil market as a whole is serviced from 12 mainline distribution terminals, four of which are located in Northern Ireland and eight in the Republic, all are sea fed.
Future uncertainties
When the Irish government sold Whitegate refinery to Tosco in 2001, the transaction came with the stipulation that crude oil processing operations should continue until at least 2016.
Mindful of that, the Department of Communications, Energy and Natural Resources commissioned a consortium of Purvin & Gertz and Byrne O’ Cleirigh to undertake a study entitled The strategic case for oil refining requirements on the island of Ireland, which was completed at the end of February 2012. This reached three main conclusions:

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  • An operating refinery provides an alternative source of product supply versus complete reliance on product imports and therefore provides flexibility in security of supply.
  • An operating refinery adds value on Ireland to the benefit its economy and provides employment.
  • There is no imperative for Ireland to have its own refining assets and the current infrastructure would be capable of supplying the required product imports.

The issue was put into sharper perspective earlier this year when Phillips 66 announced its intention to sell Whitegate and the Whiddy Island storage facility, engaging Deutsche Bank to oversee the transaction and hoping for a completion by the end of 2013.
To date there has been no news of any prospective interest and given the current situation with European refining, it will be a challenge to divest of a refinery of Whitegate’s small size and simple, hydroskimming configuration (Nelson Complexity Index of only 3.8).
In the event of ultimate closure, the Irish government has indicated a desire for the accompanying storage to continue to be used. This is not surprising since NORA now holds just over 70% of the country’s obligated requirements in physical form within the country – for which both Whitegate and Whiddy Island no doubt play a key role.
Whatever the outcome, refining operations will continue until 2016; after that…?
Distribution terminals in Ireland
Derry – completed in 2006, with a total capacity of 88,000 tonnes, it is a joint venture between LCC Oil and Statoil, from which most of the imported products are sourced. Products from this facility are supplied in to both Northern Ireland and the Republic.
Belfast – three terminals, owned/operated by:-

  • BP – a former refinery, which closed in 1981
  • NuStar – a public/independent storage facility with a total capacity of 65,000m3
  • Emo – limited to the storage of middle distillates

Dublin – four terminals which service approximately 50% of the Republic’s oil market requirements and are owned/operated by:-

  • Topaz – owns two facilities, the former Shell and Statoil terminals
  • Esso/Valero joint venture
  • Tedcastle

Bantry (Whiddy Island) – this is an entrepot facility with a total storage capacity of one million mt. It is owned/operated by Phillips 66 for the import and export of products, as well as being a holding point for National Oil Reserves Agency (NORA) products.
Foynes – two terminals, owned and operated by:-

  • Irish Bulk Liquid Storage, a subsidiary of Simon Storage. This is a public storage facility with a capacity of 14,235m3.
  • Atlantic Fuels Storage Company. A joint venture between Inver Energy and East Cork Oil, this is a public storage facility of 81,000m3 capacity, which opened in 2010.

Galway – one terminal, which opened in 2009. Owned by independent, Edward Holdings and known as the Enwest facility it has a capacity of 50,995m3.