Finnish refiner Neste has announced that it is to cease refining operations at the Naantali refinery in southern Finland, and the site will focus on its terminal and harbour operations.
The decision follows Neste’s review of operations at Naantali and nearby Porvoo to ensure the competitiveness of its oil products business. The Porvoo refinery is to be redeveloped so that it can co-process renewable and circular raw materials, in the second phase of the business operations. Neste says that it expects the demand for fossil oil products to continue to decline, and that the trend has been accelerated by the COVID-19 pandemic. With demand not expected to recover, the ‘fundamental changes’ to the business are necessary to ensure productivity, resource efficiency and adaptiveness to market changes.
The Naantali site has more than 1 million m3 of storage for crude oil and oil products, in 170 tanks. Around 350 ships per year visit its harbour facilities, transporting around 4 million tonnes of oil.
‘I want to thank our employee representatives for the co-operation negotiations that were open and thorough. Together we looked at different solutions which improve competitiveness and examined the effects of the future transformation of the oil industry. However, during the negotiations, we did not find a solution which would have enabled continued and competitive refining operations in Naantali. As part of our transformation, we will also renew the Oil Products operating model. As a consequence, some of the jobs will cease to exist but completely new jobs will also be created. In the co-operation negotiations, we agreed on comprehensive change support measures which will help our personnel in adapting to the change,’ says Hannele Jakosuo-Jansson, senior vice president, human resources, HSSEQ and procurement at Neste.
Around 370 jobs will be lost, but Neste will offer retirement agreements and support packages to those affects, such as grants for education or entrepreneurship, and a change support programme.
Neste is just the latest company to resort to using a refinery site as a terminal as refineries around the world are struggling with decreased demand and ever-tightening margins. Earlier in November 2020, BP said that it would cease refining operations at its Kwinana Refinery near Fremantle in Western Australia and convert it into an import terminal, while in August 2020 Marathon Petroleum did the same with its 161,000 bpd Martinez refinery in California, US, as did Pilipinas Shell, with its 110,000 bpd Tabangao Refinery site in Batangas City in the Philippines.
