Abu Dhabi refinery planning diesel switch

Abu Dhabi’s largest oil refinery is preparing to boost production of the industry’s lowest-sulfur diesel within three months as standards for the fuel rise, two people with knowledge of the matter said.

The emirate’s 400,000 barrel-a-day plant at Ruwais will only produce diesel with 10 parts per million of sulfur by July, said the people, who asked not to be identified because they’re not authorized to speak to journalists. Ruwais will stop making 500 ppm diesel and is selling its remaining supplies of that grade, they said.

Middle Eastern oil-producing countries are expanding refining and chemicals processing to cut reliance on crude exports. At the same time, the plants need to improve the standards of the fuels to meet European regulations and help curb air pollution throughout the Gulf.

Abu Dhabi National Oil Co. is in the process of adding 417,000 barrels of daily refining capacity at Ruwais by August in an expansion that will enable the plant to double gasoline output to meet rising domestic demand. The company is upgrading a hydrotreating unit to produce the cleaner-burning diesel, said the people.

Adnoc sold 80,000 metric tons of 500 ppm diesel to the trading unit of Saudi Arabian Oil Co. for loading in March and in April. The company agreed to sell one 40,000 ton diesel cargo for April loading at a premium of about $2.80 a barrel to Middle East benchmarks, traders said this week. Another cargo of the same size went for a premium of about $3 a barrel, traders said March 18.

A media official with Adnoc referred questions to the company’s retail fuel division, where no one answered two calls to the public relations department or a third call to the switchboard. A public relations official at Adnoc’s refining division didn’t have an immediate comment when contacted by phone today.

Abu Dhabi, the United Arab Emirates capital and largest sheikhdom, holds about 6 percent of world oil reserves. The emirate has an 80,000 barrel-a-day refinery located near the capital city. The Ruwais plant is about 240 kilometers (150 miles) west of Abu Dhabi city along the Persian Gulf coast.-Bloomberg