French-based industry major Total has confirmed that it will be permanently shutting down refining operations at its 137,000 barrel per day (bpd) Dunkirk refinery its homeland.
The firm said the decision was brought about by an ongoing decline in demand for refined products from the facility. Serving to highlight this decline is the refinery's balance sheet. In 2009 the Dunkirk refinery made a loss of over EUR130 million (equivalent to $177 million).
In place of processing crude, Total has stated its intent to build a facility on the site to provide technical support and training to the company's five other French refineries. The existing tank farm stands to become part of a logistics depot, but the firm is considering continuing operations at the plant's ethyl tertiary butyl ether (ETBE) production unit. All other refining units are expected to be dismantled by the year 2013.
As expected, the decision to shut down refining operations was met with a wave of hostility by labour unions and workers from the refinery. Between 200-300 employees are reported to have since descended upon the firm's headquarters in Paris to protest.
The industrial dispute between Total and its angry employees was prompted by the workers' fears that the closure of crude processing at the refinery would inevitably lead to a cull of jobs. While on a broader scale, the ending of operations is cause for concern for the French government. Paris is worried about the economic impact of the plant closure on the port of Dunkirk, where the refinery is a key customer. The Sarkozy-led government has been pressuring Total to address both these concerns.
Total has since announced that it has inked an agreement with fellow French firm EDF to take a 10% stake in the Dunkirk liquefied natural gas (LNG) project. While Total claims that by purchasing a stake in the LNG project will help ensure that none of the current employees at the refinery lose their jobs, the move is unlikely to satisfy the plant's workers, who are currently on strike.
One thing, however, is more of a certainty. Total's involvement will give a boost to the prospects of the EUR1 billion Dunkirk LNG project, for which a final investment decision is expected this summer.
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