Malaysia's Petronas to shut Malacca crude unit

SINGAPORE - Malaysia’s national oil firm Petronas is likely to shut a crude unit at its 200,000 barrels per day (bpd) Malacca refinery for planned maintenance in January, industry sources said on Friday.

The company plans to shut a 100,000-bpd crude distillation unit (CDU) at the Melaka-2 facility, on Malaysia’s west coast, for about 2-1/2 weeks in January, one of the sources said.

“But there should be minimal impact in terms of imports during the time,” the source added.

The CDU had faced some technical glitches last month, forcing it to slow operations, traders have said. Although the issue has been sorted out, the unit is still not running at maximum capacity, the first source said.

Petronas officials could not immediately be reached for comment.

Apart from a base oil plant, there are two CDUs in the Malacca refinery which operate as independent standalone operations.

The first is a 100,000-bpd CDU solely owned by Petronas, processing mainly sweet crude.

The second, which is the CDU to be shut for maintenance, is jointly owned by Petronas and U.S. oil company Phillips 66 and is designed to process sour crude with higher sulphur content.

With the shutdown coinciding with a separate one by India’s Reliance Industries, margins for diesel and jet fuel are expected to be supported, though there might not be a big spike as demand is lacklustre in the region, traders said.