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Repsol's bid to satisfy demand

The Spanish oil firm has made a huge investment in greatly expanding a refinery in Murcia with the aim of compensating for the national aviation fuel deficit

At a cost of nearly 3.2 billion euros, it is the biggest industrial investment ever made in Spain. Executives from Repsol are lost for words when describing the oil giant's new project in Cartagena, Murcia: a greatly expanded refinery that will make up for the deficit of aviation fuel - chiefly diesel oil and kerosene - in the national market. The new, larger facility at Valle de Escombreras will double the current capacity for distilling crude oil (up to 11 million tons a year) and will produce 4.5 million tons of diesel fuel and kerosene a year.

During an organized visit, company executives Josu Jon Imaz, director of refining and new energies, and Pedro Fernández Frial, director of the downstream area, said that the new plant will save up to 30 percent of current diesel oil imports by Spain. In monetary terms, this could represent $450 million (around 314 million euros) a year for the trade balance.

According to Fernández Frial, there is no doubt that the project will be profitable, since there is a clear market demand for a product that is scarce. Spain imports a third of the diesel oil it consumes, even as it exports gasoline. Repsol has decided to purchase larger amounts of heavy crude oil, which is cheaper, treat it more efficiently to extract more diesel oil and kerosene, and get the most out of all the infrastructure and ancillary services available at the Cartagena refinery.After three years of work, the new refinery will be operational by the last quarter of the year, said Imaz and Fernández Frial. Everything about the project is on a huge scale: it took 4.5 million hours of engineering work, 27.5 million hours of construction work, and required an average of 3,000 workers over three years. Overall, 20,000 people contributed to the project.

And the numbers do not end there. Operating the refinery will mean jobs for 790 on-site employees and contract work for 800 outside companies. According to Repsol chiefs, overall jobs at the refinery will represent 20 percent of all industrial employment in the district of Cartagena and 2.5 percent of the Murcia region's.

More heavy crude oil imports beg the question about the project's environmental impact. The company offers an optimistic view, saying that the expanded plant will have "a very positive impact on the global balance of greenhouse gas emissions." Of course, global balances are always hard to analyze. But Repsol claims that even though the Cartagena refinery's capacity will be multiplied 2.2 times, the emission per barrel will only increase 0.5 times. To reach this conclusion, the company has taken the estimated emission levels for the new plant (36.6 tons of CO2 per 1,000 processed barrels) and subtracts "green credits" it gets for the co-generation plant that will operate inside the refinery (2.9 tons of CO2 per 1,000 barrels), minus the "efficiency credits" (15.9 tons per 1,000 barrels) minus the "transportation credits" (6.7 tons of CO2 that are saved due to fewer imports). The resulting figure shows 11 tons of CO2 per 1,000 barrels, or half as many emissions as the old plant, which only produced half the amount of barrels. Is the math debatable? Perhaps.

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