<article><p class="lead">Finnish refiner Neste has concluded negotiations over the future of its two refineries in Finland and has confirmed that the 55,000 b/d Naantali refinery will cease operating by March 2021.</p><p>Neste is transitioning to focus on terminal and port operations at the Naantali site. The second stage of the "transformation" will involve converting the 197,000 b/d Porvoo refinery to co-process crude oil and renewable feedstocks. The <a href="https://direct.argusmedia.com/newsandanalysis/article/2141424">plans were first announced</a> in September.</p><p>Neste says the conversion of the Porvoo refinery will allow it to save roughly €50mn ($59.7mn) a year in fixed costs. The planned changes will result in about 370 redundancies, but some new jobs will be created.</p><p>"The Covid-19 pandemic has accelerated the decline in demand for oil products, which is not expected to recover to previous levels," the company said in a statement. "Fundamental changes are therefore required to secure the competitiveness of Neste's oil products business."</p><p>Refiners across Europe are taking steps to reduce their crude processing capacity in light of falling products demand this year. Sweden's Preem has already begun converting its 220,000 b/d Lysekil refinery to co-process crude and renewables. Total will convert the 93,000 b/d Grandpuits refinery near Paris to process biofuels only. Trading firm Gunvor has mothballed its entire 115,000 b/d Antwerp refinery, while UK-Chinese joint venture Petroineos and Spain's Cepsa have done the same with individual distillation units. </p><p class="bylines">By Benedict George</p></article>
