The future of Gunvor’s Antwerp refinery looks to be in the balance, with Chief Executive Torbjorn Tornqvist reported as saying the facility ‘has had and will now certainly continue to experience negative cash flow on a magnitude that is not affordable for the group.’
The Reuters news agency reported a Gunvor spokesman as saying that prospects for the refinery will now be discussed in consultation with a works council. The facility currently has a workforce of 230.
‘Even when demand returns to pre-pandemic levels, it will take time to reduce the substantial global overhang of oil products, particularly gasoil, which is a key output for Gunvor Petroleum Antwerp,’ said the company earlier this week.
The refinery handles a range of intermediate and finished products, including LPG, naphtha, gasoline, heating oil, vacuum gasoil and bunker fuel.
Earlier this month (18 June), Gunvor announced the closure of a new €450 million sustainability-linked borrowing base facility to support operations at its Ingolstadt refinery in Germany.
This facility, which Gunvor said was ‘heavily over-subscribed, is said to complement Gunvor’s other $725 million sustainability-linked borrowing base for its refining activities in the ARA region.
In 2018, Gunvor was the first energy commodities trading company to close a financing in which the interest rate was dependent on the company’s ability to meet sustainability criteria.
Under the terms of this deal, Gunvor received a discount on its interest rate as sustainability targets were met. This original facility has since been renewed under the same terms.
Looking at how Gunvor is positioning itself within the energy transition, the group noted that in 2019, ‘transitional’ commodities, such as natural gas, LNG and biofuels, comprised 45% of total trading activity, compared with ‘traditional’ crude oil and oil products. This was an increase of 28% from the year before.