Preem invests $527m to convert Lysekil oil refinery into renewables site
Sweden’s largest fuel refiner Preem said it plans to invest additional SEK5.5bn (US$527.6m) to phase out fossil production from its Lysekil oil refinery in favour of renewable fuels for road and air transport.
The reconstruction of the facilities will begin in 2024 and is planned to be completed in 2027.
The investment decision involves Preem’s reconstruction of the so-called IsoCracker plant (ICR) at the refinery in Lysekil.
Currently used for diesel production, following the reconstruction, the plant will shift its focus to producing sustainable aviation fuel (SAF) and renewable diesel (HVO).
“We are thrilled that Preem has committed to one of the most substantial climate investments in Sweden. The demand for SAF is rapidly increasing, and we are already in discussions with several major airlines. Both increased awareness and EU regulations drive the market. Through this investment, we are also positioning Sweden as one of the most important producers of SAF in Europe,” said Magnus Heimburg, CEO, Preem.
The investment is the second in a series of large-scale projects that expand Preem’s total renewable production capacity to approximately 2.5m cubic meters annually.
The first, the Synsat project, is ongoing and is expected to be completed in 2024, with a renewable production capacity of approximately 1m cubic meters.
In total, the two investments amount to approximately SEK10bn (US$960m). The projects serve as the foundation for Preem’s long-term production target of about 5m cubic meters of renewable fuels and the establishment of a climate-neutral value chain by 2035.
“By repurposing existing facilities, we are leveraging the operations and infrastructure already built at and around the refinery. This is by far the most sustainable strategy for our company to contribute both economically and environmentally to the transition,” added Heimburg.
Sweden currently lags far behind other European countries in terms of SAF production. The country’s total announced SAF production capacity was 55,277 tonnes per annum.