When a crisis opens up new paths
Reading time: 6 min
What do you do when suddenly nothing runs as usual? When the crude oil distillation unit at the Schwechat refinery breaks down in June and the supply to OMV customers and partners is in danger of being interrupted, a plan is worked out immediately. From the very beginning, one thing is crystal clear: The promise made to customers to ensure security of supply must be kept. Read here about the logistical challenges that had to be solved and why the impossible actually sometimes is possible.
June 3, 2022, was a day that the employees of the OMV Schwechat refinery are unlikely to forget any time soon. As part of the legally required turnaround of the refinery, damage suddenly occurred to the outer shell of a column during the water pressure test before it was put back into operation. And it was not just any unit, but the one with the cryptic name “RD4” – one of the largest crude oil distillation columns in Europe and the main column of the crude oil distillation unit in Schwechat, with which, for example, kerosin, diesel and bitumen is produced from crude oil.
You can read here what was set in motion from this point on to repair the technical damage as quickly as possible.
But what did this mean for the security of supply of products produced from crude oil? “From the very beginning it was clear: We stand by our customer promise to secure the contractually agreed supply by all means necessary”, said Michael Sattler. He headed up the task force that was in action from June 3rd around the clock to guarantee exactly that.
An alternative supply system is put in place
“Just as important as repairing the plant was establishing an alternative supply system as soon as possible. For this, our first step was to maximize the distillation capacity of a smaller crude distillation column, allowing us to cover around 20% of the previous production capacity in Schwechat”, explains Michael Sattler. And then there were considerable logistical challenges to overcome in order to secure the second pillar of supply – buying in from other refineries and seaborne imports.
OMV refineries all linked up
Another important element in securing supplies was that the OMV refinery in Schwechat works in a network with those in Burghausen/Germany and Petrobrazi/Romania. Both supplied additional quantities of feedstock to Schwechat for further processing, as did the ADNOC refinery in Abu Dhabi. Petrobrazi was also able to supply some of the Hungarian, Slovenian and Slovakian markets with finished products.
The team purchased further volumes from other countries and markets. However, there were a number of incidents at various other European refineries in the summer of 2022, which significantly limited the availability of products.
Finally, the temporary release of state fuel reserves by the Austrians ELG GmbH, as well as Hungarian and Slovakian state reserves, made a significant contribution to securing supply.
We have done everything possible to continue supplying the markets and customers served by the Schwechat refinery”, Michael Sattler, Senior Vice President, Value Chain Optimization
The markets: From airports to road construction to chemicals
These markets are located in Austria itself, as well as in the neighboring countries of the Czech Republic, Hungary, Slovenia and Slovakia. The OMV refinery supplies them with standard products such as diesel, heating oil and gasoline.
Austrian airports are another important market. OMV supplies Salzburg, Graz and above all the Vienna International Airport with jet fuel. The fact that the incident occurred at the start of the holiday season, of all times, when there are a lot of flights, did not make the team’s job any easier. “The support and flexibility of our customers played a major role in making this all possible”, says Michael Sattler. In the specific case of the airlines, for example, so-called “tankering” was used: The airlines refuel more at another destination and less at the Schwechat site. This meant that the usual amount of fuel at Schwechat Airport could be massively reduced. In addition to the airlines, heating oil customers also helped by agreeing not to replenish their stocks until later in the year.
Another market that is in high season in summer: Road construction with its demand for
Bitumen for road surfaces, which the refinery supplies to customers in Austria, but also to the aforementioned surrounding markets and even as far afield as Serbia and Romania.
“And finally, various customers from the chemicals industry are among the buyers of ethylene and propylene from the Schwechat refinery”, adds Michael Sattler.
Challenges on road, rail and river
“Securing additional volumes was not the only problem”, says Michael Sattler, “guaranteeing logistics was even more of a challenge”. Even though cargo transport capacities in Germany were severely limited due to an intensive construction program on the entire German rail network, extensive construction work was taking place on European motorways and alternative routes on rivers were sometimes not possible due to low water levels, the team still managed to find solutions.
Securing supplies by rail
In the end, a lot of the additional transport could be organized by rail. “In midsummer, 180,000 tonnes of finished products reached Austria by rail. Normally it is 30,000 tonnes”, says Michael Sattler. During the peak period in July and August, more than 100 trains crossed the German border every month – something many had previously considered impossible from a logistics standpoint.
In addition, twice as many barges – floating shipping containers – were in use. “In total, we found more than 20 different sources for product purchases. Trains and ships arrived from all over Europe. From Bremen in northern Germany to Holland, from Constanta in Romania on the Black Sea to Italy and Switzerland”.
In order to be able to distribute the delivered quantities properly, technical and organizational changes had to be implemented in the refineries in Schwechat and Burghausen as well as in the tank farms in Lobau, St.Valentin, Graz and Feldkirchen. The logistics teams on site were on duty around the clock – in this case only for unloading, not as is usually the case for loading as well.
Now that the crude oil distillation unit at the OMV Schwechat refinery has been running at full capacity again since early October, the situation has finally eased. The alternative supply system will nevertheless continue to run for some time to refill the storage tanks and return the state’s fuel reserves.
And so Michael Sattler sums up this summer with a number of hurdles and challenges: “Full commitment by the OMV team, support from supply and logistics partners, carriers, customers, authorities and politicians – and finally OMV’s own network – all this made it possible: To establish an alternative supply system with which we were able to keep our customer promise, namely full supply security for our partners and customers, even in times of crisis”.