ALCOA CONSIDERS SWITCHING PART OF ITS ALUMINA PRODUCTION TO FUEL OIL

The refinery has been operating since October 1 at a production rate of 2,200 tons per day, half of the factory’s capacity, a measure that Alcoa adopted, it says, “to reduce part of the losses it is incurring”.

Switching from gas to fuel oil could be a way for the company to save money in the face of rising natural gas prices. Its international price has soared in the wake of the war in Ukraine. Russian President Vladimir Putin threatened to cut off the tap to the European Union, which cannot find alternative suppliers. The Netherlands is the market reference for this resource at European level, and at the end of last September the values of this energy source exceeded 200 euros.

“The refinery has experienced a significant increase in its natural gas costs, which have gone from approximately $45 per ton of alumina produced in early 2021 to a price of around 245 expected by the third quarter of 2022,” Alcoa argued in July, when it announced the production cutback at the plant, whose end date it does not specify.

Although oil prices are also rising, they have risen less, as can be seen in the benchmark Brent crude oil barrel, which is at around 85 dollars. Therefore, resorting to fuel oil in part of the production process could be an alternative for Alcoa.

At peak production, 1.6 million tons per year, the alumina plant consumes a total of 3,500,000 megawatt-hours (MWh) of natural gas per year, which is almost 1 % of the total consumption of the entire Spanish state.

The possibility of switching part of the production to fuel oil at the alumina plant has been on the table for Alcoa for some time. Even before announcing, in the first instance, a production cut of 15% at the refinery, which would eventually be extended to between 50 and 60% of the plant’s production capacity.

Alcoa does not specify whether investments in the facility would be necessary to be able to use this power supply again. This is likely to be the case, given that since the A Mariña gas pipeline came into operation in 2015, the refinery switched to 100 % operation with natural gas as a power source.

No new president for Alcoa Spain, three months later, Alcoa has no news on the search for a new president for the multinational in Spain, where the company only owns the San Cibrao industrial complex. The company does not specify whether it is still looking for someone for this position, which is currently held by Álvaro Dorado, vice-president of energy of the business group.

In July, Alcoa posted on the social networking site LinkedIn that it was seeking a professional for this leadership position. Since then, Verónica Dolç has been announced as the firm’s number 2 in Europe.