Corral Petroleum Holdings AB (publ) Business Update ... - Preem

Preemraff Gothenburg generated additional operating profit from the sale of surplus heat of SEK 54.2 million (€5.9 million)with relatively little additional operating cost. Based on the Nelson Complexity Index, Preemraff Gothenburg has acomplexity index of 6. The refinery is located on a 370-acre site near the harbor of Torshamnen, Sweden’s largest harbor, inGothenburg. Preemraff Gothenburg’s proximity to this harbor, which provides for oil tanker and VLCC access, helps it tomaintain low crude oil transportation costs and its proximity to the west coast inland market helps it to minimize distributioncosts. Preemraff Gothenburg has a total storage capacity of approximately 12 million barrels and a total refining capacity ofapproximately 125,000 barrels of crude oil per calendar day. Aggregate production of refined products at PreemraffGothenburg was approximately 20 million barrels, 42.1 million barrels and 37.4 million barrels for the six months ended June30, 2011 and the years ended December 31, 2010 and 2009, respectively.Preemraff Gothenburg has been upgraded several times through large capital investments. As a result of theseimprovements, we believe that Preemraff Gothenburg is one of the best-performing hydroskimming refineries in Europe.The following chart summarizes upgrades to Preemraff Gothenburg:Upgrade at Preemraff Gothenburg Function YearIsomerization Unit ............................................................. Produces an additional low-benzene gasoline component 1993Desulphurization/Dearomatization Unit ............................ Converts conventional heating oil or diesel into virtually 1997sulphur-free, low aromatic dieselHeavy Gasoil Upgrading Unit ........................................... Upgrades heavy gasoil into heating oil for commercial 1997useSulphur Recovery Units..................................................... Converts hydrogen sulphide into liquid sulphur 1997Molex Unit......................................................................... Increases the octane of the gasoline component isomerate 2002Mild Hydrocracker Unit..................................................... Upgrades heavy oil production to low-sulphur heating oil 2003Imported crude oil arrives by ship at the harbor of Torshamnen, which is capable of receiving crude oil carriers inexcess of 200,000 dead weight tons, and is then transported to Preemraff Gothenburg by pipeline. Between 50 and 60 crudeoil carriers arrive at Torshamnen each year. At Preemraff Gothenburg, the crude oil is discharged into seven above-groundstorage tanks and two underground caverns with a combined storage capacity of approximately 5.6 million barrels.Preemraff Gothenburg operates two identical crude distillation units. During distillation, the crude oil is heated untilit separates into different fractions. After distillation, Preemraff Gothenburg further refines, upgrades and processes thefractions as follows:Liquefied Petroleum Gas Unit. In the liquefied petroleum gas unit, installed in 1967, Preemraff Gothenburgseparates the gas fractions (butane and propane) by distillation from the high-octane component.Isomerization Unit. The naphtha fraction (after desulphurization) is processed in a reformer unit to increaseoctane. In Preemraff Gothenburg’s isomerization unit, completed in 1993, an additional, low-benzenecomponent for blending gasoline is produced.Desulphurization/Dearomatization Unit. Preemraff Gothenburg’s highly sophisticated heating oil/dieseldesulphurization/dearomatization unit was completed in 1997. This unit enables Preemraff Gothenburg toproduce virtually sulphur-free (10 parts per million) and low-aromatic diesel from crude oil with high sulphur,which is typically lower in price than crude oil with low-sulphur content.Heavy Gasoil Upgrading Unit. In 1997, Preemraff Gothenburg installed a heavy gasoil-upgrading unit, whichupgrades heavy gasoil into heating oil for commercial use.Sulphur Recovery Units. The hydrogen sulphide formed during the various desulphurization reactions is fed toPreemraff Gothenburg’s sulphur recovery units, which were installed in 1997, and converted to liquid sulphurfor resale as a feedstock to chemical companies.Molex Unit. In 2002, Preemraff Gothenburg installed a molex unit, which increases the octane of the gasolinecomponent isomerate.Mild Hydrocracker Unit.In 2003, Preemraff Gothenburg completed construction of a mild hydrocracker unit, which enablesPreemraff Gothenburg to upgrade part of its heavy oil production to low-sulphur heating oil.During the first quarter of 2010, we shut down our mild hydrocracker at Preemraff Gothenburg for twomonths (until May 2010) in order to modify the unit to partly process renewable feedstock, which enables41