Alcoa converts San Ciprian Alumina Refinery to natural gas, improving global competitiveness

The Alcoa alumina refinery in San Ciprian (Lugo, Spain) today officially transitioned from fuel oil to natural gas following the completion of a new gas pipeline. The US$25 million investment to convert the refinery to natural gas is consistent with the Company’s strategy to create a lower cost, globally competitive alumina business.

“We are increasing the ability of our San Ciprian refinery to compete on a global scale by converting the facility to a secure supply of natural gas, which is lower in cost over the long term and a cleaner alternative to fuel oil for refining,” said Alan Cransberg, President of Alcoa Refining. “The San Ciprian team has worked diligently to make this transition happen and we’re extremely pleased to see the pipeline inaugurated today.”

The facility’s shift to natural gas was designed to reduce energy costs at the refinery by US$20 per metric ton compared to historic levels, supporting the Company’s goal to improve its position on the alumina cost curve to the 21st percentile by 2016. At Alcoa’s 2014 Investor Day, the Company said that its position on the alumina cost curve had improved to the 25th percentile in 2014 from the 27th percentile in 2013.

The refinery’s transition to natural gas also enables Alcoa to reduce the facility’s greenhouse gases, cutting CO2 by 30 percent and eliminating SO2 emissions.

Inauguration Ceremony

The heads of the Galician Regional Government, Natural Gas-Fenosa – which is the owner of the new pipeline, and Alcoa Spain participated in a ceremony to celebrate the pipeline’s inauguration.

“The opening of the pipeline in San Ciprian today marks the successful conclusion of a joint effort between regional Government ‘Xunta de Galicia’, with support of the Consellería of Economy and Industry; Natural Gas-Fenosa and Alcoa, and is consistent with Alcoa’s ongoing commitment to energy efficiency,” said Simon Baker, president of Alcoa’s Global Energy Assets and European region. “Alcoa appreciates the strong support for this project by the Ministries of Industry and Environment to provide this infrastructure, which is essential for the La Mariña community and helps improve the competitiveness of the regional industry in general.”