Glossary and definitions

A

  1. ACP Diesel

    Active cleaning power (ACP) is a multi-functional additive that Preem has blended in our diesel since 2006. ACP prevents coatings from forming in the engine’s injection system. This coating impairs the performance of the engine and leads to higher fuel consumption.

  2. Adjusted Equity

    Equity including non-controlling interest

  3. AEL

    Accepted Emission Levels

  4. Aromatic

    Hydrocarbon compounds produced in the distillation process, the content of which in refined products is often regulated by applicable environmental laws.

  5. Average adjusted equity

    Equity including non-controlling interests. The average value is calculated as the sum of the opening and closing balance divided by two.

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B

  1. BAT

    Best Available Technology

  2. Benzene

    An aromatic compound, the presence of which in refined products is often regulated by applicable environmental laws.

  3. Biofuel

    Liquid or gaseous fuel made of biomass and used for transportation
    purposes.

  4. Brent oil

    A benchmark oil for the various types of oils in the North Sea,
    used as the basis for pricing.

  5. Bunker fuel

    Fuel oil used as transportation fuel for ships.

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C

  1. Capital employed

    Total assets less interest-free trade payables.

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D

  1. Dated Brent Crude

    A cargo of North Sea Brent blend crude oil that has been assigned a date when it will be loaded onto a tanker. In this offering memorandum, references to the price of Dated Brent Crude are derived from data provided by Platts, a division of McGraw Hill Financial Inc.

  2. Debt/equity ratio

    Interest-bearing liabilities less cash and cash equivalents as a percentage of average adjusted equity.

  3. Diesel

    A refined product from the middle range of the distillation process, used primarily as a fuel source for vehicles.

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E

  1. Equity asset ratio

    Adjusted equity as a percentage of total assets.

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F

  1. FAME

    Fatty Acid Methyl Esters, usually obtained from vegetable/
    seed oils.

  2. FCC

    Fluid catalytic cracker unit: a refinery unit that uses a chemical process by means of a catalyst to create a new, smaller molecules from larger molecules to make gasoline and distillate fuels.

  3. Fossil fuels

    Are mainly oil, coal and natural gas. They consist of organic materials containing carbon and hydrogen compounds which are stored in bedrock. Fossil fuels are currently the dominant primary energy source on Earth.

  4. Fuel oil

    A refined product from the lower range of the distillation process, used primarily by industrial customers, like electric utilities, for steam and power generation.

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G

  1. Gasoline

    A refined product from the middle range of the distillation process, used primarily as a fuel for vehicles.

  2. Gross refining margin

    The difference between the sales revenue received from the sale of refined products produced by a refinery and the cost of crude oil and (where relevant) other immediate feedstocks processed by it. 

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H

  1. Heating oil

    A refined product from the lower range of the distillation process, used as a heating fuel or a fuel for combustion engines in industrial, residential, agricultural and commercial sectors.

  2. HPU

    Hydrogen production unit: a refinery unit that produces hydrogen for use refinery processes.

  3. HS

    High sulfur crude oil.

  4. HVO

    Stands for Hydrogenated Vegetable Oil and is a renewable fuel component that can be blended in diesel or used instead of diesel in diesel engines. Hydrogenated vegetable oil consists of a vegetable oil or animal fats refined using hydrogen under the influence of a catalyzer in order to raise quality, turning it into a fuel for diesel engines. Preem’s tall oil, which is found in Preem Evolution Diesel, is an HVO.

  5. Hydrocracking

    Sophisticated refinery process that converts residual products into lighter hydrocarbons under conditions of high temperature and pressure.

  6. Hydroskimming

    A basic refining process with some limited ability to produce gasoline.

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I

  1. IsoGHT

    Preem’s new IsoGHT plant enables diesel production using raw
    materials such as tall oil. GHT stands for Green Hydro Treater. Isomerization (Iso) chemically transforms straight hydrocarbons into branched hydrocarbons, giving the fuel superb cold weather properties.

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K

  1. Kerosene

    A refined product from the middle range of the distillation process, used either as a fuel for aviation turbines (jet engines) or as a heating fuel in smaller residential, agricultural or commercial sectors.

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L

  1. Lignin

    A residual of the Swedish forest industry and one of the most commonly occurring organic compounds in nature which helps give wood its mechanical strength. 

  2. Liquefied petroleum gas/LPG

    Liquefied petroleum gas (butane and propane or a mixture of both) used as a fuel for heating, cooking and lighting.

  3. LNG ships

    LNG stands for Liquefied Natural Gas. It is liquefied gas, mainly
    methane, that has been transformed to liquid by being cooled to -163°C under atmospheric pressure. One metric ton of LNG is equal to around 1,400 cubic meters of gas. Special ships are used to transport LNG.

  4. LS

    Low sulfur crude oil.

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M

  1. MHC

    Mild hydrocracker unit: a refinery unit that desulfurizes vacuum gasoil and converts it into lighter products and feedstock for the hydrocracker.

  2. Middle distillates

    A refined product from the middle range of the distillation process. Middle distillates include diesel, heating oil and jet/kerosene.

  3. MK1

    The designation for Swedish Environment Class 1 diesel.

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N

  1. Naphtha

    A refined product from the higher range of the distillation process, used as a solvent and as an additive for the manufacture of ethylene and other petrochemicals.

  2. Nelson Complexity Index

    A measure of the secondary conversion capacity of a petroleum refinery relative to the primary distillation capacity.

  3. Net cash margin

    Refining margin less the refinery’s fixed operating costs, excluding depreciation and other non-cash costs. Net cash margin differs from our net cash business margin.

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O

  1. OPEC

    Refers to Organization of the Petroleum Exporting Countries, a perpetual, intergovernmental organization.

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P

  1. PFAD

    Palm Fatty Acid Distillates are produced by refining crude palm oil. Used as a raw material for producing biodiesel. Preem’s fuel does not contain palm oil or PFAD.

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R

  1. Refinery

    A plant where crude oil and renewable raw materials are transformed
    into vehicle fuels.

  2. Refining margin

    Gross refining margin less variable refining costs, which consist of volume-related costs, such as the cost of energy. 

  3. Refomer plant

    Converts naphtha into gasoline by raising the octane rating.

  4. Renewable fuels

    Renewable fuels are made from sources that are constantly regenerating and therefore will not be depleted within the foreseeable future. The most common are biodiesel, biogas and ethanol. Renewable fuels are part of a closed cycle and do not create a net surplus of carbon dioxide greenhouse gases when used.

  5. Residuals

    Materials remaining after a completed process, whose main purpose is not to produce this material and where the process has not been deliberately changed to produce the material.

  6. Return on adjusted equity

    Profit/loss after tax as a percentage of average adjusted equity.

  7. Return on capital employed

    Profit/loss before borrowing expense as a percentage of average capital employed.

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S

  1. SAMIR

    Refers to the Société Anonyme Marocaine de l’Industrie du Raffinage.

  2. Self-financing ratio

    Net financing from the year’s operations in accordance with the Consolidated cash flow statement as a percentage of capital expenditures in plants.

  3. Shale oil

    An oil produced from oil shale through a process that converts the organic substance in the rock.

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T

  1. Tall oil

    A mixture of compounds obtained as a by-product of wood processing, such as from the pulp and paper industry.

  2. Turnaround

    A fundamental overhaul of a refinery where the entire refinery is shut down for inspection and maintenance.

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V

  1. VDU

    Vacuum distillation unit: a secondary processing unit consisting of vacuum distillation columns. Vacuum distillation helps to produce products out of the heavier oils left over from atmospheric distillation.

  2. VGO

    Vacuum gasoil: an intermediate refining feedstock which is upgraded by further processing for end-user consumption.

  3. VLCC

    Very large crude carrier. A tanker designed to carry between approximately 160,000 and 320,000 deadweight metric tons.

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W

  1. WAF

    West African crude oil.

  2. Well to wheel/WTW

    When comparing different fuels in WTW studies, the entire chain of production and distribution has to be taken into account as well as how efficient energy conversion is in the vehicles. The report describes costs, greenhouse gas emissions and energy consumption for individual fuels from the time they are extracted from a natural resource until they propel a vehicle – “from well to wheel”.
     

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