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Friday, 08 September 17
MIXED SIGNALS ON REFINERY PREPARATIONS FOR 2020 FUEL CHANGES - IBIA
A recent consultancy survey has suggested that some 85% of refiners have not made plans for how to deal with the expected dramatic fall in global demand for high sulphur fuel oil (HSFO) in 2020. However, some refineries have made recent announcements showing that they are making production changes, or are thinking about it.
In July, reports emerged that a new survey conducted by consulting company KBC found only 15% of oil refiners know how they are going to handle the shift in demand associated with the drop in the global sulphur limit for marine fuels from today’s 3.50% to 0.50% at the start of 2020. KBC surveyed refiners across the US, Europe, the Former Soviet Union and South Africa about their attitudes to the upcoming regulation.
A report published by KBC in April this year says the 2020 sulphur limit for marine fuels will likely see more than 2 million barrels per day (b/d) of HSFO become “stranded in the market” as ships shift to low sulphur fuels to comply. The KBC report said industry feedback indicated that maybe 10-15% of ships will have installed scrubbers that will enable them to continue to use HSFO compliantly by 2020.
A key observation in the KBC and several other reports is that refiners need to find an outlet for HSFO because it is an inevitable by-product of refinery operations, and if they cannot dispose of it they will be forced to cut overall production or even shut down. The least complex refineries with a high HSFO yield are most at risk, while complex refineries with fluid catalytic cracking and coking conversion facilities can reduce their HSFO yield to 3% or less of the total output.
The problem facing the refining industry, and by extension the marine fuels industry, is that major refinery conversions to reduce HSFO and produce more low sulphur distillate fuels are costly and take time to implement, meaning big investments that haven’t already been planned and approved are unlikely to be operational in time for 2020. And as the uptake of scrubbers may increase fast after 2020, demand for, and hence the value of HSFO could recover, creating uncertainty for refiners contemplating their options. Other tweaks are possible in the short term, such as using sweet crude oil as feedstock, but it is expected that the price differential between light sweet and heavy sour crude oils will increase.
Meanwhile, some refiners are signalling that they are taking notice of the International Maritime Organization’s decision to implement the 0.50% sulphur limit in 2020, and are planning changes in their production profiles in response to the impact of regulation.
One is the management of the Rheinland refinery in Wesseling, Germany, owned by the oil major Shell. It is currently investigating the possibility of expanding the residue processing plant at this refinery because “the high-sulfur residues used so far for the manufacture of marine fuels will no longer be marketable” as a result of the IMO’s 2020 sulphur regulation.
The refinery, which has an overall annual capacity of around 16-17 million tonnes, has yet to submit formal official documents for these plans but has held initial talks with politicians and environmental associations to present preliminary plans for a potential investment project. It means no detailed information is yet available about the scale, cost and timing of the project and it is uncertain if it will be ready in time for 2020. The refinery management said further talks are planned.
Another refiner, Par Petroleum, has gone public with plans to upgrade its Hawaii refinery to cut HSFO output and produce more high-value ultra low sulphur diesel (ULSD) and jet fuel at the plant. The plan is adding a 10,000 barrels per day diesel hydrotreater at the 93,000 b/d plant, which will reduce fuel oil product yields at the refinery by 4%, CEO Joseph Israel told S&P Global Platts in an interview in early August.
Although the refinery’s HSFO output is mainly used by local power stations to make electricity on Hawaii or shipped to the Far East, the refiner’s decision is linked to expectations of lower demand and a very low price for HSFO from the start of 2020, and better margins for ULSD.
The unit is slated to come online in the first quarter of 2019, and the cost of construction is said to be kept low, at $27 million, because the refinery already has a hydrogen plant with sufficient capacity and is currently making more hydrogen than the refinery uses.
The 2020 sulphur limit is expected to push up demand for low sulphur distillates to blend compliant marine fuels. S&P Global Platts said global demand for ULSD is expected to rise by 3.5 million b/d by 2020.
For the Par refinery, an important consideration for the investment was that the new refinery unit will have the flexibility to switch between making jet fuel or ULSD, depending on the margins at the time. At present, no jet fuel is produced locally, but it accounts for about half of all transportation fuels consumed in Hawaii.
It seems the 2020 sulphur regulation impact is increasingly on the radar for refiners, but while they may struggle to find markets for HSFO that has previously gone into the marine fuel pool in 2020, that does not guarantee that they will focus on producing compliant marine fuels. Some will, if they think the price is right and marine fuels will become a lucrative market, others will focus on inland markets.
by Unni Einemo, IBIA
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Wednesday, 23 August 17
THE STRONG IRON ORE TRADE ROUTES SUPPORT CAPESIZE SEGMENT - INTERMODAL
The upward trend in the Capesize segment is definitely being supported by the strong momentum in the key iron ore trade routes. The price of high-q ...
Tuesday, 22 August 17
WHAT IS A RELEASE CALL?
KNOWLEDGE TO ELEVATE
Joining a mutual P&I Club means each Member shares in the fortunes of that Club and its membership. The continuity of ...
Tuesday, 22 August 17
THOSE DOG DAYS OF SUMMER STEEL PRODUCTION IN CHINA - COMMODORE
COALspot.com: One popular but inaccurate narrative that makes the rounds every June and July (and occurred again this year) is that China’s s ...
Monday, 21 August 17
BANPU REVEALS FIRST HALF 2017 WITH STRONG RESULTS; SUPPORTED BY HIGHER COAL PRICES
Banpu Reveals First Half 2017 with Strong Results from Higher Coal Prices Gearing Up to the Era of New Energy with Banpu Greener & Smarter Stra ...
Monday, 21 August 17
INDIA'S COAL IMPORTS DECLINE TO 192 MT IN FY17 - PTI
Import of coal saw a decline of 6.37 per cent to 191.95 million tonnes (MT) in 2016-17 on higher production by CIL that saw the country move to a r ...
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Showing 1961 to 1965 news of total 6871 |
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- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- London Commodity Brokers - England
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
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