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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, 25 October 17
COAL MARKETS REMAINED SUBDUED - DANIEL HYNES
Coal markets remained subdued.
Daniel Hynes, Senior Commodity Strategist at ANZ, Coking coal prices were unchanged amid an absence of fresh of ...
Wednesday, 25 October 17
SHIPPING MARKET REPORT - INTERMODAL
While the majority of perspective Buyers in the dry bulk second-hand market is currently focusing on modern tonnage, there is also increased activi ...
Tuesday, 24 October 17
KOMIPO INVITED BIDS FOR MIN. 4600 NAR BLENDED SUB-BITUMINOUS COAL OF INDONESIAN ORIGIN FOR BORYEONG OR NEW BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for 5,000,000 Metric Tons of blended sub-bi ...
Tuesday, 24 October 17
CHINA'S INSATIABLE APPETITE FOR THIS ENERGY COMMODITY CONTINUES STRONG - GEORGE LAZARIDIS
Crude oil prices have been seeing some support emerge this past week as supply disruptions in Iraq and a drop in US drilling has helped bolster oil ...
Friday, 20 October 17
U.S COAL PRODUCTION FELL 1.45 PER CENT WEEK OVER WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.9 million short ton ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Australian Coal Association
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
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