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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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Monday, 25 September 17
U.S WEEKLY COAL OUTPUT DROPS FOR THE FOURTH WEEK IN A ROW, EIA DATA SHOWS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.5 million short ton ...
Wednesday, 20 September 17
SHIPPING MARKET INSIGHT - INTERMODAL
An undoubtedly interesting market lately is the newbuilding market, in which we are witnessing numerous orders across all sectors and sizes. At the ...
Monday, 18 September 17
COAL PRICES WERE RELATIVELY UNCHANGED WEEK OVER WEEK - ANZ
COALspot.com: Coal prices were relatively unchanged, with most interest remaining in the thermal coal market said Daniel Hynes. However, falling st ...
Monday, 18 September 17
PROSPECTS ARE NOT SO CLEAR CUT FOR COAL - CLARKSONS
Prospects are not so clear-cut for coal. According to Clarksons, coal has been a key energy source since the Industrial Revolution and in 2016, ste ...
Friday, 15 September 17
U.S WEEKLY COAL OUTPUT DROPS FOR THE THIRD WEEK IN A ROW, EIA DATA SHOWS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 15.7 million short ton ...
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Showing 1936 to 1940 news of total 6871 |
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- Global Business Power Corporation, Philippines
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Bhatia International Limited - India
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- The University of Queensland
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Trasteel International SA, Italy
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