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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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- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Australian Coal Association
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Marubeni Corporation - India
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Parliament of New Zealand
- Planning Commission, India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
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