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