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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, 21 August 17
FIRM DEMAND FOR CAPES CONTINUE TO SUPPORT DRY BULK SHIPPING
COALspot.com: The freight market was continued to rose this past week compared to the previous weeks, as BDI, Cape and Panamax indexes show a posit ...
Friday, 18 August 17
U.S. WEEKLY COAL OUTPUT UP 2.1% WEEK OVER WEEK, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.5 million short ton ...
Thursday, 17 August 17
DESPITE A HOLIDAY-DISRUPTED WEEK IT HAS BEEN A NEW ACTIVE WEEK FOR THE PANAMAXES - FEARNLEYS
Supramax
A very quiet start to the week with holidays in several countries. USG still bringing good results supported by a tight tonnage availabl ...
Monday, 14 August 17
CENTURIES ON, AND DRY BULK STILL RULES THE WAVES... - SARAH HOLDEN | CLARKSONS
By the late 1800s, the shipping industry had been transformed by the introduction of steam power and iron ships. Coal and grain were two of the mos ...
Monday, 14 August 17
THE FREIGHT MARKET CONTINUES ON AN UPWARD PATH
COALspot.com: The freight market was continued to rose this past week compared to the previous week, as BDI, Cape and Panamax indexes show a positi ...
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Showing 1966 to 1970 news of total 6871 |
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- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Parliament of New Zealand
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining Corp, Philippines
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
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