MOSCOW (MRC) -- Global oil refiners have upgraded processing units and adjusted operations to raise output of low-sulfur residual fuels and marine gasoil (MGO) to prepare for stricter shipping fuel standards that kick in on Jan. 1, 2020, said Hydrocarbonprocessing.
The new International Maritime Organization (IMO) rules prohibit ships from using fuels containing more than 0.5% sulfur, compared with 3.5% through the end of December, unless they are equipped with exhaust-cleaning “scrubbers”.
The shipping industry consumes about 4 million barrels per day (bpd) of marine bunker fuels, and the rule changes will impact more than 50,000 merchant ships globally, opening a significant new market for fuel producers. Below is a summary of how top refiners have prepared.
The world’s largest refiner, Sinopec Corp has started very low-sulfur fuel oil (VLSFO) output at 10 refineries in China, including Zhenhai Refining and Chemicals Co, Jinling Petrochemical Co and Hainan Petrochemical Co. The company plans total VLSFO capacity of 10 million tonnes a year (about 180,000 bpd) by 2020.
It also plans to build a fleet of 100 barges over the next three years to supply cleaner fuels to ships.
PetroChina has pledged 4 million tonnes of VLSFO in 2020, likely from its Jinzhou, Jinxi and Dalian refineries in China’s northeast, and Guangxi refinery in the south.
PetroChina Fuel Oil Co Ltd has a license to supply ship fuel in Zhoushan on China’s east coast. Total plans to supply marine fuel in Zhoushan in a joint venture with China’s Zhejiang Energy.
Top South Korean refiner SK Energy, a unit of SK Innovation, started supplying MGO from October. It can produce up to 27,000 bpd of marine gasoil, about 8% of its total gasoil output. SK is also building a vacuum residue desulphurization (VRDS) unit that can produce 40,000 bpd of LSFO* due online in March or April 2020.
As MRC informed earlier, in April 2019, LyondellBasell announced that PetroChina will use the LyondellBasell Hostalen "Advanced Cascade Process" technology to produce 1,100,000 metric tons per year of high density polyethylene (HDPE) capacity. Licensor selection had been done by China HuanQiu Contracting & Engineering Co., Ltd. (HQC), a wholly owned subsidiary of PetroChina. The low-pressure slurry process technology will be used for a 300,000-mt/year HDPE unit to be built in Korla City, Xinjiang Province, a 400,000-mt/year plant in Jieyang City, Guangdong Province and a 400,000-mt/year plant in Yulin City, Shaanxi Province in the P.R. China.
We also remind that PetroChina Co, Asia’s largest oil and gas producer, reported a sharp fall in third-quarter profit on Wednesday, dragged down by weaker global energy prices and slowing growth in its domestic gas market.
According to MRC's ScanPlast report, Russia's September estimated HDPE consumption fell to 70,570 tonnes from 108,320 tonnes a month earlier. Russian producers reduced their output due to maintenance works, whereas imports were high partially because of an increase in US shipments. The estimated HDPE consumption totalled 862,170 tonnes in January-September 2019, up by 7% year on year. HDPE imports increased by 47%, whereas production dropped by 5% due to a long period of maintenance works at three production capacities.
MRC