Diesel prices across the US soared last week, reaching multiyear highs in nearly every region. The aftermath of several hurricanes this year curtailed production, and perhaps shut some refineries for good. That, combined with strong agriculture demand, created a perfect storm for strong spot market prices. S&P Global Platts editors Josh Brown and Margaret Rogers […]
Nov 12, 2020
Diesel prices across the US soared last week, reaching multiyear highs in nearly every region. The aftermath of several hurricanes this year curtailed production, and perhaps shut some refineries for good. That, combined with strong agriculture demand, created a perfect storm for strong spot market prices. S&P Global Platts editors Josh Brown and Margaret Rogers take a look at the forces shaping the market.
Nov 06, 2020
As coronavirus cases rise sharply in Europe, many countries are entering into second lockdowns to curb the spread of the virus – but are the markets prepared for a potential second round of curtailed demand?
S&P Global Platts reporters Chris Ewen, Kieran Hess and Sarah-Jane Flaws discuss with Joel Hanley the state of refined products and the challenges ahead for transportation fuels.
Nov 19, 2020
Jet fuel took center stage at the recent International Air Transport Association Fuel Forum, as the industry grapples with the demand destruction due to air travel restrictions, but also paves the way for a clear decarbonisation agenda.
Jet fuel and derivatives editors Emma Thomas and Christopher Ewen join Francesco Di Salvo to reflect on the key takeaways from the event and the impact on the markets for conventional and sustainable aviation fuels.
This year has been a roller-coaster ride for the Asian light ends market, as the coronavirus pandemic gripped the world, slashed demand for refined oil products and forced the closure of several refineries across the region in its wake. The future of the light ends market will hinge largely on
Nov 24, 2020
This year has been a roller-coaster ride for the Asian light ends market, as the coronavirus pandemic gripped the world, slashed demand for refined oil products and forced the closure of several refineries across the region in its wake. The future of the light ends market will hinge largely on how fast the world progresses in its fight against the pandemic and its economic impact. In this podcast, S&P Global Platts light ends experts Wendy Cheong, Mark Tan, Wanda Wang, and Ramthan Hussain look ahead and explore the potential paths of the Asian gasoline, naphtha and LPG markets in 2021.
Refiners call for more biofuels support. Move seen displacing 60,000 b/d of oil demand. Hybrids get reprieve until 2035, EV sales booming.
Nov 18, 2020
Designed to help speed up the rollout of electric vehicles on the UK’s roads, the UK government said Nov. 18 it will accelerate its planned deadline for sales of new internal combustion engine (ICE) vehicles from a previous target of 2035.
Covering passenger cars and vans, or light commercial vehicles, the widely-anticipated decision maintains a 2035 cut-off for hybrids cars that include battery propulsion alongside conventional engines.
The move brings the UK into line with a number of other European countries including Germany, the region’s biggest economy and largest oil market. Sweden, Denmark, Ireland and the Netherlands also plan to end sales of new ICE cars in 2030. Norway, Europe’s electric car powerhouse, has the most ambitious plan to phase out combustion-engine cars from 2025.
But the UK’s refiners said the ban is unnecessary and urged more action to develop biofuels such as sustainable aviation fuel, or biojet as part of a “holistic” plan.
“[The] government should support the uptake of a range of technologies to reduce carbon emissions in light transport without a ban,” the UK’s refining and downstream industry body UKPIA said in a statement.
“While internal combustion engines will still be in use for some time to come, it is important to deploy low carbon liquid fuels like biofuels into the fuel mix sooner as they offer significant carbon emissions reductions with today’s car fleet,” UKPIA Director General Stephen Marcos Jones said.
As Europe’s third-biggest oil consumer after Germany and France and one of the 10 largest passenger car markets in the world, the acceleration of the UK’s ICE vehicles ban is significant for forecasts of gasoline and diesel demand as well as global car manufacturers.
Road transport accounts for more than half of oil demand in the UK, with gasoline and diesel meeting around 98% of the transport energy needs. Although diesel sales dominate the UK’s transport fuel demand at some 550,000 b/d, 59% of the cars on the UK’s roads ran on gasoline last year compared to 38% using diesel. Hybrid, electric and other propulsion cars are growing fast but from a very small base of just 3% of the car parc in 2019, according to government figures.
Europe’s long-suffering refiners have been shutting or converting their aging sites to biofuel plants in recent years as overcapacity due to sliding structural demand, competition from the Middle East and Asia and green legislation hammers refining margins.
If the UK achieves a full phase-out of ICE sales in 2030, the move could displace more than 60,000 b/d of refined motor fuels over the next 10 years, S&P Global Platts Analytics estimates.
Platts Analytics estimates that EVs could account for about 20% of the total car parc in the UK by that time, and continue to climb to account for about half of the UK’s car parc by 2040, based on estimates of vehicle age, scrappage rates, and current incentives.
The UK is a net exporter of gasoline and a net importer of jet and diesel. Overall, the UK’s six oil refineries export about a third of the refined products they produce, some two-thirds of which, or around 15 million mt/year, go to the EU.
The UK first announced a ban on sales of new conventional diesel and gasoline cars from 2040 in 2017 following similar measures by France, in a bid to lower emissions and improve air quality. At the time, the UK said its cut-off for conventional cars and vans would mean gasoline and diesel hybrid vehicles would still be permitted to be sold in 2040.
In February, the UK government flagged its intention to bring forward its planned end for the sale of new gasoline and diesel cars and vans by five years to 2035. It said the ban would also now include sales of both hybrids and plug-in hybrids.
Since then, the government has outlined plans to “build back better” from the coronavirus pandemic and is seeking views on bringing forward the UK’s EV switchover to 2035 or possibly earlier. Global EV sales have shown signs of resilience to the pandemic and, in the UK, new registrations of EVs continue to increase from year-ago levels, while gasoline and diesel registration have fallen sharply during the downturn.
Prior to the latest announcement, the UK had already seen substantial growth in electric vehicles, achieving a 2.5% market share in 2018, then 3.1% in 2019, and then over 9% in 2020 as total electric vehicle sales eclipsed 100,000 units through the first three quarters of this year.
But pure electric models still accounted for under 5% of total new car registrations in July, according to official figures, slightly lower than the average in Western Europe of about 7%.
In the current Platts Analytics Base Case, EV sales are projected to grow more than five-fold between 2020 and 2030, reaching 850,000 units sold. This is equivalent to a market share of nearly 50% and would translate into an annual displacement of more than 40,000 b/d of refined motor fuels.
China’s GDP grew by 4.9% the third quarter, putting the country’s economy back on an expansionary track. China is one of the very few countries to register a positive growth amid the COVID-19 pandemic. Against this backdrop, S&P Global Platts Head of News in Asia Mriganka Jaipuriyar, senior oil writer
Oct 29, 2020
China’s GDP grew by 4.9% the third quarter, putting the country’s economy back on an expansionary track. China is one of the very few countries to register a positive growth amid the COVID-19 pandemic. Against this backdrop, S&P Global Platts Head of News in Asia Mriganka Jaipuriyar, senior oil writer Oceana Zhou, and Head of Global Demand and Asia Analytics Dr. Kang Wu examine China’s prospects in a world that continues to face an immense oil demand destruction, forecasts of peak oil demand amid a decarbonization drive across the globe, and the implications the US elections might have on China’s near to medium term growth.
The fight for survival? The refining industry has been experiencing weak margins, low utilization rates, decimated demand and numerous supply chain issues due to the coronavirus pandemic. The IEA have said it will take years for the refining sector to fully recover with the market for refined products being smaller in 2021 than it was […]
Mar 04, 2021
The refining industry has been experiencing weak margins, low utilization rates, decimated demand and numerous supply chain issues due to the coronavirus pandemic. The IEA have said it will take years for the refining sector to fully recover with the market for refined products being smaller in 2021 than it was in 2015. Furthermore, refiners are facing considerable conundrums about how to implement technological advances, what is the future of the industry, what will the landscape of refineries across the globe look like and will the market see some certainty after a period of high volatility and rapid change.
However, an industry in flux also allows for an industry to embrace transformation and innovation while shaking off constraints and disruptions.
So ultimately what does the new normal hold for Asian refiners?
Join us at the Asia Refining Virtual Summit, March 4 2020, to discuss four key topic areas with industry leaders!
– Crude selection, optimization and buying patterns in Asia. The drive for positive margin territory.
– Case studies: China and India and the two different strategies employed to ramp up recovery
– The free-fall of the aviation industry
– Energy transition and the strive for net zero. Achieving refining excellence.
Register now to enjoy early bird discount and seize the opportunity to buy a ticket at only USD199.
There will be upside and downside for the refining industry – join the conference to gain first-hand insights, dissect challenges and understand the fundamental adjustment needed to achieve success for you and your business.
The only focused distillates event in the industry’s calendar In what started out as a promising 2020 for middle distillates, the industry found itself faced with the biggest global shakeup of the markets in history. Lockdowns imposed around the world has decimated demand for jet fuel and diesel, while the predicted warm winter ahead in […]
Feb 04, 2021
The only focused distillates event in the industry’s calendar
In what started out as a promising 2020 for middle distillates, the industry found itself faced with the biggest global shakeup of the markets in history. Lockdowns imposed around the world has decimated demand for jet fuel and diesel, while the predicted warm winter ahead in Europe shows little hope for outlook for heating oil. With many refiners having to adapt to stay afloat, when we will start to see recovery on the horizon?
At a critical time for our sector, join us to better understand how the middle distillate and refining industries are adapting in this time of great uncertainty.
Key areas of focus:
– Explore the current state of play for middle distillate markets, with a focus on upstream market dynamics, hear the refiners perspective and trade evolution for distillate products.
– Gain insights into current market outlooks for key distillate products, including jet fuel, diesel and heating oil, and explore how traditional trade flows have been disrupted in light of the coronavirus pandemic.
– Hear perspectives on the future of transport fuel, at a time of EV, emerging sustainable aviation fuels, and future fuels such as hydrogen.
– Distillates traders
– European refiners
– Terminal, ports and Logistics companies
– International oil majors
– Large scale fuel buyers
– Ship operators
– Regulators and governments
– International finance
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London — Most of the refinery maintenance work has been completed in the Middle East. Meanwhile, Saudi Arabia’s middle distillate production in September fell 18% year on year — marking its lowest level in seven months — as domestic refiners reduced run rates amid sluggish demand, data from the Joint Organisations Data Initiative showed. Middle […]
Nov 20, 2020
Meanwhile, Saudi Arabia’s middle distillate production in September fell 18% year on year — marking its lowest level in seven months — as domestic refiners reduced run rates amid sluggish demand, data from the Joint Organisations Data Initiative showed.
Middle distillate production totaled 4.21 million mt in September, down from a year ago when output was 5.11 million mt. Much of the decline was underpinned by lower jet fuel production at 357,000 mt, plunging 56% year on year to a near 10-year low. JODI historical data showed that jet fuel output was last lower in November 2010, at 304,000 mt. Meanwhile, co-distillate gasoil production in September also saw contraction, slipping 10% on the year to 3.86 million mt.
On a month-on-month basis, jet fuel and gasoil output was down by 39% and 11%, respectively.
Industry sources attributed the declines to refiners paring back runs on poor domestic and international sales, as a resurgence in COVID-19 infections rattled demand and saw countries around the globe reimpose movement restrictions, derailing the demand recovery for the middle distillate complex.
Saudi Arabia’s gasoil and jet fuel consumption tumbled 19.18% year on year to a four-month low in September to 2.23 million mt, as the coronavirus pandemic continued to take a toll on demand, latest data from the Joint Organization Data Initiative showed. Domestic consumption of the middle distillates slipped 3.8% month on month to the lowest level since June, according to JODI data.
Saudi Arabia’s jet fuel consumption led the downtrend, registering a 71.05% year-on-year dive on the back of curtailed air travel as border restrictions mostly remained in place, the data showed.
Compared to August, September jet fuel demand fell 9.84% to 110,000 mt, while gasoil consumption was 2.7% lower at 2.12 million mt.
**Uniper Energy has been running its Fujairah refinery at full capacity since Nov. 9 after maintenance was completed, the company said Nov. 15. Uniper operates two 40,000 b/d distillation units in Fujairah, with the capacity to produce about 210,000 mt a month of IMO-compliant bunker fuel. Both units were having scheduled maintenance in October.
**Bahrain’s Sitra is fully back online after maintenance was completed, according to market sources. One CDU and other units, including a platformer, were offline, according to traders. Work started around Oct. 7 and was due to be completed in November. The refinery has been running at around 65%-70% of capacity as a result of the work.
**Syria’s Homs refinery is currently undergoing works, according to Syrian TV report. The works will not impact production of refined products. Following the turnaround, the atmospheric distillation unit 10 will be able to operate at its full capacity of 1 million mt/yr following an upgrade and installation of new equipment which will improve the quality of oil products.
Upgrades new and revised entries
**Bahrain Petroleum Company (BAPCO) is aiming to phase out all fuel oil production by 2025 and focus on diesel and jet fuel, according to the company’s chairman Dawood Nassif. A $6 billion upgrade and modernization project of BAPCO’s flagship Sitra refinery is now 60% complete, Nassif said. The program will also see the refinery’s capacity expand to 380,000 b/d from 267,000 b/d. BAPCO will announce two further investments in 2021, which will see it target zero fuel oil, and focus on jet fuel and diesel, and also see its current naphtha production upgraded to petrochemicals, Nassif said. “We’re going to make jet fuel for delivery in 2023, which we believe will be smack on the recovery,” Nassif said. In the summer, Bapco said that the refinery expansion had been delayed due to COVID-19. The project, whose original timescale was four years, had been slated for completion in 2022, but that plan has changed, S&P Global Platts reported previously.
**Iran’s Isfahan oil refinery has roughly doubled its high-quality gasoil production and aims to reach Euro 5 emission specifications for the total production in 2021. The refinery’s gasoil purification unit will go on stream next year to process 20 million l/d of gasoil into high-quality fuel. Separately, the desulfurization unit at Iran’s Isfahan will go on stream in four years, the refinery managing director Morteza Ebrahimi said in August, according to state news agency IRNA. “This refinery will have all its products produced matching Euro 4 and Euro 5 standards by 2025,” Ebrahimi said.
**Syria’s Homs refinery is currently undergoing works, according to Syrian TV report. The works will not impact production of refined products. Following the turnaround, the atmospheric distillation unit 10 will be able to operate at its full capacity of 1 million mt/year following an upgrade and installation of new equipment which will improve the quality of oil products.
**Kuwait National Petroleum Co., or KNPC, has now started up all the six high-pressure Clean Fuels Project boilers at its Mina Abdullah refinery. In June, the company completed the project at its Mina Al-Ahmadi Refinery. Kuwait has three operational domestic refineries with a combined capacity of 936,000 b/d. As part of KNPC’s clean fuels project, the old processing facilities at Shuaiba refinery (200,000 bbl/d) will be retired. Upon completion Mina al-Ahmadi will have 364,000 b/d capacity and with adding Mina Abdullah the whole refinery will have 800,000 b/d capacity. Work on the clean fuels project has been going on since 2014. It will see Mina al-Ahmadi and Mina Abdullah refineries integrated into a single complex.
**Iraqi’s oil minister Ihsan Ismaeel has laid the foundation stone for two units of total capacity 20,000 b/d at the Haditha refinery site in the western province of Anbar. The units will raise the capacity of the plant to around 35,000 b/d from 16,000 b/d. International companies will be approached to bid for building an additional 35,000 b/d at the refinery, which will raise its overall capacity to 70,000 b/d.
**Iraq is forging ahead with plans to boost its refining capacity by about a third by the first quarter of 2022 to reduce dependence on imports of gasoline and gas oil, deputy oil minister told S&P Global Platts. The ministry plans to rehabilitate and develop the Baiji complex north of Baghdad, where three refineries were damaged during the war with the self-styled Islamic State group, Hamed al-Zobai said. Currently one refinery is operating at 70,000 b/d, a second 70,000 b/d unit will come online by the year-end and a third 140,000 b/d facility should be operational in the next two years. The third refinery would take total capacity at the Baiji complex back to 280,000 b/d, making it again the largest facility in the country.
**Japan’s JGC Holdings Corporation has announced that it has officially received the letter of award for upgrading Iraq’s Shuaiba refinery near Basrah in Southern Iraq, with the scheduled completion date slated for 2025. The project aims to convert the excess fuel oil produced by the existing refinery units, which is currently 45% of the yield, to much light products. The upgrading work will, among other things, entail the development of a 34,000 b/d fluid catalytic cracking unit, 55,000 b/d vacuum distillation unit and a 40,000 b/d diesel desulfurization unit. The capacity of Shuaiba is due to be expanded to 280,000 b/d. The installation and construction of the fourth CDU with 70,000 b/d capacity, the LPG unit, the water treatment unit and an additional boiler, which collectively constitute the current expansion project, was at an advanced stage when the work was suspended in March due to the pandemic lockdown.
**Iraq’s oil ministry Sept. 6 announced plans to upgrade the country’s 20,000 b/d Qayyarah refinery, with the aim of adding a second 70,000 b/d production unit that would take the total capacity of the plant to 90,000 b/d.
**Abu Dhabi National Oil Co. reported Aug. 17 “significant progress” on the crude flexibility project, or CFP, at its Ruwais refinery, with “73% project delivery” of the ongoing upgrade. Upon completion in mid-2022, the CFP will allow ADNOC to process up to 420,000 b/d “of heavier and sourer grades of crude oil” at Ruwais.
**Iran’s Persian Gulf Star’s 420,000 b/d condensate refining capacity will be raised by 60,000 b/d.
**Iran will accelerate the expansion and upgrade of the Shiraz refinery. The expansion, which started in 2017, was due to be completed in three years but was slowed down due to sanctions. The first phase of the expansion and upgrade will involve upgrading the gasoline quality, with the second phase involving a diesel upgrade. An isomerization unit and diesel hydrotreater will be built under the project, estimated at $300 million. Shiraz has around 50,000 b/d current capacity. The expansion will add 26,000 b/d.
**Phase 2 of the upgrade at Iran’s Abadan refinery, which includes modernizing units to produce Euro 4 and Euro 5 compliant products, started in February 2017. Phase 2 includes building atmospheric and vacuum units, as well as gasoline, diesel and kerosene distillation units, a sulfur unit and a catalytic cracking unit. Abadan, with 400,000 b/d nameplate capacity, aims to stabilize its throughput at 360,000 b/d. It ultimately expects, following the four-phase upgrade program, to reduce fuel oil output by 40%.
**Iran’s Bandar Abbas and Imam Khomeini refineries will build coke plants, according to local media reports. The units, which will use fuel oil as feedstock, will take three years to complete and will produce high value products. They will produce around 700,000 mt/year, mostly of needle coke.
**Following a major upgrade project, Iran’s Tabriz refinery expects to reduce its fuel oil production. The refinery currently produces 4 million liters a day (1.416 million mt/year) of fuel oil, which is primarily used as a feedstock for tar. By about 2022, the refinery is expected to reduce fuel oil, or mazut, production from around 25% of product output to below 5%.
**The Kermanshah oil refinery in the west of Iran plans to raise capacity by 15,000 b/d and upgrade its products output. “With the implementation of this project, Kermanshah oil refining capacity will reach 40,000 b/d and quality of its products will be upgraded to Euro 5,” the head of the refinery’s board of directors, Sohrab Barandishan, said. No target date for the start or completion of the work was given.
**A gas condensate project is under construction in Iran as part of eight planned 60,000 b/d condensate refineries around Siraf, Bushehr province. The National Development Fund is financing one of the plants.
**ENOC is currently undertaking a $1 billion expansion program to boost the Jebel Ali refinery’s capacity to 210,000 b/d and meet Euro 5 emissions standards. It signed a contract with France’s Technip in September 2016 for the engineering, procurement and construction of a new 70,000 b/d condensate processing train.
**Saudi Arabia’s Rabigh Refining and Petrochemical Co., or Petro Rabigh, has awarded US-based Jacobs a contract to provide front-end engineering and design work, as well as project management consultancy, for a fuel oil upgrade project dubbed “Bottom of the Barrel.” The project aims to convert residue from crude distillation. The refinery is in the process of launching the phase 2 expansion which adds 15 chemical units in the Petro Rabigh complex.
**Saudi Aramco plans to complete a $2.5 billion clean fuels project at its Ras Tanura refinery in the first quarter of 2021. Work on the clean fuels project at Ras Tanura, which started in 2018, is 62% complete. The clean fuels project will produce lower sulfur diesel with low benzene content.
**Saudi Aramco has awarded a contract to KBR to provide technology, license, basic engineering design and equipment for its solvent de-asphalting for the Riyadh refinery residue upgrading and clean fuels project. The solvent de-asphalter technology assists refiners in complying with new International Maritime Organization fuel regulations in 2020, KBR said.
**US engineer CB&I has been awarded a $95 million contract for the expansion and modernization of Sasref.
**Iraq has added another 10,000 b/d of refining capacity after completing the rehabilitation of a CDU at the Kasik refinery in the north of the country, the oil ministry said. Rehabilitation work continues at the refinery’s other 10,000 b/d CDU.
**Jordan Petroleum Refinery Co. has awarded a contract to US engineer KBR for the design of a new residue hydro-processing unit as part of its expansion of the Zarqa refinery in Jordan.
**Iraq plans to invite international companies to compete to build a 300,000 b/d refinery in the south of the country, the oil minister said Nov. 18. The refinery, to be built in Fao in the Basra Governorate, will be offered under the Build Operate Transfer or Build Own Operate Transfer investment model, Ihsan Ismaael said in a statement. A petrochemical facility could be integrated into the refinery at a later stage, he added.
**Iran’s Khatam al-Anbiya has started construction work on a 120,000 b/d plant to process gas condensate from the offshore South Pars gas field. The construction is scheduled to finish in two years, according to the commander of the Khatam al-Anbiya Construction Headquarters, Saeed Mohammad, speaking on state television. Khatam al-Anbiya’s headquarters is the construction wing of the country’s elite Islamic Revolution Guard Corps (IRGC).
**Iraq is forging ahead with plans to boost its refining capacity. A new 140,000 b/d refinery in Karbala is expected to come online in the first quarter of 2022. Plans are also underway to build a new 70,000 b/d refinery in Qayara, near the Qayara oil field in the north. Besides these projects, the oil ministry is seeking to encourage investors to finance “investment refineries,” in several locations, including Zubair and Fao in the south. Iraq is in talks with Eni to build a 300,000 b/d refinery near the Zubair oil field operated by the Italian company in the southern part of the country. The first phase of the project includes commissioning 150,000 b/d by 2025.
**Iraq opened a downstream tender, hoping to attract engineering and construction companies to build a new refinery in Basra province.
**Iraq’s oil ministry is seeking investors for a 100,000 b/d refinery in Wasit province, a 70,000 b/d refinery in Samawa province and a 70,000 b/d refinery in Kirkuk. It has also added a 70,000 b/d site at Diwaniya, in Qadisiya province, south of Baghdad, a new 150,000 b/d project to be built in the west Anbar province. Work has yet to start on the 150,000 b/d Missan refinery.
**Fluor Corporation said that its joint venture with Daewoo Engineering & Construction and Hyundai Heavy Industries has successfully started up two boilers which began generating steam at the new Al-Zour refinery. Upon completion, the 615,000 b/d refinery is expected to “be one of the largest refineries in the world,” Fluor said. The refinery has been targeted for completion in 2020. The petrochemicals complex at Al-Zour is due for completion in 2023, with start-up expected in 2024.
**Saudi Aramco expects to begin processing crude at its Jazan refinery by Q1 2021, CEO Amin Nasser said Aug. 10. The newly constructed refinery, also spelled Jizan, will start with crude runs of 200,000 b/d before ramping up to 400,000 b/d, Nasser said. It had previously been expected to be commissioned at the end of 2019 and be ready for full operations in the second half of 2020. The refinery, in the far south of Saudi Arabia on the Red Sea about 60 km (37 miles) from the Yemeni border, has been targeted in several missile attacks by Iran-backed Houthi rebels in Yemen, though Saudi officials say they have intercepted each attempted strike.
**UAE-based Brooge Energy said it had entered a refinery agreement with its Phase I customer to use best efforts to finalize the technical and design feasibility studies for its Fujairah refinery to be located on Phase I and II land and operated by Brooge Energy. The refinery was expected to be operational in Q3 2021 and produce low sulfur fuel oil in compliance with IMO 2020 requirements. Phase I started in January 2018.
**The Duqm refinery project in Oman was expected to start up in 2022. Construction of the plant, located in the special economic zone in Duqm, began in June 2018.
**Construction of the Anahita Oil Refinery in the western province of Kermanshah will start by the private sector in the current Iranian year that started March 20, the provincial governor Houshang Bazvand was quoted as saying by official news agency IRNA. According to Shana, the Anahita refinery has been designed to process 150,000 b/d of crude oil.
**Angola’s state-owned oil company, Sonangol, is working with Iraq’s ministry of oil to build a complex refinery in Mosul. The discussions between Sonangol and the ministry are for a refinery with a capacity of 100,000-150,000 b/d of complex products.
**Kuwait may add a new refinery in the south of the country, which could add 130,000-160,000 b/d of capacity.
**Canada’s Pacific Future Energy has been awarded a contract to build a 150,000 b/d refinery outside the southern Iraqi town of Nassiriya.
**Houston-based GTC Technology has agreed to a deal to provide a gasoline production unit to Iraq’s Al-Barham Group, which plans to build a refining complex in the northern city of Kirkuk.
SAF adoption sees "busiest" year despite pandemic. Industry lacking regulatory framework seen on USWC. Higher SAF blends on horizon.
Nov 12, 2020
The coronavirus pandemic has forced the global aviation community to face the “the largest shock in the history of air traffic,” according to the International Air Transport Association, the host of the symposium.
According to the trade association, the crisis’ effects are so pronounced that effects will be felt even three decades in the future, with projected traffic in 2050 down 16% from IATA’s pre-pandemic forecast.
While the fallout from the pandemic has crunched forecasts and even forced 64% of the world’s aircrafts into storage, according to a speaker, it has not hampered the industry’s sustainability goals in general or the adoption of SAF in particular. Despite the pandemic, another speaker claimed that 2020 has been the “busiest” year in the adoption of SAF.
“SAF is a key pillar — if not the key pillar — in the decarbonazation of the aviation industry,” said Lloyd Pinnell, Aviation Lead of the Energy Transitions Commission.
Currently, over 300,000 commercial flights have been powered by SAF blends while producers of the fuel have secured approximately $6.5 billion in forward purchase agreements, according to IATA. While the group says that market penetration is still less than 1%, it maintains that the industry could hit 2% in 2025.
Presenters at the symposium stressed that a policy framework is crucial in achieving market penetration thresholds, like the 2% suggested by the IATA.
The Carbon Offsetting and Reduction Scheme for International Aviation has outlined the pathway for halving the industry’s 2005 emissions by 2050 by way of carbon neutral growth, but policy intervention on a more localized level is still needed — similar to the framework seen in parts of the US.
SAF production costs can far exceed that of conventional jet fuel, but producers can offset those costs with environmental credits.
In the US, SAF generates D4 renewable identification numbers and qualifies for a $1/gal biomass-based diesel tax credit. Combined, those credits can generate over $2.40/gal for a producer. The real attraction for SAF in the US, however, is in California thanks to the state’s Low Carbon Fuel Standard.
Under the state program, SAF generates over $1/gal in addition to the federal incentives above. That means the total value of credits attached to SAF in California can exceed the cost of production, depending on current RIN and LCFS credit prices.
California is not the only US state with an LCFS. Oregon currently has a similar program and other states and Canadian provinces are considering launching their own.
Multiple technical pathways to develop SAF are currently available to the industry using an array of different feedstocks, the most common of which are fats, oils and greases.
Regardless of which feedstock is chosen, however, it is often considered the greatest component in the overall cost of SAF. While some feedstocks may appear to be simple, each requires a significant amount of preparation in order to be eventually used on an aircraft.
In order to establish a downward trajectory for the price of SAF, the industry first needs to bring down the cost of feedstocks, according to one panelist.
Depending on which feedstock and technical pathway is utilized, SAF is currently certified in blends with its traditional counterpart up to 50%. But this could soon change, according to the panelists.
On Nov. 12 aircraft engine producer Rolls Royce announced that it would be testing an engine powered by 100% SAF. According to Simon Burr, the company’s director of product development and technology, Rolls Royce expects to see a reduction in emissions in the test, and plans to share its findings with the rest of the aviation community.
Rolls Royce was not immediately available for further comment via email.
“It’s not about Rolls Royce, it’s about moving the whole industry forward,” said Burr during the symposium.
Singapore — Japan’s ENEOS plans to shut its larger naphtha-fed steam cracker at Kawasaki in December to conduct emergency repairs at the unit, a company source said Nov. 20. The steam cracker is able to produce 515,000 mt/year of ethylene and 300,000 mt/year of propylene. The source said the shutdown will be for around one […]
Nov 20, 2020
The steam cracker is able to produce 515,000 mt/year of ethylene and 300,000 mt/year of propylene.
The source said the shutdown will be for around one month.
The 105,000 mt/year butadiene unit at the same location will be shut down as well due to the steam cracker problem, the source added.