Reports related to this article:
Project(s): View 3 related projects in PECWeb
Plant(s): View 3 related plants in PECWeb
en
Researched by Industrial Info Resources (Sugar Land, Texas)--The upcoming International Maritime Organization (IMO) regulations limiting sulfur in fuels for ocean-going vessels pose a significant challenge for global petroleum refineries, according to the U.S. Energy Information Administration (EIA).
Set to take effect in January 2020, the IMO regulations will reduce the maximum amount of sulfur content (by percent weight) in marine fuels used on the open seas from 3.5% to 0.5%. Industrial Info is tracking refinery projects across the globe that involve production of fuel that will meet the compliance standards.
According to the EIA's December 14 Today in Energy article, the rules apply across multiple countries' jurisdictions to fuels used in the open ocean, representing the largest portion of the approximately 3.9 million-barrel-per day global marine fuel market. The drive to lower the amount of sulfur in marine fuel is aimed at reducing the amount of sulfur dioxide that is produced when the fuel is burned. Sulfur dioxide is a precursor to acid rain.
Click on the image at right for an EIA graph showing a timeline of global marine fuel limits.
"The IMO regulations pose a challenge for global petroleum refineries: how to increase the supply of low sulfur products for use in marine applications and minimize the output of high sulfur oils," according to the article. Residual oil makes up the largest component of marine fuels used by large ocean-going vessels, also known as bunker fuel. But removing sulfur from residual oils or upgrading them to more valuable lighter products, such as diesel and gasoline, can be an expensive and capital-intensive process.
Refineries could divert more low-sulfur distillate fuel into the bunker fuel market, which would mean ocean-going ships would be competing with trucks, heavy equipment, trains, and planes for supplies of distillate fuels at a time when global demand for distillate is already high, according to the article. Refineries might also choose to process crude oils that are lower in sulfur, yield a greater amount of distillates, and yield lower amounts of residual oils.
Industrial Info is tracking several refinery projects that have ties to the IMO regulations. In the Virgin Islands, Limetree Bay Terminals, a joint venture by ArcLight Capital Partners LLC (Boston, Massachusetts) and Free Point Commodities (Stamford, Connecticut), is working on the restart of the St. Croix Refinery, which will be renamed the Limetree Bay Refinery. The revived 200,000-barrel-per-day refinery would produce IMO-compliant, low-sulfur fuels. The $1.4 billion project is expected to be completed in late 2019. Jacobs Engineering Group Incorporated (NYSE:JEC) (Dallas, Texas), which recently agreed to sell its energy, chemicals and resources business to WorleyParsons (North Sydney, Australia), is listed as the project engineer. For more information, see Industrial Info's project report.
In Louisiana, PBF Energy Incorporated (NYSE:PBF) (Parsippany, New Jersey), is preparing to kick off a $110 million project to restart and revamp the Delayed Coker Unit 1 at its Chalmette Refinery to take advantage of residual fuel prices due to the IMO regulations. For more information, see Industrial Info's project report. For related information, see August 15, 2018, article - PBF Turns Focus to Louisiana, Delaware Refinery Projects.
At the Bill Greehey Refinery-East In Corpus Christi, Texas, Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) is planning at least three projects tied to the IMO standards, including a $5 million crude unit upgrade so that it can produce more coker naphtha in order to produce more IMO-compliant fuels. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Set to take effect in January 2020, the IMO regulations will reduce the maximum amount of sulfur content (by percent weight) in marine fuels used on the open seas from 3.5% to 0.5%. Industrial Info is tracking refinery projects across the globe that involve production of fuel that will meet the compliance standards.
According to the EIA's December 14 Today in Energy article, the rules apply across multiple countries' jurisdictions to fuels used in the open ocean, representing the largest portion of the approximately 3.9 million-barrel-per day global marine fuel market. The drive to lower the amount of sulfur in marine fuel is aimed at reducing the amount of sulfur dioxide that is produced when the fuel is burned. Sulfur dioxide is a precursor to acid rain.
"The IMO regulations pose a challenge for global petroleum refineries: how to increase the supply of low sulfur products for use in marine applications and minimize the output of high sulfur oils," according to the article. Residual oil makes up the largest component of marine fuels used by large ocean-going vessels, also known as bunker fuel. But removing sulfur from residual oils or upgrading them to more valuable lighter products, such as diesel and gasoline, can be an expensive and capital-intensive process.
Refineries could divert more low-sulfur distillate fuel into the bunker fuel market, which would mean ocean-going ships would be competing with trucks, heavy equipment, trains, and planes for supplies of distillate fuels at a time when global demand for distillate is already high, according to the article. Refineries might also choose to process crude oils that are lower in sulfur, yield a greater amount of distillates, and yield lower amounts of residual oils.
Industrial Info is tracking several refinery projects that have ties to the IMO regulations. In the Virgin Islands, Limetree Bay Terminals, a joint venture by ArcLight Capital Partners LLC (Boston, Massachusetts) and Free Point Commodities (Stamford, Connecticut), is working on the restart of the St. Croix Refinery, which will be renamed the Limetree Bay Refinery. The revived 200,000-barrel-per-day refinery would produce IMO-compliant, low-sulfur fuels. The $1.4 billion project is expected to be completed in late 2019. Jacobs Engineering Group Incorporated (NYSE:JEC) (Dallas, Texas), which recently agreed to sell its energy, chemicals and resources business to WorleyParsons (North Sydney, Australia), is listed as the project engineer. For more information, see Industrial Info's project report.
In Louisiana, PBF Energy Incorporated (NYSE:PBF) (Parsippany, New Jersey), is preparing to kick off a $110 million project to restart and revamp the Delayed Coker Unit 1 at its Chalmette Refinery to take advantage of residual fuel prices due to the IMO regulations. For more information, see Industrial Info's project report. For related information, see August 15, 2018, article - PBF Turns Focus to Louisiana, Delaware Refinery Projects.
At the Bill Greehey Refinery-East In Corpus Christi, Texas, Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas) is planning at least three projects tied to the IMO standards, including a $5 million crude unit upgrade so that it can produce more coker naphtha in order to produce more IMO-compliant fuels. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
