Note – this article was originally published on hydrocarbonengineering.com
The refining industry has become known for its resilience and adaptability. These attributes will be essential to help it weather a perfect storm which will have far-reaching consequences for the sector through to 2050. The storm broke on the 1st of January, with the implementation of the IMO 2020 regulations for marine fuels. But preparations for that milestone are already well under way. The challenge for refiners is that the shipping industry will begin to use more middle distillates and less heavy fuel oil to reduce sulphur emissions.
Refinery upgrade investments are required to ensure that the product mix remains relevant and profitable. One option is to invest in a ‘delayed coker unit’ to convert the heavy fractions to coke and marine gas oil (MGO). An alternative outlet for the heavy-ends is to process them in gasifiers which produce syngas for IGCC power generation. This is the option that has been taken at the Saudi Aramco Jazan refinery in their project to construct a 2.4GW power plant which is integrated to the refinery.
The automotive sector will also drive changes in the refined products fuels mix. The growth of electric vehicle usage and the emergence of hydrogen and LNG as transportation fuels will progressively erode the demand for diesel and gasoline. Capacity additions in Africa and the United States will curtail export markets for Gasoline produced in Europe. Despite the growth of new automotive fuels, the shortage of diesel in the European market is expected to deepen as it continues to be the fuel of choice for heavy vehicles and it will now also be diverted to marine applications as MGO. It all adds up to an uncertain dynamic in the product mix but clearly indicates over-capacity for gasoline production in Europe.
One alternative outlet for the surplus of lighter fractions in the European downstream arena will be to convert them to higher value petrochemicals. This was the topic of several keynote speakers who successively took the stage at the congress to emphasise the importance of refinery and petrochemicals integration.
Even further out are the Paris Agreement 2050 targets for carbon dioxide emissions reductions to slow down climate change. Refineries and other industrial activities will need to undergo a major transformation in their operations to play their part in reaching this goal. One option is to increase the quantity of bio-based feedstocks to the refinery to create renewable bio-fuels. A strategy that Neste Oil in Finland explained they have been pursuing for many years with great technical and commercial success.
Some operators reported Carbon Dioxide emission intensity reductions in the order of 20% in the past 5 years through a series of process equipment upgrades and the implementation of basic best practices, such as the use of additional steam traps. Production of the electrical power required for refining operations through renewable wind and solar routes is also an emerging strategy for de-carbonisation of refinery operations. More futuristic climate action mitigation strategies include re-use of carbon dioxide emissions to produce chemicals, such as the production of polyurethane via polyols.
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