Impact of low-sulphur bunkers on refineries
Proposed IMO global sulphur specifications on bunker fuels market and options available to reduce fuel oil sulphur are reviewed
Mike Stockle and Tina Knight, Foster Wheeler Energy Limited
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The International Maritime Organisation (IMO) recently announced that it is supporting a move to a global sulphur specification on bunkers of 0.5 wt%, with certain environmentally sensitive areas moving to even lower sulphur levels. Foster Wheeler has examined the impact this could have on a typical European refinery configuration and operation, with a series of worked examples that focus on various refinery configurations, and shows how these configurations could be adapted to meet the new specifications. Changes to refinery operation in terms of blending and crude selection are considered, as are options for residue upgrading to meet a 0.5 wt% fuel oil specification, or to move out of the fuel market altogether. A view is taken of what exactly should be considered with the increased upgrading required to meet 0.5 wt% bunkers in terms of refinery investment, price of bunkers and impact on other key refinery considerations such as CO2 emissions.
This specification would present a significant bunker fuels sulphur content reduction over the coming years, which is why the potential impacts these changes could have on fuel oil markets and on the operation and configuration of refineries are discussed.
Proposed changes to the standard and SOx emission control areas (SECAs) bunker fuel specifications are shown in Figure 1. As can be seen, the proposed changes would see significant changes in fuel oil sulphur content, with the allowable sulphur content in bunkers reducing from 4.5–0.5 wt% (almost a 90% reduction) and the allowable level in SECAs reducing from 1.5–0.1 wt% (an almost 95% reduction). These changes will give refiners a number of significant challenges, which will vary for each region and refinery. If adopted, they could be particularly challenging for European refiners, since much of Europe’s bunker fuel market will be into SECAs, as the two current SECA regions are the Baltic Sea and the North Sea and English Channel.
Fuel oil markets
The world fuel oil markets for the coming years are shown in Figure 2, as predicted by Wood Mackenzie. It can be seen that bunkers currently make up about 30% of the world fuel oil market and that over the coming years growth in bunker fuels is expected to make up for declining inland fuel oil sales to keep global demand fairly constant.
The changes in bunkers’ specifications have the potential to seriously impact the world fuel oil markets and may also impact the markets for other transport fuels as the changes to the fuel oil markets impact them.
The biggest impact outside of the fuel oil market is likely to be on the distillate and diesel markets. At 0.1 or 0.5 wt% sulphur in fuel oil it seems possible that there will be a switch to distillate use, as it will become increasingly difficult and/or expensive to achieve the required level of desulphurisation in fuel oil.
According to information from Wood Mackenzie, current global demand for bunkers is focused on Asia Pacific (38%) and Greater Europe (33%). A proportion of the demand will be in SECAs and this low sulphur bunker demand will increase if the number of SECAs increases.
Discussion of options
A number of potential options exist to reduce either fuel oil sulphur content or the amount of high-sulphur fuel oil produced. Options considered are:
• Crude substitution
• Blendstock hydrotreatment
• Residue desulphurisation
• Residue hydrocracking
• Crude desulphurisation
• Fuel oil destruction.
For most refineries, the sulphur content of the fuel oil they produce is largely controlled by the crude oil processed in the refinery. Figure 3 shows the impact of crude selection by considering a range of 24 crudes and looking at the sulphur content of a blend of vacuum residue and 15% straight-run kerosene.
From this chart, it can be seen that the reduction from 4.5–3.5 wt% will have little impact on refiners, as most crudes will be able to produce fuel oil below 3.5 wt%, and where crudes do show levels above 3.5 wt% they will either be blended with lower sulphur crudes or processed in full upgrading refineries. This is further confirmed when you consider that the IMO’s figures for 2004–2006 show an average sulphur content for bunkers of around 2.7 wt%.
The change to a 0.5 wt% sulphur specification will be harder to achieve, with very few crudes being able to produce a fuel oil meeting this specification without some sort of residue upgrading/desulphurisation.
For SECA bunker fuels, the requirements are even tougher: the current 1.5 wt% can be met by low-sulphur crudes and the 1 wt% limit should be achievable from some refineries, but a 0.1 wt% specification will be extremely difficult to achieve. None of the crudes considered can meet this specification from blending vacuum residue (VR) and kerosene, and for many crudes 0.1 wt% would not be obtainable even with residue desulphurisation. Realistically, to achieve 0.1 wt% sulphur would require a move from using fuel oils to using distillate.
The obvious solution to reducing sulphur in bunkers is to look at desulphurisation options, including:
• Blendstock desulphurisation Removing sulphur from the easiest to treat blend components of the fuel oil
• Pre-upgrading sulphur removal For example, installing VGO hydrotreating to reduce the sulphur content of FCC, LCO and DCO
• Residue upgrading Direct hydrotreatment of the hardest to treat residue streams
• Whole crude hydrotreatment To convert high-sulphur crudes to low-sulphur crudes.
Blendstock treatment is the easiest to achieve, as the sulphur species are the easiest to remove and there are fewer other contaminants. However, the blendstocks are lower in sulphur anyway, so treating these streams has less impact on the overall sulphur content of the pool. To illustrate this, we can consider the impact on some of the typical fuel oil blends mentioned earlier. For example, if we look at a blend of 85% VR and 15% kerosene for Urals crude, the fuel oil has a sulphur content of 2.55 wt%. If the kerosene is desulphurised to 10 ppm, this drops to just 2.52 wt% — a reduction of just over 1%. This means blendstock desulphurisation is only really practical where a refinery fuel oil product is marginally higher than the fuel oil specification.
Pretreatment of feeds to upgrading units, such as VGO hydrotreatment before an FCC, offers more scope for reducing the sulphur content of the fuel oil. FCC products are often relatively high in sulphur and make up a significant part of the fuel oil pool. By removing the sulphur from these fractions, the overall pool content can be significantly reduced. While VGO is more difficult to treat than diesel or kerosene, it is still much easier to treat than a full residue stream.
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