What You Need to Know: IMO 2020
The International Maritime Organization (IMO) is a specialized agency of the United Nations that provides a regulatory framework for the international shipping industry. The IMO oversees maritime safety, security, and environmental protection, which includes regulating sulfur emissions. Since January 2012, the IMO has prescribed a 3.5% m/m (mass by mass) sulfur limit in bunker fuels. Effective January 2020, the bunker fuel sulfur limit will drop to 0.5% m/m.
Industry Response to IMO 2020 Regulation
Petroleum industry stakeholders are carefully considering their options to achieve compliance and remain competitive in a post-2020 regulatory regime.
While the IMO has suggested that sulfur emission requirements could be met through “equivalent methods” such as installation of exhaust gas cleaning systems or scrubbers aboard vessels, this option is widely seen as impractical and economically unfeasible.
Refiners have turned their attention to addressing IMO 2020 regulation at the fuel source. Some refiners are looking to move away from processing sour feedstock altogether. Other refiners are looking to continue to process sour feedstock by reconfiguring their operations or implementing novel technologies.
Current Situation Calls for New Technologies
A large portion of the world’s heavy sour production is currently destined for the bunker fuel market. Producing 3.5% m/m sulfur content bunker fuel currently offers attractive margins to refiners as they are able to transform cheaply sourced heavy sour crudes, such as those originating from Canada’s oilsands, into sellable end-products.
The upcoming IMO 2020 regulation complicates matters for the refiner. Moving from 3.5% to 0.5% m/m sulfur content bunker fuel can be difficult because heavy crudes are typically incompatible with conventional desulfurization technologies. Heavy crude components cause rapid deactivation of desulfurization catalysts and cause equipment fouling. Meanwhile, the limitations and shortcomings of conventional heavy crude pre-treatment technologies are well understood and it is difficult to build an economic case for implementing such technologies.
According to the International Energy Agency (IEA), approximately 4MMbbl/d of oil-based marine fuel is consumed in international navigation. Residual fuel oil, which mainly comes from the bottoms of heavy sour feedstock, accounts for 80% of the current bunker fuel produced. The IEA estimates that in 2020 there will be a dramatic shift from using residual fuel oil to service the bunker fuel market, as refiners focus on producing more distillates.
Oil-based marine fuel consumption in international navigation (Source: IEA)
Stakeholders in jurisdictions that produce large quantities of heavy sour crude must be aware of the implications if refiners begin to move away from processing sour feedstock. If technologies are not implemented that allow heavy sour crudes to remain competitive, experts estimate that up to two million barrels of heavy sour production per day will be negatively impacted by IMO 2020 regulation.
SELEX-Asp: A Commercial Solution to IMO 2020 Regulation
One of the emerging, premier heavy crude treatment technologies on the market is Selective Extraction of Asphaltenes (SELEX-Asp). SELEX-Asp is a commercial, patented, low cost, low complexity, and environmentally friendly process. The novelty of SELEX-Asp lies in its unique ability to cleanly and with a high degree specificity, reject only asphaltenes from heavy oil fractions in the form of solid granules. By doing so, it maximizes the yield and economics of producing deasphalted oil, which can then be sent to conventional refining processes to produce low sulfur consumer grade fuels.
The rejected asphaltenes, which contain more than 85% carbon, can either be used as feedstock for making carbon products or disposed of in an environmentally friendly manner without the need for secondary treatment. SELEX-Asp replaces the need for operating highly energy and capital intensive processes, such as cokers, visbreakers, or conventional solvent deasphalting technologies which require secondary processing to reclaim the value of the pitch.
Desulfurization Demonstration Results
Demonstration results from processing bitumen-derived vacuum residue in a SELEX-Asp unit prior to hydroprocessing have been provided below. The process was operated and monitored continuously for two months without fine-tuning, after which the hydroprocessing unit was decommissioned and inspected. Throughout the demonstration, the catalyst maintained excellent activity, and there were no signs of pressure drop build-up through the equipment.
The demonstration showed that SELEX-Asp could be used to reliably produce feed for conventional refining processes that make low sulfur consumer products. A number of privately owned refineries in Asia currently utilize SELEX-Asp to produce deasphalted oil destined for hydroprocessing.
In a refinery, implementation of SELEX-Asp increases crude processing flexibility. Meanwhile, implementing SELEX-Asp in jurisdictions that produce large quantities of heavy sour crude would allow those jurisdictions to remain competitive in a post-IMO 2020 era.
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