Refining, fuel quality, and operational considerations resulting from MARPOL Annex VI
INMARCO
November 2, 2018
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What is IPIECA?
• Global oil and gas association for environmental and social issues• Formed in 1974 following the launch of UN Environment• Only global association involving both upstream and downstream
IPIECA is the industry’s principal channel of communication with the United Nations.
IPIECA Members
2020 Compliance Options
1. Continue using HSFO with a scrubber2. Use <0.50% S MDO / MGO3. Newly formulated <0.50% S fuels4. Convert the vessel to LNG as fuelMight depend on:‐ Age of vessel‐ Payback time for scrubber installs (if possible)‐ Availability of chosen fuel(s) on typical route‐ Whether routes include ECA‐ Availability of segregated tankage on vessel‐ Other factors
• Scope of regulatory change in S specifications
Global S cap –A very significant step change
* Incremental S to be removed as elemental S, S contained in coke or S removed in waste gas SOx abatement unit. Global S cap duty estimated based on actual average fuel oil S level of 24500 ppm (MEPC 69/5/7)
** Includes additional S removed from other products
Lighter Product Mix Requires Higher Conversion Complexity
Virgin light ends
Atmos.Pipe‐still
Naphtha Hydrofining Reformer
Distillate Hydrofining
LPG
Naphtha
Gasoline
Jet Fuel/Kerosene
Diesel/Distillate
Fuel Oil
CrudeOil
Vacuum Pipe‐still
Alkylation
CokerGasoline
Jet Fuel/Diesel
Cracked Light Ends
Gas Oil
Gas Oil
Light Ends
AsphaltFuel Oil
Coke
Low Conversion Refinery Additional Medium and High Conversion Processing
Additional High Conversion Processing
VGO Hydrocracker
(HDC)
Fluid Catalytic Cracking (FCC)
Source: ExxonMobil
• Increased Coker unit throughputs to upgrade residual streams− Carbon removal process more crude oil required (+ 0.2‐1.2 mb/d)
• Vacuum unit throughputs increase producing more vacuum gasoil (VGO)
• Shifting Fluid Catalytic Cracking feedstock from VGO to resid− Can lead to increased refinery SO2 emissions− Regulatory constraints – need for added abatement facilities
• Increased severity on desulphurization/hydrocracking units− Substantial increases in H2, Sulphur recovery plant load
• 2 – 4.5% increase in global refining CO2 emissions predicted− Increased Sulphur removal and increased crude runs/coke output
Refining Changes needed ‐ example
Source: EnSys/Navigistics, Supplemental Marine Fuel Availability Study, 15 July 2016
Refinery challenges and opportunities will varyDecisions made by individual refiners
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Marine Fuel Stability and Compatibility – Issues, Tests and Management
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Issues:
Fuel stability: The potential for a fuel to change condition in storage in certain circumstances, depending on its resistance to breakdown
Fuel compatibility: The tendency of fuels to produce deposits when mixed. The issue may immediately occur when fuels co‐mingle
Marine Fuel Stability and Compatibility – good practices
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• Avoid mixing bunker fuels from different sources wherever possible
• Store fuels separately until compatibility testing has been carried out
• Do not mix straight‐run fuel oil [the product of atmospheric or vacuum distillation] with a cracked [additionally processed] one – if not possible keep the ratio to a minimum
• Do not mix fuels with greatly dissimilar densities
• Where possible choose fuels with similar viscosities and densities
• Do not mix a fuel oil with a marine diesel oil or marine gas oil
− 0.50% S demand will likely be met by a mix of components (distillates, low‐S residuals) and new fuel oil formulations as the market responds over time and new streams are introduced
− The CARB implementation in California and ECA implementation in Europe has provided useful case studies of operational challenges on changing over from HFO use to MDO / MGO.
Future Marine Fuel Mix
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More Paraffinic
More Aromatic
MGO/380cStblend
ComplexBlends
What is IMO doing?
DD MMM YYYY11
• IMO is developing 3 sets of Fuel Quality Guidelines• Guidelines for fuel purchasers and users (completed)
• Guidelines for fuel suppliers – were finalized at MEPC 73 on the basis of a proposal developed initially by IBIA
• Guidelines for Member State Authorities – were finalized at MEPC 73 on the basis of the report of a Correspondence Group
What is industry doing?
• Concerns raised at MEPC included issues that could potentially increase safety risks to ships. It will be important to make sure that adequate information on such potential risks is made available to ship operators, such that they can take appropriate action to mitigate those risks.
• OCIMF and IPIECA recognise the need for a suitable industry guidance that addresses the impact on fuel and machinery systems resulting from new fuel blends or fuel types, and provides guidance on the handling, storage and use of such fuels. Consequently, we have agreed to develop a guidance document and have engaged with organisations such as CIMAC, Energy Institute and ISO to carry out the task, and are inviting other interested parties, including end users, to join us.
Industry Guidance
DD MMM YYYY13
• The initiative to develop industry guidance on safe handling of 0.50 % S marine fuels included in the OCIMF/IPIECA submission has been very well received• In his closing remarks, the Assistant Secretary General of IMO referred to this initiative “with great appreciation”
• Several delegations have nominated experts to contribute to the Joint Industry Project (JIP) effort• Draft ToR reviewed with interested stakeholders in July 2018
• Draft work plan developed early September• Target will be to have an outline of the guidance ready for submittal to PPR 6 (i.e. by December 2018)
• There is a lot of interest to use this forthcoming guidance as basis for the development of training materials
• ISO/TC 28/SC 4/WG 6: responsible for the development of specifications of marine fuels: ISO 8217
• ISO 8217:2017 General Requirements along with the characteristics included in Table 1 and 2 of ISO 8217: 2017 cover all fuels, including 0.50% max. sulfur fuels.
• ISO 8217 is consistently been reviewed and adapted to meet the changing requirements of the shipping industry. Past revisions have always been retrospective based on user’s experience of fuels available on the market−Typical review track takes 3 years
• ISO/TC 28/SC 4/WG 6 is developing PAS 23263 as an interim solution, and will deliver a full revision of ISO 8217 after 2020
ISO Standards under development
Verification of fuel S level
DD MMM YYYY15
• Ongoing discussion at IMO on the fuel S verification method (Appendix VI of Annex VI – not based on 95% confidence limits – non‐acceptance of testing results >0.10% or > 0.50%)
• The current procedure “means that the fuel purchaser must specify a fuel that is well enough below the Regulation 14 standard”
• This is a real problem, as verification method is also relevant in light of the carriage ban of non‐compliant fuel
• No conclusion reached – to be discussed further at PPR 6
• Will address quality considerations that may apply to marine fuels in view of the range of marine fuels that will be placed on the market in response to the International statutory requirements to reduce exhaust gas emissions (e.g. cold flow properties, stability, minimum viscosity)
• A study has been initiated to investigate whether test methods currently not yet widely used for marine fuel stability testing, can provide additional guidance on stability and compatibility of different fuel blend formulations (or mixtures thereof) that are anticipated to be available in the market from late 2019
Publically Available Specification (PAS) 23263*
* Guidelines for fuel suppliers and users regarding marine fuel quality considering the implementation of maximum 0.50%S in 2020
The landscape going in to 2019
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• Constructive stakeholder engagement is important
• IPIECA / OCIMF are collaborating with shipping industry associations on a document / training material on Specifications, Safety and Product handling
• Together with the planned IPIECA workshops this should help educate stakeholders on the potential for incidents
Recap
1. The IMO decision is firm and final
2. Future level of scrubber penetration (pre‐ and post 2020) remains a significant uncertainty factor
3. Little time is left for preparations – IMO’s timeline for developing implementation measures (completion mid‐2019) is tight
4. New specifications, test methods under development
5. All actors: shipping, refining and fuel suppliers need to be engaged: on quality, management and handling, safety and operations
6. The ECA experience is vital in understanding what you need to know (panel session)
Thank You
Back up slides: the MF ‐ JIP
JIP Guidance 0.50% S Fuels (1)
JIP Guidance 0.50% S Fuels (2)
JIP Guidance 0.50% S Fuels (3)
JIP Guidance 0.50% S Fuels ‐ Contributors