Fuel For Thought
December 2011

African Refinery Expansion

▪ African Refinery Expansion

The new owners of the Djibouti oil refinery are expanding it, investing 150 million US$ to boost capacity from 40,000 to 100,000 barrels per day. The incoming mix will include both light and heavy Arabian crude and the output will include gasoil and kerosene. Husam Alameri is chief executive officer of the United Arab Emirate firm Al Brooge Shares & Bonds, which just acquired a 75 percent stake in the refinery. The company is behind the expansion. Alameri said that work on the refinery would begin within six months but did not give an expected completion date. Target markets for the refinery products include Ethiopia, Kenya and Uganda.

▪ Boosting Oman's Output

The Sohar refinery is due for an upgrade, with the modernization to be done to the tune of 1.5 billion US$. The project will increase output from less than 120,000 to nearly 190,000 barrels per day. Additionally, the project will upgrade the refinery product, allowing it to produce higher grade petrochemicals while cutting emissions. Technology from UOP, a Honeywell company based in Des Plaines, Illinois, USA, will be used, UOP Middle East general manager Keith Aspray revealed. The technology will convert heavy crude into low-contaminant deasphalted oil, which can then be used to produce liquefied petroleum gas, gasoline, jet fuel, diesel and propylene. The new unit will process 2.5 million metric tons of heavy crude per year, and the entire expansion project is due to be online in 2015.

▪ Pakistan Refinery: More and Better

Spending to the tune of 150 million US$ will buy an Attock Refinery Limited plant in the Kohat region in Pakistan two improvements, said company spokesman Asif Saeed. The first benefit will be a capacity increase from 42,000 to 54,000 barrels per day. The second will be better quality fuel, such as diesel that can meet Euro II standards with regard to sulphur content. Other quality changes will be higher RON petrol, as well as a reduction in the benzene and aromatics in the fuel. The project is expected to be complete in two years.

▪ European Woes Continue

The news out of Europe is not good, and it involves more than the debt crisis that has plagued the Euro zone. For the region's refiners, the next decade could be challenging – but not in a good way. Those plants that are newer and better able to meet increasingly tough environmental laws should do well, relatively speaking. Most of these plants are on Europe's coasts and they have attracted the attention of investors looking to snap up good deals. Other refineries are located inland and will have trouble meeting new emission standards. Also, they cannot easily expand to combat a challenging business environment, both because of emission regulations and slow growth in demand. Consultancy FACTS Global Energy reportedly estimated that 1.4 million barrels per day in capacity – equivalent to seven medium-sized refineries – need to shut down by 2015 to make the area competitive.

▪ Chinese Air Pollution

China's Ministry of Environmental Protection had both good and bad news in its report on the country's air quality in the first half of 2011. Among the good news was that Beijing had cut emissions of sulphur and particulate matter. The bad news, however, included a 1.9 percent increase in emissions of nitrogen oxide, a lung irritant, in the capital city. What's more, the Ministry of Environmental Protection said the average air quality in 45 major cities was rated poor, rating a three on a four-grade scale set up by the Ministry. On a positive note, tighter vehicle and industrial plant emissions are having a beneficial effect in combating air pollution.

▪ Calculating Cleaner Fuel

Cleaner fuels are a matter of math, according to Solvejg Jorgensen. A scientist at the University of Copenhagen in Denmark, Jorgensen published a study in the Journal of Physical Chemistry that revealed a mathematical model for the decomposition of biofuels. Because they are composed of large molecules, two chemically similar biofuels can decompose into very different compounds, some of which are toxic. The different outcomes are a result of the synthesis method used to make the biofuel. Thus, the wrong choice in manufacturing can lead to a fuel that actually is environmentally harmful, rather than helpful. The modeling technique may point the way to making cleaner fuels.

▪ Fresh Air Needed for Indian Capital

Delhi, India's capital, could use s0me fresh air – or at least tighter emission standards, a study from the Massachusetts Institute of Technology found. The problem is suspended particulate matter. The researchers looked at the concentration of particles that measure less than 100 microns, or smaller than a strand of hair. India's national standard calls for the concentration of such particles to be less than 60 micrograms per cubic meter. The study revealed the concentration in Delhi to be about 120 micrograms per cubic meter. That is double than the comparable figure for Tokyo and above the 90 in Malaysia's Kuala Lumpur. It also is quite a bit higher than the 20 microgram per meter standard set by the World Health Organization. To attack this and other pollution problems, plans are afoot to divide India into different zones, each with separate environmental policy, plan and target.

▪ MTBE Demand Up

China has stopped re-export of MTBE due to rising domestic fuel demand, according to reports from traders. That tightness of supply of the petrol oxygenate showed up elsewhere as well. In a conference call discussing earnings this past quarter, Peter Huntsman, CEO of the American-based chemical supplier Huntsman, noted that the company's MTBE product line performed very well, with above average returns. Part of that was due to the spread between the price of MTBE and the cost of the raw materials that go into making it. Similarly, European-based chemical maker LyondellBasell reported higher than normal margins for its unit that produces MTBE.

▪ Clearing Indonesian Air

Jakarta only gets 27 days of clean air a year, according to the Committee for Leaded Gasoline Phase-Out, an environmental group. Group chairman Ahmad Safruddin said that the Indonesian capital's air has a suspended particulate matter pollution level of 150 micrograms per cubic meter, far above the level called for by the Indonesian government and WHO. Most of this pollution comes from vehicles, Safruddin said. He noted that the government, automotive makers and fuel suppliers need to take steps to clean up the air and thereby improve public health.

No items found.
In other news...
In Focus
April
2022
Rising energy prices: Possible consequences for transportation fuels and clean fuels

In this issue of In Focus, we look at the potential impact of the recent oil and energy price rally on gasoline demand and our industry. Governments around the world are considering various measures to combat the looming energy crisis, mainly caused by the Russian invasion of Ukraine.

READ MORE
In Focus
January
2022
Indonesian Institute of Energy Economics (IIEE) Study: Cleaner Fuels for a More Sustainable Future

In this ‘In Focus’ newsletter we would like to focus on the “Cleaner Fuels for a More Sustainable Future” study published by the Indonesian Institute of Energy Economics (IIEE) in 2021. The study forms part of a larger research study titled “Strategy to Fulfil Fuel Supply in Indonesia to Comply with Euro 4 Vehicle Standards” conducted by the IIEE last year, which identified three major issues as reasons for the delay in the rollout of the plan and made some recommendations on how to tackle the issues. The Asian Clean Fuels Association contributed to the study.

READ MORE
In Focus
January
2022
Mobility in Asia at the crossroads

In this ‘In Focus’ newsletter we would like to draw our readers’ attention to a joined opinion statement issued by Clean Air Asia (CAA) and the Asian Clean Fuels Association (ACFA), in which both organizations highlight their observations and express their concerns related the use of coal to fuel Asia’s energy demand.

READ MORE

The ACFA Update

Give your inbox a top up of the latest news on clean fuels