Cleaner fuel in Iran

▪ Cleaner fuel in Iran

Officials at Tehran Oil Refinery revealed that upgrades underway to allow the production of Euro-5 compliant fuel will be done soon. Managing Director Mohsen Qadiri announced that the refinery changes will improve fuel quality by reducing the amount of sulphur in petrol to 10 parts per million (ppm), as well as lowering other contaminants. The upgrades, done at a cost that could approach US$1 billion, are expected to be complete by October. At that time, production of up to 8 million liters of Euro-5 compliant fuel is slated to begin.

▪ A Vietnamese Doubling

A new refinery in Vietnam is a step closer to reality, thanks to a US$ 1 billion commitment from Vietinbank. PetroVietnam, the state-run oil and gas company, plans to develop the Nghi Son oil refinery. The facility will be operational in 2014, with a 10 million ton crude oil processing capacity. It will produce 2.3 million tons of petrol and other oil products per year. The new refinery will more than double the company in-country refining capacity and is just the beginning of PetroVietnam's expansion plans, which include constructing five to six additional oil refineries within five years.

▪ A Rising Middle Class in Africa

Africa could be a promising market for vehicles and fuels, according to a recently released report from the African Development Bank. The study found that 313 million Africans were middle class, up from 196 million in 2000 and 151 million in 1990. For Ghana, for example, that translates into an 81% rise in cars and motorcycles since 2006. In South Africa, there were 300 vehicles per 1,000 people in 2007, double the number five years earlier. The emerging middle class is due to strong economic growth. Ghana, for instance, is benefiting from high gold and cocoa prices.

▪ Indian Expansion

`Chennai Petroleum Corp. announced that it is expanding the production capacity and complexity of its refinery in Manali, India, which will raise capacity to 17 million tons, up from 10.5 million tons, a year by 2016. The total cost of the expansion will be Rs 123.40 billion (US$ 2.76 billion). The first step in the project will be a short-term capacity increase to 11.1 million tons by September, which will cost Rs 3.4 billion (US$75.9 million). Company Finance Director N. C. Sridharan said this first step will consist of debottlenecking and increasing the efficiency of old operating units.

▪ Sinopec Takes Stake in Saudi Refinery

Sinopec (China Petroleum & Chemical Corp.) is acquiring a 37.5% stake in Red Sea Refining, a joint venture that will build a refinery at the Red Sea port of Yanbu. Saudi Arabia. Construction of the refinery will start once an agreement with Saudi Aramco becomes binding. The refinery will process 400,000 barrels a day of Arabian heavy crude and will begin operations in 2014. Eventual output will be 90,000 barrels of petrol and 263,000 barrels of ultra-low sulphur diesel a day. Other products will be petroleum coke and sulphur. The refinery will supply domestic, as well as international, markets.

▪ Philippines Refinery Upgrade Scheduled

By partnering with five foreign firms – Axens, UOP LLC, CB&I Lummus, Foster Wheeler AG and Daelim Industrial – Petron Corp., the largest refining and marketing company in the Philippines, has started the process of doubling the capacity of its refinery in Limay. The US$ 1.8 billion upgrade should be complete by the end of 2014, increasing capacity to 360,000 barrels per day. The upgrade is being done in order to compete with other Asia-Pacific refineries, Petron officials said. The expansion will also enable the production of Euro 5-compliant fuels.

▪ Sinopec Offers Refineries Incentives to Spur Production

Sinopec is trying to squeeze every last drop of capacity out of its refineries. According to industry sources, the company offered to pay a premium price to domestic refineries for petrol and diesel production above the April quota. Any higher production rates that result will help stabilize the local fuel supply. However, getting much more out of the refineries will be a challenge, because their utilization rate is already high. China’s National Development and Reform Commission (NDRC) recently banned diesel exports, a sign of the seriousness of the domestic fuel supply situation.

▪ New Car Labeling Unveiled in America

Starting in 2013, cars sold in the U.S. will have to display comparisons of fuel economy and emissions with the average of similar cars. It is the first significant change in the labeling requirements in decades. The U.S. Environmental Protection Agency is requiring cars to have a numerical rank from 1 to 10, with the score combining information on fuel economy and greenhouse gas emissions. The new window stickers will also take into account new types of vehicles, such as those that are all electric. The goal of the labels is to provide consumers with more of the information they need when deciding which vehicle to purchase.

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