Carrying on from last weeks comments on declining residual oil quantities.
The Globe and Mail published recently an article about the fact that heavy oil is gaining weight in energy markets, based on comments at the World Heavy Oil Congress in Edmonton, earlier this month. According to the experts, by 2030 heavy oil will make up 16 - 20% of the world total supply of oil, up from below 6% today.
Refineries, to process heavier oil, require to upgrade the refining process in order to get adequate quantities of refined product from the feedstock. The upgrade of the refining process results in lower quantities of residuals that are not suitable as base for marine fuel blending. They are too heavy and S-content is way too high to be used as base for IFO blending. As a rule of thumb, the S-content in the residual is typically more than twice the S-content of the feedstock.
The EIA charts show how residual declined, without a major shift towards heavier feedstock. Looking forward we'll need to factor in the increase in heavier feedstock as well as increased synthetic crude oil quantities.
Wednesday, March 30, 2011
Wednesday, March 23, 2011
Marine Fuel - 1
From time to time I look at the EIA website, mostly out of curiosity. The US Energy Information Agency publishes the US statistics on oil related matters every Wednesday.
The EIA's weekly supply estimates have in their right columns the links to graphs, showing historic trends to 2011 for specific products and groups. The ones I find of interest are the trends for crude oil refinery inputs, gasoline, distillate fuels and residual fuels. What these graphs indicate to me is that refinery yields have increased over the years. US refiners are producing more refined product from lower feedstock quantities, thereby leaving less residual oil for marine fuel blending. The EIA figures suggest that US refineries produce a lower percentage of residual oil than others.
If we take the US refining trend towards higher refinery yields as indicative for how global refining evolves, then it is reasonable to project that somewhere down the line there won't be enough residual fuel to satisfy the demand for industrial and marine fuel.
The EIA's weekly supply estimates have in their right columns the links to graphs, showing historic trends to 2011 for specific products and groups. The ones I find of interest are the trends for crude oil refinery inputs, gasoline, distillate fuels and residual fuels. What these graphs indicate to me is that refinery yields have increased over the years. US refiners are producing more refined product from lower feedstock quantities, thereby leaving less residual oil for marine fuel blending. The EIA figures suggest that US refineries produce a lower percentage of residual oil than others.
If we take the US refining trend towards higher refinery yields as indicative for how global refining evolves, then it is reasonable to project that somewhere down the line there won't be enough residual fuel to satisfy the demand for industrial and marine fuel.
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