Global energy and commodity price reporting agency Argus Media in late April provided a marine fuels market related update:
Iraq is facing the growing challenge of tackling surplus high-sulphur fuel oil (HSFO) supplies ahead of the International Marine Organisation's (IMO) sulphur cap coming into effect in 2020, the IEA said.
The IMO regulation will cap sulphur content at 0.5pc on marine fuels from January, which will lower global demand for HSFO, pressuring prices and limit Iraq's export opportunities.
Iraq's upgrading capacity relative to primary distillation capacity is less than 10pc, lower than the Middle East average of 23pc, and well below the global average of over 40pc, the IEA said. Heavy fuel oil accounts for just under half of Iraq's refinery output, while products in high demand — including gasoline, diesel and kerosene — represent just one third. Globally, gasoline, diesel and kerosene average 70pc of refining output, while heavy fuel oil makes up less than 10pc.
This is likely to become increasingly problematic for Iraq without an increase in upgrading or hydrotreating facilities, given the lack of storage capacity and transport pipeline for heavy fuel oil. An increase in storage demand for high sulphur fuel oil (HSFO) in the run up to IMO 2020 already points to potential difficulties refiners face with dealing with too much fuel oil, while having to secure storage for new IMO compliant marine fuels.
Iraq's fuel oil production rose by 19pc on the year in 2018 to around 320,000 b/d, Jodi data show. Domestic demand for the product rose by 46pc to 291,000 b/d, while stocks averaged 946,000bl, up by 28pc on the year.
Re-injecting the fuel into oil fields to boost recovery or blending into the export stream would reduce quality and export revenues. Iraq is looking to keep crude earnings high, as a ramp up in capital spending and wages amid a less conservative oil price assumption has raised concerns that Baghdad will exceed its 2019 budget deficit.
Using high-sulphur fuel oil for power generation would provide a temporary solution, especially amid Iraq's gas shortages. It would still require some investment "to ensure infrastructure connectivity between refineries and power plants", the IEA said. But in the longer term, feeding excess fuel oil into the power sector may not remain a cost-effective option, as global heavy fuel markets rebalance post-2020 and prices stabilise as a result.
Rehabilitating the 70,000 b/d Baiji refinery would help in the short term. Iraq's oil ministry began rehabilitating hydrogen and gasoline units at the refinery's Salahuddin 1 and 2 plants in January, with a plan to double overall capacity by the end of March. But the oil ministry said earlier this month it was still working to reach 140,000 b/d, and has not set a new deadline.
Full restoration of the plant would increase Iraq's operational refining capacity by 30pc, the IEA said. Iraq imports up to $2.5bn of refined products each year. Plans to raise refining capacity to 1.5mn b/d by 2022 from around 875,000 b/d now is ambitious, as a number of tenders to build refineries have so far failed to secure investment.
Source: Argus Media
Published: 6 May, 2019
The local bunkering sector has adapted to IMO 2020 requirements and LSFO is now available at more than two earlier locations, notes bunker supplier Trillion Energy.
Claiming USD 108,887.87 for the supply and delivery of 310.00 mt of low sulphur marine gas oil at the Port of Jeddah on or about 23 February 2020.
A sanitisation expert offers Manifold Times a summary of the processes involved in disinfecting a ship together with the equipment and products used in the operation.
‘As the saying goes without people buying things, manufacturing will slow, trade will also slow and shipping movements slows down. It’s a whole chain of reaction,’ says Simon Neo.
Laboratory looking to collaborate with Singapore bunker surveyors to roll out COVID 19 testing service, which has been successfully adopted by land-based industries, to the maritime sector.
Sinfeng Marine Services filed an application to the Court of Appeal to withhold information from the liquidators on October 2019; the appeal was dismissed a month later.