air pollution and energy efficiency · 2016. 10. 31. · july 15, 2016 ensys energy with...
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https://edocs.imo.org/Final Documents/English/MEPC 70-INF.9 (E).docx
E
MARINE ENVIRONMENT PROTECTION COMMITTEE 70th session Agenda item 5
MEPC 70/INF.9
21 July 2016 ENGLISH ONLY
AIR POLLUTION AND ENERGY EFFICIENCY
Review of fuel oil availability as required by regulation 14.8 of MARPOL Annex VI –
Result of multi stakeholder study by EnSys/Navigistics
Submitted by BIMCO and IPIECA
SUMMARY
Executive summary: This document provides the full report of a supplemental marine fuel availability study
Strategic direction: 7.3
High-level action: 7.3.1
Output: 7.3.1.10
Action to be taken: Paragraph 2
Related document: MEPC 70/5/5
Introduction 1 MARPOL Annex VI, regulation 14.8 requires a review of the standard set forth in regulation 14.1.3 to be completed by 2018 to determine the availability of fuel oil to comply with the fuel oil standard set forth in that paragraph. Action requested of the Committee 2 The Committee is invited to review the complete report of the Supplemental Fuel Availability study by EnSys/Navigistics as the basis of the findings of the report's executive summary, set out in document MEPC 70/5/5.
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MEPC 70/INF.9 Annex, page 1
https://edocs.imo.org/Final Documents/English/MEPC 70-INF.9 (E).docx
ANNEX
SUPPLEMENTAL MARINE FUEL AVAILABILITY STUDY
Supplemental Marine Fuel Availability Study
July 15, 2016
EnSys Energy with Navigistics Consulting
7/15/2016
Supplemental Marine Fuel Availability Study
MARPOL Annex VI Global Sulphur Cap 2020 Supply-Demand Assessment Final Report
EnSys Energy & Systems, Inc.
1775 Massachusetts Avenue, Lexington, MA, 02420
(781) 274 8454
www.ensysenergy.com
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Table of Contents
1 Introduction ....................................................................................................................... 1
2 Executive Summary ............................................................................................................ 3
2.1 2020 Marine Fuels Demand ........................................................................................ 4
2.2 2020 Global Fuel Formulation ..................................................................................... 5
2.3 2020 Global Demand ................................................................................................... 6
2.4 2020 Refining Capacity ................................................................................................ 7
2.5 WORLD Model Case Results ........................................................................................ 7
2.5.1 2020 Base Case (No Global Fuel) ......................................................................... 7
2.5.2 2020 Global Fuel Cases ........................................................................................ 8
2.5.2.1 Inadequate Capacity ..................................................................................... 8
2.5.2.2 Major Changes to Refinery Operations, Marine Fuels Blending, Crude and
Product Movements .................................................................................................... 10
2.5.2.3 Need for Time ............................................................................................. 11
2.5.2.4 Severe Economic Impacts ........................................................................... 11
2.6 Context for Viewing Results ...................................................................................... 16
2.6.1 Factors Intrinsic to the WORLD Model .............................................................. 16
2.6.2 External Factors ................................................................................................. 17
2.7 Overall Conclusions ................................................................................................... 18
3 Demand Assessment ........................................................................................................ 20
3.1 Adjust the IMO’s 3rd GHG Study to 2020 without the 0.5% Sulphur Cap ................. 21
3.2 Potential Role for LNG by 2020 ................................................................................. 22
3.3 Potential Role for Other Alternative Fuels by 2020 .................................................. 23
3.4 Vessel Speeds and Use of Slowdown in 2020 ........................................................... 24
3.5 Scrubber Penetration by Year-End 2019 ................................................................... 36
3.6 Marine Fuel Demand and “Switch” Volumes in 2020 ............................................... 51
3.6.1 Scrubber Energy Use .......................................................................................... 53
3.6.2 EU and China Territorial Adoption of 0.5% max Sulphur Marine Fuel Zones
outside of ECAs ................................................................................................................ 54
4 WORLD Modelling Cases & Premises .............................................................................. 55
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4.1 Cases Run .................................................................................................................. 55
4.2 Global 2020 Supply-Demand Outlook ....................................................................... 57
4.2.1 The Need for a Global Outlook .......................................................................... 57
4.2.2 Comparison of Recent Global Outlooks ............................................................. 57
4.3 Supply Demand Outlook ........................................................................................... 60
4.4 Product Quality Outlook ........................................................................................... 64
4.4.1 Gasoline ............................................................................................................. 65
4.4.2 Jet Fuel and Kerosene ........................................................................................ 65
4.4.3 On and Off Road Diesel Fuel, Heating Oil .......................................................... 65
4.4.4 Residual Fuel ...................................................................................................... 66
4.5 Marine Fuels Grades & Qualities .............................................................................. 66
4.6 Transportation Outlook ............................................................................................. 68
4.7 Refining Capacity Outlook ......................................................................................... 69
4.7.1 Overview ............................................................................................................ 69
4.8 Base Capacity January 2016 ...................................................................................... 69
4.9 Closures 2016 – 2019 ................................................................................................ 72
4.10 Projects 2016 – 2019 ............................................................................................. 77
4.11 Projected Net Available Capacity End 2019 .......................................................... 83
4.11.1 Nameplate versus Effective Capacity ................................................................ 84
4.11.2 Regional Refinery Maximum Utilisation Rates .................................................. 84
4.11.3 Hydrogen Plant, Sulphur Plant and FCC SOx Emissions ..................................... 86
4.11.3.1 Hydrogen Plant Capacity ............................................................................ 87
4.11.3.2 Sulphur Plant Capacity ................................................................................ 88
4.11.3.3 FCC SOx Emissions Constraints ................................................................... 91
5 WORLD Modelling Results ............................................................................................... 92
5.1 Key Model Results & Findings ................................................................................... 93
5.1.1 2015 Calibration Case ........................................................................................ 93
5.1.2 2015 Adjusted Case............................................................................................ 93
5.1.3 2020 Base Case .................................................................................................. 94
5.1.4 2020 Global Fuel Cases ...................................................................................... 96
5.1.4.1 Changes in Refining Operations & Trade Movements ............................... 96
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5.1.4.1.1 Refinery Operations ............................................................................................ 96
5.1.4.1.2 Marine Fuel Blending .......................................................................................... 99
5.1.4.1.3 Refinery CO2 Emissions ..................................................................................... 101
5.1.4.1.4 Crude & Product Flows ..................................................................................... 101
5.1.4.2 Changes in Supply Costs and Differentials ............................................... 106
5.1.5 Detailed Global Case Results ........................................................................... 115
5.2 Over/Under Optimisation Factors and Risks ........................................................... 121
5.2.1 Factors Intrinsic to the WORLD Model ............................................................ 122
5.2.1.1 Model Inherent Crude and Product Trade Flexibility ............................... 122
5.2.1.2 Model Inherent Refinery Operations & Blending Flexibility .................... 122
5.2.1.3 Model Inherent Product Logistics Flexibility & Quality ............................ 123
5.2.1.4 Inland versus Coastal Refineries ............................................................... 123
5.2.2 External Factors Impacting Premises ............................................................... 126
5.2.2.1 2020 Refinery Available Capacity ............................................................. 126
5.2.2.2 Impact on Crude Runs & Prices ................................................................ 127
5.2.2.3 Level of Global Demand and Call on Refining .......................................... 128
5.2.2.4 Global Crude Slate .................................................................................... 130
5.2.2.5 Marine Fuel Total Demand ....................................................................... 130
5.3 Summary of Findings & Conclusions ....................................................................... 131
6 Appendices ..................................................................................................................... 134
6.1 Background on the EnSys WORLD Model ............................................................... 134
6.2 Refinery Projects Detail ........................................................................................... 138
6.2.1 Projects 2016-2019 Included ........................................................................... 138
6.2.2 Projects Post 2019 Excluded ............................................................................ 143
6.3 WORLD Model Results – Detail ............................................................................... 144
6.3.1 Refinery Operations – 2020 Base Case ............................................................ 144
6.3.2 Refinery Operations – 2020 Mid Switch High MDO Case ................................ 149
6.3.3 Refinery CO2 Emissions .................................................................................... 154
6.3.4 Crude and Product Movements – 2020 Base Case .......................................... 155
6.3.5 Crude and Product Movements – 2020 Mid Switch High MDO Case ............. 161
6.3.6 Crude Movements by Type – 2020 Base Case ................................................. 167
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6.3.7 Crude Movements by Type – 2020 Mid Switch High MDO Case ..................... 172
6.3.8 Marine Fuels Blends – 2020 Base and Mid Switch Cases ................................ 177
6.3.9 Marine Fuels Global Average Densities – 2020 Base and Mid Switch Cases ... 180
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Table of Exhibits
Exhibit 2-1 Navigistics 2020 Marine Fuel Demand Outlook (Energy balanced) ........................ 5
Exhibit 2-2 WORLD Model Cases ............................................................................................... 6
Exhibit 2-3 Diesel – IFO Price Differentials Northwest Europe ................................................ 14
Exhibit 2-4 Northwest Europe MDO vs HS IFO Prices - $/tonne ............................................. 15
Exhibit 2-5 Impact of Global Rule on Global Product Supply Costs - $/barrel Change ........... 15
Exhibit 3-1 Marine Fuel Demand Analytical Approach ............................................................ 21
Exhibit 3-2 Fuel Mix Scenarios from 3rd GHG Study ............................................................... 21
Exhibit 3-3 Fuel Mix from 3rd GHG Study for 2020 with and without Global Sulphur Cap .... 22
Exhibit 3-4 Marine Fuel Prices, $s per Ton .............................................................................. 25
Exhibit 3-5 Vessel Time Charter Rates, $s per Day .................................................................. 26
Exhibit 3-6 Average at Sea Speed, knots ................................................................................. 27
Exhibit 3-7 Vessel Fuel Consumption Speed Relationship ....................................................... 28
Exhibit 3-8 Fuel Speed Curve – Relative Fuel Consumption Factor v. Froude Number .......... 28
Exhibit 3-9 Daily Fuel Consumption at Sea 2007, 2012, and 2016 .......................................... 30
Exhibit 3-10 Number of Ships by Type and Size Category 2012 and 2016 .............................. 31
Exhibit 3-11 DWT Capacity by Ship Type for the Size Categories shown previously, 2012 and
2016 ......................................................................................................................................... 32
Exhibit 3-12 Waterborne Trade, 2012 and 2016 (estimated by CRS) ...................................... 32
Exhibit 3-13 “Trade Limited”: adjusted Fleet Capacity, 2012 and 2016 (estimated by CRS) .. 32
Exhibit 3-14 “Trade Limited”: adjusted Fleet Size, 2012 and 2016 ......................................... 33
Exhibit 3-15 “Trade Limited” Fleet-wide Fuel Consumption Change, 2012-2016 ................... 34
Exhibit 3-16 Actual and Predicted Optimal Speeds 2007, 2012, 2016, and 2020 ................... 35
Exhibit 3-17 Actual and Scrubber Installations by Year (2010 through 2015 – not cumulative)
and Ship Populations (as of 2012) ........................................................................................... 40
Exhibit 3-18 Actual Scrubber Economics, Ships in Target Population and Fuel Consumed .... 43
Exhibit 3-19 Whole Fleet Scrubber Market Penetration S-Curve ............................................ 45
Exhibit 3-20 Whole Fleet Predicted Scrubber Penetration, cumulative .................................. 46
Exhibit 3-21 Whole Fleet ex ECA Predicted Scrubber Penetration, , cumulative .................... 48
Exhibit 3-22 ECA Only Predicted Scrubber Penetration, cumulative ...................................... 49
Exhibit 3-23 ECA Proxy Predicted Scrubber Penetration, cumulative ..................................... 50
Exhibit 3-24 ECA Proxy Predicted Scrubber Penetration Adjusted, cumulative ..................... 51
Exhibit 3-25 Navigistics 2020 Marine Fuel Demand (Energy balanced) .................................. 51
Exhibit 3-26 2020 Marine Fuel Demand Cases ........................................................................ 52
Exhibit 4-1 Summary of WORLD Model Cases ......................................................................... 56
Exhibit 4-2 Recent Global Outlooks ......................................................................................... 59
Exhibit 4-3 Global Demand Differences versus WEO 2015 New policies ................................ 59
Exhibit 4-4 2020 Base Case Supply Demand Outlook .............................................................. 62
Exhibit 4-5 WORLD Model Product/Consumption Types ........................................................ 63
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Exhibit 4-6 OPEC 2015 World Oil Outlook Demand by Product .............................................. 63
Exhibit 4-7 Marine Fuel Grades Modelled ............................................................................... 67
Exhibit 4-8 Global Refinery Base Capacity per Different Organisations .................................. 70
Exhibit 4-9 Assessed Refinery Capacity January 2016 ............................................................. 71
Exhibit 4-10 Refinery Closures Recent & Projected by Year and Region ................................. 74
Exhibit 4-11 Refinery Closures Recent & Projected ................................................................. 74
Exhibit 4-12 Refinery by Refinery Closures - 1 ......................................................................... 75
Exhibit 4-13 Refinery by Refinery Closures - 2 ......................................................................... 76
Exhibit 4-14 Refinery by Refinery Closures – 3 ........................................................................ 76
Exhibit 4-15 Watch List for Potential Refinery Closures .......................................................... 77
Exhibit 4-16 Refining Base Capacity January 2020 – 2016 Base Less Closures ....................... 77
Exhibit 4-17 Refining Projects Through 2019 .......................................................................... 79
Exhibit 4-18 OPEC 2015 World Oil Outlook Project Additions ................................................ 81
Exhibit 4-19 Refining Projects through 2019 - Adjusted .......................................................... 82
Exhibit 4-20 Projected Total Refining Capacity End 2019 ........................................................ 82
Exhibit 4-21 EnSys vs MTOMR Capacity Projection ................................................................. 83
Exhibit 4-22 Historical United States Refinery Utilisations ...................................................... 85
Exhibit 5-1 Impact of Global Rule on Refinery Crude Runs ................................................... 103
Exhibit 5-2 Impacts on Hydrogen, Sulphur and FCC SOx Scrubber Requirements ................ 103
Exhibit 5-3 Impacts on Hydrogen, Sulphur Plant % of 2016-2019 Projects ........................... 104
Exhibit 5-4 Total Marine Fuel Pool Selected 2020 Cases ....................................................... 105
Exhibit 5-5 Changes in Crude Oil Movements 2020 Mid Switch High MDO vs Base Case .... 106
Exhibit 5-6 Diesel – IFO Price Differentials Northwest Europe .............................................. 110
Exhibit 5-7 Diesel – IFO Price Differentials United States Gulf Coast .................................... 111
Exhibit 5-8 Diesel – IFO Price Differentials Asia (Singapore) ................................................. 112
Exhibit 5-9 Summary 2020 MGO – IFO Differentials $/tonne Basis ...................................... 113
Exhibit 5-10 Northwest Europe MGO vs HS IFO Prices - $/tonne ......................................... 113
Exhibit 5-11 Impact of Global Rule on Global Product Supply Costs - $/barrel Change ....... 114
Exhibit 5-12 Impact of Global Rule on Global Product Supply Costs – Percent Change ....... 114
Exhibit 5-13 WORLD Premises & Results – Refining Additions .............................................. 115
Exhibit 5-14 WORLD Premises & Results – Refinery Distillation and Upgrading ................... 116
Exhibit 5-15 WORLD Premises & Results – Refinery Desulphurisation, Hydrogen, Sulphur
plant ....................................................................................................................................... 117
Exhibit 5-16 WORLD Premises & Results – Crude & Product Prices ...................................... 118
Exhibit 5-17 WORLD Premises & Results – Price Differentials & Crack Spreads ................... 119
Exhibit 5-18 WORLD Premises & Results – Product Supply Costs ......................................... 120
Exhibit 5-19 Isolated Refining Capacity - Distillation ............................................................. 125
Exhibit 5-20 Isolated Refining Capacity – Upgrading and Desulphurisation ......................... 126
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Acronyms & Abbreviations
bbl Barrel
boe Barrel of oil equivalent (on energy content basis)
b/d barrels per day
BTX Benzene, toluene, xylene (mixed) aromatics
cd calendar day – used in reference to plant capacity to denote
maximum long term sustainable throughput allowing for planned
shutdowns (see CD)
CTL coal-to-liquids
DM Distillate Marine (per ISO 8217 Specification)
DWT Deadweight capacity of a ship
ECA Emissions Control Area
EIA Energy Information Administration
EPA Environmental Protection Agency
FCC fluid catalytic cracker
FSU Former Soviet Union
HCR hydrocracker
HDS hydrodesulphurization (unit)
HFO heavy fuel oil (taken in this report as equating to IFO)
H2S hydrogen sulphide
HS high sulphur
GTL gas-to-liquids
IEA International Energy Agency
IEO [EIA] International Energy Outlook
IFO (marine) intermediate fuel oil
IMO International Maritime Organization
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ISO International Standards Organization
LNG liquefied natural gas
LS low sulphur
MARPOL International Convention for the Prevention of Pollution from Ships
mb/d million barrels per day
mb/cd million barrels per calendar day (referring to refinery plant capacity)
mtpa million tonnes per annum
MDO marine diesel (taken here as equating to ISO-8217 DMB)
MGO marine gasoil (taken here as equating to ISO-8217 DMA)
MTOMR [IEA] Medium Term Oil Market Report
NGL’s natural gas liquids
RO-RO Roll-on/ roll-off – ship designed to carry wheeled cargo
RM Resid Marine (per ISO 8217 Specification)
scf/d standard cubic feet per day (of natural gas or hydrogen)
scf/cd standard cubic feet per day (in reference to capacity)
sd stream day – used in reference to plant capacity to denote maximum
short term throughput (see CD)
st/d short tons per day (1 short ton = 2000 lbs)
st/cd shorts tons per calendar day (in reference to sulphur plant capacity)
VLCC Very large crude carrier
WORLD [EnSys] World Oil Refining Logistics Demand Model
WEO [IEA] World Energy Outlook
WOO [OPEC] World Oil Outlook
UNEP United Nations Environmental Protection
United Kingdom United Kingdom of Great Britain and Northern Ireland
United States United States of America
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US United States of America
USEC United States of America East Coast
USGC United States of America Gulf Coast
‘switch volume’ the volume of high sulphur marine fuel to be converted to 0.5%
sulphur standard under the IMO Global Sulphur Cap
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1 Introduction
MARPOL Annex VI calls for a Marine Fuel Availability Study that will inform the debate,
scheduled for MEPC 70 in October 2016, and the related decision to be taken by the IMO,
over whether the 0.5% Global Sulphur Cap should be implemented in 2020 or delayed to
2025. EnSys and Navigistics, as others, have believed for some time that the IMO decision
will have major impacts on the maritime and refining industries, as well as the global
environment. We have also been concerned that any single study would generate debate
whereas adding a second study could reduce uncertainty and place the IMO in a stronger
position to make a sound decision. Accordingly EnSys Energy and Navigistics Consulting
have undertaken this Supplemental Marine Fuels Availability Study with the aim of providing
additional insight and a ‘second opinion’ that will inform the IMO and stakeholders. As
always in these studies, our goal has been to provide an assessment that is impartial,
objective and thorough. This work has been executed with sponsorship from several
associations, namely: IPIECA, BIMCO, Fuels Europe / CONCAWE, Canadian Fuels Association
and Petroleum Association of Japan.
In undertaking this analysis, we have been mindful of the Terms of Reference for the IMO
study and have aimed to address the items raised therein. This Final Report describes the
work we have undertaken, our methods, findings and conclusions. The body of the report
below contains six sections:
Section 2 – Executive Summary – focusses on the key findings and their implications.
Section 3 contains the Navigistics demand analysis comprising (1) findings from our detailed
evaluation of scrubber potential, (2) an assessment of projected total 2020 marine fuels
‘base’ demand, i.e. before application of the Global Sulphur Cap and (3) resulting assessed
potential required ‘switch volumes’ of HS HFO to LS (0.5% sulphur) compliant fuel.
Section 4 describes the use of EnSys’ proprietary WORLD model, a fully integrated model of
the global petroleum ‘liquids’ supply, refining, demand and trade industry that has been in
use, calibrated and verified since 1987. The WORLD Model cases and associated premises
are detailed including our refinery capacity outlook. .
Section 5 presents the results from the WORLD Model cases and as such gets to the heart of
this report and the analysis. A second part of Section 5 discusses a range of factors that
could influence the results either ‘up’ or ‘down’. These provide a critical context for viewing
and evaluating the Model results themselves. The factors reviewed cover both features of
the WORLD Model itself which are likely to influence results and external developments
which could affect the premises used and hence results. The section concludes with a
summary of findings and conclusions.
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Section 6, Appendices, includes three sections. The first, Section 6.1, provides background
on the EnSys WORLD Model. The second (6.2) provides detail on refinery projects. The third
section (6.3) provides supporting detail on WORLD Model results, including refinery
operations and CO2 emissions, crude and product movements and marine fuel blends.
Price Terminology Used in the Report
In order to maintain clarity, throughout this Report,
‘price’ is used solely to refer to published reported
prices, as for instance 2015 average reported prices
for selected crude oils and products or ‘world’/IEA
import crude oil price as included in the IEA WEO.
‘Supply cost’ is used to refer to results generated
within the WORLD Model relating to products and
crude oils. In mathematical terms, the Model
generates ‘marginal prices’. These EnSys equates to
open market prices for crude oils or products but –
again – to avoid confusion – we refer to these as
‘supply costs’. Likewise, when used, the terms
‘differentials’, ‘margins’ and ‘crack spreads’ refer to
WORLD Model results that have been derived from
Model supply costs.
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2 Executive Summary
EnSys, refining and oil markets specialists, and Navigistics, marine specialists, have
combined their experience and expertise to evaluate the outlook for marine fuels supply
and demand in 2020 on the basis that the MARPOL Annex VI 0.5% sulphur Global Fuel
standard would be implemented at the start of that year. Our goal is to support the IMO
and stakeholders in making their decision on 2020 versus 2025 timing by conducting an
analysis which supplements the ‘2018’ study now being undertaken by another contractor
for the IMO, i.e. to provide a ‘second opinion’ which should hopefully reduce the range of
uncertainty facing the IMO.
This Final Report presents our findings with respect to the following key questions:
1. What is the marine fuel outlook for 2020, firstly for total demand and then, critically,
for the volume that would need to be ‘switched’ from high sulphur to 0.5% sulphur
fuel to meet the IMO Global Sulphur Cap?
2. What is the likely range of variability or uncertainty in the ‘switch volume’ outlook?
3. What are the potential options for formulation of the 0.5% Global fuel?
4. What is the base outlook for global ‘liquids’ supply, demand and refining in 2020
including the level of available refining capacity?
5. Given the above:
a. How is the global refining industry likely to respond and adapt its operations?
b. Will it be able to meet the full Global Rule supply requirements?
c. What are the expected economic impacts across marine fuels and all other
fuels worldwide as a result of the Global Sulphur Cap?
Our ‘bottom line’ assessment from having addressed the above, item by item, is that:
The uptake of scrubbers will be limited by end 2019 such that the required ‘switch
volume’ from high sulphur to Global Fuel standard is estimated as 3.8 mb/d (195
million tpa) plus and minus a range of uncertainty
Based on this outlook, the global refining industry will lack sufficient capacity in one
critical respect in 2020, namely sulphur plant and to a lesser degree hydrogen plant,
(both vital to the ability to desulphurise refinery streams), to fully respond to the
Global Sulphur Cap
However, even if sufficient sulphur and hydrogen plant capacity were to become
available, which we believe to be unlikely, for the industry to attempt to fully
respond the Global Sulphur Cap in 2020 would lead to severe strains on global oil
markets with sharply increased supply costs not only for marine fuels but, critically,
for nearly all fuels in all regions worldwide. Further, the scale of the needed refining
adjustments and the impossibility in the refining industry of adding capacity in
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months rather than years are such that strained supply and markets can be expected
to be sustained over an extended period.
Even the possibility of alleviating the market strain through the expansion of markets
for HS HFO displaced from consumption on ships is uncertain, would take time and
would bring its own consequences including increases in crude oil and – potentially -
product costs stemming from increased use of crude oil. Further, it could result in a
reallocation of HS fuel and emissions from ships to land rather than a net reduction
in sulphur emissions.
The balance of this Final Report sets out the basis for these findings.
2.1 2020 Marine Fuels Demand
We developed our 2020 marine fuel demand perspective using the IMO’s 3rd GHG Study as
our basis. We assessed the likely impact on global marine fuel demand of increased ships’
speeds based on projected marine distillate costs in 2020 (based on $80 per barrel Brent
crude oil) and actual vessel speeds in 2016 - based on a sampling of data for bulkers (over
60k DWT), containerships (over 3,000 TEUs), and crude oil tankers (over 80k DWT). The
speed adjustment increased marine fuel demand by 7.1%. We conducted a survey of
Exhaust Gas Cleaning System Association (EGCSA) members to determine the actual
scrubber installations to date and calculated the expected installation of scrubbers by year-
end 2019 based on those findings. Scrubbers are predicted to be installed on ships
consuming 48 million tons of HS IFO in 2020. Our total calculated marine fuel consumption,
with speed up, in 2020 is 342 million tons (energy balanced). (3rd GHG Study scenario
average was 330 million tons.) The most critical finding, from a fuel availability perspective,
is that we assess the need to “switch” 205 million tons of HS HFO to 195 million tons (3.8
mb/d) of marine distillates (or other 0.5% sulphur fuel).1 Exhibit 2-1 summarises this
central assessment.
1 The tons and volume differences derive from the energy content differences as per Exhibit 2-1.
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Exhibit 2-1 Navigistics 2020 Marine Fuel Demand Outlook (Energy balanced)
Allowing for a greater degree of vessel speed-up could, we believe, raise required ‘switch
volume’ to around 4.2 mb/d. We thus set out a range of +/-0.4 mb/d around our central
estimate of 3.8 mb/d. This central estimate for a 3.8 mb/d (195 mtpa) switch volume to
marine distillate equates to a reduction in 2020 marine HFO demand from 253 to 48 mtpa
(per Exhibit 2-1). Since 2020 inland HFO demand is projected at 210 mtpa (3.7 mb/d), the
effect of the Global Sulphur Cap is thus to drop total 2020 HFO demand by some 44%.
2.2 2020 Global Fuel Formulation
Most earlier studies have expressed the view that the Global Sulphur Cap would require a
switch to 0.5% sulphur marine distillate. However, the fact is 0.1% sulphur ECA fuel
offerings have included proportions of heavier fuels. There is also a clear refining incentive
to produce heavier compliant fuels as these would use less distillate, more heavy
components and thus be lower cost. We therefore assessed that Global Fuel compliance via
100% marine distillate would not be realistic.
Our High MDO cases assumed 90% MDO (at DMB standard) and 10% heavier fuel. 2 This low
penetration scenario for heavier fuel can be taken to reflect either an initial situation, early
in 2020, where the refining and blending industry reacts by supplying predominantly
previously proven marine (distillate) fuels and/or a somewhat longer term situation where
technical or other issues relating to heavier fuel grades have continued to limit their
acceptance.
We also examined Low MDO scenarios with higher levels of penetration by heavier 0.5%
marine fuel types, anything from a light to a heavy IFO but always within ISO 8217
specifications for RM grades. (There is nothing in the IMO MARPOL Annex VI regulation
2 ECA and non-ECA marine distillates (other than Global Fuel) were taken to be at DMA standard.
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which states that the Global Fuel must be a particular grade.) For the Low MDO scenario,
we opted to be relatively conservative and assumed that, during 2020, acceptance and
penetration of heavier 0.5% sulphur marine fuel formulations could at best reach around
half of the total 0.5% marine fuel supplied. The resulting WORLD Model cases are as
summarised in Exhibit 2-2 below.
WORLD Model Cases
Case No.
Year Case Description Global Fuel
Switch Volume mb/d
Switch Volume
mtpa
% MDO in Global
Fuel
0 2015 Base / Calibration Case No 0 0 0%
1 2020 Base Case No 0 0 0%
2 2020 Low Switch – High MDO Yes 3.4 175 90%
3 2020 Mid Switch – High MDO Yes 3.8 195 90%
4 2020 High Switch – High MDO Yes 4.2 215 90%
5 2020 Low Switch – Low MDO Yes 3.4 175 50%
6 2020 Mid Switch – Low MDO Yes 3.8 195 50%
7 2020 High Switch – Low MDO Yes 4.2 215 50%
Exhibit 2-2 WORLD Model Cases
2.3 2020 Global Demand
Given the scale of the recent drop in crude oil prices, we see it as essential to use as a basis
for our global (WORLD) modelling a ‘top down’ supply/demand/world oil price outlook that
reflects this development. Outlooks available to us in March that had been produced in
2015 or early 2016 by the three main agencies that develop public world supply/demand
projections, namely the IEA, EIA and OPEC Secretariat, ranged from a low of 97.4 to a high of
100.5 mb/d for global demand in 2020. As a ‘central’ case, and effectively the IEA’s
reference long term outlook, we elected to use the IEA WEO New Policies Case which
projects 2020 demand at 98.9 mb/d. (After applying our 2020 Base Case marine fuels
outlook, this adjusts to 99.2 mb/d.)
Since that time, two new EIA outlooks have 2020 demand at 100.3-101.5 mb/d and a recent
comment by a prominent energy analyst Daniel Yergin would appear to indicate that his
analytical firm, IHS, now sees 2020 demand at 101.3 mb/d. Therefore, as further discussed
below, the outlook used is somewhat low compared to latest projections, with implications
for the impacts the Global Sulphur Cap would have.
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The WEO New Policies case projected world oil price in 2020 at $80/barrel.3 EnSys
combined ‘top down’ regional projections for supply and demand in the WEO with ‘bottom
up’ detailed data on crudes and non-crudes supply and on demand by product to flesh out
the base supply/demand picture for 2020.
2.4 2020 Refining Capacity
In developing the basis for this study, EnSys undertook a thorough update to our refinery
capacity, projects and closures data. For this, we drew on multiple sources. We continued to
make limited adjustments to that outlook and incorporated our latest assessments as of
early June into our modelling. Recognising that projects by definition comprise somewhat of
a moving target, we project that total capacity additions from projects for 2016 through
2019 are likely to add some 5.6 mb/cd of new distillation capacity together with close to 3
mb/cd of upgrading capacity and 3.6 mb/cd of desulphurisation. Partially offsetting these
additions, we have assessed potential closures to end 2019 at 2 mb/cd. Combining these
developments with base capacity as of January 2016 leads us to projected available capacity
at end 2019 of 101.3 mb/cd to which WORLD Model cases added a further 0.3 to 0.45
mb/cd of capacity via minor debottlenecking (small capacity, low cost expansions). The
resulting total of around 101.7 mb/cd of 2020 available capacity is close to the 101.8 mb/cd
projected by the IEA in its February 2016 MTOMR.
As a key component of our refinery capacity analysis, we paid particular attention to
capacity ‘effective availability’ (i.e. maximum utilisation rate). Capturing this distinction
versus ‘nameplate’ capacity is essential to developing realistic assessments of global refining
system capability. We used our 2015 Calibration case as a means to fine tune values in
order to get the Model set to the right degree of ‘tightness’ in the global system (i.e. a good
match to major published 2015 crude and product price differentials); also to achieve
regional refinery throughputs that were close to 2015 actuals.
Finally, we also paid particular attention to supplementing published data for hydrogen and
sulphur plant capacities via additional research and Model checks. We did this to ensure
that the 2020 Base Case would have adequate – but not much excess – hydrogen and
sulphur plant capacity against which the impacts of the Global Fuel cases could be gauged.
2.5 WORLD Model Case Results
2.5.1 2020 Base Case (No Global Fuel)
As previously noted, significant time was spent achieving a good 2015 Calibration case. The
initial 2015 case was adjusted in June for minor assessed refinery base capacity changes. All
3 IEA import price in $2014.
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subsequent 2020 cases were run using the adjusted refinery capacity data, i.e. the figures
presented above. The next step was the 2020 Base Case, i.e. no Global Fuel. This
constituted a key reference point against which the impacts of the two sets of three Global
Fuel cases could be evaluated. Versus 2015, the 2020 Base Case shows differentials for
(inland) diesel versus HS IFO that are within but close to the upper end of the recent
historical range. This derives from an embedded projection of continuing growth for
diesel/gasoil and jet/kerosene demand. As we discuss below, this outlook may not fully
reflect a recent softening in (inland) diesel demand growth.
2.5.2 2020 Global Fuel Cases
The two sets of Global Fuel cases simulate substantial, and relatively immediate, changes
imposed on to the 2020 Base Case. The results point to severely strained and potentially
infeasible refining sector conditions, impacting supply costs for all products across all world
regions, not just marine fuels. Regarding the two sets of cases, the High MDO series had
greater impacts on the system and product supply costs than the Low MDO (High Heavier
Fuel) cases. This is to be expected since the allowed heavier marine fuels are generally
easier and less costly to produce. Equally, the impacts increased in going from Low to Mid
to High Switch volume.
2.5.2.1 Inadequate Capacity
Our view is that in 2020 the global refining industry will lack sufficient sulphur plant and
secondarily hydrogen plant capacity to fully meet the Global Sulphur Cap, i.e. switch 3.8+/-
mb/d (195+/- mtpa) to 0.5% Global Fuel standard. This is based on our assessment that
expected 2020 hydrogen and sulphur plant capacity, in the form of current base plus firm
projects less effects of closures, will not be adequate to meet the increased
desulphurisation load (which requires hydrogen as a key input and produces H2S which must
be recovered in sulphur plants). Based on the hydrogen and sulphur plant effective
availabilities we employed, additional hydrogen plant capacity would be needed to the tune
of some 35-50% of the level of additions via known 2016-2019 projects (and an increase of
20-35% over the 2020 Base Case which allowed for and included hydrogen plant additions
equating to 17% of firm projects). While this might be plausible, the corresponding level for
sulphur plants is that further additions equating to 60-75% of the planned 2016-2019
projects would be needed to meet the industry’s sulphur recovery needs under the Global
Fuel cases. (The 2020 Base Case showed only 2% of further sulphur plant additions needed
beyond projects.)
Even if we are being overly conservative on hydrogen and sulphur plant maximum
utilisations, (we have global averages of around 70-75% of calendar day capacity for
hydrogen plants and 48.5-52.5% for sulphur plants depending on the case), the message is
that we do not see 2020 capacity for these units as adequate to meet the increased sulphur
recovery load under the Global Fuel cases.
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In addition, we placed constraints on the level of FCC stack gas SOx emissions allowed in the
Global Fuel cases. This was necessary because FCC’s act as partial sulphur removal units;
increased feed sulphur leads to increased sulphur, in the form of SOx, in FCC stack gas. In
the Global Fuel cases, we only allowed FCC stack gas emission to rise provided FCC SOx
scrubbers were installed. In the Global Fuel cases, SOx scrubbers were installed at the level
of some 200 – 400 st/d of sulphur removal capacity. Firstly, the fact that such capacity was
installed in the Global Fuel cases confirms the pressure to raise FCC feed sulphur levels.
Second, and more critical here, we do not believe such capacity would be installed by 2020
(or an equivalent alternative in the form of FCC feed desulphurisation units). This projected
inability to handle increased FCC sulphur emissions adds to the projected inability to handle
the increased hydrogen and sulphur recovery requirements.
Our Model cases show that, if extra hydrogen, sulphur recovery and FCC SOx scrubber
capacity were to exist, the global system’s hydrocrackers and desulphurisation units should
be able to handle the needed extra sulphur removal load, albeit with associated severe
market strain developing as detailed below. Base Case sulphur removal load of around
69,000 st/d total on the hydrocracker and desulphurisation units would need to rise to
79,000 +/- st/d in the Global Fuel cases. We have not evaluated the degree to which this
increase would comprise increases in feed sulphur level with relatively little change in
percent desulphurisation levels or would entail appreciable increases in percent
desulphurisation. (The latter is less likely to be achievable.) We believe mainly the former.
However, our view is that this result – that the global system’s hydrocracking and
desulphurisation units can handle the increased load - needs to be treated with some
degree of circumspection since desulphurisation processes tend to be limited in terms of the
maximum percentage desulphurisation they can achieve.
Overall, on the above basis, we believe full compliance with the Global Sulphur Cap is not
feasible with the refinery equipment expected to be in place in 2020. Put another way, for
the global refining system to be able to adjust fully to the Global Sulphur Cap in 2020, we
believe additional sulphur and hydrogen plant beyond expected 2020 capacity plus FCC SOx
scrubber capacity would be needed.
The projections selected and developed under this study for 2020 global demand and
available refining capacity are broadly similar to those being projected by the IEA. However,
where we differ with the IEA is on projected ‘switch volume’ to compliant fuel under the
Global 0.5% Sulphur Rule. Against our assessment here of 3.8 mb/d (195 mtpa)4, (3.4 mb/d
4 The advent of the 0.5% Global Sulphur Cap, would at 3.4 – 4.2 mb/d switch volume increase total global distillate demand (gasoil/diesel plus jet/kero) ‘overnight’ by some 10%. Since IFO today contains proportions of lighter, distillate type, blendstocks as well as residual streams, the total volume of residual fuel to be upgraded to distillate and desulphurised to 0.5% would be less than the assessed 3.8 mb/d central switch volume (from HFO to MDO or other compliant fuel) but the impact on global refining would still be substantial.
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[175 mtpa] without any vessel speed up), the IEA has presented in its 2015 and 2016
MTOMR’s switch volumes of respectively 2.2 and 2.0 mb/d (approx. 110 and 100 mpta). At
the same time, they have declared that they see those volumes as causing severe challenges
to the global refining industry.
2.5.2.2 Major Changes to Refinery Operations, Marine Fuels Blending, Crude and
Product Movements
The Model cases (run with hydrogen and sulphur plant capacity added in order to obtain
feasible results) quantify and illustrate that the Global Sulphur Cap would have extensive
impacts on refinery processing, marine fuel blending and crude and product routing.
Essentially all refinery units would be affected. As components of the mechanism by which
refiners would react:
Crude runs would increase by 0.25-1.25 mb/d (approx. 12.5-62.5 mtpa). This is
because of increased processing intensity and associated higher fuel and hydrogen
use and because throughputs to cokers5 would be maximised in order to process
high sulphur residua which have to be removed from the marine fuel pool
Operations would change on FCC units (notably increases in low sulphur resid feed)
and on hydrocrackers
Desulphurisation load on HDS units and hydrocrackers would rise and throughputs
would be maximised
Catalytic reforming unit severities would rise to generate more hydrogen, needed as
part of the increased desulphurisation load. This shift would affect yields of LPG
streams and gasoline ‘reformate’ from catalytic reformers, in turn impacting gasoline
and LPG economics
All of these assuming the increased hydrogen and sulphur plant capacity described
above.
Refinery CO2 emissions are also projected to increase under the Global Sulphur Cap
because of the increase in refinery processing intensity.
Whether the industry would be able to achieve worldwide the full suite of changes shown as
needed would be very dependent on actual operating capacity, on achievable utilisation
rates and also on the evolution by 2020 of global supply and demand, including the quality
of the global crude slate.
5 Cokers (delayed or fluid coking units) ‘crack’ most frequently low quality vacuum residual streams to lighter components but some 30-40 weight percent of the product yield is solid petroleum coke which is ‘lost’ from the petroleum liquids system.
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In terms of marine fuel blending, Model results show that the Global Sulphur Cap would
lead to up to 2.8 mb/d (approx. 145 mtpa) of distillates/VGO plus low sulphur resid being
added to the global marine fuel pool and over 2.6 mb/d (close to 150 mtpa) of medium and
high sulphur residual removed. (The quantity differences are in part because of different
volume energy contents.) Taken down to the refinery and port/blender level, these equate
to massive changes in marine fuel blends across the sector.
In similar vein, Model results show changes to regional crude runs and major shifts in crude
flows. At the aggregate level, the 2020 Mid Switch High MDO case projects 44 mb/d
(approx. 2,200 mtpa) of crude oil trade between the major regions (up from 43 mb/d
[approx. 2,150 mtpa] in the Base Case). Of this 44 mb/d, there are over 8.5 mb/d (approx.
430 mtpa) of crude oil routing changes, i.e. 20% of exported crude. (Changes in product
flows are also identified as being substantial.) These, like the refining changes, constitute a
major set of realignments for the industry to accomplish and ones that would not be
achieved overnight or likely even in a few weeks. (Apart from anything else, transit times on
longer crude hauls run in the range of 15 – 30 days and full purchase-to-delivery cycles still
longer.)
2.5.2.3 Need for Time
As stated above, the projected changes to refinery operations, blending and crude and
product flows are of such a scale that, even with preparation, they would not occur
‘overnight’. The world’s refineries, pipelines and maritime shippers react efficiently to
changes in markets and economics, but changeovers of this magnitude would take weeks
and potentially months to complete.
Compounding this situation is the presence of uncertainty over the formulation of the
Global Fuel. There is an economic incentive for refiners to offer – and shippers to buy -
heavier 0.5% sulphur grades since they would be lower cost than marine distillate.
However, ‘new’ marine fuels formulations generally will only be accepted gradually and
once they are shown to not cause problems during on-board use. Such acceptance could
therefore take many months.
2.5.2.4 Severe Economic Impacts
The changes in projected product supply costs and refining economics as a result of a full
switch to Global Fuel are indicated as potentially extreme. The precise numbers in these
strained Model cases are not the main point. What is most important is the finding and
message that the modelling analysis is pointing to a severe degree of economic strain on the
global refining and supply system should the Global Sulphur Cap be enacted in full force in
January 2020.
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Exhibits 2-3 and 2-4 illustrate the market impacts projected in the Model cases.6 Starting
from a 2020 Base Case within - if at the upper end of - the normal historical range, i.e.
around $35-38/barrel for inland ULS diesel – HS IFO380 differentials, projections for the
High MDO cases lie in the $70-80/barrel range. In the Low MDO scenarios, the situation is
noticeably ‘better’, but these differentials are still in the $60-70/barrel range. In $/tonne,
these differentials range up to $380 versus under $190 in the Base Case. These are well
beyond anything in recent history, including 2008 when distillate became extremely tight.
In the WORLD Model, we compute and report what we term product ‘supply costs’. These
are computed by multiplying the projected ‘marginal cost’ (which we equate to regional
supply cost) of each product in each region by its sale / consumption volume to arrive at
total $/day cost for that product. These costs are then added together across all Model
regions and products to arrive at the total global supply cost. Dividing by the demand
volume for each product we can express supply cost as average $/barrel.
The results from the Model cases indicate the effect of the Global Sulphur Cap would be to
increase open market prices by some $10 to nearly $20 /barrel average across all products
in all regions worldwide – not just across marine fuels. (See Exhibit 2-5.) The corresponding
percentage increases are around 11 to 23 percent. Expressed as $billion per year, the
increase in global supply costs across all petroleum products is projected to range from
somewhat under $350 bn/yr to over $700 bn/yr depending on the scenario. This ‘all
products’ effect arises because refining is a co-product industry and so developments in
marine fuels quality and mix impact inland diesel and gasoil which in turn impact the closely
related products jet/kerosene, then gasoline and so on.
A further implication of this is that light/heavy crude differentials would be significantly
impacted as would be refining margins, with different types of refinery impacted differently.
As an illustration of the impact on light versus heavy crude oils, Brent-Mayan differentials
are projected to double under the High MDO cases and to still widen significantly under the
Low MDO cases. These same Model projections indicate sophisticated refineries that run
heavy sour crude and fully upgrade to clean products, with emphasis on distillates
(gasoil/diesel and jet/kero), would see large increases in margins. Conversely, refineries
that are simpler and have an appreciable yield of high sulphur residual fuel would be
expected to see margins deteriorate versus ‘business as usual’. One potential implication is
that sustained low margins resulting from the advent of the Global Sulphur Cap could lead
more refineries to close.
6 The 1.5% / 0.5% designation on MGO in Exhibit 2-4 refers to respectively the existing 1.5% sulphur specification for MGO (DMA) in ISO 8217:2012 and the 0.5% standard that would apply under the IMO Global Sulphur Cap.
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One question these Model results pose is how long the strained market conditions could be
expected to continue. Our view is that the strained conditions could be relatively long
lasting. Yes, the refining industry would attempt to adapt but investments would be needed
and those would take years not months to bring on stream. Scrubbers would become highly
attractive economically but it would still take time to equip large numbers of vessels. It is
more likely that in the short to medium term something else would have to ‘give’, most
likely either a reduction in the volumes of Global Fuel refiners attempt to produce and
shippers to purchase or the interjection of a clearing mechanism for surplus heavy fuel that
would entail continued market stress because of low residual fuel prices and (still more)
increases in crude runs.
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Exhibit 2-3 Diesel – IFO Price Differentials Northwest Europe
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Exhibit 2-4 Northwest Europe MDO vs HS IFO Prices - $/tonne
Exhibit 2-5 Impact of Global Rule on Global Product Supply Costs - $/barrel Change
$0
$100
$200
$300
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Northwest Europe MGO vs HS IFO380
IFO380 HS
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2.6 Context for Viewing Results
WORLD is a detailed, powerful and proven model. But it is just that – a model. Results out
are dependent on premises in and the Model itself embodies certain facets which can affect
results. We have therefore set out several points which we believe are key to setting a
context within which to view the Model results. The ‘bottom line’ from this is that we see
most factors pointing to the Model results understating rather than overstating the
challenges and costs the industry and markets would face.
2.6.1 Factors Intrinsic to the WORLD Model
One aspect of the WORLD Model is that is generally run with only very limited constraints
on crude movements. In contrast, in the real world, many movements are tied to
ownership interests and/or term contracts. Thus there is potentially more flexibility
inherent in the WORLD Model cases to reallocate crudes than exists in the real world,
especially in the near term after an event such as the Global Sulphur Cap. Therefore, if
anything, the Model results arguably overstate the ease with which the crude oil market
could adapt (at least in a period of a few months) and understate the difficulty and costs.
A central aspect of any mathematical model is that it reacts instantly to changes. WORLD
results implicitly have the world’s refineries responding rapidly and fully to the Global
Sulphur Cap. While much of the world’s refining industry operates at a very sophisticated
level in terms of economic planning, it is not necessarily the case either that the industry in
total will react (which is implicitly assumed in the Model) or that all affected refineries
would react swiftly or fully. For these reasons, if anything, the Model results are also likely
to overstate the ease and speed with which the industry would react in terms of refining
adjustments and thus again understate the supply and market impacts, especially in the
shorter term.
A related factor is that refineries in WORLD are aggregated into large regional groups (36
spread across the Model’s 23 regions with highest disaggregation in the United States of
America and Canada). Over time, EnSys has applied methods to offset the resulting implicit
risk of over-optimisation. However, in the Model, all refineries within a region are implicitly
inter-connected and can share units, capacities and also blend streams. In reality, that is
often not the case since refineries may be dozens or hundreds of miles apart. Thus the
Model intrinsically tends to overstate the ease with which blendstocks can be shared or
traded within a region and thus may understate the costs of meeting a regulation such as
the Global Sulphur Cap. Even to the extent refineries are coastal and can ship blend stocks
to other refineries, doing so adds costs which are not reflected in the Model.
For regions outside the United States of America and Canada, the Model intrinsically
assumes, through regional refinery aggregation, that none of the refineries in a given region
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is isolated inland and thus unable to contribute to marine fuels production. An assessment
by EnSys led to the conclusion that, in WORLD, this effect relates to some 9% of the world’s
refinery capacity – and around 6% of upgrading and desulphurisation capacity. Thus, while
not large, this effect nonetheless leads to a minor degree of over-optimisation in the
WORLD Model results.7
2.6.2 External Factors
The Model results show a clear need for increases in crude runs under the Global Sulphur
Cap. In the Model cases, we held marker crude price constant in order to maintain
consistency across cases. Yet it is clear that a (relatively rapid) increase in crude oil demand
at a non-trivial level would almost certainly lead to an increase in global crude oil prices.
Even a $1/barrel increase in crude oil price would add on the order of $35 billion/year to
global petroleum product supply costs, a $5/barrel increase around $180 billion / year to
cost increases already assessed at $350 to $700+ billion / year per Model cases depending
on the scenario. The market would eventually adapt and price elasticity effects would bring
demand and supply costs down. However, the potential for damage to the world’s
economies from petroleum product price spikes is well known.
As noted above, latest available global outlooks have higher global demand for 2020, at
around 100 – 101.5 mb/d, than the 98.9 mb/d we used from the 2015 WEO (99.2 mb/d
after adjustment to our marine fuels demand outlook). There is of course uncertainty in
these outlooks but, were EnSys to re-run WORLD cases with 2020 demand in the 100 – 101
mb/d range to be more in line with the latest agency outlooks, the difficulties being
projected would be further exacerbated. Again, the implication is that the current WORLD
Model results may be understating the difficulty and challenge to implement the Global
Sulphur Cap. Offsetting this is the fact that assessments of 2015 actual ‘demand’ allowing
for product inputs to inventory and of refinery crude runs have recently been adjusted
upward by the IEA and other agencies. Were EnSys to rerun the 2015 Calibration case, we
would likely moderately adjust upward maximum allowed process unit utilisation rates to
still ‘hit’ the same supply costs and differentials at higher global refinery throughput. This
would carry through into the 2020 cases and tend to ease the economic impact of the
Global Fuel cases. Overall, our view is that these two global demand / refinery runs effects
broadly offset each other.
Recent press articles have referred to a ‘diesel glut’. Recognizing that our initial projection
for 2020 inland diesel demand was potentially above what latest projections would show
(i.e. that there is a softening in the rate of growth for diesel), EnSys adjusted global 2020
7 Restrictions of time and budget prevented EnSys from addressing this issue by re-working the Model’s refining groups but this could be done in the future.
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land-based diesel demand down by 0.25 mb/d and gasoline 0.25 mb/d up across all final
cases versus our original (April) 2020 demand projection. We tested the potential impact of
a further softening in diesel demand by running sensitivity cases with a further 0.25 mb/d
less inland diesel demand and 0.25 mb/d more gasoline. While, under this assumption, the
impacts of the Global Rule on distillates supply costs worldwide softened, the impacts on
gasoline supply costs increased so that aggregate supply costs across all products indicated
no net improvement.
2.7 Overall Conclusions
Our demand analysis projects that a limited fraction of ships will be running with onboard
scrubbers by end 2019 and therefore that the bulk of the compliance load will fall on
refiners to supply 0.5% sulphur Global Fuel.
Given this outlook, Model results point to extreme difficulty – and indeed potential
infeasibility - for the refining sector to supply the needed fuel under the Global Sulphur Cap
and to simultaneously meet all other demand without surpluses or deficits. Market impacts
are projected as very substantial across all products and regions worldwide, not just marine
fuels, and, consequently, potentially significant impacts across economies and sectors.
Moreover, as stated above, we see the Model results if anything understating rather than
overstating the challenges in meeting the Global Sulphur Cap in 2020.
The WORLD Model results themselves indicate the global refining industry is unlikely to be
able to meet the needed extra sulphur removal demand because 2020 sulphur plant (and
hydrogen plant) capacity will not be adequate based on current capacity plus projects. The
projection is that these capacity limitations would prevent the industry from supplying the
volumes (and qualities) needed to achieve full compliance with the Global Sulphur Cap.
The Model results further show that, even if sufficient added sulphur plant and hydrogen
capacity were to become available, the industry could potentially meet the Global Fuel
volumes but only with attendant severe economic impacts in the form of substantial
increases in supply costs not only for marine fuels but also for nearly all fuels (except high
sulphur HFO) across all regions of the world. Refining economics would also be impacted
with potential adverse consequences for simpler refineries that could lead to more closures.
Should the shipping industry be able to accept relatively new IFO 0.5% sulphur fuel
formulations, (versus marine distillate), that would moderately alleviate the economic
impacts of the fuel switch but this would almost certainly take time and is not guaranteed
given recent ship operational issues with 1% sulphur fuels. It should be born in mind that
achieving compliance using a higher proportion of LS IFO fuels does little or nothing to
change the issue regarding potentially inadequate sulphur plant capacity; this because the
sulphur removal load is unchanged.
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We therefore conclude that a full-on switch to the Global Sulphur standard in January 2020
does not look workable.
This study has been focussed on one question – if the Global Sulphur Cap is implemented in
full in January 2020 what is the impact? Any rigorous analysis of the follow-on implications
of our findings on this question is beyond the scope of this assignment. However, our
findings clearly beg the question of what would or could happen. Our judgement and
experience indicate that, if the rule were in full force with all refiners and shippers
attempting to comply, the impacts across all products (not just marine) worldwide would be
severe. Refiners would not be able to put in capacity rapidly to resolve the market strain –
even minor projects take one to two years to implement and major ones often three to as
much as seven.
Also, an added factor to be considered by refiners in making investment decisions
specifically to address the marine fuels market is that the projected extreme price
differentials caused by the shift to 0.5% sulphur marine fuel would greatly enhance the
economics of and arguably orders for scrubbers. This would create the prospect of the
proportion of vessels able to use HS marine fuel growing over time, in turn cutting the
volumes of Global Fuel needed. An expectation of such a scenario would create a perceived
risk that marine-fuel-specific refinery investments could become ‘stranded’. This, in its turn,
would cut the justification for and likelihood of such investments occurring. Thus achieving
full compliance, whether by scrubbers or refining, would take time. The expected adverse
market impacts from the rule would also take time to fade, with the potential for
widespread economic consequences in the interim.
We do not see any easy resolution of this situation. Even the possibility of alleviating the
market strain through the expansion of markets for HS HFO is uncertain, would take time
and would bring its own consequences including increases in crude oil and – potentially -
product costs stemming from increased use of crude oil. Further, it could result in a
reallocation of HS fuel and emissions from ships to land rather than a net reduction in
sulphur emissions.
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3 Demand Assessment
Our approach to estimating 2020 marine fuel demand is based on the principle that the
IMO’s 3rd GHG Study developed a widely accepted global 2012 marine fuel consumption
baseline. That widely accepted baseline was projected to 2020 in the 3rd GHG Study based
on the following:
The Global 0.5% sulphur cap would enter into force in 2020.
Scrubbers would be used on vessel’s consuming ~60 percent of global marine fuel
LNG would grow to ~8 percent of marine fuel consumption in 2020 or about 27
million tons from about zero tons in 2012 (excepting LNG tanker boil-off
consumption) and estimated 8 million tons in 2015.
The vessel speeds identified in the 2012 baseline would continue through 2020 (the
3rd GHG Study was conducted in 2q2014 when Brent crude oil prices were on the
order of $100 per barrel).
Sixteen growth scenarios were projected to 2050. The sixteen growth scenarios were
relatively consistent to 2020 (with widening divergence occurring beyond 2025). We
used the average of the sixteen growth scenarios in 2020 as our starting point
forecast of 2020 marine fuel demand (consistent with the 3rd GHG Study)..
Our analytical approach to estimating 2020 marine fuel demand and the all-important
“switch” volume (the amount of HFO that will be converted to a marine distillate based fuel)
is based on accepting the 3rd GHG Study’s 2012 baseline and marine transport activity
forecasts and focusing our efforts on the 3rd GHG Study’s major assumptions that have the
most impact and, we believe, needed updating based on being two years closer to 2020.
Our primary areas of focus in re-examining the 3rd GHG Study’s 2020 projection are:
Potential changes in vessel slowdown and operating speed impacts on global marine
fuel demand. Vessel speed has a tremendous impact on vessel fuel efficiency (ships
get much higher “miles per gallon of fuel consumed” at slower speed. The optimal
economic speed is based on a trade-off between fuel costs (in $s per ton) and ship
costs (in $s per day term charter hire).
Potential penetration of LNG as a marine fuel. LNG has no sulphur and very low NOx
emissions. NOx emissions are in the process of being regulated more strictly for
international shipping.
The likely uptake of marine exhaust gas cleaning systems or scrubbers by year-end
2019. Scrubbers are an alternative compliance mechanism for meeting the 0.5%
sulphur cap while using HFO (of up to 3.5% sulphur). The scrubber issue is perhaps
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the most important. Consider that no 0.5% sulphur marine fuel would be needed if
all vessels used scrubbers as their compliance mechanism. Our analytical approach is
shown in Exhibit 3-1.
Exhibit 3-1 Marine Fuel Demand Analytical Approach
3.1 Adjust the IMO’s 3rd GHG Study to 2020 without the 0.5%
Sulphur Cap
We adjusted the IMO’s 3rd GHG Study to a no 0.5% sulphur cap in 2020 based on
information provided in paragraph 3.2.7 (page 156-157) of the 3rd GHG Study. The fuel mix
information in Table 74 “Fuel mix scenarios used for emissions projection (mass%)” shown
in ¶ 3.2.7 that we used is summarized in Exhibit 3-2.
Fuel Mix 2012 Base
Case
2020 High LNG-extra ECAs
Case
2020 Low LNG-constant ECAs
Case
HFO 85% 60% 73%
MGO &
LSHFO 15% 30% 25%
LNG 0% 10% 2%
Total 100% 100% 100%
Exhibit 3-2 Fuel Mix Scenarios from 3rd GHG Study
2020
Adjust IMO 3rd
GHG Study to no 0.5% Cap basis
2020
Vessel Slow-down Adjustment
& LNG Use
2020
Scrubber Penetration
2020 Marine Fuel Demand & Switch
Volume
Supplemental Marine Fuel Availability Study
July 15, 2016
22
Based on the fuel mix for domestic and international shipping developed for 2015 in the 3rd
GHG Study and energy balancing (constant joules), we developed the fuel mix for 2020 with
(as per 3rd GHG Study) and without the 0.5% sulphur cap in 2020 shown in Exhibit 3-3.
3rd GHG 3rd GHG 3rd GHG
2020 2020 2020
With 0.5% Intl Domestic Total Global
HFO 186 5 191
MGO 77 35 112
LNG 17 10 27
Total 280 50 330
2020 2020 2020
Without 0.5% Intl Domestic Total Global
HFO 222 9 232
MGO 53 35 88
LNG 5 6 11
Total 280 50 330
Exhibit 3-3 Fuel Mix from 3rd GHG Study for 2020 with and without Global Sulphur Cap
3.2 Potential Role for LNG by 2020
LNG has the potential to eliminate SOx emissions, as natural gas does not contain sulphur.
The marine use of LNG faces two significant hurdles:
Ship Retrofitting - Engine technology for retrofitting as well as LNG storage tanks
onboard are a potential roadblock to LNG powering.
LNG Bunkering – The availability of LNG for ship bunkering is emerging with
bunkering facilities announced/operational in Europe and the United States.
However, these facilities are not widespread and between now and 2020 we expect
that LNG vessels will only be developed in areas with known supplies and on vessels
Supplemental Marine Fuel Availability Study
July 15, 2016
23
that do not require origin/destination flexibility (e.g., ferries trade on fixed routes
whereas tankers and bulkers do not trade on the same route every voyage).
We reviewed numerous studies on LNG as a marine fuel by the leading classification
societies, technical societies (e.g. Society of Naval Architects and Marine Engineers,
SNAME), government sponsored organisations, and engine manufacturers.
The 3rd GHG Study predicts LNG demand in 2020 ranging from 2 percent (in the low LNG
penetration scenario) to 10 percent in the high LNG penetration scenario. It is unclear how
boil-off from LNG tankers is handled in the 3rd GHG Study. Based on LNG tanker fuel
consumption it appears that LNG boil-off is accounted for in estimating LNG tanker fuel
consumption of HFO and MGO/MDO but is not added in as LNG fuel.
There are LNG powered ferries in operation in Europe and LNG powered offshore supply
vessels (OSVs) in operation in the United States Gulf of Mexico. The first LNG powered large
cargo ship, Tote’s two Marlin Class LNG powered containerships, will be used in the United
States domestic trade between Jacksonville, Florida and San Juan, Puerto Rico. The first
Marlin Class containership was launched on 18 April 2015 at NASSCO in San Diego, CA. The
Tote 3,100 TEU containership entered service in late 2015. Tote is also converting its ORCA
Class RO-ROs to LNG. The two ORCA Class RO-ROs trade between Tacoma, Washington and
Anchorage, Alaska. Crowley is also building two LNG powered containerships for the Puerto
Rico – the United States mainland trade.
The economic case for LNG has declined with the 2014-5 crude oil price collapse as the price
spread between LNG and oil (on a joules basis) has declined.
In assessing 2020 marine fuel demand, we applied the IMO 3rd GHG projections of 3.3% of
total fuel with no 0.5% standard and 8.5% with the standard. (See Exhibit 12.), 8.5%,
equating to 27 mtpa of total marine fuel, corresponds to the IMO 16 scenario average for
2020. However, given the current state of development of LNG powered vessels, our belief
is that the 2 percent low case in the 3rd GHG Study could be a more appropriate level of
LNG use for 2020. Should this prove to be the situation, the effect would be to moderately
raise the total volume of liquid marine fuels demand in 2020 and, with that, the volume to
be switched to 0.5% sulphur under the global standard. Our final assessment of LNG
penetration is the 11 million tons we developed for 2020 without the global 0.5% sulphur
cap shown previously.
3.3 Potential Role for Other Alternative Fuels by 2020
The alternative fuels currently under consideration are nuclear, methanol, and hydrogen
(fuel cells). Nuclear power has been tried in cargo ships in the past but has faced significant
public perception problems. The primary nuclear vessels are naval vessels (primarily
submarines and aircraft carriers) and icebreakers (Russian Federation). Methanol marine
Supplemental Marine Fuel Availability Study
July 15, 2016
24
engines are just entering the “trial” stage with a Stena Ro-Pax ferry recently commissioned.
Hydrogen powered fuel cells have been installed in a few ship-assist tugs with limited
installations elsewhere.
For our 2020 demand outlooks, we assume minimal market penetration of alternative fuels
other than LNG.
3.4 Vessel Speeds and Use of Slowdown in 2020
The IMO 3rd GHG Study detailed the reductions in ship speeds that occurred between 2007
and 2012 and its demand projections were based on a continuation of current shipping
speeds. (The study was undertaken, as noted, assuming high crude oil prices would
continue.) The optimal economic speed of cargo ships is a trade-off between fuel costs and
vessel charter costs (time basis). As fuel costs per ton decline (with assumed constant time
charter rates) the optimal economic speed of a ship would increase (all else equal).
Similarly, if time charter rates increased (with assumed constant fuel cost per ton) the
optimal economic speed of a ship would increase (all else equal) in order to reduce total
vessel voyage time and, therefore, charter hire.
The 2014 crude oil price collapse resulted in a dramatic decline in marine fuel costs as
shown in Exhibit 3-4.
Supplemental Marine Fuel Availability Study
July 15, 2016
25
Exhibit 3-4 Marine Fuel Prices, $s per Ton
As is obvious in Exhibit 3-4, marine fuel prices have declined dramatically from the 2nd
Quarter of 2014 ($582 per ton of IF-380) when the IMO 3rd GHG Study was conducted to the
1st Quarter of 2016 ($143 per ton IF-380). Given this decline in the cost of marine bunkers
one would expect to see vessel speeds increase.
However, as previously mentioned vessel time charter rates are also an important
component of the calculus of the optimal economic speed of a ship. Time charter rates for
tankers (310k DWT VLCC basis one-year), bulkers (170k DWT Capesize basis one-year), and
containerships (Post-Panamax 6,800 TEU basis three-years) are shown in Exhibit 3-5.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,4002
00
7-J
an
20
07
-Ju
l
20
08
-Jan
20
08
-Ju
l
20
09
-Jan
20
09
-Ju
l
20
10
-Jan
20
10
-Ju
l
20
11
-Jan
20
11
-Ju
l
20
12
-Jan
20
12
-Ju
l
20
13
-Jan
20
13
-Ju
l
20
14
-Jan
20
14
-Ju
l
20
15
-Jan
20
15
-Ju
l
20
16
-Jan
Mar
ine
Fu
el P
rice
s, R
ott
erd
am, $
pe
r to
n
Marine Fuel Prices - Rotterdam, $s per Ton2007 - 2016
IF-380
MGO
Source: Clarkson Research
Services Limited - Shipping
Intelligence Network (SIN)
Supplemental Marine Fuel Availability Study
July 15, 2016
26
Exhibit 3-5 Vessel Time Charter Rates, $s per Day
While tanker (VLCC) rates have risen significantly from the 2nd Quarter of 2014 ($24,500 to
$25,500 for all three vessel types) to the 1st Quarter of 2016 (VLCC $46,300), rates for
containerships (6,800 TEU $14,000 per day) have declined by nearly half and bulkers (170k
DWT Capesize $5,400) have collapsed to near cash costs. This would indicate that an update
on vessel speed is appropriate given the change in optimal speed economics from the time
of the 3rd GHG Study.
We conducted a study of vessel speed for the larger tanker, bulker, and containership size
categories used in the 3rd GHG Study. Our study was done on a random sampling of vessels
(at sea not approaching a port) using AIS data (using Genscape’s Vessel Tracker). The results
of our vessel speed update analysis in comparison with the 2007 and 2012 speeds identified
in the 3rd GHG study are shown in Exhibit 3-6.
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Tim
e C
har
ter
Rat
es,
$s
pe
r D
ay
Tanker, Bulker and Containership Time Charter Rates, $s per Day
2014 - 2016
Bulker-170k DWT Cape Size
Tanker - 310k DWT VLCC
Containership,6,800 TEUPost-Panamax
Source: Clarkson Research
Services Limited - Shipping
Intelligence Network (SIN)
Supplemental Marine Fuel Availability Study
July 15, 2016
27
IMO 3rd
GHG
IMO 3rd
GHG
Navigistics
Ship Type Size,
lower
Size,
upper Units
Design
Speed 2007 Speed 2012 Speed 2016 Speed
Bulk
Carrier
60,000 99,999 dwt 15.3 13.0 11.9 11.7
Bulk
Carrier
100,000 199,999 dwt 15.3 12.8 11.7 11.6
Bulk
Carrier
200,000 dwt 15.7 11.5 12.2 11.9
Container 3,000 4,999 TEU 24.1 18.6 16.1 16.4
Container 5,000 7,999 TEU 25.1 20.6 16.3 17.5
Container 8,000 11,999 TEU 25.5 21.3 16.3 17.7
Container 12,000 14,499 TEU 28.9 20.6 16.1 18.5
Container 14,500 TEU 25.0 14.8 19.7
Oil Tanker 80,000 119,999 dwt 15.3 13.3 11.6 12.7
Oil Tanker 120,000 199,999 dwt 16.0 13.7 11.7 12.9
Oil Tanker 200,000 dwt 16.0 14.6 12.5 12.8
Exhibit 3-6 Average at Sea Speed, knots
As the data shows in Exhibit 3-6, bulker speeds (given the dire financial conditions in the
trade) have declined slightly (probably constant within the accuracy of our sampling
approach) from 2012 (the 3rd GHG Study’s baseline) to 2016 (April). Containership speeds
have increased slightly given the decline in fuel price (recognize also that there is some
inertia in changing container speeds as ships must be either inserted or deleted in a trade
string to maintain constant port calls i.e., it is more complicated to alter containership
speeds than it is for tankers and bulkers due to the network nature of container shipping
services). Tanker speeds have increased from 2012 to 2016 as well. None of the vessel types
or sizes analysed have returned to 2007 speed levels as of this time.
Determining the impact of the speed changes identified is a complex process as the
relationship between fuel consumption and vessel speed is driven by many factors as shown
in Exhibit 3-7.
Supplemental Marine Fuel Availability Study
July 15, 2016
28
Source: St. Amand, D., Optimal Economic Speed and the Impact on Marine GHG Emissions,
Society of Naval Architects and Marine Engineers (SNAME) Transactions 2012.
Exhibit 3-7 Vessel Fuel Consumption Speed Relationship
The above relationship was developed into a fuel speed model (same source) for use in
estimating the impact of reduced speed operations as shown in Exhibit 3-8.
Source: St. Amand, D., Optimal Economic Speed and the Impact on Marine GHG Emissions,
Society of Naval Architects and Marine Engineers (SNAME) Transactions 2012.
Exhibit 3-8 Fuel Speed Curve – Relative Fuel Consumption Factor v. Froude Number8
8 Froude number (Fn) in hydrodynamic terms is a vessel’s speed (meters per second) divided by the square root of the gravitational constant (9.81) times the length on waterline of a ship (in meters).
Hull
Power v. speed
Propeller
Propulsive Efficiency v.
RPM
Main Engine SFC v. %MCR
Fuel SpeedRelationship
0.000
0.100
0.200
0.300
0.400
0.500
0.600
0.700
0.800
0.900
1.000
0.0000 0.0500 0.1000 0.1500 0.2000 0.2500
Re
lati
ve F
ue
l Co
nsu
mp
tio
n F
acto
r-R
ed
uce
d/F
ull
Spe
ed
Froude Number
Supplemental Marine Fuel Availability Study
July 15, 2016
29
The plot shown in Exhibit 3-8 was developed as a tool for use in estimating the impact of
speed reduction on vessel fuel consumption and is useful for high-level analysis of marine
fuel consumption at varying speeds. There are many factors that impact the relationship
between fuel consumption and vessel speed including:
Vessel hull form and characteristics including length, beam, draft, block coefficient,
displacement, wetted surface, etc. (the above curve only considers vessel length as it
is readily available – by only using the model within one vessel type and size
category the simplification is not problematic).
Propeller type, design, and operating parameters (rpm, thrust, etc.).
Engine type and design (slow speed two stroke turbo charged, electronic injection
controls, slide valves, etc.).
Hull condition (e.g., fouling), propeller condition, and engine condition.
Vessel load condition (laden or ballast) and trim.
Sea state and other ambient conditions.
The curve in Exhibit 3-8 does not take these variables into account but rather looks at the
relative fuel consumption between design speed and reduced speed. The curve is not meant
to accurately predict the actual fuel consumption in service for a specific vessel but rather as
a useful tool in predicting the fleet wide impact of speed reduction on fuel consumption.
The Fuel-Speed Model was tested against the 2007 and 2012 data from the 3rd GHG Study
and found to be consistent for tankers and bulkers. The model predicted a larger impact for
containerships than was shown in the 3rd GHG Study (i.e., predicted lower fuel consumption
at reduced speeds than was found in the 3rd GHG Study). Containerships operate at higher
speeds (as shown in Exhibit 3-6) with higher Froude numbers than tankers and bulkers and
as seen in Exhibit 3-8 are in a much steeper portion of the fuel speed curve.
Fortunately, the speed changes between the 2012 3rd GHG Study baseline and the updated
AIS sampling study for 2016 are not large so we can use a simple linear interpretation to
assess the impact of the speed changes on fuel consumption. The average at sea daily fuel
consumption for each ship type and size (evaluated for average speed) are shown in Exhibit
3-9.
Supplemental Marine Fuel Availability Study
July 15, 2016
30
IMO 3rd
GHG
IMO 3rd
GHG Calculated
2016-
2012
Ship Type Size,
lower
Size,
upper Units 2007 T/D 2012 T/D 2016 T/D
%
Change
Bulk
Carrier
60,000 99,999 dwt 37.7 28.8 27.2 -5.6%
Bulk
Carrier
100,000 199,999 dwt 55.5 42.3 41.1 -2.8%
Bulk
Carrier
200,000 dwt 51.2 56.3 54.1 -3.9%
Container 3,000 4,999 TEU 90.4 58.7 62.5 6.5%
Container 5,000 7,999 TEU 151.7 79.3 99.5 25.5%
Container 8,000 11,999 TEU 200.0 95.6 124.8 30.6%
Container 12,000 14,499 TEU 231.7 107.8 173.9 61.3%
Container 14,500 TEU 100.0 183.2 83.2%
Oil
Tanker
80,000 119,999 dwt 49.2 31.5 43.0 36.4%
Oil
Tanker
120,000 199,999 dwt 65.4 39.4 55.0 39.6%
Oil
Tanker
200,000 dwt 103.2 65.2 70.6 8.3%
Exhibit 3-9 Daily Fuel Consumption at Sea 2007, 2012, and 2016
While bulkers show a decline in vessel fuel consumption at sea per day, tankers and
containerships show significant increases in daily at sea fuel consumption.
The overall impact on marine fuel consumption is a function of time at sea and changes in
fleet size. We used the average days at sea per year from 2012 as shown in the 3rd GHG
Study (the change in speed would impact the average days at sea but is not considered to be
significant).
The number of ships in each type and size category changed between 2012 and 2016 as
shown in Exhibit 3-10.
Supplemental Marine Fuel Availability Study
July 15, 2016
31
2012 2016
Ship Type Size, lower Size,
upper
# of Ships # of Ships
Bulk
Carrier
60,000 99,999 2,259 2,852
Bulk
Carrier
100,000 199,999 1,246 1,324
Bulk
Carrier
200,000 294 526
Container 3,000 4,999 968 838
Container 5,000 7,999 575 614
Container 8,000 11,999 331 542
Container 12,000 14,499 103 175
Container 14,500 8 64
Oil Tanker 80,000 119,999 917 921
Oil Tanker 120,000 199,999 473 503
Oil Tanker 200,000 601 657
Exhibit 3-10 Number of Ships by Type and Size Category 2012 and 2016
Based on the changing freight rates it is expected that vessel utilization has not remained
constant between 2012 and 2016. Therefore, it would be inappropriate to scale the fuel
consumption directly with the change in fleet size. We developed and used a “Trade
Limited” adjusted fleet size to scale fuel consumption from the vessel to the fleet level. The
“Trade Adjusted” fleet scaling was done to account for significant “idling” of bulkers and
containerships as well as the use of floating storage for holding crude oil at sea (the tanker
size categories are primarily crude oil tankers AFRAmax, SuezMax, and VLCCs).
Our approach was to examine the increase in fleet capacity (on a DWT basis) for each major
ship type as shown in Exhibit 3-11.
Supplemental Marine Fuel Availability Study
July 15, 2016
32
2012 2016 Change
Dry Bulk 458,973 576,099 25.5%
Crude Oil 357,556 379,897 6.2%
Containers 147,710 187,589 27.0%
Exhibit 3-11 DWT Capacity by Ship Type for the Size Categories shown previously, 2012 and 2016
We did account for the change in average ship size in each category (all ship counts and
parameter information derived from the IHSF database (SeaWeb) that was also used in the
3rd GHG Study (for the ship types and sizes examined the data was tested for consistency
and accuracy – no adjustments were needed).
The next step was to examine trade growth from 2012 to 2016. This was done on a
seaborne trade basis using tons of cargo carried (ton-mile data was not available) from
Clarksons’ Research Services (CRS) Shipping Review and Outlook Spring 2016 as shown in
Exhibit 3-12.
Trade
,mTons
2012 2016 Change
Dry Bulk 4,232 4,702 11.1%
Crude Oil 1,906 1,938 1.7%
Containers 1,463 1,762 20.4%
Exhibit 3-12 Waterborne Trade, 2012 and 2016 (estimated by CRS)
As can be seen between Exhibit 3-11 and Exhibit 3-12 the size of the fleet has increased
more than the trade volume has grown. We then developed “Trade Limited” vessel counts
to more accurately use in scaling changes in individual ship daily at sea fuel consumption to
fleet-wide fuel consumption. The “Trade Limited” fleet capacity is shown in Exhibit 3-13.
2012 Change 2016 Trade Limited
Dry Bulk 458,973 11.1% 509,946
Crude Oil 357,556 1.7% 363,559
Containers 147,710 20.4% 177,898
Exhibit 3-13 “Trade Limited”: adjusted Fleet Capacity, 2012 and 2016 (estimated by CRS)
Supplemental Marine Fuel Availability Study
July 15, 2016
33
The next step involves adjusting the Total Fleet to the “Trade Limited” Fleet vessel counts in
each size category (this adjustment was done reflecting actual ship numbers and the trend
to larger ships). This is done to develop an operating fleet with consistent 2012 basis and is
shown in Exhibit 3-14.
2012 2016 2016 2016
Ship Type Size,
lower
Size,
upper
# of
Ships
# of
Ships
Trade Limited
#
Adjusted
#
Bulk
Carrier
60,000 99,999 2,259 2,852 2,510 2,510
Bulk
Carrier
100,000 199,999 1,246 1,324 1,384 1,324
Bulk
Carrier
200,000 294 526 327 367
Container 3,000 4,999 968 838 1,166 838
Container 5,000 7,999 575 614 693 614
Container 8,000 11,999 331 542 399 453
Container 12,000 14,499 103 175 124 175
Container 14,500 8 64 10 64
Oil Tanker 80,000 119,999 917 921 932 921
Oil Tanker 120,000 199,999 473 503 481 481
Oil Tanker 200,000 601 657 611 635
Exhibit 3-14 “Trade Limited”: adjusted Fleet Size, 2012 and 2016
The process involved the following:
1. Identifying the actual ship count in April 2016 for each ship type and size category.
2. Identifying the number of ships in each category if we just increased the size of the
2012 ship count by the growth in cargo tons.
3. Adjusting the ship counts where the “Trade Limited” fleet was larger than the actual
fleet and then adjusting the ship count in specific categories to match Trade Limited
DWT capacity to Adjusted Fleet capacity (Bulkers >200,000 DWT, Containerships
between 8,000 and 11,999 TEUs, and Tankers over 200,000 DWT).
Supplemental Marine Fuel Availability Study
July 15, 2016
34
The change in fleet-wide fuel consumption (at sea only in thousands of tons per year) is
shown in Exhibit 3-15.
Ship Type Size, lower Size,
upper
Units 2012 2016 Change
Bulk
Carrier
60,000 99,999 dwt 12,198.6 13,031.2 832.6
Bulk
Carrier
100,000 199,999 dwt 10,591.0 10,992.1 401.1
Bulk
Carrier
200,000 dwt 3,234.0 4,016.0 782.0
Container 3,000 4,999 TEU 13,455.2 10,894.7 (2,560.5)
Container 5,000 7,999 TEU 11,212.5 14,418.6 3,206.1
Container 8,000 11,999 TEU 8,076.4 13,911.2 5,834.8
Container 12,000 14,499 TEU 2,441.1 7,789.8 5,348.7
Container 14,500 TEU 202.4 2,825.3 2,622.9
Oil Tanker 80,000 119,999 dwt 5,410.3 7,358.1 1,947.8
Oil Tanker 120,000 199,999 dwt 3,784.0 5,449.1 1,665.1
Oil Tanker 200,000 dwt 9,195.3 10,442.6 1,247.3
Total 79,800.8 101,128.7 21,327.9
Exhibit 3-15 “Trade Limited” Fleet-wide Fuel Consumption Change, 2012-2016
Overall, the change in ship speeds between 2012 and 2016 (in isolation) is calculated to
increase marine annual fuel consumption by 21.3 million tons per year. We did not include
all ship types and sizes in our analysis but rather examined the vessel types and sizes that
are the most likely to adjust speeds in service and were major fuel consumers (~35 percent
of total marine fuel consumption in 2012 was used by the ship types and size categories
selected). The 21.3 million tons per year represents a 7.1 percent increase in fuel
consumption from the 300.5 million tons per year 2012 baseline developed in the 3rd GHG
Study.
Supplemental Marine Fuel Availability Study
July 15, 2016
35
For marine demand development we adopted the following two scenarios for assessing
2020 marine fuel consumption:
2012 3rd GHG Study baseline adjusted to 2020 as done in the 3rd GHG Study (i.e., use
the 2020 3rd GHG Study average 2020 scenario).
Increase the first 3rd GHG Study baseline scenario marine fuel demand by 7.1% to
use a 2016 based speed allowance.
Using the Optimal Economic Speed model described previously (using 2016 fuel prices and
charter rates) showed that all ship types and sizes would be returning to Design CSR speeds.
2007 vessel speeds (actual) may be understated because of sea conditions. Sea conditions
were accounted for in the 2012 speed analysis done in the 3rd GHG Study. The optimal
speed (as determined using the Optimal Speed Model) and actual speeds are shown for
tankers and bulkers in Exhibit 3-16. The 2020 scenario is based on 2016 charter rates and an
assumed MGO price of $646 per ton (based on $80 Brent crude price using EnSys’ WORLD
Model).
Desig
n
2007 2007 2012 2012 2016 2016 2020
Ship
Type
Size, lower
Size,
upper
CSR,
Knots
Speed,
actual
Speed,
Model
Speed,
actual
Speed,
Model
Speed,
actual
Speed,
Model
Speed,
Model
Bulk
Carrier
60,000 99,999 15.3 13.0 15.3 11.9 11.5 11.7 15.1 10.6
Bulk
Carrier
100,000 199,999 15.3 12.8 15.3 11.7 11.8 11.6 15.3 10.8
Bulk
Carrier
200,000 15.7 11.5 12.2 11.9 15.7 11.4
Oil
Tanker
80,000 119,999 15.3 13.3 15.3 11.6 11.7 12.7 15.3 13.1
Oil
Tanker
120,000 199,999 16.0 13.7 16.0 11.7 12.2 12.9 16.0 13.6
Oil
Tanker
200,000 16.0 14.6 16.0 12.5 12.5 12.8 16.0 13.9
Exhibit 3-16 Actual and Predicted Optimal Speeds 2007, 2012, 2016, and 2020
The Optimal Economic Speed Model shows that at 2016 term charter rates and roughly
2012 fuel costs (MGO at $80 per barrel Brent equivalent) would cause bulkers to operate
slower than in 2012 and tankers would return to 2007 speeds.
Supplemental Marine Fuel Availability Study
July 15, 2016
36
However, it is recognized that increasing vessel speed has the same impact as increasing
vessel supply. Increasing vessel supply would impact freight rates and perhaps fuel prices.
Using the actual 2016 charter rates, fuel prices, and fleet capacity was considered to be
more conservative than developing a freight rate forecast (through an iterative process
examining speed and deliverability) for 2020 for use in the Optimal Economic Speed Model.
3.5 Scrubber Penetration by Year-End 2019
Scrubber penetration is one of the most critical of the “demand” side issues for determining
the amount of heavy fuel oil (HFO) marine bunkers (e.g., IF-380, IF-180, etc.) that will need
to be “switched” to marine distillate or other non-residual based fuel (e.g., LNG, methanol,
etc.) in order to comply with the 0.5% global sulphur cap. A vessel equipped with a marine
scrubber will be able to comply with the 0.5% sulphur cap while operating on residual based
fuels (e.g., 3.5% sulphur HFO) and, therefore, would not require the fuel to be “switched.”
We have developed an independent analysis of likely scrubber penetration by year-end
2019 as follows:
Developed and completed a new and independent survey of the members of the
Exhaust Gas Cleaning System Association (EGCSA) of marine scrubber installations
(the survey was developed and conducted by Navigistics with guarantees of
confidentiality of all individual responses - no EGCSA staff or members were shown
or provided data from any responses). Nine of the 14 manufacturing members of the
EGCSA responded to our survey (64 percent - members that have not completed a
marine scrubber installation were excluded from the response analysis). The non-
respondents were generally smaller scrubber manufactures with an estimated two
or three units installed. The respondents included the manufacturers/installers of
330 of the 346 identified marine scrubber installations or 95 percent. With the
assistance of EGCSA, website and news release information from the non-
respondents, and other sources we were able to develop an estimate of the
production/installation profile of the 16 marine scrubbers not included in direct
responses. We believe that our survey provides close to a 99% scrubber
identification rate. Of the 346 scrubber installations identified 238 were completed
by year-end 2015. The other 108 are in the process of being installed in 2016 or are
contracted for installations on newbuildings with deliveries in 2017 and 2018. We
believe the 2016-2018 data provide only “partial” year total orders (i.e., we do not
know what full year totals will be) and, therefore, are excluded from year-end totals.
As of mid-March 2016 90 vessels were being fitted with scrubbers (with expected
completion in 2016). 101 vessels were fitted with scrubbers in 2015. Note that all
reference to “fitted with scrubbers” and “number of scrubbers” used in this analysis
reflect the number of vessels fitted with scrubbers and not the number of scrubber
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units installed on vessels (some vessels use multiple scrubber units to handle the
exhaust from all engines/boilers). Therefore, a ship fitted with three scrubber
systems would be counted as one scrubber (equipped vessel). Survey respondents
advised both the number of ships equipped and the number of scrubber systems on
each ship.
The EGCSA members indicated that the uncertainty over the implementation date of
the global 0.5% global sulphur cap (2020 or 2025) has been a significant impediment
to sales. Shipowners expressed unwillingness to the scrubber manufacturers to
invest the approximate $3 to $8 million (varies with scrubber type and size) unless
required to by regulation. Recently the classification society, DNV-GL, announced a
“scrubber ready” notation for newbuildings. Knut Ørbeck-Nilssen, CEO at DNV GL
was quoted in a DNV-GL press release9 as follows:
“This new SCRUBBER READY class notation gives shipowners the flexibility to minimize their
initial investment when ordering a newbuilding, while at the same time having the
confidence that their vessels are already on the track to easy compliance with incoming
emissions regulations,”
This new DNV-GL class notation lends further credence to the notion that shipowners are
preparing for but not ordering scrubbers for complying with the global sulphur cap.
Remember also that ships are regularly bought and sold (i.e., there is an extensive second
hand market) and a shipowner may not expect to be the owner of a given ship in 2020 let
alone 2025 (further reducing their incentive to install a scrubber this far in advance of an
“uncertain” regulatory requirement). It is also unclear at this time whether the sale price of
an existing ship reflects an increased value if a scrubber is installed.
The EGCSA survey identified that 236 of the 346 scrubbers installed or on order (68%
through 31 December 2015) were for cruise ships, ferries, and RO-RO/Passenger
type vessels. Many of these vessels operate primarily in Emission Control Areas
(ECAs – current ECAs include the North Sea and Baltic in Europe and the North
America ECA around the United States and Canada plus Hawaii and the United States
Caribbean territories) that had a 0.1% sulphur cap as of 1 January 2015. This provides
insight into the scrubber penetration rate prior to a certain implementation date.
Our approach to calculating the likely 2020 scrubber penetration rate involved the following
analytical steps:
9 3 March 2016 see https://www.dnvgl.com/news/dnv-gl-scrubber-ready-a-step-ahead-of-tomorrow-s-regulations-58846.
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1. Conduct a survey of scrubber manufacturers to identify existing (and
underway) marine scrubber installations by type of ship and when placed in
service.
2. Assess scrubber economics to determine the vessel types and sizes that
would find scrubbers economically attractive. We included economic
questions in our scrubber survey and reached out to other sources (e.g., ship
owners for feedback on the installed cost of scrubbers). We also obtained
scrubber capital costs and operating costs from CE Delft (as presented at the
EGCSA’s annual meeting on 25 February 2016 that we also attended and used
to solicit support for our survey). The economic costs for scrubbers that we
developed were consistent with those presented by the CE Delft team and so
we are using similar scrubber capital and operating costs as CE Delft in this
analysis. We tested the scrubber economics at a range of price spreads
between IF-380 and marine distillates (e.g., MDO and MGO) both current and
projected to 2020 (based on an assumed $80 per barrel Brent crude oil price
in 2020 using preliminary analysis with EnSys’ WORLD model to predict
product price differentials).
3. Using a four year payback rule (capital costs divided by annual savings less
operating costs on a before tax basis – savings are taken as the differential
between MGO and IF-380 consumed) we identified which of the vessel types
and sizes would find scrubbers economically attractive (the vessel types and
sizes are the same as used in the IMO’s 3rd GHG Study - see Tables 12 and 13
on pages 56-57 of the 3rd GHG Study). We based our number of ships,
average engine size, and average annual fuel consumption for each ship type
and size category on the data for 2012 included in Table 14 of the IMO’s 3rd
GHG Study (see pages 59-60). We also eliminated vessels that were
considered unlikely to install scrubbers due to size, physical constraints,
current use of marine distillates, and operating patterns (e.g., tug boats,
yachts, fishing boats, offshore supply vessels, etc.). This provided an estimate
of the population of ships that potentially would find scrubbers as an
economically attractive compliance option.
4. We then used linear regression and the “S-Shaped” technology introduction
curve to project, based on actual installations through 2015, what the
installed scrubber rate would likely be at the end of 2019 (based on current
available information). We did this analysis from the following three
perspectives in order to gain insight into the “regulatory uncertainty” issue
facing scrubber sales:
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I. Whole fleet and regulatory perspective with an assumed global
sulphur cap of 0.5% commencing 1 January 2020 with no
consideration of ECA impacts (for vessel types and sizes with a four-
year or less payback). Total 2012 vessel population (potential
scrubber installations) of 23,892.
II. ECA only (North Sea and Baltic10) perspective for Ferry, Cruise (Global
operators), and RO-Pax vessels only with a 1 January 2015 sulphur cap
of 0.1% (for vessel types and sizes with a four-year or less payback).
Total 2012 vessel population (potential scrubber installations) of 533.
III. World Fleet ex ECA with a 1 January 2020 global sulphur cap of 0.5%
(for vessel types and sizes with a four-year or less payback) excluding
the 533 vessels in the Europe ECA population. Total 2012 vessel
population (potential scrubber installations) of 23,359.
5. As a next step, we compared the required scrubber installation rate with the
scrubber manufacturing capacity provided by the respondents to our EGCSA
survey. Several respondents pointed out that scrubber manufacturing
capacity was flexible and could be “ramped-up” if demand surfaced through
sub-contracting component manufacturing (e.g., pumps and valves). We are
also aware that manufacturers of scrubbers for land-based facilities are
preparing to enter the marine market with potentially large manufacturing
capacity (in comparison with existing marine scrubber manufacturers).
Based on the analytical steps just described we arrived at a “likely” scrubber penetration
rate in the 2020 to 2025 period.
EGCSA Survey Results
The EGCSA Survey results were reported in part previously in this report. The overall results
by year of installation are shown in Figure 3-17.
10 In this section of our report all references to ECA only and ex-ECA relate to the North Sea and Baltic ECAs and do not consider the North American ECA as explained previously (e.g., the number of exemptions / extensions granted by the United States Coast Guard and EPA combined with the “non-availability” exemption make the North American ECA a less “regulatory certain” sulphur cap.
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Whole Fleet ECA Only Ex ECA only
Year \ Population, # Economic Ships 23,892 533 23,359
2010 1 1
2011 4 1 4
2012 12 4 8
2013 28 19 9
2014 89 77 12
2015 101 68 33
Total Scrubbers Installed (Cumulative) 235 169 67
Exhibit 3-17 Actual and Scrubber Installations by Year (2010 through 2015 – not cumulative) and Ship Populations (as of 2012)
The initial year is shown in the above Exhibit as the year shown with 1 installation (2010 for
the whole fleet, 2011 for the ECA only fleet, and 2010 for the Ex-ECA fleet). Note that
scrubbers installed in the 2005-2009 period (only a few) were considered “test” installations
that likely had special arrangements between the scrubber manufacturer and the shipowner
and, therefore are excluded from our analysis.
Scrubber Economics
CE Delft developed the costs of scrubbers (hybrid retrofit) as follows (this cost equation is
consistent with our findings):
Capital Costs = $2.9 million + $58 x Installed Power (in kWs)
Operating Costs (annual) = $1.3 thousand + $0.6 per kW of Installed Power + 0.5% fuel cost
Using these costs and a fuel differential of $235 per ton (based on $80 per barrel Brent
crude oil) shows the following ships (by type and size per IMO 3rd GHG Study categories) to
have a payback period of four years or less (payback period is defined as Capital Costs
divided by Annual Fuel differential savings less annual operating costs – all before tax) as
shown in Figure 3-18.
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Ship Type Size,
lower
Size,
upper Units
Number
(IHSF)
Payback,
Years
Econo
mic
1=yes
# ships IF-380
Consumed
Bulk
Carrier 0 9,999 dwt 1,216 13.4
0 0
Bulk
Carrier 10,000 34,999 dwt 2,317 4.1
0 0
Bulk
Carrier 35,000 59,999 dwt 3,065 3.2 1 3,065 14,712
Bulk
Carrier 60,000 99,999 dwt 2,259 2.3 1 2,259 15,361
Bulk
Carrier 100,000 199,999 dwt 1,246 1.8 1 1,246 12,211
Bulk
Carrier 200,000
dwt 294 1.5 1 294 3,616
Chemical
Tanker 0 4,999 dwt 1,502 9.3
0 0
Chemical
Tanker 5,000 9,999 dwt 922 6.9
0 0
Chemical
Tanker 10,000 19,999 dwt 1,039 3.5 1 1,039 4,156
Chemical
Tanker 20,000
dwt 1,472 2.2 1 1,472 10,010
Container 0 999 TEU 1,126 3.7 1 1,126 4,391
Container 1,000 1,999 TEU 1,306 2.1 1 1,306 10,187
Container 2,000 2,999 TEU 715 1.6 1 715 8,294
Container 3,000 4,999 TEU 968 1.2 1 968 17,811
Container 5,000 7,999 TEU 575 1.1 1 575 13,915
Container 8,000 11,999 TEU 331 1.0 1 331 9,798
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Container 12,000 14,499 TEU 103 1.2 1 103 3,028
Container 14,500
TEU 8 1.1 1 8 260
General
Cargo 0 4,999 dwt 11,620 27.2
0 0
General
Cargo 5,000 9,999 dwt 2,894 9.4
0 0
General
Cargo 10,000
dwt 1,972 3.1 1 1,972 9,268
Liquified
Gas
Tanker
0 49,999 cbm 1,104 4.9
0 0
Liquified
Gas
Tanker
50,000 199,999 cbm 463 0.8 1 463 10,464
Liquified
Gas
Tanker
200,000
cbm 45 0.6 1 45 1,733
Oil
Tanker 0 4,999 dwt 3,500 16.6
0 0
Oil
Tanker 5,000 9,999 dwt 664 9.9
0 0
Oil
Tanker 10,000 19,999 dwt 190 7.2
0 0
Oil
Tanker 20,000 59,999 dwt 659 2.4 1 659 4,152
Oil
Tanker 60,000 79,999 dwt 391 1.9 1 391 3,245
Oil
Tanker 80,000 119,999 dwt 917 1.8 1 917 8,528
Oil
Tanker 120,000 199,999 dwt 473 1.5 1 473 5,723
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Oil
Tanker 200,000
dwt 601 1.0 1 601 12,020
Other
Liquids
Tankers
0
dwt 149 15.9
0 0
Ferry-pax
only 0 1,999 gt 3,081 17.2
0 0
Ferry-pax
only 2,000
gt 71 3.0 1 71 348
Cruise 0 1,999 gt 198 16.2
0 0
Cruise 2,000 9,999 gt 69 8.5
0 0
Cruise 10,000 59,999 gt 115 0.9 1 115 2,266
Cruise 60,000 99,999 gt 87 0.5 1 87 5,011
Cruise 100,000
gt 51 0.4 1 51 3,733
Ferry -
Ro-pax 0 1,999 gt 1,669 22.9
0 0
Ferry -
Ro-pax 2,000
gt 1,198 2.3 1 1,198 8,865
Regrigera
ted Bulk 0
dwt 1,090 2.4 1 1,090 6,213
RO-RO 0 4,999 dwt 1,330 9.4
0 0
RO-RO 5,000
dwt 415 1.5 1 415 4,482
Vehicle 0 3,999 vehicl
e 279 2.1 1 279 2,037
Vehicle 4,000
vehicl
e 558 1.6 1 558 5,915
Exhibit 3-18 Actual Scrubber Economics, Ships in Target Population and Fuel Consumed
Based on our scrubber economic analysis (at a fuel price differential of $235 per ton LS MGO
v. HS IF-380), 23,892 ships of a total population of 107,749 (based on 2012 fleet per IMO’s
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3rd GHG Study) would be candidates for scrubbers. These 23,892 ships consumed 86% of the
global marine HFO consumption in 2012. We did not assess the suitability for retrofit for the
vessel types that were determined to be economically viable. Henceforth, we only perform
analysis and refer to penetration rates as based on the economically viable population
identified in Exhibit 3-18.
There are numerous barriers that can hinder the adoption of economically attractive marine
technology. These barriers were examined in depth in a 2012 study for the European
Commission entitled “Analysis of market barriers to cost effective GHG emission reductions
in the maritime sector” by Maddox Consulting (Navigistics was the “technical” lead on the
study). We have addressed “regulatory uncertainty” but numerous other barriers exist
including the “principle-agent” barrier (e.g., under a term charter the shipowner does not
pay for fuel and, therefore, would not benefit directly from installing a scrubber as seen in
the United States Jones Act’s product tanker fleet operating in the North America ECA).
Other barriers to scrubber adoptions would also include the economic condition of the dry
bulk fleet with its current historically low freight rates (i.e., at today’s freight rates dry bulk
vessels do not provide the cash flow needed to cover the capital costs of a scrubber).
Concerns regarding scrubber “wash-water” disposal were handled by only using “hybrid”
scrubbers in our economic analysis. A “hybrid” scrubber can operate in open loop mode
away from “no discharge” or more restrictive discharge areas (in open loop mode scrubber
wash water is discharged directly overboard) and in closed loop mode in other areas (in
closed loop mode wash water is retained onboard for later discharge).
The “S-Curve” Model
We assessed the scrubber penetration rates (for vessel types and sizes with a four-year or
less payback) using the S-curve model (with 60% maximum penetration in each case).
Scrubbers are at an early stage of the market introduction period. Projecting a market
penetration is difficult at such an early stage. The S-Curve approach used is consistent with
the development of a 2020 mid-level MGO/MDO scenario.
An S-Curve has the format as follows:
Where: Y = Market share in a given year
ϒ = Maximum market share, taken as 60% consistent with low 3rd GHG HFO fuel mix
X = Year (Start 2010 is start year after trial period)
α = Independent variable, intercept
β = independent variable
Y =Υ
(1 +eα+βX)
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Where α and β are found by linear regression.
The “whole fleet” I sample has a total ship population of 23,892. The regression results yield
an adjusted R squared of 0.975 with:
α = 10.32942
β = -1.09267
The resulting S-Curve is shown below.
Exhibit 3-19 Whole Fleet Scrubber Market Penetration S-Curve
Source: Navigistics analysis
Similar “S-Curves” were developed for the ECA-only and Whole Fleet less ECA populations.
Year-end Penetration,
Actual, %
Penetration,
Predicted, %
Predicted Ships Pred. Ships
per Year
Actual, Ships
per Year
2010 0.004% 0.006% 1 1 1
2011 0.021% 0.017% 4 3 4
2012 0.071% 0.052% 12 8 12
0.000%
10.000%
20.000%
30.000%
40.000%
50.000%
60.000%
70.000%
Penetration
Predicted
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2013 0.188% 0.155% 37 25 28
2014 0.561% 0.459% 110 73 89
2015 0.984% 1.347% 322 212 101
2016 3.847% 919 597
2017 10.180% 2,432 1,513
2018 22.718% 5,428 2,996
2019 38.702% 9,247 3,819
Exhibit 3-20 Whole Fleet Predicted Scrubber Penetration, cumulative
Note that in the Exhibit 3-20 the Penetration %s shown are all based on a 23,892 ship fleet
population for each year shown.
The key value in this Exhibit is the cumulative 38.7% by year end 2019 (i.e., the ships that
are predicted to be fitted with scrubbers in time for the potential 1 January 2020 global
0.5% sulphur cap). The 38.7% penetration rate equates to 33% of global HFO consumption
(2012 basis – unadjusted for scrubber manufacturing capacity).
However, the prior analysis does not take into account the regulatory uncertainty related to
the 2020/2025 issue. Based on the interviews with scrubber manufacturers, regulatory
uncertainty has been a major barrier to scrubber sales. Therefore, it is important to assess
the potential impact of regulatory uncertainty on scrubber penetration.
Our approach to examining scrubber penetration with less regulatory “uncertainty” involves
examining the penetration of scrubbers in the various ECAs. We have broadly grouped the
ECAs into North American (waters off the United States and Canada) and European (North
Sea and Baltic). Our approach to the analysis varies by ECA grouping as follows:
North America – The United States Coast Guard and EPA have granted numerous
exemptions/extensions to compliance with the 0.1% sulphur restriction to 1 January 2020.
These exemptions/extensions include all steam-powered vessels (there are numerous steam
powered tankers, containerships, bulkers, and others operating in the United States Jones
Act cabotage trade). Also vessels with compliance plans for installing scrubbers or
converting to LNG were granted exemptions/extensions. As of this date there are two
bulkers operating on the Great Lakes with scrubbers and three containerships in the Alaskan
trade are adding scrubbers. There are six containerships/ RO-ROs either recently delivered
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or under construction that are or will be LNG powered. In the coastal tanker trade all vessels
are complying (if not exempted to 2020) by using LSMDO. All of the Jones Act tankers are on
term charters under which the charterers pay for the fuel directly so there is no incentive at
this time to fit scrubbers or convert to LNG.
In Canada a “Fleet Averaging” system has been developed for the Great Lakes and St.
Lawrence Seaway system that allows a vessel operator to establish a plan for meeting the
ECA sulphur restriction through a fleet wide average system that is available through 31
December 2020. The “fleet averaging” system allows a 10% sulphur credit if a vessel was
delivered after 31 December 2008 and a 20% credit if the vessel was delivered after 31 July
2012 and has more than 5 kW of installed power. After 31 December 2020 all Canadian
vessels must comply with the ECA sulphur restriction. It is believed that Canada’s “fleet
averaging” system was developed as a competitive response to the United States
exemptions/extensions granted on the Great Lakes.
Because of the exemptions/extensions granted by the United States authorities and
Canada’s “fleet averaging” system, we do not view the North American ECA as operating
under regulatory “certainty.”
Europe – European ferry operators have been “early adopters” of scrubber technology. We
do believe that the North Sea and Baltic ferry and RO-RO pax system has been operating
with more regulatory certainty regarding the 0.1% sulphur restriction imposed on 1 January
2015. As stated previously, Ferry / Cruise / RO-RO Pax vessels accounted for 169 of the 235
vessels fitted with exhaust gas scrubbers (through year end 2015 per the EGCSA survey).
Based on IHS Sea-Web’s vessel database we identified a total population of
Ferry/Cruise/RO-RO pax of 565 vessels that would fall into the “potential” for Europe ECA
compliance (or global cruise ship operator). The “potential” rule was based on economics
(over 2,000 GT) with a flag state bordering the North Sea or Baltic or a cruise ship registered
in a North Sea or Baltic country or using an open registry (e.g., Bahamas). The actual
scrubber penetration at year-end 2014 was 18%. By year end 2015 actual scrubber
penetration was 30% (the S-Curve model “predicted” a 34% scrubber penetration).
As found in our EGCSA survey, 101 of the 134 scrubber installations through year-end 2014
(75% - 134 is the sum of 2010-2014 in Exhibit 3-17) appear to be driven by complying with
the 1 January 2015 ECA sulphur cap of 0.1%. These installations were done with more
regulatory certainty (the 1 January 2015 ECA requirement for the North Sea and Baltic was
adopted by the IMO in October 2008 as part of the amendments to MARPOL Annex VI and,
therefore, were known throughout the period in question) than currently exists for the 0.5%
global sulphur cap that will become effective on either 1 January 2020 or 1 January 2025.
Supplemental Marine Fuel Availability Study
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Therefore two cases can be made regarding the scrubber installations identified as being
driven by the North Sea and Baltic ECA requirements as follows:
The 101 scrubber installations done to comply with the 1 January 2015 ECA
requirement should not be included in predicting scrubber penetrations for a still
“unknown” 0.5% Global sulphur cap compliance date (the “Global ex-ECA scenario”).
and/or
The installation of scrubbers in anticipation of the 1 January 2015 ECA sulphur gap
could serve as a “proxy” for scrubber penetration for the Global sulphur cap given an
assumed “certainty” date (when MEPC will decide) for the 2020/2025 issue (the
“ECA proxy scenario”).
Both of these are examined in the following paragraphs.
The Global ex ECA scenario predicted scrubber penetration rate (using the S-Curve model
with 60% max penetration) is shown in Figure 3-21 (the cumulative column shows actual
installations through 2015 then adds predicted installations each year in number of ships - %
penetration based on 2012 population of 23,359 ships).
Actual/year Predicted/year Cumulative Penetration %
2010 1 2 1 0.0%
2011 4 2 5 0.0%
2012 8 4 13 0.1%
2013 9 10 22 0.1%
2014 12 21 34 0.1%
2015 33 46 67 0.3%
2016 100 167 0.7%
2017 213 380 1.6%
2018 443 823 3.5%
2019 877 1,700 7.3%
Exhibit 3-21 Whole Fleet ex ECA Predicted Scrubber Penetration, , cumulative
The Global ex-ECA scenario predicts that 7.3% of the 2012 fleet will be equipped with scrubbers by year-end 2019. This 7.3% of the Global ex-ECA fleet is estimated to consume 6.2% of Global ex-ECA HFO consumed. To this total we must add the ECA total projected to
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be 56% of ECA HFO consumption (estimated at 5.0% of total HFO in 2012 remember Europe ECAs only). This yields a Global total HFO consumed by ships equipped with scrubbers at year-end 2019 of 8.7% of total marine HFO consumption (2012 consumption basis Global ex-ECA plus ECA).
The ECA Proxy scenario predicted scrubber penetration rate (using the S-Curve model with max 60% penetration) is shown in Figure 3-22 (the cumulative column shows actual installations through 2015 then adds predicted installations each year in number of ships - % penetration based on 2012 population of 533 ships).
Actual/year Predicted/year Cumulative Penetration %
2011 1 1 1 0.2%
2012 4 4 5 0.9%
2013 19 17 24 4.5%
2014 77 58 101 18.9%
2015 68 113 169 31.7%
2016 87 256 48.0%
2017 31 287 53.8%
2018 8 294 55.2%
2019 2 296 55.6%
Exhibit 3-22 ECA Only Predicted Scrubber Penetration, cumulative
Note: The penetration % should become asymptotic to 60%. However, the use
of “actuals” combined with “predicted” is less as 2015 (after the regulation
came into force) the 68 “actual” installations was less than the “predicted” 113
scrubber installations. The “predicted” scrubber installations not adjusted for
“actual” installations is asymptotic to 60%.
The ECA proxy scenario is more complicated as we must account for the following two factors:
When did the ECA “regulatory certainty” become accepted in the marine industry (by shipowners, the buyers of scrubbers).
When did shipowners recognize scrubbers as an acceptable compliance option.
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We’ve adopted a simple rule that both conditions are met when scrubber penetration installations reached approximately 1% of the total applicable population. For the ECA proxy scenario this occurred in 2012 as shown in Figure 3-23 when scrubber penetration reached 0.9%.
The ex-ECA scenario reaches 0.7% penetration in 2016 but does not cross the 1% threshold until 2017. Timing for implementation of the Global 0.5% sulphur cap will be finalized at either MEPC 70 (Fall 2016) else at MEPC 71 (Spring 2017). Therefore, we used 2017 as our base year for “regulatory certainty” for the 2020 (assumed) Global sulphur cap. The ECA proxy scenario shows that scrubber penetration for the ex-ECA fleet would be as shown in Figure 3-23 (with 2017 as the base year).
Ex ECA only, % ECA Proxy, %
2016 0.71%
2017 1.63% 0.9%
2018 3.52% 4.5%
2019 7.28% 18.9%
Exhibit 3-23 ECA Proxy Predicted Scrubber Penetration, cumulative
The ECA proxy scenario is below the Global ex ECA scenario for all installations before 2018. Therefore, to develop our ECA proxy scenario we need to adjust the scrubbers installed by the pre-2018 installations (actual through 2015 and predicted Global ex ECA in 2016 and 2017). This adjustment is shown in Figure 3-24.
Global ex ECA
ECA proxy
ex ECA /year
ECA Proxy/year
Higher of
Cumulative Penetration, %
2010 1 1 1 1 0.0%
2011 5 4 4 5 0.0%
2012 13 8 8 13 0.1%
2013 22 9 9 22 0.1%
2014 34 12 12 34 0.1%
2015 67 33 33 67 0.3%
2016 167 100 100 167 0.7%
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2017 380 219 213 219 219 386 1.7%
2018 823 1,052 443 833 833 1,219 5.2%
2019 1,700 4,426 877 3,375 3,375 4,593 19.7%
Exhibit 3-24 ECA Proxy Predicted Scrubber Penetration Adjusted, cumulative
The adjusted ECA proxy scenario shows that 19.7% of the ex-ECA fleet is predicted to be equipped with scrubbers by year-end 2019. This equates to 15.9% of the HFO consumed (2012 basis). To this we must add the ECA scrubber equipped ship HFO consumption predicted for year-end 2019, this yields a Global total HFO consumption (on ships equipped with scrubbers of 18.7%).
This equates to 48.2 million tons per year in 2020 or 0.9 mb/d of HFO consumption in 2020.
We believe that the ECA proxy adjusted scenario is the most reasonable scenario to use for scrubber penetration and HFO fuel consumption in 2020.
3.6 Marine Fuel Demand and “Switch” Volumes in 2020
To calculate our central marine fuel demand scenarios for 2020, we energy balanced with
constant energy between cases (scrubber energy use excluded so as not to impact “switch”
volumes). The energy balanced (final) Navigistics 2020 marine fuel demand and “switch”
volumes are shown in Exhibit 3-25.
Exhibit 3-25 Navigistics 2020 Marine Fuel Demand (Energy balanced)
Exhibit 3-26 summarizes marine fuel demands by type and total for the 2020 Base Case (no
Global Fuel) and for the three Global Fuel scenarios. Final volumes used in WORLD cases
were arrived at by applying the 90:10 (High MDO) and 50:50 (Low MDO) to set the
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proportions of Global MDO versus Global heavier fuels allowed to meet total Global Fuel
demand.
Exhibit 3-26 2020 Marine Fuel Demand Cases
Millions b/d 2020:no 2020:yes2020:Effect of
global rule
2020 2020 2020
Scenario Global 0.5% fuel no yes Effect of 0.5
NavLow HFO 4.11 0.85 (3.26)
NavLow MDO 1.75 5.14 3.39
NavLow ECA 0.57 0.57
NavLow LNG 0.44 0.44 0.00
NavLow Total fuel 6.31 6.43 0.13
NavLow Total HFO+MDO 5.86 5.99 0.13
NavLow Scrubber % of total fuel 13.3%
n.b. Scrubber % of total fuel mmtpa 15%
NavMod HFO 4.49 0.85 (3.63)
NavMod MDO 1.75 5.52 3.77
NavMod ECA 0.57 0.57
NavMod LNG 0.44 0.44 0.00
NavMod Total fuel 6.68 6.82 0.14
NavMod Total HFO+MDO 6.24 6.38 0.14
NavMod Scrubber % of total fuel mb/d 12.5%
n.b. Scrubber % of total fuel mmtpa 14%
NavHi HFO 4.86 0.85 (4.01)
NavHi MDO 1.75 5.92 4.17
NavHi ECA 0.57 0.57
NavHi LNG 0.44 0.44 0.00
NavHi Total fuel 7.05 7.21 0.16
NavHi Total HFO+MDO 6.61 6.77 0.16
NavHi Scrubber % of total fuel 11.8%
n.b. Scrubber % of total fuel mmtpa 13%
2020 Base Case
2020 Global Fuel Cases
Summary of Marine Fuels Demand Cases
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Without the “speed-up” impact, applying our analysis of scrubber penetration to the IMO’s
3rd GHG Study original outlook (at lower LNG and scrubber penetration) leads to an energy
balanced “switch” volume from HFO to MDO of 3.4 mb/d (175 mtpa). Including the impact
we have assessed for “speed-up” adds 0.4 mb/d to the “switch” volume’ leading to our
central estimate of 3.8 mb/d (195 mtpa). Our high case equated to 4.2 mb/d (215 mtpa)
switch volume.
For reference purposes, the 3rd GHG Study (as produced with no changes) has a “switch”
volume of 0.44 mb/d, (approx. 22 mtpa), reflecting the high scrubber penetration and LNG
use assumed in that study.
Our central estimate for a 3.8 mb/d (195 mtpa) switch volume to marine distillate equates
to a reduction in 2020 marine HFO demand from 253 to 48 mtpa (per Exhibit 3-25). Since
2020 inland HFO demand is projected at 210 mtpa (3.7 mb/d), the effect of the Global
Sulphur Cap is thus to drop total 2020 HFO demand by some 44%.
3.6.1 Scrubber Energy Use
An exhaust gas cleaning system requires energy to operate the pumps and scrubbing units
to clean the SOx from the exhaust gas of a ship. This energy use is estimated at 1% of the
power used by the engine(s) that are installed on the ship. The 1% is electrical energy that is
either generated by auxiliary diesel generator sets (burning either MDO/MGO or HFO), shaft
generators (using main engine power, HFO), or in a few cases waste heat generators (few
installations to date – using the heat in the exhaust to generate electrical power). For our
analysis, we do not include increased energy consumption for exhaust gas cleaning in our
analysis of refinery switch volume (other than in assessing scrubber economics) as it is a
small amount (at 48 million tons/year HFO fuel consumption on ships equipped with
scrubbers this would equal 0.48 million tons/year or 0.0083 mb/d of additional switch
volume if all ships fitted with scrubbers powered them with auxiliary diesel generators
running on MDO/MGO).
The 0.008 mb/d maximum impact on the 2020 medium case switch volume of 3.8 mb/d is
considered very small in the overall “switch” volume analysis (a 0.2% maximum impact).
Given the level of uncertainty with how the electricity to power the exhaust gas cleaning
system is generated onboard and the fact that this can be “covered” by less than a 0.1 knot
reduction in vessel speed, we have opted to handle scrubber energy consumption as within
the error tolerance of the overall refining analysis and not explicitly increase the overall
switch volume. We consider this to be a “conservative” assumption by not increasing the
switch volume.
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3.6.2 EU and China Territorial Adoption of 0.5% max Sulphur Marine
Fuel Zones outside of ECAs
The adoption by the EU and China of specific territorial water in which ships can only use
fuel with a maximum of 0.5% sulphur (unless equipped with a scrubber) is handled within
the total marine fuel switch cases. The 0.5% maximum sulphur in marine fuel in 2020 would
apply to those waters under the IMO’s Annex VI regulation (if adopted in 2020). Therefore,
these territorial (not IMO-adopted ECA) marine fuel sulphur restrictions are fully accounted
for in our analysis of the 2020 marine fuel switch volumes.
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4 WORLD Modelling Cases & Premises
4.1 Cases Run
Exhibit 4-1 sets out the WORLD Model cases run. The 2015 case served to establish a basis
for stepping forward to the 2020 Base Case (No Global Fuel). Then Cases 3 through 7
comprise a range of Global Fuel scenarios. All of Cases 3 through 7 were run as ‘deltas’ off
the 2020 Base Case, i.e. what was changed was the marine fuels total demand, switch
volume and/or the percent required to be met with MDO versus alternative compliant fuel.
MDO was taken to be DMB fuel11. The allowed alternative compliant fuels were 0.5%
sulphur but heavier than MDO (DMB), anything from a light to a heavy IFO but always within
ISO 8217 specifications for RM grades. These fuels were introduced into the analysis since
(a) fuels offered under the 0.1% sulphur ECA standard have included grades heavier than
marine distillate and (b) because prior WORLD analyses of 2020 conducted in 2015 showed
that there is a refining logic and incentive to blending heavier 0.5% marine fuels. (This
stems from the fact that a nominally 0.5% sulphur distillate fuel will have quality ‘giveaway’
on viscosity, carbon residue and other parameters which can be taken advantage of to blend
in other blendstocks that are poorer quality - and lower cost - while still staying within ISO
8217 RM grade specifications. There is nothing in the IMO MARPOL Annex VI regulation
which states that the Global Fuel must be a particular grade.)
In short, it appears unrealistic to assume that compliance would be entirely via use of
marine distillate. What the split may be between marine distillate and heavier grades is an
unknown. Consequently we took the path of assessing two different levels of potential
heavier fuel use. Cases 3 through 5 assume a conservative, low, use of heavier fuels. We
opted for 10% since a scenario with nil heavier marine fuels seems unlikely. The low
penetration level can be taken to reflect either an initial situation, early in 2020, where the
refining and blending industry reacts by supplying predominantly previously proven marine
(distillate) fuels and/or a somewhat longer term situation where technical or other issues
relating to heavier fuel grades have continued to limit their acceptance.
Cases 5 through 7 assume a higher level of heavy fuels usage. Again the level here is open
to question. Refining and blending economics would arguably drive the industry toward a
11 We are aware from previous work that the majority of marine distillate currently sold is at the higher DMA quality. Our cases were on the basis that all ‘traditional’ MDO would be to DMA quality – with maximum Sulphur cut to 0.5% nominal in 2020 in the Global Fuel cases. We were also on the basis that all 0.1% sulphur ECA fuel would be to DMA standard. This possibly ignores the heavier ECA fuels that have been made available but also ignores that we understand some ECA fuel may be sold at qualities more in line with on-road diesel, i.e. we believe these two factors roughly offset each other.
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longer term predominance of heavier fuels (as is the case today where IFO predominates
over marine diesel use). As the case results show, this would bring down the costs of
marine and other fuels versus a predominant use of MDO. For the purposes of this analysis,
with its focus on the year 2020, we opted to be relatively conservative and assumed that,
during 2020, acceptance and penetration of heavier 0.5% sulphur marine fuel formulations
could reach around half of the total 0.5% marine fuel supplied. (Were cases to be run
showing higher penetrations of heavier grades they would show further reductions in supply
costs versus the 50% level but – as stated – we believe it is questionable whether say a 75-
80% level would be realistic in 2020 and have therefore, to date, not modelled such a
penetration level.)
WORLD Model Cases
Case No.
Year Case Description Global Fuel
Switch Volume mb/d
Switch Volume
mtpa
% MDO in Global Fuel
0 2015 Base / Calibration Case No 0 0 0%
1 2020 Base Case No 0 0 0%
2 2020 Low Switch – High MDO Yes 3.4 175 90%
3 2020 Mid Switch – High MDO Yes 3.8 195 90%
4 2020 High Switch – High MDO Yes 4.2 215 90%
5 2020 Low Switch – Low MDO Yes 3.4 175 50%
6 2020 Mid Switch – Low MDO Yes 3.8 195 50%
7 2020 High Switch – Low MDO Yes 4.2 215 50%
Notes:
Strictly the 2020 Base Case should contain small volumes of 0.5% marine fuel to account for the three DECA’s (Domestic Emissions Control Areas) being introduced in China and for the 0.5% fuel volumes required by the EU for use within its Exclusive Economic Zone (EEZ) waters from 2020 whether or not the IMO Global Sulphur Cap is introduced then or delayed until 2025. EnSys and Navigistics did not attempt to estimate these volumes since the main focus was on the 2020 Global Fuel cases which necessarily included these volumes.
Exhibit 4-1 Summary of WORLD Model Cases
The overall goal of the cases run was to (a) calibrate the WORLD Model using 2015 then (b)
establish a 2020 No Global Fuel Base Case followed by (c) cases evaluating a range of Global
Fuel scenarios. Using this approach, it was possible to assess the incremental effects on
supply and world oil refining and markets of switching to the Global Fuel at different levels
of uptake (switch volume) and of assumed fuel mix.
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4.2 Global 2020 Supply-Demand Outlook
4.2.1 The Need for a Global Outlook
Marine fuels demands comprise part of the total worldwide demand for respectively middle
distillate (gasoil and diesel) and heavy (or residual) fuel oils. In turn, those are elements of
the total global “liquids” market which comprises the light products, LPG’s, naphtha and
gasoline, the middle distillates, jet fuel/kerosene and gasoil/diesel, and the “other products”
which comprise an array of minor fuels from propylene, aromatics and other specialty
streams to lubricating oils, asphalt and the refinery by-products petroleum coke and
sulphur. Since crude oils contain varying percentages of the lightest LPG type components
through to the heaviest residual fractions, and since refining is a co-product processing
industry, changes in one segment of the refined products market in terms of demand level
or quality impact across the total market as do changes in the quality of crude oils available
worldwide and the volume and mix of natural gas liquids, biofuels, gas-to-liquids, coal-to-
liquids and other “non-crude” supply streams.
Thus to assess what the product supply/demand outlook could look like in 2020 for marine
fuels, with a potential large swing from IFO to marine distillate or other fuel compliant with
the 0.5% sulphur standard, it is first necessary to understand the base outlook for the global
supply and refining system across all products. Various agencies led by the International
Energy Agency (IEA), the United States Energy Information Administration (EIA) and the
OPEC Secretariat generate such projections on a regular basis. EnSys is thoroughly familiar
with these outlooks. We spend a significant part of our time employing them as “top down”
scenarios to then examine, using our WORLD Model, how the global industry is likely to
react and operate in terms of refinery throughputs, capacity additions, crude and products
trade and associated economics.
4.2.2 Comparison of Recent Global Outlooks
To set a basis for the 2020 WORLD Modelling, we examined recent studies from these
agencies. These are summarized in Exhibits 4-2 and 4-3.
In the first quarter of 2016, when we were reviewing which global outlook to use as the
basis for the WORLD Model cases, the EIA had not released their 2016 IEO or AEO. The
available outlooks produced in 2015 spanned from a projected low of 97.4 mb/d for 2020
global demand (OPEC 2015 World Oil Outlook) to a high of 100.2 mb/d (IEA 2015 World
Energy Outlook Current Policies case). The then sole available outlook produced in 2016,
the IEA February 2016 Medium Term Oil Market Report had a higher projection, at 100.5
mb/d, than any of the outlooks produced in 2015. At 98.9 mb/d for 2020, the IEA WEO
New Policies case, which is effectively the IEA’s reference outlook, equated exactly to the
average of all the 2015 outlooks.
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It goes without saying that oil markets are currently in a state of major flux and uncertainty
and that this in turn heightens the uncertainty underlying any projection of supply, demand
and price to 2020. It is noteworthy that, even though the IEA’s 2015 WEO doubtless more
fully takes account of the crude price drop than did the 2014 WEO, the 2015 WEO Current
Policies and New Policies projections of 2020 global demand are both down versus the 2014
projections. We believe this relates to projected reductions in global economic growth in
the period to 2020 (that offset the effects of lower oil prices in promoting demand). That
said, since the 2015 WEO New Policies case constituted IEA’s ‘reference case’ and since it
comprised – in first quarter 2016 - a relatively central outlook, we used this for our 2020
global supply/demand/oil price ‘top down’ projection. Once we had inserted our marine
fuels demand outlook, 2020 global demand adjusted up slightly to 99.2 mb/d from the
original WEO 98.9 mb/d.)
As the updated Exhibit 4-2 shows, the just-released EIA outlooks continue the trend toward
upward revisions in the 2020 demand outlook. At 100.3 mb/d, the IEO is very close to the
IEA MTOMR. The 2016 AEO Early Release contains the highest outlook to date at 101.5
mb/d and is a full 3.1 mb/d above the projection for 2020 contained in the AEO EIA released
a year ago. In addition, in a May 16th Wall Street Journal article, Daniel Yergin stated that
“by 2020 world oil consumption could be 5.7 million barrels per day higher than this year’s
95.6 million”. This would appear to refer to a current IHS forecast for 2020, one that would
total 101.3 mb/d and again very close to the 2016 AEO figure of 101.5 mb/d.
As discussed further in Section 5.2.2.3, we recognize that latest available outlooks are
veering toward higher demand levels with implications for the degree of challenge in
meeting the Global Sulphur Cap. If we were to select a global outlook today, we would
likely opt for a level above 100 mb/d and thus at least 1 mb/d above that we employed via
our selection of the 2015 WEO New Policies case.
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Exhibit 4-2 Recent Global Outlooks
Exhibit 4-3 Global Demand Differences versus WEO 2015 New policies
Projected 2020
Demand
Change
YoY
Projected 2020
Oil PriceOil Price Basis
mb/d mb/d $/barrel
IEA WEO (Nov) 2014 Current Policies 100.6 $116/$136 IEA import price in $2013/nominal
IEA WEO (Nov) 2015 Current Policies 100.2 -0.4 $83/$92 IEA import price in $2014/nominal
IEA WEO (Nov) 2014 New Policies 99.1 $112/$131 IEA import price in $2013/nominal
IEA WEO (Nov) 2015 New Policies 98.9 -0.2 $80/$89 IEA import price in $2014/nominal
IEA WEO (Nov) 2015 Low Oil Price 99.7 $55/$61 IEA import price in $2014/nominal
IEA MTOMR (Feb) 2015 99.1 $73IEA import price current year dollars,
implies around $66/bbl in $2014
IEA MTOMR (Feb) 2016 100.5 1.5 n.a.
OPEC WOO (Nov) 2014 96.9 $95.4/$110 OPEC Reference Basket $2013/nominal
OPEC WOO (Dec) 2015 97.4 0.5 $70.7/$80 OPEC Reference Basket $2014/nominal
EIA AEO (April) 2015 - Reference Case 98.4 $79/$90 Brent $2013/nominal
EIA IEO 2016 - released early May 100.3 $79.13 Brent $2015/n.a. nominal
EIA AEO 2016 - early release 101.5 3.1 $76.57/$84.59 Brent $2015/nominal
Notes:
Recent Global Outlooks - Updated
WEO demand figures adjusted for the fact that the IEA present biofuels in gasoline/diesel equivalent volumes. These are
multiplied by an overall factor of approx 1.4 to put biofuels and thus total demand on same basis as other outlooks.
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4.3 Supply Demand Outlook
Exhibit 4-4 summarizes the detail in the 2020 Base Case supply and demand outlook.12
Underlying these global totals are breakdowns by region and by crude type, NGL split, and
by grade within each product category. The marine diesel category is broken into three
grades: 0.1% ECA MGO (assumed to be at DMA standard), 1%/0.5% ‘traditional’ MGO/MDO
(again assumed DMA) and 0.5% Global Fuel (assumed DMB). The grades IFO encompass HS
IFO180 and IF380 plus 0.5% lighter (closer to VGO quality) and heavier (IFO) grades.
(Overall, the WORLD Model includes some 55 product grade/consumption types as
summarised in Exhibit 4-5.)
The crude supply mix stems from the WEO regional breakdown of total liquids supply and is
based on the return in that projection to an approximately $80/barrel ($2014) by 2020.
Clearly, developments in crude supply warrant monitoring, for example how predominantly
heavy crude production will progress in Canada,13 Venezuela, Mexico and Brazil and light
crude production in the United States, North Sea, North and West Africa, and the Caspian.
Problems or improvements could swing the global crude slate either lighter or heavier – or
they could partially offset each other, leaving total crude quality little changed. As it stands,
our projection includes essentially static overall global crude slate quality at around 32.6°
API and 1.25 % sulphur.
With respect to non-crudes supply, there is again some degree of uncertainty in the outlook
stemming from the recent large moves in crude oil and natural gas prices. Recent strong
growth in NGL’s production is being tempered by these price reductions. Similarly, lower oil
prices tend to weaken the economics of GTL and CTL liquids and also of biofuels. By way of
example, the November 2015 WEO New policies case we used had an assessed 2.94 mb/d of
biofuels supply in 2020. The February 2016 MTOMR had a total of 2.67 mb/d for 2020 and
the just-released EIA 2016 IEO has 2.5 mb/d. These differences may relate purely to
differing methodologies or they may indicate a downward trend. To the extent the growth
in all these non-crudes supplies slows, it will increase the ‘call on refining’. As essentially all
the non-crudes supplied are light, clean streams, declines will not only require volume
replacement by crude oil but will also tend to add to refinery upgrading and
desulphurisation load. Both of these effects will tend to raise prices for clean products.
On the demand side, the WEO and other similar outlooks do not contain projections for
demand by product type. EnSys’ approach is to use historical data and growth rates but to
also wherever possible take into account an available third party outlook by product. For
12 The fact that the supply and demand totals do not exactly match is an artifice of the balancing method within WORLD. 13 A new outlook from the Canadian Association of Petroleum Producers is due this June.
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this study EnSys used the outlook from the 2015 OPEC World Oil Outlook as a starting point
and then tuned to the WEO ‘top down’ demands. Exhibit 4-6 shows the relevant table from
the World Oil Outlook.14
Versus an initial 2020 demand assessment, (made in April), we adjusted our 2020 global
outlook for land-based diesel down by 0.25 mb/d and gasoline up by 0.25 mb/d to reflect
the current softening in diesel demand growth and strengthening in that for gasoline. In
Section 5.2.2.3, we discuss further the implications of changes in the supply and demand
outlook.
14 Note, the WOO Table 5.1 embodies an assumed 2020 shift of IFO to marine distillate.
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Exhibit 4-4 2020 Base Case Supply Demand Outlook
Supply mb/dCrude Oil
United States 9.014
Canada 4.024
Mexico 2.125
Greater Caribbean 3.719
Rest of South America 4.412
Europe North 2.734
Europe South 0.155
Europe East 0.142
FSU excluding Caspian 10.321
Caspian 2.661
Middle East 27.887
Africa North 2.54
Africa West 4.436
Africa East-South 0.278
Pacific Japan/Australasia 0.713
Pacific 'High Growth' 1.27
China 4.559
Other Asia 1.944
Total Crudes 82.934
Non-Crudes
NGL's 10.006
Methanol (for MTBE) 0.158
Petrochemical Returns 0.357
Biofuels 2.94
GTL Liquids 0.199
CTL Liquids 0.1
Process Gain / Other 2.491
Total Non-Crudes 16.251
Total Supply 99.185
Demand
LPG's (incl ethane) 9.504
Naphtha 7.361
Gasoline 25.472
Jet/Kerosene 7.454
Inland Diesel / Heating Oil 27.866
Marine Diesel 1.883
Inland Residual Fuel 4.039
Marine IFO 4.354
Other Products 9.773
Crude Direct Use 1.29
Transport Losses 0.189
Total Demand 99.185
Global Supply/Demand 2020 Base Case
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WORLD Model Product/Consumption Types LPG's 2
naphtha 3
gasoline 18
jet/kero 3
inland diesel 7
inland resid 3
marine fuels 7
other products 10
sub total 53
crude direct use 1
transport losses 1
total 55
The other products category includes: propylene, aromatics (BTX), lubes & waxes,
asphalt, FCC coke, high grade petroleum coke, fuel grade petroleum coke, process gas, sulphur
Exhibit 4-5 WORLD Model Product/Consumption Types
Exhibit 4-6 OPEC 2015 World Oil Outlook Demand by Product
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4.4 Product Quality Outlook
WORLD contains regional grade break downs across each of gasoline, diesel/gasoil and
residual fuel with associated assessed typical properties based on specifications by grade.
Increasingly, developing countries are following the lead of the industrialised nations in
shifting their gasoline and diesel products progressively toward advanced ultra-low sulphur
specifications; normally based on EURO III/IV/V standards. These trends are embodied in
the Model. Current and recent product qualities are assessed based on several sources
including country by country research, data from UNEP and others.
We obtain and apply data on product specifications but are also aware that there can be
appreciable product quality ‘giveaway’, i.e. that, at times, actual product qualities, notably
sulphur, can be well within the stated specifications. This was evident when EnSys
conducted a project for the World Bank in 2009 to assess the refining costs of implementing
advanced ‘AFRI’ standards for gasoline and diesel in sub-Saharan Africa. (The AFRI standards
broadly follow the EURO III/IV/V standards.)
Also, in a 2014 study, EnSys simulated 225 refineries across the world’s developing regions
in order to assess product sulphur levels for the International Council on Clean
Transportation (ICCT). The analysis indicated then current weight average diesel fuel
sulphur levels of close to 3,000 ppm for the Middle East, 2,000 ppm for the Greater
Caribbean region (in which we include Colombia, Ecuador, Mexico and Venezuela) and
1,400-1,700 ppm for other developing regions. In many instances, assessed ‘actual’ sulphur
levels were well below specification for the grade. Weight averaged sulphur levels were
also assessed for gasoline, jet/kerosene and residual fuels. The latter were indicated as
averaging close to 30,000 ppm in the Middle East and Greater Caribbean down to around
15,000 ppm in Africa. These findings were embodied in the WORLD Model.
In addition, for trending product qualities forward, EnSys has relied on research as well as a
section in the 2014 OPEC World Oil Outlook which covered product quality developments in
detail. The following lists the main product quality trends from 2015 to 2020 contained
within the Model for this study. Most of the ‘action’ is in the developing regions. This is
because, in the industrialised regions, gasoline and on-road diesel are generally at ultra-low
sulphur standards (predominantly 10 ppm) off-road diesel and heating oil are at low sulphur
standard (which we define here as 500 ppm nominal) and tight standards also apply to
residual fuels (in the range of 0.3 – 1.0%). The following commentary excludes marine fuels
which are dealt with in Section 4.5.
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4.4.1 Gasoline
Current regional and grade limits in WORLD range from a high of 450 ppm to a low of 10
ppm (ULS grades) even though, as discussed above, nominal specifications can be
appreciably higher.
Developments assumed 2015 to 2020:
the United States and Canada move to 10 ppm (“Tier 3” gasoline) from the current
30 ppm standard
FSU, notably Russian Federation – substantial progress toward ULS standards (10
ppm)
Africa, Middle East, Latin America, developing Asia – significant progress in reducing
overall gasoline sulphur levels (by 45 – 65%), also limited introduction of EURO type
ULS grades (10-50 ppm).15
4.4.2 Jet Fuel and Kerosene
While the nominal specification for jet fuel is 3,000 ppm, the Model limits for 2015 are 700
ppm with lower limits in one or two regions such as Pacific Industrialised. The 2020 case
assumes introduction of tighter specifications (50 ppm) in the United States, Canada and
Europe but no change in other regions where sulphur reduction is assumed to be enacted
post 2020.
Similar reductions were assumed in kerosene sulphur because jet fuel (Jet A/A-1) and
kerosene are extremely similar products and can be co-produced.
4.4.3 On and Off Road Diesel Fuel, Heating Oil
Current sulphur limits in the Model range from 10 ppm for ULS diesel to highs of 4,000 –
5,000 ppm for off-road diesel/heating oil in selected regions, (a total of seven different
grades), in part reflecting the findings from EnSys’ ICCT study noted above.
Developments assumed 2015 to 2020:
US and Canada – heating oil standards progress from LS (500 ppm) to ULS
standards
FSU, notably Russian Federation - substantial progress toward ULS standards
(10 ppm) for on-road diesel, more limited progress for offroad/heating oil
Latin America, Africa, developing Asia – limited progress toward implementing
ULS fuels but appreciable reductions in total diesel/heating oil pool sulphur
levels
15 The trend to the EURO III/IV/V grades also leads to tighter specifications for octane, benzene and aromatics.
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Middle East – limited change toward tighter standards.
4.4.4 Residual Fuel
In covering inland residual fuels, WORLD contains three grades, 0.3%, 1% and high sulphur.
The ‘high’ sulphur standard is taken in most regions to be 3%, although in Mexico for
example the high sulphur fuel there is sold at a 4% standard. In regions such as Europe,
Pacific Industrialised (Japan, Australasia), the United States and Canada, there is no ‘high’
sulphur fuel allowed for domestic consumption; all consumption is taken to be of 1% or
0.3% fuel. Tight standards are also applied in the Model Pacific High Growth region which
embodies Republic of Korea, Taiwan Province of China, Singapore among others.
In the 2020 cases, no changes were assumed in inland residual fuel qualities or mixes.
4.5 Marine Fuels Grades & Qualities
Exhibit 4-7 below summarises the marine fuels grades used in the modelling, namely three
distillate and four IFO grades.
We are aware from previous work that the majority of marine distillate currently sold is at
the higher DMA quality. Our cases were on the basis that all ‘traditional’ MGO would be to
DMA quality – with maximum Sulphur cut to 0.5% nominal in 2020 in the Global Fuel cases.
We were also on the basis that all 0.1% sulphur ECA fuel would be to DMA standard. This
possibly ignores the heavier ECA fuels that have been made available but also ignores that
we understand some ECA fuel may be sold at qualities more in line with on-road diesel, i.e.
we believe these two factors roughly offset each other.
For the 2020 Global Fuel cases, the Global Fuel requirements were assumed to be met by
MDO at DMB standard or, alternatively, by heavier (IFO) fuels. Our basis for selecting DMB
rather than DMA for 0.5% fuel delivered as distillate was that the large volumes involved
would drive refiners and blenders to opt for the somewhat heavier fuel (i.e. DMB) and
would put in place the logistics to supply DMA and DMB separately. We recognize this is a
parameter that could be subject to debate.16
The alternative heavier 0.5% fuels were given specification ranges that would keep them
within ISO 8217 specifications but which broadly would cover potential for supplies of both
heavy and lighter, low viscosity RM IFO grades. The IFO 80 grade was introduced to reflect
16 As indicated in Exhibit 4.7, there are differences between DMA and DMB but they are relatively limited. DMB can be slightly heavier, (higher density), has a higher maximum viscosity; also a higher maximum pour point, lower cetane index and a micro carbon residue limit to guard against the inclusion of heavy residual type blendstocks.
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that the advent of the 0.1% sulphur ECA standard has led to the supply of a number of new
formulations that are more in akin to VGO than to residual fuel grades. That said, the Global
IFO 80 grade and to some degree the Global IFO 380 grade represent new fuel
compositions, in terms of blendstocks. EnSys recognised that these could take time to be
accepted because it would be necessary to first establish that they did not cause onboard
operational issues; hence the case approach adopted to consider a more conservative ‘High
MDO’ scenario and an alternative ‘Low MDO’ scenario which allowed for sale of higher
proportions of the Global IFO fuels.
Note that EnSys invariably allows for product quality giveaway in the many product
specifications embodied in the Model, i.e. when we use the term 0.5% Fuel, that is nominal
and we select a lower actual value (such as 0.4%) to reflect the likely actual range of blend
qualities; likewise with other specifications.
In addition to the specifications shown, for the IFO grades, EnSys placed upper limits at,
respectively, 25% and 10% on the volume proportions of cracked stocks and visbroken
stocks allowed into the IFO blends. This was done to guard against potential fuel instability
that could, for instance, lead to asphaltene deposition.
Exhibit 4-7 Marine Fuel Grades Modelled
WORLD Model GradeISO8217
Grade
density @
15C - max
wt %
sulphur -
max
flash
point
degC -
min
viscosity
@ 40C
(mm2/s) -
max
viscosity
@ 50C
(mm2/s) -
max
pour point
Summer /
Winter
average
(degC) - max
cetane
index -
min
micro
carbon
residue
(%m/m) -
max
Marine Distillate Fuels
'Traditional' MGO DMA 890 1.5/0.5 60 6 0/-6 = -3 40
ECA MGO DMA 890 0.1 60 6 0/-6 = -3 40
Global MDO DMB 900 0.5 60 11 6/0 = 3 35 0.3
IFO Fuels
HS IFO180 RMG 0.991 3.5 60 180 30 18
HS IFO380 RMG 0.991 3.5 60 380 30 18
Global IFO 80 / 'Hybrid' RMD 0.975 0.5 60 80 30 14
Global IFO 380 RMG 0.991 0.5 60 380 30 18
Key Specifications Employed
Marine Fuel Grades Modelled
1. 'Traditional' MGO 2015 sulphur limit was set to 0.5% to reflect Ensys' understanding of typical actual quality
2. 'Traditional' MGO 2020 sulphur limit was set to 0.5% in line with Global Fuel Rule
3. In 2020 Global Fuel cases, HS IFO use was restricted to volumes related to vessels assumed to install scrubbers
4. CCAI (IFO specification) was mot modelled.
Notes:
Supplemental Marine Fuel Availability Study
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4.6 Transportation Outlook
WORLD contains a detailed representation of inter-regional marine movements, with
expanded detail on pipelines and rail for the United States and Canada. Each year we
update to the January release of WorldScale flat rates and analyse the state of the tanker
market and potential trends in order to project future percents of WorldScale. Recently,
the tanker market has seen relatively low rates. For this and other recent studies, we have
been assuming a gradual increase in rates to reflect a slow return toward a more balanced
market.
With respect to pipelines, we track the United States and Canadian projects in our monthly
North America Logistics Review. The major lines of concern are arguably the three main exit
pipeline projects out of western Canada, namely Keystone XL, Trans Mountain expansion
and Energy East. Keystone XL we consider as potentially cancelled (i.e. unless resurrected
by a change of the United States Administration in the November 2016 election). Both
Trans Mountain expansion and Energy East are experiencing headwinds and a slow
permitting process. Currently in our database, we have Trans Mountain online in 2019 and
Energy East in 2020. However, to reflect the doubt that exists and to adopt a ‘central
estimate’ we assumed for this study that Trans Mountain would be online by 2020 but that
Energy East would not.17 We did assume that a number of lesser the United States pipeline
projects would go ahead, including some degree of Canada to the United States cross-
border expansion as well as increased movements to eastern Canada via the Line 9 reversal.
Overall, the assumptions made on major pipelines affect primarily the directions in which
western Canadian crude can flow.
Finally, the Model embodies crude-by-rail options. Even allowing for normally low
utilisations, there is substantial capacity available today to move crudes from especially the
Bakken and western Canada to coastal markets. Because of yet another crude-by-rail train
derailment and fire, this time in Oregon, EnSys cut the potential 2020 capacity for moving
crude by rail into the United States West Coast and thence potentially to export.
17 In May, the Canadian National Energy Board (NEB) issued a report recommending that the Canadian government approve the Trans Mountain Expansion Project (Project), subject to 157 conditions; http://www.neb-one.gc.ca/pplctnflng/mjrpp/trnsmntnxpnsn/index-eng.html.
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4.7 Refining Capacity Outlook
4.7.1 Overview
In developing the basis for this study, EnSys undertook a thorough update to our refinery
capacity, projects and closures data. We have continued to make limited adjustments to
that outlook and have incorporated our latest assessments as of early June into our
modelling. We have a January 2016 total base capacity of 97.7 mb/cd. This is slightly above
the level assessed by the IEA in their February 2016 MTOMR. Our assessment is for refinery
projects to add 5.6 mb/cd of additions by end 2019. We also estimate a total of 2 mb/cd of
refinery closures between 2016 and end 2019. The net effect is a projected end 2019 global
base capacity of 101.3 mb/cd. We note this brings our capacity outlook close to the 101.8
mb/cd listed in the IEA February 2016 MTOMR. The gap narrows to a minimal level when
2020 minor debottlenecking additions from the WORLD Model cases of around 0.3 to 0.45
mb/cd are added in. The resulting tables are set out in Exhibits 4-9, 4-16, 4-17, 4-19, and 4-
20 below.
As a key under-pinning of our WORLD modelling activities, EnSys maintains a detailed,
global refinery database. This is regularly reviewed and updated. For this Supplemental
Marine Fuels project, we have updated our data covering each of the three components
affecting projected 2020 available capacity, namely: base capacity, (updated to January
2016), closures, (with focus on those expected to occur in 2016 through 2019), and projects,
(with emphasis on those that can be expected to be on stream by end 2019 – and so able to
contribute to compliance with the MARPOL Annex VI Global Sulphur Cap). Thus January
2016 base capacity minus assessed closures to end 2019 plus capacity additions via projects
through 2019 equals projected end 2019 capacity.
The sections below review each of these facets in turn, leading to our projection of net
available end 2019 capacity. Our research relies on publicly available data, including surveys
(such as from the Oil & Gas Journal) that can be purchased, supplemented by mainly online
research into sources ranging from industry press to investor presentations and refining
company websites. We are at pains to cross-check across sources wherever possible.
We would point out that refinery projects – and closures – constitute moving targets and
that there can be varying degrees of clarity over status, timing and configuration. In short, it
is necessary to recognise that there at least a limited degree of uncertainty surrounding
2020 capacity.
4.8 Base Capacity January 2016
As noted above, data on the global oil industry is not an exact science. No one has a perfect
view, including on refining base capacity. Exhibit 4-8 below compares EnSys’ assessment of
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global base capacity as of January 2016 against that in the IEA 2016 MTOMR and three other
sources. Given the range of these estimates, and the time spent over the past few years
examining individual refinery data, we believe our assessment of 96.7 mb/cd is sound.
Exhibit 4-8 Global Refinery Base Capacity per Different Organisations
In this project, we updated our capacity base from January 2015 to January 2016. Exhibit 4-
9 provides the resulting breakdown of capacity for major process units18 aggregated by
major region and globally.
18 The WORLD Model includes breakdowns within the unit categories shown and additional unit types (not shown) with their capacities.
Reference Date mb/cd
IEA MTOMR February 2016 2015 (1) 97.2
BP Statistical Review June 2016 2015 (1) 97.2
EnSys Marine Fuels April 2016 Jan 2016 97.4
EnSys Marine Fuels June 2016 Jan 2016 97.7
OGJ Refinery Survey Jan 2016 89.5
IEA WEO 2015 2014 (1) 94.1
Note:
1. Not stated whether beginning of end of year. For MTOMR presumed end of 2015
Global Refinery Base Capacity per Different Organisations
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Exhibit 4-9 Assessed Refinery Capacity January 2016
In the time between conducting our initial 2015 Model Calibration case and our final 2020
analytical cases, we made small adjustments to refinery base capacity. In addition, we
undertook research on solvent deasphalting capacity. United States capacity data are
contained in annual refiner submissions to the EIA. Our focus was on capacity outside the
United States. As a result, we arrived at assessed total global refinery solvent deasphalting
capacity of just over 1 mb/cd. This was a significant increase (some 300,000 b/cd) over our
previous assessment (based as it was more on published data).
Solvent deasphalting is relevant in that the process extracts limited quantities of vacuum
gasoil (VGO) remaining in vacuum residua. It thus has the effect of recovering additional
VGO (albeit generally of low quality) and of reducing the volume of remaining vacuum
residua that commonly is routed to a coker. It thus tends to reduce loads on cokers, freeing
up capacity to take in other feedstocks. As further described in Section 5.1.2, because of
these changes, EnSys reran the 2015 WORLD case and the 2020 Base and Global Fuel cases.
The net effect of the slight increase in total available refinery capacity plus the increase in
assessed solvent deasphalting capacity was to modestly narrow light-heavy product supply
cost differentials across all cases.
million barrels per calendar
day
Asia
Pacific Europe FSU
Middle
East Africa
Latin
America
North
America Global
Distillation
Crude Oil (Atmospheric) 32.105 15.716 8.028 9.487 4.206 6.277 21.864 97.683
Vacuum 11.004 6.584 3.210 2.610 1.042 2.754 10.051 37.256
Upgrading
Coking 2.799 0.702 0.318 0.287 0.084 0.646 3.211 8.047
Catalytic Cracking 5.814 2.208 0.775 0.814 0.255 1.242 6.548 17.656
Hydrocracking 3.125 1.920 0.402 0.901 0.163 0.197 2.173 8.881
Gasoline Quality
Reforming 3.867 2.363 1.169 1.025 0.499 0.394 4.472 13.789
Isomerisation 0.367 0.594 0.293 0.348 0.060 0.055 0.911 2.629
Alkylation 0.315 0.237 0.017 0.092 0.034 0.145 1.289 2.129
Polymerization 0.012 0.044 0.010 0.005 0.006 0.006 0.057 0.141
Desulphurisation
Naphtha 4.222 3.085 1.216 1.375 0.618 0.543 5.456 16.516
Gasoline 1.695 0.582 0.149 0.240 0.101 0.285 2.675 5.727
Middle Distillates 8.923 5.403 2.039 2.265 0.820 1.026 7.140 27.617
Vacuum Gasoil/Residual 3.162 1.740 0.271 0.376 0.034 0.230 3.147 8.959
REFINING CAPACITY JANUARY 1, 2016
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4.9 Closures 2016 – 2019
Exhibits 4-10 and 4-11 below summarize EnSys’ assessment of potential refinery closures
while Exhibits 4-12 through 4-14 provide underlying detail. We would point out that, while
the latter exhibits detail individual refineries, our primary objective is to assess the expected
overall level of closures through 2019. Therefore, with regard to refineries that are
projected to close, we are in a sense using these as proxies; in other words it may turn out
that a specific refinery expected to close in fact does not but that another similar facility in
the region does.
The data show that, between 2012 and 2015, some 3.8 mb/d of refinery capacity closed.
Much of this, 1.8 mb/d, was in Europe followed by 0.8 mb/d in Asia (led by Japan then
Australia, Taiwan Province of China and Singapore), close to 0.4 mb/d in North America,
(Alaska, California and eastern Canada), then close to 0.6 mb/d in Latin America (refineries
on the islands of St. Croix and Aruba) and 0.26 mb/d in the Russian Federation. These
closures include both total and partial refinery shutdowns. In Europe, for example, most
but not all have been complete refinery closures. In contrast, the residue upgrading ratio
rule introduced in Japan in 2010 has led to a range of mainly partial closures and a focus on
reductions in crude distillation capacity rather than secondary units.
A key question in this study is – what extent of closures could be expected through 2019?
Already announced closures, taken as firm, total 1.6 mb/cd for 2016 through 2019. The
closures are in Japan, other Asia, Kuwait and Europe. Those in Japan constitute a
continuation of reaction to the residue upgrading rule with listed total closures of some 0.53
mb/d. Those in Kuwait total 0.34 mb/d and result from KNPC’s plans to close the Shuaiba
refinery in 2017 and to close old capacity at the Mina al-Ahmadi refinery while adding new
capacity (handled under our projects list) at the Mina al-Abdullah refinery as part of a
project to integrate the two facilities.
In addition to actual and announced near term closures, EnSys maintains a list of refineries
that we consider are potential closure candidates (‘closure watch list’). These are
summarised in Exhibit 4-15. Based on recent history, we believe that additional refinery
closures will occur beyond those that have been formally announced. We took our ‘watch
list’ as a starting point for assessing potential additional closures. The total capacity of
refineries currently on the watch list is in excess of 1.4 mb/d. We assumed that, of these,
one could expect at least around 0.4 mb/d could close by end 2019. We placed these
closures in Asia, Europe and North America. These, combined with the announced closures,
lead to a total of just over 2 mb/d of closures for 2016 through 2019.
As Exhibit 4-10 illustrates, our assessment leads to a projected closure rate of just over 0.5
mb/d per year, essentially half the average of close to 1 mb/d per year that occurred from
2012 through 2015. The reduction in rate of closure is arguably not surprising though given
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the extent of closures that have been occurring since 2008 and the effects these have had.
Notably, cumulative closures in Western Europe (EU-15 plus Norway) led to utilisations
rising to the high 80% range in 2015 from an unsustainable 75% a few years before. In
addition, while the reduction in crude oil price has tended to constrain refined product light-
heavy price spreads, it has also substantially reduced the cost of natural gas used for fuel
and hydrogen feedstock in Europe and Asia. This has narrowed the competitive
disadvantage on operating costs versus refineries in the United States and parts of the
Middle East. Likewise, the crude price reductions are arguably raising expectations for
increases in total global demand, (see Section 4.3), which in turn could lead refiners in
vulnerable regions to hold off on announcing closures. There is also the possibility that not
all of the ‘announced’ closures will actually occur.
Consequently, we believe this estimated level of refinery closures through 2019 is
reasonable. WORLD Modelling results do indicate potential for additional closures by 2020,
over and above the 2 mb/cd assumed. However, recent prospects for more rapidly rising
global liquids demand could act to deter refiners from closing facilities.19 Exhibit 4-16 sets
out the resulting projected 2020 base capacity, i.e. the 2016 base minus closures and before
addition of projects.20
19 In its June Oil Market Report, the IEA stated they see global supply and demand being rebalanced by the second half of 2016 because of demand rising more rapidly. The IEA revised its projection for 2016 demand growth to 1.6 million b/d from1.2 million b/d, an appreciable 400,000 b/d increase. http://www.oceanintelligence.com/news/141935?tag=22-210916-1424670-0-OI. 20 There is currently a small discrepancy between our closure projects list – which leads to 2.33 mb/d of closures 2016-2019 – and our WORLD Model refinery database – which has 2.4 mb/d. This will be resolved before Model cases are undertaken.
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Exhibit 4-10 Refinery Closures Recent & Projected by Year and Region
Exhibit 4-11 Refinery Closures Recent & Projected
million b/cd 2012 2013 2014 2015 2016 2017 2018 2019
Total
2012 -
2019
Total
2016 -
2019
North America 0.07 0.09 0.22 - - - 0.12 - 0.49 0.12
Latin America 0.59 - - - - - - - 0.59 -
Europe 0.97 0.20 0.37 0.26 - - 0.27 0.18 2.24 0.45
FSU - - - 0.26 - - - - 0.26 -
Africa - - - - - - - - - -
Middle East - - - - - 0.20 - 0.14 0.34 0.34
Asia Pacific 0.08 0.14 0.60 - 0.88 0.12 0.13 - 1.94 1.12
Total: 1.71 0.43 1.18 0.52 0.88 0.32 0.51 0.32 5.86 2.03
Refinery Closures Recent and Projected by Region
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Exhibit 4-12 Refinery by Refinery Closures - 1
(1) Taiwan Province of China
Region Closure Type Status Country Location Company Capacity (b/d) Year
Asia Pacific Refinery Closure Closed Australia Clyde Refinery Shell (79,000) 2012
Asia Pacific Refinery Closure Closed Japan Sakaide Cosmo (140,000) 2013
Asia Pacific Refinery Downsize Closed Japan Chiba
Kyokuto Petroleum
Ind. (subsidiary of
TonenGeneral) (23,000) 2014
Asia Pacific Refinery Downsize Closed Japan Kawasaki TonenGeneral (67,000) 2014
Asia Pacific Refinery Downsize Closed Japan Wakayama TonenGeneral (38,000) 2014
Asia Pacific Refinery Closure Closed Japan Tokuyama Idemitsu Kosan (120,000) 2014
Asia Pacific Refinery Closure Closed Japan
Muroran Refinery
(Hokkaido) JX Nippon (180,000) 2014
Asia Pacific Refinery Downsize Closed Japan Yokkaichi Cosmo (43,000) 2014
Asia Pacific Refinery Closure Closed Australia Kurnell Refinery Caltex (124,500) 2014
Asia Pacific Refinery Closure Closed Singapore Jurong
Jurong Aromatics
Corp (JAC) (100,000) 2016
Asia Pacific Refinery Closure Closed Others(1) Kaohsiung
Chinese Petroleum
Company (270,000) 2016
Asia Pacific Refinery Closure Closed Australia
Brisbane Refinery
(Bulwer Island) BP (102,000) 2016
Asia Pacific Refinery Closure Closed Japan
Nishihara
Refinery
(Okinawa)
Petrobras/Nansei
Sekiyu (90,000) 2016
Asia Pacific Refinery Downsize Announced Japan
Chiba
(consolidation
betw. 2 Refs)
Tonen General &
Cosmo (100,000) 2016
Asia Pacific Refinery Downsize Announced Japan Yokkaichi
Cosmo Oil (?and
Showa Shell?) (63,000) 2016
Asia Pacific Refinery Closure Announced Japan
likely shut 1 of its
7 refineries JX Energy (121,000) 2016
Asia Pacific Refinery Downsize Announced Japan unknown Showa Shell (34,000) 2016
Asia Pacific Refinery Downsize Announced Japan Ichihara, Chiba Idemitsu Kosan (20,000) 2017
Asia Pacific Refinery Downsize Announced Japan unknown
Tonen General &
Kyokuto (72,000) 2017
Asia Pacific Refinery Downsize Announced Japan unknown Taiyo Oil (13,000) 2017
Asia Pacific Refinery Downsize Announced Japan unknown Fuji Oil (13,000) 2017
Recent (from 2012) and Projected Global Refinery Closures
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Exhibit 4-13 Refinery by Refinery Closures - 2
Exhibit 4-14 Refinery by Refinery Closures – 3
Region Closure Type Status Country Location Company Capacity (b/d) Year
Europe Refinery Closure Closed France Petit Couronne Petroplus (162,000) 2012
Europe Refinery Closure Closed France Berre l'Etang LyondellBasell (105,000) 2012
Europe Refinery Closure Closed Italy Rome Total Erg (86,000) 2012
Europe Refinery Downsize Closed Italy Trecate ExxonMobil (70,000) 2012
Europe Refinery Closure Closed
United
Kingdom Coryton Petroplus (220,000) 2012
Europe Refinery Downsize Closed
United
Kingdom Fawley Refinery Esso (ExxonMobil) (80,000) 2012
Europe Refinery Closure Closed Romania Arpechim Petrom (70,000) 2012
Europe Refinery Downsize Closed
Czech
Republic Paramo Unipetrol (20,000) 2012
Europe Refinery Closure Closed Ukraine Lisichansk Rosneft (TNK-BP) (160,000) 2012
Europe Refinery Downsize Closed Germany
Harburg -
Hamburg Shell (110,000) 2013
Europe Refinery Closure Closed
Canary
Islands Tenerife Cepsa (88,000) 2013
Europe Refinery Closure Closed Italy Mantova Refinery MOL Group (55,000) 2014
Europe Refinery Closure Closed Italy
Porto Marghera
(near Venice) Eni (80,000) 2014
Europe Refinery Closure Closed
United
Kingdom Milford Haven Murphy Oil (130,000) 2014
Europe Refinery Downsize Closed
United
Kingdom
Ellesmere Port
(Stanlow) Essar Oil (101,000) 2014
Europe Refinery Closure Announced France
La Mede
(Marseille) Total SA (160,000) 2018
Europe Refinery Closure Closed Italy Gela (Sicily) Eni (100,000) 2015
Europe Refinery Downsize Closed
United
Kingdom Lindsey Total (103,500) 2015
Europe Refinery Closure Closed Switzerland Collombey Tamoil (55,000) 2015
Europe Refinery Downsize Announced
United
Kingdom Killingholme Phillips 66 (110,600) 2018
FSU Refinery Downsize Closed
Russian
Federation
Syzran and
Novokuibyshevsk Rosneft (260,000) 2015
Recent (from 2012) and Projected Global Refinery Closures
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Exhibit 4-15 Watch List for Potential Refinery Closures
Exhibit 4-16 Refining Base Capacity January 2020 – 2016 Base Less Closures
4.10 Projects 2016 – 2019
EnSys maintains a database of refinery projects. The 2015 OPEC World Oil Outlook, Chapter
621, contains a detailed review of projects as we saw them in mid-2015. For this study, we
have undertaken a thorough update, mindful of the continuing effects of low oil prices in
reducing cash flow available for projects and of the potential for delays and cancellations.
In reviewing projects, it is critical to assess each project according to its status and
probability of going ahead. EnSys classifies projects into five categories as follows:
Class 1 – an announcement and little more, little definition, very high uncertainty
21 http://www.opec.org/opec_web/en/publications/340.htm.
b/cd Asia Pacific Europe FSU Middle East Africa North
America
Latin
AmericaGlobal
Presumed Closed (125,000) (177,000) - - - (115,000) - (417,000)
Presumed Stays Open (109,000) (356,000) (190,000) (210,000) - (154,000) (31,000) (1,050,000)
Total (234,000) (533,000) (190,000) (210,000) - (269,000) (31,000) (1,467,000)
Watch List for Potential Refinery Closures
million barrels per calendar
dayAsia
Pacific Europe FSU
Middle
East Africa
Latin
America
North
America Global
Distillation
Crude Oil (Atmospheric) 30.984 15.271 8.028 9.147 4.206 6.277 21.749 95.660
Vacuum 10.889 6.486 3.210 2.505 1.042 2.754 9.996 36.883
Upgrading
Coking 2.784 0.702 0.318 0.287 0.084 0.646 3.211 8.032
Catalytic Cracking 5.766 2.173 0.775 0.814 0.255 1.242 6.548 17.572
Hydrocracking 3.104 1.920 0.402 0.855 0.163 0.197 2.136 8.777
Gasoline Quality
Reforming 3.825 2.310 1.169 1.010 0.499 0.394 4.441 13.647
Isomerisation 0.357 0.557 0.293 0.348 0.060 0.055 0.911 2.582
Alkylation 0.313 0.233 0.017 0.092 0.034 0.145 1.289 2.123
Polymerization 0.012 0.044 0.010 0.005 0.006 0.006 0.057 0.141
Desulphurisation
Naphtha 4.165 3.007 1.216 1.352 0.618 0.543 5.435 16.336
Gasoline 1.695 0.582 0.149 0.240 0.101 0.285 2.675 5.727
Middle Distillates 8.856 5.263 2.039 2.207 0.820 1.026 7.115 27.327
Vacuum Gasoil/Residual 3.107 1.740 0.271 0.376 0.034 0.230 3.147 8.904
REFINING BASE CAPACITY JANUARY 1, 2020 - 2016 BASE LESS CLOSURES
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Class 2 – project scope / configuration usually defined but still at an early stage and
considered to have a high level of uncertainty
Class 3 – well defined, potentially financing arranged and engineering contracts let but still
not near construction
Class 4 – close to construction and strong backing hence considered highly likely to go ahead
Class 5 – under construction with significant progress clear hence considered certain to
complete.
In evaluating projects, we generally exclude projects in Classes 1 and 2 as being too
uncertain and include projects in Classes 4 and 5.22 The main questions tend to arise over
projects in Class 3 and here we often apply a probabilistic approach, i.e. assume that x % go
ahead within the timeframe. From experience, refinery projects tend to slip and so
excluding a portion of the Class 3 projects captures this tendency. Another factor is that, in
this marine fuels study, we have taken the view that, while simulating 2020, we are planning
to count in only that capacity which we expect to be on stream by end 2019 – and which is
thus able to contribute to meeting the IMO Global Sulphur Cap which would come in on
January 1st 2020. The project table presented in Exhibit 4-17 lists our current assessment of
capacity additions for 2016 through 2019 by major process categories by region and
globally. This Exhibit (shown as “UNADJUSTED”) includes 100% of Class 3 projects (as well as
4 and 5). Then, we set out our reasons for adjusting these capacity additions and show the
resulting adjusted additions from 2016 through 2019 in Exhibit 4-19.
As noted elsewhere, capacity additions are always a moving target and so we continually
monitor developments. As can be seen, with 100% of all Class 3 projects included, our
projection is for 6.4 mb/d of new distillation capacity to come on stream between January
2016 and December 2019 plus substantial amounts of secondary capacity; over 3.1 mb/d of
upgrading, nearly 0.9 mb/d of gasoline quality and almost 4.0 mb/d of desulphurisation.
The bulk of this new capacity is in Asia, led by China and India, and the Middle East with
projects including several large new refineries and expansions. The bulk of the North
America projects are in the Gulf Coast region. These include a number of condensate
splitter projects (hence the high ratio of distillation to secondary capacity). They exclude a
number of additional splitter projects that we have downgraded; also the recently mooted
major expansion at the Exxon Beaumont refinery.
22 Including all Classes, refinery projects listed today total some 20 mb/d of distillation capacity plus secondary additions. It is therefore (a) critical to carefully evaluate status and timing and (b) to be expected that variations in assessed probability and timing can lead to potentially appreciable differences in capacity assessed to be available by a given horizon.
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Relatively limited additions are projected as firm in other regions. In Africa, two large
projects not included are the Nigerian Dangote project, (variously being reported as
anything from 400,000 to 650,000 b/d capacity but with projected start up after 2019), and
the Mthombo project in South Africa (360,000 b/d, nominally at the site preparation stage
but with delays reported and start up not now projected until after 2019). Capacity
expansion in Europe is focussed mainly on one project for a new refinery in Turkey. In the
FSU, most projects in the Russian Federation are focussed on upgrading and quality
improvement rather than distillation expansion. Quality improvement projects are spread
through most regions driven by the on-going drive toward low and ultra-low sulphur
gasoline and diesel standards.
Details underlying the summary data in Exhibit 4-17 are shown in Appendix Section 6.2. The
section lists major projects by region together with aggregate additions from small projects.
Section 6.2.2 lists major Class 3 projects which we see as potentially starting up in the 2020-
2021 time frame.
Exhibit 4-17 Refining Projects Through 2019
million barrels per calendar
day
Asia
Pacific Europe FSU
Middle
East Africa
Latin
America
North
America Global
Distillation
Crude Oil (Atmospheric) 3.095 0.207 0.305 1.478 0.295 0.176 0.845 6.402
Vacuum 0.693 0.086 0.010 0.370 0.124 0.269 0.015 1.567
Upgrading
Coking 0.269 0.095 0.167 0.309 0.025 0.223 0.179 1.267
Catalytic Cracking 0.449 0.000 0.139 0.100 0.050 0.063 0.020 0.821
Hydrocracking 0.240 0.131 0.277 0.121 0.090 0.042 0.155 1.056
Gasoline Quality
Reforming 0.276 0.028 0.018 0.226 0.061 0.040 0.002 0.651
Isomerisation 0.011 0.015 0.037 0.042 0.033 0.000 0.000 0.138
Alkylation 0.014 0.000 0.041 0.000 0.000 0.000 0.034 0.089
Polymerization 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Desulphurisation
Naphtha 0.318 0.032 0.021 0.260 0.070 0.065 0.002 0.768
Gasoline 0.151 0.000 0.090 0.194 0.040 0.070 0.004 0.549
Middle Distillates 0.533 0.092 0.339 0.425 0.151 0.291 0.171 2.002
Vacuum Gasoil/Residual 0.154 0.000 0.075 0.349 0.000 0.071 0.000 0.649
of which
VGO 0.124 0.000 0.075 0.194 0.000 0.053 0.000 0.446
Resid 0.030 0.000 0.000 0.155 0.000 0.018 0.000 0.203
REFINING PROJECTS THROUGH 2019 - UNADJUSTED
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As part of our assessment, we compared our listed projects with those from the IEA 2016
MTOMR. There are many similarities but also some differences. The latter concern mainly
projects in the United States. The box below elaborates on the different assumptions made.
Comparison of the United States Refining Projects – EnSys vs. IEA MTOMR
2016
The IEA MTOMR 2016 shows completion of a 15 kbpd refinery by the Three Affiliated Tribes in
Thunder Butte, North Dakota in 2016 whereas EnSys does not believe this project will move
forward because it is currently on-hold.
o Source: Indianz
IEA MTOMR 2016 shows Alon in Bakersfield 65 kbpd will go ahead in 2017 whereas EnSys does
not believe this project will move forward. Per Alon Jan 2016 Investor Presentation (Slide 4),
“*The California refineries have not processed crude since 2012” and (Slide 17) ”Received permit
in September 2014 to construct a new 140,000 bpd rail unloading facility at the Bakersfield
refinery; however, the current crude differential environment would not justify construction at
this time”
o Source: Alon Investor Presentation (Jan 2016)
the United States Splitter Projects
In light of recently lifted the United States export ban, the IEA MTOMR 2016 also makes several
optimistic assumptions about condensate splitter projects in the United States. For example, one
project the IEA MTOMR 2016 lists as going ahead in 2016 is Targa Resources’ 35 kbpd
condensate splitter project in Channelview, Texas (EnSys currently sees this as a low ranked
project). A Dec 2015 Reuters article says that “Targa Resources Partners LP is working closely
with Noble Group as Asia's biggest commodity trader evaluates whether to move forward a deal
to support a Targa-built condensate splitter.”
o Source: Reuters
The IEA MTOMR 2016 shows completion in 2017 of Martin Midstream’s 50 kbpd in Corpus
Christi, Texas whereas EnSys does not predict that this project will materialize. The December
2015 Fuelfix article asserts, “Martin Midstream appears poised to scrap its splitter plan or shift to
a cheaper stabilizer,” said Housley Carr with RBN Energy.
o Source: Fuelfix
The IEA MTOMR 2016 shows completion in 2017 of Castleton Commodities’ 100 kbpd in Corpus
Christi, Texas and EnSys currently perceives this as a low ranked project. December 2015 Fuelfix
article states “Castleton Commodities has delayed plans to start construction in the middle of
this year but has indicated it could start work early next year.”
o Source: Fuelfix
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We also reviewed our projects against the assessment we undertook in mid-2015 as part of
our OPEC 2015 World Oil Outlook cycle. Table 6.1 from the World Oil Outlook is reproduced
here as Exhibit 4-18. The 2016 – 2019 distillation capacity additions (with associated
secondary capacity not shown) total 4.8 mb/d. This projection was the result of a careful
evaluation of the projects identified at the time and of a degree of factoring applied to the
Class 3 projects (and all Class 1 and 2 projects excluded). As noted, the project additions
listed in Exhibit 4-17 are on the basis of all Class 3 projects being included. For 2016-2019,
these total some 3.4 mb/d, over half of the total 6.4 mb/d of Class 5+4+3 projects, i.e. a
significant proportion.
On conducting our current projects update, we identified, in part courtesy of the MTOMR,
that several significant projects in China should be added to the projects list, mainly at Class
3 or above. All told these sum to a raw total of around 1 mb/d. Allowing for these projects
to be ‘factored down’ because they mainly fall in Class 3, and adding those to the 4.8 mb/d
for 2016-2019 from the 2015 OPEC World Oil Outlook, leads to an indicated total for 2016-
2019 projects of around 5.5-5.6 mb/d (4.8 plus approximately 1 mb/d times 75%). Applying
the same 75% factor to the Class 3 projects across our updated database leads to a 2016-
2019 total of 5.6 mb/d as set out in Exhibit 4-19. Based on experience and the stated cross-
check we believe this outlook is reasonable. Note we have been careful to update timing on
a number of large projects that have now slipped out of the 2016-2019 time frame. These
include al-Zour in Kuwait, Dangote in Nigeria and Mthombo in South Africa. (See Appendix
Section 6.2.2 for detail.)
The resulting net projected end 2019 refining capacity is set out in Exhibit 4-20.
Exhibit 4-18 OPEC 2015 World Oil Outlook Project Additions
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Exhibit 4-19 Refining Projects through 2019 - Adjusted
Exhibit 4-20 Projected Total Refining Capacity End 2019
million barrels per calendar
dayAsia
Pacific Europe FSU
Middle
East Africa
Latin
America
North
America Global
Distillation
Crude Oil (Atmospheric) 2.615 0.153 0.281 1.359 0.279 0.176 0.772 5.635
Vacuum 0.614 0.076 0.010 0.357 0.103 0.231 0.015 1.406
Upgrading
Coking 0.229 0.085 0.167 0.283 0.019 0.198 0.157 1.137
Catalytic Cracking 0.389 0.000 0.133 0.100 0.050 0.053 0.020 0.745
Hydrocracking 0.229 0.102 0.252 0.117 0.074 0.031 0.151 0.956
Gasoline Quality
Reforming 0.240 0.021 0.018 0.214 0.061 0.032 0.002 0.588
Isomerisation 0.011 0.015 0.028 0.039 0.033 0.000 0.000 0.126
Alkylation 0.014 0.000 0.041 0.000 0.000 0.000 0.031 0.086
Polymerization 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
Desulphurisation
Naphtha 0.276 0.024 0.021 0.246 0.070 0.056 0.002 0.695
Gasoline 0.131 0.000 0.087 0.183 0.036 0.056 0.003 0.496
Middle Distillates 0.476 0.071 0.326 0.400 0.135 0.250 0.156 1.814
Vacuum Gasoil/Residual 0.133 0.000 0.075 0.329 0.000 0.057 0.000 0.594
of which
VGO 0.108 0.000 0.075 0.183 0.000 0.043 0.000 0.408
Resid 0.026 0.000 0.000 0.146 0.000 0.015 0.000 0.186
REFINING PROJECTS THROUGH 2019 - ADJUSTED
million barrels per calendar
dayAsia
Pacific Europe FSU
Middle
East Africa
Latin
America
North
America Global
Distillation
Crude Oil (Atmospheric) 33.598 15.424 8.309 10.505 4.485 6.454 22.520 101.296
Vacuum 11.504 6.562 3.220 2.862 1.145 2.985 10.011 38.289
Upgrading
Coking 3.012 0.786 0.485 0.570 0.103 0.844 3.368 9.169
Catalytic Cracking 6.155 2.173 0.908 0.914 0.305 1.295 6.568 18.317
Hydrocracking 3.333 2.022 0.654 0.972 0.237 0.228 2.287 9.733
Gasoline Quality
Reforming 4.064 2.330 1.187 1.225 0.560 0.426 4.443 14.234
Isomerisation 0.369 0.572 0.321 0.387 0.093 0.055 0.911 2.708
Alkylation 0.327 0.233 0.058 0.092 0.034 0.145 1.319 2.209
Polymerization 0.012 0.044 0.010 0.005 0.006 0.006 0.057 0.141
Desulphurisation
Naphtha 4.440 3.030 1.237 1.598 0.689 0.599 5.437 17.031
Gasoline 1.826 0.582 0.236 0.422 0.137 0.341 2.678 6.223
Middle Distillates 9.332 5.334 2.366 2.607 0.955 1.276 7.271 29.141
Vacuum Gasoil/Residual 3.240 1.740 0.346 0.705 0.034 0.288 3.147 9.498
PROJECTED REFINERY CAPACITY END 2019 INCLUDING PROJECTS
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4.11 Projected Net Available Capacity End 2019
To take the assessment of end 2019 base capacity one step further, we compared our
outlook with that contained in the IEA 2016 MTOMR. This comparison is summarised in
Exhibit 4-21. Our end 2019 projected base capacity comes out at 101.3 mb/d, 0.5 mb/d
below the IEA’s 101.8 mb/d. For the reasons set out above, we believe this basis is
reasonable in terms of both projects and closures.
We would point out that 101.3 mb/d would not represent the final capacity in the 2020
case. This is because, although 2020 is considered as too near to today to allow for
unfettered investment by the Model in additional refining capacity, we do allow for limited
creep / de-bottlenecking capacity across primary and a number of secondary units in
selected regions. WORLD Model results, (see Section 5.1.5), embodied around 0.3 to 0.45
mb/d of additional minor debottleneck distillation capacity (plus secondary units) in the
2020 cases taking our projected end 2019 total capacity in place up very close to the IEA
estimate.
Exhibit 4-21 EnSys vs MTOMR Capacity Projection
million b/cd
2016
MTOMR
EnSys June
2016
Jan 2016 base capacity 97.2 97.7
Additions to end 2019 5.8 5.6
Announced/firm closures to end 2019 (2) (1.22) (1.60)
Presumed additional closures to end 2019 0.00 (0.40)
Total projected closures to end 2019 (1.22) (2.00)
Net additions to (end) 2019 incl closures 4.6 3.6
Net end 2019 base capacity (1) 101.8 101.3
WORLD Model De-bottleneck Capacity Additions
up to 0 0.45
Final Projected End 2019 Capacity 101.8 101.8
Notes:
1. Main difference here relates to EnSys including the K Lindsey
closure in 2015 versus IEA 2016
EnSys vs. IEA MTOMR Refinery Capacity Projection
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4.11.1 Nameplate versus Effective Capacity
EnSys would stress that the above assessment relates to nameplate capacity. We recognise
in the WORLD Model that there are significant differences between nameplate and effective
capacities. Even in regions with highly efficiently run refineries, such as the United States,
sustained annual average utilisations rarely rise much above 90% of calendar day capacity.
In many other regions utilisations can be far lower. This is the case, for example, in parts of
Africa and the FSU. (Currently refineries in Nigeria have all but stopped after a long period
of utilisations reported as low as 30%.) In addition, there are areas of the Middle East and
Africa where conflicts are causing partial or total refinery shut-downs, in turn raising the
question of whether these refineries will be back in operation, even at moderate rates, by
2020. Over time, EnSys has built in to the WORLD Model effective maximum utilisation
rates by region to reflect these factors.
We would also point out that the extent of refinery turnarounds and unscheduled
shutdowns varies from year to year; further that, if faced with wide price differentials in
2020, refiners may defer turnarounds thus raising short term effective available capacity.
However, we do not believe it is appropriate to build such an assumption in to the analysis;
rather we have applied typical/average conditions.
Overall, it has to be recognised that there is inevitably some degree of uncertainty in the
projection of both nameplate and effective available capacities – just as there is with total
demand and marine fuels demand / switch volume. If and as necessary, these can be
tackled via Model sensitivity cases.
4.11.2 Regional Refinery Maximum Utilisation Rates
As stated above, the world’s refineries do not operate either primary (distillation) or
secondary process units at nameplate capacity. Making this distinction in global WORLD
type analyses is absolutely critical.23 The United States arguably has the world’s most
efficient refineries but EIA data show that, as a whole, the United States system has
operated since 1985 at anywhere from a low of 77.6% of nameplate (calendar day) capacity
to a high of 95.6%. In 2015, overall utilisation was 91.2%, a level towards the upper end of
the historical range.
23 The 2015 BP Statistical Review indicates 2014 global refinery utilisation rate at just under 80% equating to a nearly 20 million b/d gap between nameplate capacity (96.5 mb/cd 2014 per BP) and refinery throughput (76.8 mb/d 2014 per BP).
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The United States Percent Utilization of Refinery Operable Capacity (Percent) – Source EIA
Decade Year-0 Year-1 Year-2 Year-3 Year-4 Year-5 Year-6 Year-7 Year-8 Year-9
1980's
77.6 82.9 83.1 84.4 86.3
1990's 87.1 86.0 87.9 91.5 92.6 92.0 94.1 95.2 95.6 92.6
2000's 92.6 92.6 90.7 92.6 93.0 90.6 89.7 88.5 85.3 82.9
2010's 86.4 86.2 88.7 88.3 90.4 91.2
Exhibit 4-22 Historical United States Refinery Utilisations
In this analysis, EnSys applied maximum crude unit utilisation rates that reflected current
and recent operations across the world’s regions. For the 2015 Calibration Case, maximum
utilisation rates covered a range from 88-93% for the United States and Canadian refining
regions to a low of 50% for West Africa. For Europe, maximum utilisations were set at up to
85-86% for Western Europe, moderately lower for Eastern Europe. For the Latin American,
Caspian and Middle East regions, maximum utilisations were set in the broadly in the mid
70’s% range. Other regions were set to maxima generally in the low to mid 80% range.
For the 2020 cases, allowed maximum utilisations were left unchanged for most regions, in
some instances moderately raised. West Africa maximum utilisations were modestly
increased on the basis that, by 2020, there one could foresee at least some small
improvement in the region in terms of its refinery operations24. In the Middle East, a limited
improvement was also allowed for; this to reflect the new, large scale, and one would
expect, efficient capacity coming on stream there. (Implicitly, this premise assumes that
additional capacity will not be taken offline in the region or elsewhere through conflict.)
Small increases in maximum utilisation were allowed for in the Russian Federation and the
Pacific Industrialised region (Japan plus Australasia) as a reflection of the on-going
rationalisation programs there. In China, refinery utilisations have been dropping as
capacity additions have out-paced domestic demand growth but a small increase by 2020
was applied to allow for the potential that this situation could turn around.
In Europe, utilisations have risen significantly in recent years due to the spate of closures
there. Looking ahead to 2020, the assumption was made that maximum utilisations /
effective available capacity would stay essentially unchanged as some additional closures
offset flat to declining regional product demand. In Latin America, maximum utilisations
were projected to remain unchanged through 2020. (The difficulties being experienced in
24 NNPC has been putting out requests for assistance to restart and improve operations at its refineries. Note we assumed the Dangote project would not be on stream by end 2019.
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Brazil and Venezuela today may if anything lead to further reductions in effective capacity
available.)
Overall, as elsewhere in this analysis, our goal was to achieve ‘central’ assumptions for the
2020 cases.
Secondary process units were assigned maximum utilisations / effective availabilities based
on industry knowledge and published data. They also constituted a ‘tuning’ variable in
calibrating the 2015 Calibration Case. Effective secondary capacity availability is arguably a
more important driver of refining economics and hence product supply costs and
differentials than is primary distillation capacity. Again, mainly United States history was
used to gauge ‘efficient’ potential utilisations for the major upgrading units (the EIA carry
data on capacity of and inputs to catalytic cracking, hydrocracking and coking units, also
catalytic reforming). Maximum utilisations for other regions were then ‘scaled’ based on
regional utilisations relative to the United States.
Maximum utilisations for other secondary units are based on accumulated knowledge from
industry sources. Overall, ‘efficient’ maximum utilisations were set at 90% for FCC and
coking, slightly lower for hydrocrackers, 90%+/- for the main desulphurisation units
(somewhat lower for resid desulphurisation) and 85%+/- for tertiary units such as
alkylation.25 For hydrogen plant, ‘efficient’ maximum utilisation was set at somewhat over
90% and for sulphur plants 65%. Again, variations are embodied in WORLD to reflect
regional differences in utilisation rates / effective availability of capacity.
4.11.3 Hydrogen Plant, Sulphur Plant and FCC SOx Emissions
In conducting the analysis, EnSys paid particular attention to capacity for and potential
constraints that could arise related to hydrogen and sulphur plants and also regarding FCC
SOx emissions. These are three areas of the WORLD Model that are both critical to this
study, since a primary impact of the Global Sulphur Cap will be to require substantial
sulphur removal, and can have a ‘tail wagging the dog’ effect of even causing the Model to
go infeasible if capacity is inadequate in the scenario being modelled. EnSys therefore
wanted to ensure they could be handled adequately, both in terms of establishing a realistic
baseline and in terms of capturing whether available capacity in 2020 would be sufficient
under the Global Sulphur Cap and then, if not, how much additional capacity would be
needed.
25 EIA data showed maximum annual average utilizations between 2010 and 2015 of 87% for FCC units, 89% for coking, 90% for hydrocrackers and 80% for catalytic reforming units.
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4.11.3.1 Hydrogen Plant Capacity
Hydrogen plant data represent a particular challenge. One reason is that, in certain regions,
most notably the United States, there is substantial use of merchant hydrogen plant
capacity, i.e. outside refinery gates, which supplements hydrogen generated by in-refinery
hydrogen plant and catalytic reformers. For example, in the United States Gulf Coast, there
is a 1.4 billion scf/d hydrogen supply and pipeline system (operated by Air Products) which
supplies refineries in the region and is the biggest of its kind in the world. Further, the EIA
requires that refiners report in-refinery hydrogen plant capacity26 whereas the Oil & Gas
Journal, for its Worldwide Refining Survey, requests respondents also take account of
‘outside the fence’ merchant capacity from which they receive hydrogen. Finally, the
quality of reported hydrogen plant capacity data is variable. This is evident, for example, in
China where only minimal hydrogen plant capacity is reported in the January 2016 Oil & Gas
Journal Refining Survey. (China is also one region where merchant capacity is starting to
appear.)
To deal with the potential gaps in reported hydrogen plant capacity, the 2015 Calibration
Case was run with the option to purchase additional hydrogen plant capacity where
needed.27 As a result, limited amounts of hydrogen plant capacity were selectively added in
to the base, notably in the United States, China and, to lesser degrees, the Russian
Federation and Europe. The 2015 case with the added capacity was then cross-checked to
ensure that no regions were showing significant excess amounts of hydrogen plant capacity.
(This could have led to unrealistic ‘free’ capacity being spuriously available in the 2020
cases).
As with all the refinery processes, for the 2020 Base Case, known assessed hydrogen plant
capacity additions via projects were added in to the base 2020 capacity. The Base Case was
run with the option to “purchase” additional hydrogen plant capacity but the additions were
checked as to their scale. The 2020 Base Case added only a small amount of further
hydrogen plant capacity, some 619 million scf/cd on top of a projected 2020 base of 27,436
million scf/cd including projects. This was considered realistic given that the known projects
included only in-refinery additions; also that the total hydrogen plant additions projected via
projects from 2016 through end 2019 we assessed at 3,704 million scf/d. In short, we
26 EIA Forms 810 and 820. 27 Hydrogen is produced from purpose-built hydrogen plant but also as a byproduct from catalytic reforming units. Their main function is to increase the octane level of naphtha for use as gasoline blendstock but they also produce propane, butane and hydrogen. The level of hydrogen produced from the catalytic reformers is a function of their throughput but also their severity of operation (octane level of the reformate product). Thus there is some degree of potential to vary hydrogen production from the reformers but this tends to be limited by their need to produce key blendstock for gasoline (and in some refineries for use as BTX aromatics feedstock). The WORLD Model captures the interplay between hydrogen available from hydrogen plant and from the catalytic reformers.
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concluded this approach set up a relatively realistic 2020 Base Case outlook with respect to
hydrogen plant capacity.
2020 Global Fuel cases were also run with hydrogen plant capacity addition allowed. A key
aim here was to assess the degree to which Global Fuel scenarios would require additional
capacity, over and above the total in the Base Case, to cope with the increased
desulphurisation load. The indicated incremental hydrogen plant requirements could then
be assessed against the rate of capacity additions via 2016-2019 projects to determine if
such further additions by end 2019 would be achievable.
4.11.3.2 Sulphur Plant Capacity
Sulphur plant capacity data do not suffer from the inside/outside the refinery fence
complexity of hydrogen plant but our experience has been that the capacity data are not
always fully captured. According to our database, which is based on public data
supplemented by research, a significant number of the world’s refineries have some form of
hydro-desulphurisation capacity but no reported sulphur plant capacity. This includes
refineries in the United States, Canada, Europe and Japan/Australasia. We find it difficult to
believe that so many refineries, especially in the industrialised regions, are operating with
no sulphur plant, and hence with the implication that H2S from desulphurisation units is
going either to fuel or the flare.
In WORLD, we do not normally allow for H2S to go to the flare or fuel and did not do so in
any of the cases run for this study. Thus the presence of inadequate/under-reported sulphur
plant capacity in the WORLD Model data can distort the results obtained (‘tail wagging the
dog’ effect) and can go so far as to make a Model case mathematically infeasible.28
Consequently, we have followed the practice of adding in limited amounts of sulphur plant
capacity to the calibration case in order to maintain feasibility (and to establish a baseline as
if all refineries were routing H2S to the sulphur recovery plant). In this study, we added
close to 9,800 st/cd as adjustments to the original 2016 base capacity of nearly 120,000
st/cd (to arrive at an ‘assessed’ 2016 base capacity before projects of just over 128,000
st/cd). We fully understand that this means we are adding capacity which may or may not
in fact exist today and, thus, that we may be understating future needed additions.29
However, the approach does lead to a 2020 basis (see below) from which it is possible to
assess the effects of changing fuels requirements. Moreover, supplemental research (see
28 This is because, if the sulphur plant capacity specified in the Model case is inadequate to handle the H2S generated from desulphurization units, then the fact that part of the H2S has ‘nowhere to go’ will prevent the Model from removing sufficient sulphur from the demanded gasoline, jet/kero, diesel etc. and thus prevent these products from being produced to the required sulphur specification standards. This inability to meet required product sulphur limits will send the Model infeasible. 29 To the extent that refiners with HDS capacity but no sulphur plant were to respond to the Global Sulphur Rule by putting more H2S to fuel or flare, the sulphur extracted at those refineries would merely be emitted locally instead of at sea. Again, this possibility was not permitted in the WORLD Model cases.
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box) reinforced the adjustments made for the two countries where the gaps between
reported and needed sulphur plant capacity were largest, namely the Russian Federation
and China.
As with hydrogen plant, the 2020 Base Case was run with the option to purchase additional
sulphur plant capacity. The needed volume, over and above additions via known projects
was small, just over 300 st/cd versus additions versus projects of 13,366 st/cd and a total
2016 base plus projects of over 141,000 st/cd. Thus, as with hydrogen plant, this small 2020
Base Case addition was assessed as reasonable.30 Again, the key question was whether and
how much additional sulphur plant capacity (over and above base capacity plus projects)
would be indicated as needed in the Global Fuel cases and whether such levels of further
additions could realistically be achieved by end 2019.
30 A key factor affecting whether and how much additional sulphur plant capacity is needed is the assumed level of utilization. In the WORLD Model, our base assumption is for a maximum ‘efficient’ 65% utilization / effective availability to allow for the high level of redundancy normally employed with sulphur plants. We then assign variations off this base level for each refining region. As can be seen in Section 5 Model results tables, our overall global utilizations were generally in the 48-53% range. Research and contact with sulphur plant experts confirmed that this level lies in the middle of a typical operating range from 40 – 70%. Also, the fact that the utilization levels we had set led to a very small amount of required additions in the 2020 Base Case, over and above known projects, tended to reinforce that we had picked appropriate levels for sulphur plant utilization. A number of factors combine to lead to the relatively low utilization levels that are typical for sulphur plants. Firstly, spare capacity is needed so that the refinery can cover a sulphur plant outage and still not exceed its allowed SOx emissions limits. As a result, refineries may have two, three or more sulphur plants to provide necessary redundancy. This situation is compounded by the need to (a) accommodate the refinery switching to a higher sulphur than normal crude slate and (b) to deal with the consequences of potential surges or upsets in the upstream gas plant which extracts H2S that is routed to the sulphur plant. The Director of Technology at Jacobs Comprimo Sulfur Solutions pointed out that “Refineries need to deal with a shutdown scenario. So when a sulfur recovery unit trips, the capacity needs to be off loaded to other SRUs or the refinery production needs to be cut (in most countries) so that is the main reason why there is some installed spare capacity and the SRUs run below max capacity.”
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Sulphur Plant Capacity Research
As stated in the body of the text, the WORLD cases were run with adjustments to sulphur (and hydrogen) plant capacity that were developed by running 2015 test cases which showed how much additional capacity was needed, i.e. which highlighted and enabled us to adjust for gaps in the published capacity data. Since running the WORLD cases, EnSys has undertaken further research into sulphur plant capacity data. We researched and contacted major sulphur plant process vendors as detailed below.
Company Sulphur Removal Technology
Number of SRU Projects
Jacobs Comprimo Sulfur Solutions 191
Black & Veatch Oxygen Enrichment/Claus/ Tail Gas Treatment
138
Air Liquide Claus and Oxyclaus 104
Kinetic Technology Sulphur Recovery 86
WorleyParsons Oxygen Enrichment 38
Data provided by these vendors, placed together with data from Hydrocarbon Publishing and the Oil & Gas Journal, enabled us to piece together more complete pictures of sulphur plant capacity in selected target countries. The supplemental research from the tertiary sources resulted in raising assessed Russian Federation sulphur capacity from 1,413 st/d to 3,924 st/d. These figures excluded 18 of the 39 total refineries in the country. The 18 excluded refineries account for 1.4 of the 7 mb/cd of Russian Federation capacity. Extrapolating the data indicated total Russian Federation sulphur production capacity of somewhat under 5,000 st/d. By comparison, the 2015 modelling exercise we conducted led to us add 3,370 st/d of capacity to the original 1,413 to arrive at a total of 4,783 st/cd, i.e. very close to the capacity reported via vendor research and then extrapolated.
Likewise, adding data from vendors raised China’s sulphur plant capacity from 4,239 to 7,886 st/cd and covered 23 of 49 total refineries. The missing 26 refineries account for roughly 4.2 of the total 13 mb/cd of crude refining capacity in China. Extrapolating the data indicates possible total sulphur plant capacity in China of around 9,000-11,000 st/d (ignoring China’s ‘teapot’ refineries where sulphur plant capacity is expected to be low as the refineries are generally simple.) By way of comparison, EnSys’ 2015 modelling lead to 4,365 st/cd being added to the original 4,239 st/cd for a total for China of 8,594 st/cd.
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4.11.3.3 FCC SOx Emissions Constraints
FCC units act as partial desulphurisation units with the extracted sulphur routed to the FCC
stack gas as SOx. Resulting emissions to atmosphere may be controlled via installation of
stack gas SOx scrubbers. Another common means to reduce FCC SOx emissions is for
refiners to install an FCC feed desulphurisation unit where the sulphur is removed in the
form of H2S and then converted to sulphur in a sulphur recovery plant. This generally
reduces feed and thus product sulphur and SOx emissions by around 90%. The feed
treatment unit also has the effect and benefit of appreciably improving FCC yields.
Consequently, many refiners have opted for feed desulphurisation over stack gas scrubbing.
(Stack gas scrubbers have very high operating costs.)
The WORLD Model embodies FCC feed desulphurisation and the computation of FCC stack
sulphur emissions as a function of FCC feed quality and process operations. The Model also
includes the FCC SOx scrubber unit. An issue in this area is that there is a lack of data on
FCC SOx scrubber capacity. However, we are aware that it is unrealistic to assume that
refineries can simply raise their FCC SOx emissions should a particular scenario indicate that
raising the sulphur level of FCC feed is warranted. Such potential certainly exists in the case
of the Global Sulphur Cap, because refiners could have economic incentives to switch lower
sulphur VGO and residua from FCC feed to 0.5% sulphur marine fuel blends and take higher
sulphur feeds into the FCC. Such switching would tend to be limited by the need for the
refineries to still meet the specifications for gasoline and distillate products from the FCC.
However, to cover this situation, EnSys adopted a two-step process.
Firstly, the 2020 Base Case was run without constraint on FCC SOx emissions. Then the
emissions from that case were put into the Model as upper limits which were assumed to
remain in place across the Global Fuel cases. Thus, any need to raise FCC feed sulphur in a
Global Fuel case resulted in the need to purchase FCC SOx scrubber capacity so that there
was no net increase in FCC SOx emissions to atmosphere. The Global Fuel cases thus
captured both the economic impacts (on product prices) of the need to constrain FCC SOx
emissions and/or purchase SOx scrubber capacity and showed how much of such capacity
would be needed under any shift to the Global Fuel standard.
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5 WORLD Modelling Results
This section gets to the core of the analysis by setting out our assessment of the ability of
the global refining sector in 2020 to meet assessed marine fuels demand. In the body of
this section below, we have focussed on key results which convey primary messages from
the analysis, generally at the global level. Appendix Section 6.3 contains additional detail for
two key cases, namely the 2020 Base and Mid Switch High MDO cases. These detailed
tables provide further information, notably at the regional level, and they illustrate the level
of detail that applies across all cases, namely:
Refinery operations for major process units, again for each of the ten regions and
global, including: capacity additions, throughput and utilisations
Total crude oil movements, total trade other than crude oils (i.e. including non-
crudes, products and intermediates), and product movements for the major
products between ten aggregate regions
Crude oil movements by type, with seven crude oil categories, for each of the ten
aggregate regions., expressed first from the perspective of imports into and
production and consumption within the region and secondly from the perspective of
production within and exports from the region.
The first part of this Section concentrates on actual Modelling results obtained; the second
part reviews the factors that could materially impact and change the results, and hence the
2020 outlook.
Detailed global results are set out in Section 5.1.4 and are referred to throughout the next
sections below. As a general point, we would emphasise that, in WORLD Model cases,
everything must balance. Neither crudes, nor products nor intermediate streams can be
‘dumped to ground’ or bought in. For instance, it is not possible for the refining regions to
spuriously demand say more light sweet crude than is available globally in total. If that
happens, the case is flagged as infeasible. Also, each refinery and each region must balance
in terms of inputs and outputs. Across crudes and every other stream, imports must
balance exports. All supply of all crudes and non-crudes must be used (except for volume of
the marker crude which is allowed to float and given a price); and all demands for all
products must be met (except for fuel grade petroleum coke and elemental sulphur which
are allowed to float and are given prices). In short, the system has to maintain an overall
global balance. In doing so, very few movements or refinery operations are forced; rather
the Model is allowed to use the flexibilities inherent in the global refining and transport
system to move crudes, non-crudes and products, and to set refinery processing and
blending operations and thus to achieve an overall global balance.
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5.1 Key Model Results & Findings
As noted elsewhere in this report, there is no such thing as perfect insight into the exact
situation that will apply in 2020 in terms of either global liquids supply and demand, marine
fuels demand, required ‘switch volume’ under the Global Sulphur Cap, refining capacity or
key economic parameters, notably world oil price, also freight rates. The cases run to date
and set out below therefore aim to shed light on the central issue of the supply and market
impacts for an assessed likely range of potential marine fuel ‘switch volume’ and Global Fuel
formulation given central premises regarding global demand, refining capacity, etc.
Additional sensitivities can be probed via added WORLD Model cases if appropriate.
5.1.1 2015 Calibration Case
To establish a basis for the 2020 modelling cases, EnSys undertook a 2015 Calibration Case.
A primary purpose of the this case was to achieve WORLD Model results that closely
matched actual 2015 year average data for crude oil and product prices and differentials,
i.e. which thus set the Model to an appropriate degree of market tightness / slackness.
Exhibit 5-16 compares 2015 actual average open market / spot prices in selected major
market centres (shown in the first column) with the corresponding Model results (shown in
the second and third columns).31 Outside of the 2015 data in the first column, the only
input price in the exhibit is that for Saudi Light crude oil. All other Model prices/supply costs
are outputs. (Input prices were from Bloomberg except those for MGO $/tonne which were
from Clarkson Research Services.) The same applies to the resulting computed differentials
shown in Exhibit 5-17.
As can be seen, the Model prices obtained were generally close to the reported 2015 actual
prices, giving confidence that the Model was calibrated to an appropriate level of tightness /
slackness. A key part of the tuning related to setting regional maximum effective
availabilities / utilisation rates on distillation and secondary processing units. These settings
impacted and were used to tune regional crude runs as well as prices/differentials.
5.1.2 2015 Adjusted Case
In a final review of base refinery capacity, as discussed in Section 4.8, EnSys identified a
small amount of additional refinery capacity that needed to be added in to the base and
undertook research which led to an appreciable upward revision in solvent deasphalting
capacity. We subsequently reran the 2015 case (the Adjusted Base Case). The capacity
31 Note that in the WORLD Model we are taking marginal costs and equating those to spot prices. Also, we have not, at any stage in this analysis attempted to assess or report impacts on retail prices with its necessary consideration of both taxes and subsidies.
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additions led to moderate softening in crude and product differentials. The 2020 cases were
run with the same base capacity as per the Adjusted Base case (plus 2016-2019 projects and
net of 2016-2019 closures), i.e. the various cases were run with the capacities listed in
Exhibit 4-9 (January 2016 capacity) and Exhibit 4-20 (end 2019 capacity).
5.1.3 2020 Base Case
The 2020 Base Case (no Global Fuel) constituted the basis against which the Global Fuel
cases were run and evaluated, enabling us to identify and quantify the projected differential
impacts of implementing the Global Sulphur Cap in January 2020. As the detailed exhibits
show:
Global demand was modelled at 99.2 mb/d. (The IEA WEO was at 98.8 mb/d which
adjusted up to 99.2 mb/d when we applied our marine fuels demand outlook.) This
and other ‘top down’ parameters relating to supply and world oil price were taken
from the 2015 IEA WO NEW Policies case.
Total 2020 marine bunkers demand was assessed at 6.24 mb/d (341 mtpa) excluding
LNG. This comprised approximately 0.57 mb/d (approx. 29 mtpa) of 0.1% ECA fuel
(at DMA standard), 1.18 mb/d (approx. 59 mtpa) of other MDO (again at DMA
standard) and 4.494 mb/d (approx. 253 mtpa) of IFO, predominantly IFO380.
To end 2019 base distillation capacity of 95.66 mb/cd plus 5.64 mb/cd of assessed
construction was added 0.36 mb/cd of minor debottlenecking, leading to a total
capacity of 101.66 mb/cd.
Minor debottlenecking was also allowed and took place for vacuum distillation, FCC,
hydro-cracking and coking; also limited revamping of high pressure catalytic
reformers to CCR type and of conventional distillate desulphurisation to ultra-low
sulphur type.
As previously discussed, small amounts of hydrogen and sulphur plant capacity
additions were seen as necessary. For hydrogen plant, these equated to 17% of the
3704 million scf/cd added via projects. Again, EnSys considered this plausible given
that the known projects are only for in-refinery plant and additional merchant plant
capacity can be expected to be installed in the period from 2016 through 2019. The
Base Case sulphur plant additions over and above projects equated to only 2% of the
13,366 STPD projected to be added 2016-2019, indicating that sulphur plant
additions via 2016-2019 projects look to be in good balance with 2020 Base Case
capacity needed. Hydrogen plant utilisations in the Base Case were almost 75%
global average and sulphur plant utilisation close to 50%.
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FCC stack sulphur emissions were computed at 4,673 tonnes per day total across the
36 refining groups in the Model.32 The 2020 Base Case emissions were then set as
upper limits (i.e. not-to-exceed levels) for all the Global Fuel cases and, in those
cases, additional FCC sulphur (SOx) emissions handled via purchase of incremental
SOX scrubber capacity.
Global crude runs were at 82.2 mb/d, representing an overall 80.9% utilization level
– although with major variations from region to region. (See Appendix Section 6.3 for
more detail.)
Major upgrading units were projected as running at 67.3% for cokers, 72.8% for
FCC’s and 78.0% for hydrocrackers, global average. The somewhat lower utilisation
for cokers reflects the combination of cumulative major investments in coking
capacity and the recent lightening of the global crude slate.
Overall distillate desulphurisation capacity utilisation was projected at 77.1% with
VGO and resid desulphurisation units at respectively 70.0% and 61.4% global
average.
For catalytic reforming, hydrogen and sulphur plant the levels were respectively
69.1%, 74.8% and 48.7%.
For all units it should be borne in mind that allowed maximum utilisations (maximum
effective availabilities) were set generally well below nameplate capacity especially
in certain regions of the world.
Marker crude (Saudi Light) price was set at $76.03/barrel (FOB), $26.53 / barrel
higher than in 2015.
Gasoline to HS IFO380 supply cost differentials were projected as moderately ($4-
7/barrel) higher than in 2015 but ULS/LS diesel to HS IFO380 differentials markedly
($13-15/barrel) higher. These widened Base Case (no Global Fuel) distillate-resid
differentials reflect the growth in jet/kero and gasoil/diesel demand contained in the
demand projection (with the adjustment discussed earlier) and equate to the upper
end of the range for such differentials in recent years. (See Exhibits 5-6, 5-7, 5-8.)
Approximately $4-6/barrel of the widening in the diesel-IFO differentials versus 2015
is accounted for by the increase in crude oil price. (See Exhibit 5-17.)
Likewise 2020 Base Case crack spreads were indicated as around $7-10/barrel higher
for sweet crudes than was the case in 2015 and $10-12/barrel for heavy, high
sulphur crudes. Again, up to $4/barrel of this increase is due to the higher world
crude oil price.
32 The WORLD Model contains 23 ‘supply-demand’ regions. The five United States PADD district regions are broken into sub-PADD level refining groups, and Canada’s refining is split into three groups, leading to a total of 36 refining groups in the Model. Outside the United States and Canada, each supply-demand region has one refining group which aggregates all the refineries in that region.
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Overall, the 2020 Base Case indicates appreciable tightening, especially on distillate
products (jet fuel, kerosene and diesel) versus the situation in 2015. Again, the relatively
significant growth in these products that was included in the Base Case outlook is a central
factor. This effect is further examined in Section 5.2.2.
5.1.4 2020 Global Fuel Cases
The two sets of Global Fuel cases simulate substantial, and relatively immediate, changes
imposed on to the 2020 Base Case. The results point to severely strained and potentially
infeasible refining sector conditions, impacting pricing for all products across all world
regions, not just marine fuels. Regarding the two sets of cases, the High MDO series had
greater impacts on the system than the Low MDO (High Heavier Fuel) cases. This is to be
expected since the increased volumes of heavier marine fuels allowed under the Low MDO
cases, (50% of total ‘switched’ fuel versus 10% in the High MDO cases), are generally easier
and less costly to produce. Equally, the impacts increased in going from Low to Mid to High
Switch volume.
5.1.4.1 Changes in Refining Operations & Trade Movements
5.1.4.1.1 Refinery Operations
The results indicated that, even with the additions to capacity for hydrogen plant, sulphur
plant and FCC SOX scrubbers allowed for in the Model, (see further discussion below), the
industry would only be able to handle the projected switch volumes with severe economic
strain. The mechanism for achieving the switch volume conversion would entail extensive
changes to refinery operations and to inter-regional trade. Important factors indicated
from the modelling results include:
A key component indicated in achieving the required upgrading of residual streams
to marine distillate boiling range is increases in coker unit throughputs. Thus
effective availability / maximum achievable utilisations of coking capacity, and
projected supply of heavy crudes that take up coking capacity, are central to the
ability of the refining industry to respond in 2020 to the Global Sulphur Cap
Cokers are a ‘carbon removal’ upgrading process33 such that part of the liquid
coker feedstock is rejected as solid petroleum coke. This in turn necessitates
running more crude oil to replace the lost residual liquid volumes rejected to coke.
Refinery processing intensity and thus fuel use also increase, thereby further
33 FCC (fluid catalytic cracking) is also a carbon removal process and produces coke. Hydrocracking in contrast is a hydrogen addition upgrading process since external hydrogen becomes embodied in the streams being processed in the unit. Where the hydrogen used has been generated from natural gas, this means the hydrocracker acts as a partial ‘gas-to-liquids’ process.
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raising required crude runs. The additional crude runs bring in light components
including fractions which add directly and indirectly (e.g. via FCC and
hydrocracking) to the production of more middle/marine distillate material. As
shown in Exhibits 5-1 and 5-14, these increases in crude runs are significant,
around 0.25 mb/d at the Low switch level up to close to 1.25 mb/d at the High
level. In the Model cases these increase were all projected to be Middle East
medium sour as the balancing crude type. Further, no change was made in
assumed world crude oil price to reflect the increased crude runs
Vacuum unit throughputs increase because of the higher crude runs, producing
VGO and vacuum resid
Coker utilizations are maximized to upgrade high sulphur vacuum resid to cracked
distillates and naphtha. (As would be expected, the Low MDO cases – which call for
less upgrading to distillate versus the High MDO – show less tendency to ‘max out’
coker utilisations.)
The 4 +/- mb/d (approx. 200+/- mtpa) of IFO released contains lighter cuts as well
as residual streams
FCC resid feed rate increases, releasing VGO. FCC conversion levels tend to drop to
increase distillate (light cycle oil) yield at the expense of gasoline
Hydrocrackers (already operating close to full in the Base Case) take in more HS
VGO less LS VGO, also more coker gasoil
VGO/resid HDS unit utilisations are maximised
Distillate HDS unit duties / desulphurisation rates are maximised. Note this can be
at the expense of catalyst life so not sustainable longer term
Catalytic reforming unit severities rise, producing more hydrogen and impacting
gasoline and LPG pools
Even so, appreciable hydrogen plant throughput/capacity increases are needed,
around 2-3% incremental over total global 2020 Base Case capacity and around 35-
50% of additions via 2016-2019 projects (20 – 35% versus projected 2020 Base
Case situation which included additional hydrogen plant capacity added by the
Model)
Substantial sulphur recovery plant throughput/capacity increases are also needed,
around 6% incremental over total global 2020 Base Case capacity and around 60-
75% of additions via 2016-2019 projects. See Exhibits 5-2 and 5-3. These required
sulphur plant capacity increases are on top of a projected / allowed increase in
sulphur plant utilisations of close to 4% worldwide average between the 2020 Base
and Global Fuel cases. See Exhibit 5-15.
The above add up to very substantial changes in refinery operations especially if attempted
over a relatively short period.
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Sulphur disposition is clearly crucial in governing the extent to which the global refining
industry can react to and meet the Global Sulphur Cap. All assays and process vectors in the
WORLD Model are weight and sulphur balanced and essentially all products have weight
percent / ppm specifications imposed. We do not currently generate sulphur balance
reports. That said the main mechanisms by which the industry is responding to the Global
Sulphur Cap are evident in the Model results. Taking the Mid Switch High MDO case as an
example, converting 3.8 mb/d (195 mtpa) of HS IFO to 0.5% (nominal) sulphur content fuel
requires extracting or reallocating of the order of 15,000 st/d of sulphur. Versus the 2020
Base Case, sulphur plant throughputs go up by 10,000 st/d, signifying increased hydro-
processing severity/throughput (desulphurisation and hydrocracking), hydrogen use and
sulphur recovery as the primary mechanism to change the required marine product sulphur.
In addition, the 2020 Mid Switch High MDO case shows an increase versus the 2020 Base
Case of around 0.43 mb/d of fuel grade petroleum coke production. Depending on its exact
sulphur content, this removes 4,000 – 6,000 st/d of sulphur. Thirdly, the 2020 Global Fuel
cases call for increases in FCC SOx scrubber capacity in the range of 200 to 400 st/cd (of
sulphur) depending on the case. These three routes sum to a total of around 14,000 –
16,000 st/d, i.e. they balance with the 15,000 st/d to be removed.
Despite the increasing trend toward ever tighter low and ultra-low sulphur standards across
most of these products in most regions of the world, it is conceivable that the pressure to
reduce marine fuel sulphur under the Global Sulphur Cap could lead to pressure to raise
sulphur contents on other fuels where there is any opportunity because of available
‘giveaway’ versus the fuel’s sulphur specification. Since refiners blend to minimise
‘giveaway’ versus sulphur and other key specifications, we would expect this scope to be
very limited. We would point out though that the combined jet/kero, inland gasoil/diesel
and inland residual fuels sold comprise a projected 2020 pool totalling almost 40 mb/d of
product – and gasoline another 25 mb/d. That said, significant portions of the gasoline and
diesel pools today constitute low and ultra-low sulphur products, as noted, where the scope
to raise sulphur content is either nil or minuscule. EnSys examined results from the 2020
Base Case and found that, in the Base Case, the vast majority of product blends worldwide,
covering gasoline, jet fuel, kerosene, diesel, heating oil and residual fuels were limiting in
the Model on sulphur, i.e. had no scope for increase. There were limited exceptions in
certain regions in the case of jet fuel, (against a typical 700 ppm assumed maximum), and
high sulphur inland HFO and marine IFO.
In short, the way the Model 2020 Base Case was set up means that – in the Global Fuel
cases - the scope to move sulphur into non-marine products is minuscule. In other words,
the cases are arguably conservatively appropriate because they call for the
refining/blending sector to fully deal with the change in marine fuel sulphur with no ‘easy
out’ options.
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One question these Model results bring up is whether the desulphurisation and
hydrocracking units would in fact be able to handle the increased processing severity
implied in these results. Given that the combined throughput on hydrocrackers plus
distillate and VGO/resid desulphurisation units in the 2020 Base Case is 36.6 mb/d, a brief
side calculation indicates that the increased load may be manageable but EnSys would
caution that the ability indicated in the Model runs for the HDS plus HCR units to cope with
the Global Fuel shift should be treated with some circumspection. 34
In any event, provided we have not understated the effective capabilities (effective
maximum utilisations) of the hydrogen and sulphur plants, the modelling results indicate it
is the capacity levels of those two units that would limit first. WORLD Model results for 2020
have global Base Case sulphur plant throughputs at somewhat over 69,000 st/d but rising to
79,000+/- st/d under the Global Fuel cases, i.e. around a 15% increase. (See Exhibit 5-15.)
As we state, we believe this means the sulphur plant capacity projected to be in place in
2020, and to a lesser degree the hydrogen plant capacity, would be inadequate to meet
requirements under the Global Sulphur Cap. Put another way, our Model projections
indicate full compliance with the Global Sulphur Cap will not be feasible with the refinery
equipment expected to be in place in 2020.
5.1.4.1.2 Marine Fuel Blending
Exhibit 5-4 summarises impacts on marine fuels blends for three 2020 cases: Base Case, Mid
Switch Low MDO and Mid Switch High MDO. Addition detail for these cases is provided in
Appendix Section 6.3.7.35 These cases represent a progression in terms of the marine fuel
pool getting lighter; the switch to 0.5% Global Fuel is allowed to be 50:50 MDO and IFO in
the Low MDO case and 90:10 MDO/IFO in the High MDO case.
The table highlights the progressive shift away from residual content (especially high
sulphur resid streams) and toward increased distillates and vacuum gasoils (VGO). The
increases in distillates include increases in both ‘straight run’ and ‘cracked stock’ streams.
The increases in VGO comprise increases mainly in ‘straight run’ streams but also limited
increases in hydrodesulphurised VGO indicating some potential degree of ‘pulling’
desulphurised VGO streams away from FCC feed. This is consistent with the albeit limited
34 We believe it would be more a matter of whether the HDS and HCR units could handle the increased absolute sulphur removal, based on increases in sulphur in the feedstock, rather than increases in the percentage desulphurization. (Raising the sulphur in the feedstock and keeping the desulphurization percentage constant will still lead to more tons of sulphur being removed.) 35 Appendix Section 6.3.8 summarises global average densities for each marine fuel ‘pool’ for the 2020 Base Case and Mid Switch High MDO cases.
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increases projected for FCC SOx scrubber capacity which reflect the increased pressure on
FCC feed sulphur content.
The Mid Switch cases each include a switch volume of 3.8 mb/d (195 225 mtpa) from high
sulphur marine fuel (predominantly IFO) to 0.5% Global Fuel. In each Mid Switch case, the
HS resid stream content in the marine fuel pool drops to 0.5 mb/d from 3.1 mb/d in the
2020 Base Case. (The HS resid remains solely in the 0.84 mb/d [48 million tpa] of HS IFO
projected to be used in ships with scrubbers.) The distinction is important between the 3.8
mb/d switch volume and the 2.6 mb/d reduction in HS resid content (and 2.4 mb/d
reduction in total resid content i.e. including LS resid streams). The former equates to total
volume shift to Global Fuel standard, the latter to the change in (HS) resid volume content
of the total marine fuel pool.
The difference is because (a) the total marine fuel pool being represented here includes
both ‘traditional’ MDO and 0.1% ECA fuel, both of which are distillate fuels and (b) because
the HS IFO in the Base Case itself includes lighter ‘cutter stocks’ as well as residual streams.
The 2020 Base Case global HS IFO pool contained 2.55 mb/d of mixed lighter cutter stocks,
0.46 mb/d of VGO (which may in reality be present mainly as a component of atmospheric
resid streams) and 3.24 mb/d of mixed residual streams, predominantly high sulphur. (See
Section 6.3.7.) Thus, while the total switch volume is – in this scenario – 3.8 mb/d, the total
HS resid that must be removed from the pool under the Global Sulphur Cap and thus
upgraded is less – at 2.6 mb/d. Partly offsetting the reduction in HS resid content, the
volume of LS resid increases by a small amount (0.26 mb/d) in the High MDO Mid Switch
case and by a much larger 1.45 mb/d in the Low MDO case (which allowed 50% of the
Global Fuel to be IFO type fuels). It is important to recognise these shifts and distinctions
when considering the impacts on refinery processing.
Likewise, under the Global Sulphur Cap, the volume of combined distillates and VGO
needing to be incrementally added into the marine fuel pool (relative to the Base Case) is
2.5 mb/d in the Mid Switch High MDO case and over 1.1 mb/d in the Mid Switch Low MDO
case. (Note the volumes required are affected by differences in energy content which were
taken into account in our ‘switch’ case projections.) The relatively high proportion of VGO
foreseen as being added (around 20% of the pool in the Low MDO case and 31% in the High
MDO case) is a reflection of the fact that we assumed the Global Fuel MDO would be to
DMB standard. This is a heavy distillate whose specifications allow in significant proportions
of VGO-quality streams. In addition, the heavier (light IFO) type blends allowed for in
significant volume under the Low MDO cases also allow in significant proportions of VGO.36
36 The Mid Switch Low MDO case allowed 50% of the Global Fuel to be IFO, either IFO80 or the traditional IFO380. In this case, only 6% of the total LS IFO was the low viscosity blend. This appears logical as the general
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Overall, this aspect of the Model case results points to the Global Sulphur Cap necessitating
a very substantial scale of change in the marine fuel blends and thus across the blending
sector.
5.1.4.1.3 Refinery CO2 Emissions
Appendix Section 6.3.3 sets out global refinery CO2 emissions under the Model 2015 and
2020 cases. These are set out on two bases, first total direct emissions (predominantly from
hydrogen plant and refinery fuel) and then with emissions from combustion of refinery
petroleum coke added in. This step is taken since it can be argued that inclusion of
petroleum coke emissions is necessary to fully account for effective refinery CO2 output.
(The counter argument is that incremental fuel grade petroleum coke displaces coal and so
there is no net increase.)
The results indicate that the Global Fuel cases increase global direct refinery CO2 emissions
by around 3.7 – 4.4% in the High MDO cases and 2.1-2.5% in the Low MDO cases. Because
of the increase in coker throughputs and petroleum coke output in the Global Fuel cases,
adding in emissions from petroleum coke production has an appreciable impact. It raises the
increases over the 2020 Base Case to the 9.5 – 10% range in the High MDO cases and to 7%
in the Low MDO cases.37 Including fuel grade petroleum coke, these increases equate to
around 135 million tonnes/year for the High MDO cases versus the 2020 Base Case and
above 90 million tonnes/year for the Low MDO cases; (and to respectively around 40 and
20-25 million tonnes/year excluding emissions from incremental petroleum coke). These are
partially offset by reductions in CO2 emissions from the conversion to lighter marine fuels.
For instance, in the Mid Switch High MDO case, we calculate CO2 emissions from
combustion of marine fuels at 1,087 million tonnes/year versus 1,100 million tonnes/year in
the 2020 Base Case. This reduction of 13 million tonnes/year does not offset the increases in
CO2 emissions resulting from more intense refinery processing (even discounting the effect
of fuel grade petroleum coke).
5.1.4.1.4 Crude & Product Flows
Substantial changes to crude flows are also shown as needed to accompany and achieve the
projected and wide-ranging refinery operational changes. Details of crude oil and product
flows are contained in the Appendix Sections 6.3.4 through 6.3.7. These include total crude
refining/blending logic would drive toward using any possible quality premium, such as on viscosity, to blend to the maximum allowable level. 37 In the Low MDO cases, there are two offsetting effects as switch volume is raised, an increase in direct refinery CO2 emissions and a decline in petroleum coke emissions.
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trade, total trade by major products and for all non-crudes; also trade by major crude grade
with import and export balances by region.
Exhibit 5-5 summarises changes in inter-regional crude movements for the 2020 Mid Switch
volume High MDO case versus the 2020 Base Case. Among other changes:
The United States refinery throughputs increase by around 0.7 mb/d with the region
taking in increased volumes primarily of (heavy and medium) crudes from Latin
America and the Middle East
As a result, some Canadian (heavy) crude is diverted away from the United States
notably to Asia. (Note, in this analysis we assumed expansion of the Trans
Mountain pipeline to 890,000 b/d by 2020. Eliminating the Trans Mountain
expansion would reduce the potential to reallocate these heavy crudes.)
Conversely, the United States exports more (light) crude to Canada, Latin America
and Asia
African crude exports are maximised (regional crude runs drop slightly) with
increased flows mainly to Asia and less to Latin America and domestically
Europe retains more of its regional production (with exports to Asia dropping
commensurately), takes in more Middle East crude and less Latin American and the
Russian Federation/Caspian, part of which is then refined domestically in the
Russian Federation/Caspian where refinery runs increase moderately
The Middle East (in this analysis) bears the full brunt of required increased
production (+0.7 mb/d change between the 2020 Base and Mid Switch High MDO
cases) with increased exports to the United States, Europe and Africa, less to Asia.
At the aggregate level, the 2020 Mid Switch High MDO case projects some 44.0 mb/d
(approx. 2,200 mtpa) of crude oil trade between the major regions (up from 43.0 mb/d
[approx. 2,150 mtpa] in the Base Case). Of this 44 mb/d, there are some 8.6 mb/d (approx.
500 mtpa) of crude oil routing changes, i.e. 20% of exported crude trade.
Total trade of non-crude supply streams (NGL’s, biofuels, etc.) plus finished products and
intermediates is likewise projected to increase and change because of the Global Sulphur
Cap. Total imports/exports in the Base Case of 19.7 mb/d (approx. 985 mtpa) are projected
to rise to 22.4 mb/d (approx. 1,120 mtpa) in the Mid Switch High MDO case, with 6.6 mb/d
(approx. 330 mtpa) of total trade/routing changes. These shifts are indicated as spread
across all the non-crude/product groups.
The particulars of trade movements developed using the WORLD Model are very sensitive
to assumptions. That said, the message that comes across here is that, like the refining
changes, the levels of trade shifts projected here constitute a major set of realignments for
the industry to accomplish and ones that would not be achieved overnight or likely even in a
few weeks. (Apart from anything else, transit times on longer crude and product hauls run
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in the range of 15 – 30 days. Also the Model contains only very limited constraints on crude
and product movements, whereas, in the real world, term contracts, ownership interests
etc. can all act to create a degree of lag and inertia if the system has to make major
adjustments.)
Exhibit 5-1 Impact of Global Rule on Refinery Crude Runs
Exhibit 5-2 Impacts on Hydrogen, Sulphur and FCC SOx Scrubber Requirements
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Exhibit 5-3 Impacts on Hydrogen, Sulphur Plant % of 2016-2019 Projects
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Exhibit 5-4 Total Marine Fuel Pool Selected 2020 Cases
million bpdTotal
Marine
Fuel
Total
Marine
Fuel
Change vs.
Base Case
Total
Marine
Fuel
Change
vs. Base
Case
Change
vs. Low
MDO
Case
kerosenes 0.48 0.35 (0.12) 0.59 0.11 0.23
middle distillates 1.29 1.70 0.41 2.04 0.75 0.34
cracked stocks 0.78 0.82 0.03 0.95 0.17 0.13
VGO SR (non HDS) 0.31 0.95 0.64 1.59 1.28 0.64
VGO HDS 0.14 0.32 0.18 0.36 0.21 0.03
resid SR LS / HDS < 1% 0.04 1.49 1.45 0.30 0.26 (1.19)
resid SR MS 1-2% 0.07 0.18 0.11 0.05 (0.02) (0.13)
resid SR HS > 2% 2.99 0.46 (2.54) 0.48 (2.51) 0.02
resid visbroken 0.13 0.03 (0.10) 0.03 (0.11) (0.00)
Total 6.25 6.30 0.05 6.38 0.14 0.08
Total distillates (incl cracked stocks) 2.55 2.87 0.32 3.58 1.03 0.71
Total VGO 0.46 1.27 0.82 1.95 1.49 0.68
Total resid 3.24 2.16 (1.09) 0.86 (2.38) (1.30)
Total 6.25 6.30 0.05 6.38 0.14 0.08
Total distillates (incl cracked stocks) 41% 46% 56%
Total VGO 7% 20% 31%
Total resid 52% 34% 13%
Total 100% 100% 100%
of which
atmos resid HS > 3% 2.30 0.33 (1.97) 0.39 (1.91) 0.06
vacuum resid HS > 3% 0.69 0.13 (0.57) 0.09 (0.61) (0.04)
visbroken resid HS > 3% 0.12 0.03 (0.09) 0.02 (0.10) (0.01)
Total resid HS > 3% 3.12 0.49 (2.63) 0.50 (2.62) 0.01
HS resid as % of total resid 96% 23% 58%
LS VGO / Resid < 1% 0.45 2.55 2.10 1.88 1.43 (0.67)
Total Marine Fuel Pools Selected 2020 Base and Mid Switch Cases
Mid Switch Low MDO Mid Switch Hi MDOBase Case
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Exhibit 5-5 Changes in Crude Oil Movements 2020 Mid Switch High MDO vs Base Case
5.1.4.2 Changes in Supply Costs and Differentials
The changes in open market product supply costs and refining economics projected as a
result of a full switch to Global Fuel are indicated as having the potential to be extreme. In
the past 28 years, the WORLD Model has been used to simulate inter alia a series of both
real and hypothetical oil market disruptions.38 The economic impacts coming out of the
Model cases here are similar to effects we have seen in analyses of simulated market
disruptions. The precise numbers in these strained Model cases are not the main point.
What is most important is the finding or message that the modelling analysis is pointing to a
severe degree of economic strain on the global refining and supply system should the Global
Sulphur Cap be enacted in full force in January 2020.
Exhibits 5-6 through 5-10 focus on the impacts of most relevance to the marine market,
namely differentials between diesel and HS IFO380. Since we did not have available long
data series for marine distillate fuels, we have presented differentials for on-road diesel
versus HS IFO in three key markets, Northwest Europe, the United States Gulf Coast and
Asia (Singapore). The exhibits illustrate the substantial increases in differentials, from
within, if at the upper end, of the normal historical range in the 2020 Base Case, i.e. around
$35-38/barrel, to the $70-80/barrel range in the High MDO cases – and still in the $60-
70/barrel range in the Low MDO cases. In $/tonne, these differentials range up to $380
versus under $190 in the Base Case. These are well beyond anything in recent history,
including 2008 when distillate became extremely tight.
38 EnSys has worked for many years on disruption analyses for the United States Department of Energy Office of Strategic Petroleum Reserve and also the Office of Policy and International Affairs.
million bpd Total
Exports
Total
Local +
Exports
Producing Regions1.00
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastAsia
United States 0.32 (0.00) (0.32) 0.07 0.13 0.00 0.00 0.00 0.00 0.12
Canada 0.04 (0.00) (0.32) (0.05) 0.00 0.00 0.01 0.00 0.00 0.35
Latin America (0.13) 0.00 0.31 (0.07) 0.13 (0.01) (0.43) 0.00 0.00 0.08
Africa 0.06 (0.00) 0.07 (0.00) (0.23) (0.06) (0.05) 0.00 0.00 0.26
Europe (0.15) 0.00 0.00 0.00 0.00 0.00 0.15 0.00 0.00 (0.15)
FSU (0.05) (0.00) 0.13 0.04 0.00 0.00 (0.23) 0.05 0.00 0.00
Middle East 0.71 0.71 0.79 0.00 (0.01) 0.03 0.55 0.00 0.00 (0.65)
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.04 (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.00)
Other Asia/Pac 0.16 (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.00)
Total Imports 1.00 0.99 0.04 (0.11) 0.02 (0.15) 0.00 0.00 0.22
Total Crude Runs 0.70 0.66 (0.00) 0.02 (0.04) (0.00) 0.05 0.00 0.02
Crude Oil Movements: 2020 Mid Switch High MDO Case vs 2020 Base Case
Consuming Regions
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In the scenarios with less Global MDO, more Global IFO, the situation is ‘better’ as noted.
However, while increasing the proportion of heavier marine fuel helps reduce costs, the
impacted is limited by the fact that essentially the same amount of sulphur must still be
removed because the specification is still 0.5% whatever the fuel formulation.
Exhibit 5-10 2015 data are taken from published prices for MGO and HS IFO380. The MGO
prices are from Clarksons and the IFO from Bloomberg. The Bloomberg IFO prices check
closely with those from Clarksons and in turn the supply costs in our 2015 Model case were
close to these actuals. However, the MGO supply costs from our 2015 Model case were well
below the Clarksons actual prices. One reason for this could be that the actual quality of the
MGO sold, as reflected in the Clarksons prices, is higher than the DMA type qualities we
have assumed in our Model cases. Should that be the case, our Model cases are potentially
understating the differentials that would apply in 2020; or, put another way, the implication
is that we should possibly be using higher qualities for the MGO which, again, would lead to
wider differentials than we are showing.
In the WORLD Model, we compute and report what we term aggregate product ‘supply
costs’. These are computed by multiplying the open market $/bbl supply cost of each
product in each region from the Model results by its sale / consumption volume to arrive at
total $/day supply cost for that product. The supply costs for each product are then added
together across all Model regions to arrive at the total global supply cost by product.
Finally, summing the global totals for each product give the aggregate supply cost across all
products. The units of the supply cost are $/barrel * million barrels / day = $ million /day.
So we can express and compare costs in that form or we can divide by the demand volume
for each product and so express supply cost as average product $/barrel.
Exhibit 5-18 provides detail of global supply cost by product across the Model cases. Exhibit
5-11 illustrates product supply impacts as $/barrel changes average across all sold products
worldwide versus the 2020 Base Case. Exhibit 5-12 shows the data expressed as percent
changes in global average supply cost versus the 2020 Base Case. These charts and tables
reinforce the potentially major impact of the Global Sulphur Cap across total petroleum
products, not solely marine fuels. The results from the Model cases indicate the effect
would be to increase open market prices by some $10 to nearly $20 /barrel average across
all products in all regions worldwide – not just across marine fuels. The corresponding
percentage increases are around 11 to 23 percent. Expressed as $billion per year, the
potential increase in global supply costs across all petroleum products is projected to range
from somewhat under $350 bn/yr to over $700 bn/yr depending on the scenario.39
39 Note this analysis and all prices here are quoted in $2015 not $ nominal.
Supplemental Marine Fuel Availability Study
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Exhibit 5-18 gives the breakdown of supply costs by product type. In, for example the Mid
Switch High MDO case, total weighted average marine fuels supply costs go up by 27%
versus the 2020 Base Case per the Model results. This scale of increase is due to the
combined effects of increases in distillate supply costs and a much increased proportion of
MDO in the marine fuel mix. Average supply costs go up by 24% for jet/kero and inland
gasoil/diesel but also by 18% for gasoline and 9% for naphtha and lighter products. This is
because refining is a co-product business and what happens with one product affects every
other. In this vein, projected supply costs for inland residual fuels drop by 11% because of
the shift away from HS IFO. This in turn is a weighted average of supply costs for low
sulphur residual fuels which stay relatively constant and of significant reductions in supply
costs for high sulphur residual fuels (which also carry through into HS IFO supply costs).
A further implication of this is that light/heavy crude differentials would be significantly
impacted as are refining margins, with different types of refiner impacted differently.
Exhibit 5-16 shows how Brent-Mayan differentials double under the High MDO cases and
still widen significantly under the Low MDO cases. These same Model projections indicate
sophisticated refineries that run heavy sour crude and fully upgrade to clean products, with
emphasis on distillates (gasoil/diesel and jet/kero), would expect to see large increases in
margins. (See the crack spreads in Exhibit 5-17 for United States Gulf Coast Saudi Heavy and
Mayan crudes.) Conversely, refineries that are simpler and have an appreciable yield of high
sulphur residual fuel would be expected to see margins deteriorate versus ‘business as
usual’. One implication is that sustained low margins resulting from the advent of the
Global Sulphur Cap could lead more refineries to close.
One question these Model results pose is how long the strained market conditions could be
expected to continue. Our view is that the strained conditions could be relatively long
lasting. Yes, the refining industry would attempt to adapt but investments would be needed
and those would take years not months to bring on stream. Scrubbers would become highly
attractive economically but it would still take time to equip large numbers of vessels. It is
more likely that in the short to medium term something else would have to ‘give’, most
likely either a reduction in the volumes of Global Fuel refiners attempt to produce and
shippers to purchase or the interjection of a clearing mechanism for surplus heavy fuel that
would entail continued market stress because of low residual fuel prices and (still more)
increases in crude runs.
From our experience in the industry, we do not see any opportunity for a swift change that
would resolve the market strain that is indicated. It is possible that the market for selling
high sulphur fuel into the power and industrial boiler sectors could expand given time. This
would, however, constitute a reversal of the long term trend for reductions in sales of HFO
into those sectors. Also, to occur, it would mean HS HFO would need to be priced
competitively with natural gas or coal. That would tend to keep HS HFO prices down at
Supplemental Marine Fuel Availability Study
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109
depressed levels and so could potentially do little to directly ease the projected strain in
market differentials. What growth in HS HFO sales would do is allow more crude oil to be
run (assuming incremental supplies are readily available from OPEC or other countries). This
would bring in light streams that would help to raise or ease supply of gasoline, jet/kero,
land and marine distillates. It would tend though to bring higher crude oil prices which in
turn would raise product supply costs. In short, we do not see any short term mechanism
that would offset or eliminate the potential economic strain projected as resulting from fully
meeting the Global Sulphur Cap in 2020.
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Exhibit 5-6 Diesel – IFO Price Differentials Northwest Europe
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Exhibit 5-7 Diesel – IFO Price Differentials United States Gulf Coast
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Exhibit 5-8 Diesel – IFO Price Differentials Asia (Singapore)
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Exhibit 5-9 Summary 2020 MGO – IFO Differentials $/tonne Basis
Exhibit 5-10 Northwest Europe MGO vs HS IFO Prices - $/tonne
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
20
15
: B
ase
Cas
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on
20
15
: B
ase
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20
20
: B
ase
No
0.5
% F
uel
20
20
: Lo
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wit
ch H
igh
MD
O
20
20
: M
id S
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ch H
igh
MD
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20
20
: H
igh
Sw
itch
Hig
h M
DO
20
20
: Lo
w S
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ch L
ow
MD
O
20
20
: M
id S
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ch L
ow
MD
O
20
20
: H
igh
Sw
itch
Lo
w M
DO
$/t
on
ne
Northwest Europe MGO vs HS IFO380
IFO380 HS
MGO 1% / 0.5%
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Exhibit 5-11 Impact of Global Rule on Global Product Supply Costs - $/barrel Change
Exhibit 5-12 Impact of Global Rule on Global Product Supply Costs – Percent Change
Supplemental Marine Fuel Availability Study
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115
5.1.5 Detailed Global Case Results
Exhibit 5-13 WORLD Premises & Results – Refining Additions
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
2015 2015 2020 2020 2020 2020 2020 2020 2020
Base Case
Calibration
Base Case
Adjusted
Base No
0.5% Fuel
Low Switch
High MDO
Mid Switch
High MDO
High Switch
High MDO
Low Switch
Low MDO
Mid Switch
Low MDO
High
Switch
Low MDO
Demand million b/d
World demand 93.67 93.67 99.19 98.95 99.34 99.73 98.95 99.34 99.73
Total Marine Bunkers Demand 5.70 5.70 6.24 6.00 6.40 6.79 6.00 6.40 6.79
Switch to LS Global Fuel (MDO/Hybrid/IFO) 0.00 0.00 0.00 3.40 3.79 4.18 3.40 3.79 4.18
of which
Switch using LS MDO 0.00 0.00 0.00 3.08 3.43 3.78 1.78 1.99 2.19
Switch using LS Hybrid / IFO 0.00 0.00 0.00 0.32 0.36 0.40 1.62 1.80 1.99
Switch % MDO 0% 0% 0% 90% 90% 90% 52% 52% 52%
Refining n.b. 2 mb/d of closures assumed by 2020
Base Capacity mb/cd 97.40 97.68 95.66 95.66 95.66 95.66 95.66 95.66 95.66
Firm Construction mb/cd 5.64 5.64 5.64 5.64 5.64 5.64 5.64
Further Crude Unit Additions mb/cd 0.04 0.03 0.36 0.45 0.45 0.45 0.38 0.45 0.45
Total Additions over Base mb/cd 0.04 0.03 6.00 6.08 6.09 6.09 6.01 6.08 6.09
Total Capacity at Horizon mb/cd 97.44 97.72 101.66 101.74 101.75 101.75 101.67 101.74 101.75
Total Investment over Firm Projects ($bn 2014)$0.34 $0.15 $4.26 $12.48 $13.77 $14.51 $10.60 $11.34 $12.36
Investment Change vs Base Case $0.00 $8.23 $9.52 $10.25 $6.35 $7.08 $8.10
Secondary Processing Capacity Additions
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
(beyond assessed projects)
ATMOSPHERIC DISTILLATION 0.04 0.03 0.36 0.45 0.45 0.45 0.38 0.45 0.45
VACUUM DISTILLATION 0.00 0.00 0.04 0.07 0.06 0.06 0.05 0.05 0.05
COKING 0.00 0.00 0.02 0.06 0.06 0.06 0.04 0.04 0.04
VISBREAKING
CATALYTIC CRACKING 0.01 0.01 0.09 0.10 0.10 0.10 0.10 0.09 0.10
HYDRO-CRACKING 0.00 0.00 0.02 0.02 0.02 0.02 0.02 0.02 0.02
CATALYTIC REFORMING - REVAMP 0.03 0.01 0.17 0.21 0.29 0.30 0.21 0.21 0.28
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
DESULPHURIZATION (excluding NDS)
- GASOLINE - ULS
- DISTILLATE - REVAMP TO ULS 0.07 0.02 0.39 0.45 0.45 0.44 0.46 0.47 0.47
- DISTILLATE ULS NEW 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
- DISTILLATE CONV/LS NEW
- VGO/RESID
HYDROGEN (MMSCFD) 0 0 619 1670 1822 1935 1265 1358 1430
SULPHUR PLANT (TPD) 0 0 310 8830 9560 10190 7700 8360 9180
FCC SOX SCRUBBER (TPD) 0 0 0 290 330 380 220 240 300
FCC SULPHUR EMISSIONS (TPD) n.r. n.r. 4673 4791 4790 4790 4795 4790 4790
Model Additions over and Above Projects as % of Base Case Project Additions
Hydrogen Plant
Additions 2016-2019: 3704 MMSCFD 0% 0% 17% 45% 49% 52% 34% 37% 39%
Sulphur Plant
Additions 2016-2019: 13366 STPD 0% 0% 2% 66% 72% 76% 58% 63% 69%
WORLD Global Premises & Results
Supplemental Marine Fuel Availability Study
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116
Exhibit 5-14 WORLD Premises & Results – Refinery Distillation and Upgrading
Throughputs & Utilizations
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
Total Crude Runs mb/d 78.77 78.67 82.21 82.64 83.06 83.48 82.45 82.85 83.24
Total Capacity mb/cd 97.44 97.72 101.66 101.74 101.75 101.75 101.67 101.74 101.75
Utilizations (% of calendar day capacity) 80.8% 80.5% 80.9% 81.2% 81.6% 82.0% 81.1% 81.4% 81.8%
Crude Distillation
ATMOS:Base Capacity (data) 97.40 97.68 95.66 95.66 95.66 95.66 95.66 95.66 95.66
ATMOS:Known Projects (data) 0.00 0.00 5.64 5.64 5.64 5.64 5.64 5.64 5.64
ATMOS:Debottlenecking (WORLD) 0.04 0.03 0.36 0.45 0.45 0.45 0.38 0.45 0.45
ATMOS:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
ATMOS:Total Operating Capacity 97.44 97.72 101.66 101.74 101.75 101.75 101.67 101.74 101.75
ATMOS:Crude Throughput 78.77 78.67 82.21 82.64 83.06 83.48 82.45 82.85 83.24
ATMOS:Refinery Utilisation 80.8% 80.5% 80.9% 81.2% 81.6% 82.0% 81.1% 81.4% 81.8%
ATMOS:Average API 33.73 33.95 33.86 34.10 34.05 34.06 33.94 33.96 34.02
ATMOS:Average Sulphur 1.20% 1.21% 1.22% 1.21% 1.21% 1.22% 1.21% 1.21% 1.21%
Incremental Crude Run vs. Base 2020 0.43 0.85 1.27 0.24 0.64 1.03
Vacuum Disitllation
Vacumn:Base Capacity (data) 37.16 37.26 36.88 36.88 36.88 36.88 36.88 36.88 36.88
Vacumn:Known Projects (data) 0.00 0.00 1.41 1.41 1.41 1.41 1.41 1.41 1.41
Vacumn:Debottlenecking (WORLD) 0.00 0.00 0.04 0.07 0.06 0.06 0.05 0.05 0.05
Vacumn:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Vacumn:Total Operating Capacity 37.16 37.26 38.33 38.35 38.35 38.35 38.33 38.33 38.33
Vacumn:Throughput 24.61 24.80 25.45 26.49 26.50 26.64 26.13 26.24 26.40
Vacumn:Utilizations 66.2% 66.6% 66.4% 69.1% 69.1% 69.5% 68.2% 68.5% 68.9%
Total Coking (Delayed + Fluid)
Coking:Base Capacity (data) 8.05 8.05 8.03 8.03 8.03 8.03 8.03 8.03 8.03
Coking:Known Projects (data) 0.00 0.00 1.14 1.14 1.14 1.14 1.14 1.14 1.14
Coking:Debottlenecking (WORLD) 0.00 0.00 0.02 0.06 0.06 0.06 0.04 0.04 0.04
Coking:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Coking:Total Operating Capacity 8.05 8.05 9.19 9.23 9.23 9.23 9.21 9.21 9.21
Coking:Throughput 6.17 6.12 6.18 7.32 7.32 7.32 6.96 6.88 6.79
Coking:Utilizations 76.6% 76.1% 67.3% 79.4% 79.4% 79.4% 75.5% 74.7% 73.8%
Total FCC (includes RFCC)
FCC:Base Capacity (data) 17.65 17.66 17.57 17.57 17.57 17.57 17.57 17.57 17.57
FCC:Known Projects (data) 0.00 0.00 0.75 0.75 0.75 0.75 0.75 0.75 0.75
FCC:Debottlenecking (WORLD) 0.01 0.01 0.09 0.10 0.10 0.10 0.10 0.09 0.10
FCC:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FCC:Total Operating Capacity 17.66 17.66 18.41 18.42 18.42 18.42 18.41 18.41 18.41
FCC:Throughput Total million bpd 13.64 13.63 14.03 14.08 14.04 13.99 14.03 14.01 13.99
FCC:Utilizations 77.2% 77.2% 76.2% 76.4% 76.2% 76.0% 76.2% 76.1% 76.0%
FCC:Resid feed million bpd 3.14 2.74 3.49 4.56 4.67 4.69 3.93 3.96 3.98
FCC:Resid feed percent of total 23.0% 20.1% 24.9% 32.4% 33.3% 33.5% 28.0% 28.2% 28.4%
FCC:Conversion % n.r. 74.0% 72.8% 72.5% 72.5% 72.6% 73.0% 73.0% 73.0%
Total Hydrocracking
HCR:Base Capacity (data) 8.93 8.93 8.78 8.78 8.78 8.78 8.78 8.78 8.78
HCR:Known Projects (data) 0.00 0.00 1.02 1.02 1.02 1.02 1.02 1.02 1.02
HCR:Debottlenecking (WORLD) 0.00 0.00 0.02 0.02 0.02 0.02 0.02 0.02 0.02
HCR:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
HCR:Total Operating Capacity 8.94 8.94 9.82 9.82 9.82 9.82 9.82 9.82 9.82
HCR:Throughput 6.85 6.86 7.66 7.75 7.77 7.80 7.75 7.76 7.79
HCR:Utilizations 76.7% 76.8% 78.0% 78.9% 79.1% 79.4% 78.9% 79.0% 79.3%
Total Distillate Desulfurization
Desulfur:Base Capacity (data) 27.61 27.62 27.33 27.33 27.33 27.33 27.33 27.33 27.33
Desulfur:Known Projects (data) 0.00 0.00 1.81 1.81 1.81 1.81 1.81 1.81 1.81
Desulfur:Debottlenecking (WORLD) debottlenecking not allowed in cases - only limited revamp from conventional to ULS debottlenecking not allowed in cases - only limited revamp from conventional to ULS
Desulfur:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Desulfur:Total Operating Capacity Net 27.61 27.62 29.14 29.14 29.14 29.14 29.14 29.14 29.14
Desulfur:Throughput 20.75 20.88 22.47 22.25 22.27 22.29 22.38 22.40 22.43
Desulfur:Utilizations 75.2% 75.6% 77.1% 76.4% 76.4% 76.5% 76.8% 76.9% 77.0%
WORLD Global Premises & Results
Supplemental Marine Fuel Availability Study
July 15, 2016
117
Exhibit 5-15 WORLD Premises & Results – Refinery Desulphurisation, Hydrogen, Sulphur plant
Throughputs & Utilizations
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
Total Distillate Desulfurization
Desulfur:Base Capacity (data) 27.61 27.62 27.33 27.33 27.33 27.33 27.33 27.33 27.33
Desulfur:Known Projects (data) 0.00 0.00 1.81 1.81 1.81 1.81 1.81 1.81 1.81
Desulfur:Debottlenecking (WORLD) debottlenecking not allowed in cases - only limited revamp from conventional to ULS debottlenecking not allowed in cases - only limited revamp from conventional to ULS
Desulfur:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Desulfur:Total Operating Capacity Net 27.61 27.62 29.14 29.14 29.14 29.14 29.14 29.14 29.14
Desulfur:Throughput 20.75 20.88 22.47 22.25 22.27 22.29 22.38 22.40 22.43
Desulfur:Utilizations 75.2% 75.6% 77.1% 76.4% 76.4% 76.5% 76.8% 76.9% 77.0%
VGO Desulfurization
VGO HDS:Base Capacity (data) 7.05 7.08 7.05 7.05 7.05 7.05 7.05 7.05 7.05
VGO HDS:Known Projects (data) 0.00 0.00 0.41 0.41 0.41 0.41 0.41 0.41 0.41
VGO HDS:Debottlenecking (WORLD) debottlenecking not allowed in cases debottlenecking not allowed in cases
VGO HDS:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
VGO HDS:Total Operating Capacity 7.05 7.08 7.46 7.46 7.46 7.46 7.46 7.46 7.46
VGO HDS:Throughput 4.73 5.09 5.23 5.55 5.58 5.59 5.56 5.57 5.58
VGO HDS:Utilizations 67.1% 71.9% 70.0% 74.4% 74.8% 74.9% 74.5% 74.7% 74.8%
Resid Desulfurization
Resid HDS:Base Capacity (data) 1.88 1.88 1.85 1.85 1.85 1.85 1.85 1.85 1.85
Resid HDS:Known Projects (data) 0.00 0.00 0.19 0.19 0.19 0.19 0.19 0.19 0.19
Resid HDS:Debottlenecking (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Resid HDS:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Resid HDS:Total Operating Capacity 1.88 1.88 2.04 2.04 2.04 2.04 2.04 2.04 2.04
Resid HDS:Throughput 0.90 1.03 1.25 1.34 1.32 1.30 1.21 1.24 1.25
Resid HDS:Utilizations 47.8% 55.0% 61.4% 65.7% 64.8% 64.0% 59.5% 60.7% 61.4%
Total Catalytic Reforming
Cat Reforming:Base Capacity (data) 13.69 13.79 13.65 13.65 13.65 13.65 13.65 13.65 13.65
Cat Reforming:Known Projects (data) 0.00 0.00 0.59 0.59 0.59 0.59 0.59 0.59 0.59
Cat Reforming:Debottlenecking (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Cat Reforming:Major New Units (WORLD) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Cat Reforming:Total Operating Capacity 13.69 13.79 14.23 14.23 14.23 14.23 14.23 14.23 14.23
Cat Reforming:Throughput 9.58 9.55 9.84 9.96 9.97 9.97 9.91 9.91 9.92
Cat Reforming:Utilizations 70.0% 69.2% 69.1% 70.0% 70.1% 70.0% 69.7% 69.6% 69.7%
Total Hydrogen Plant million SCFD
Hydrogen:Base Capacity (data) 23,635 24,402 23,732 23,732 23,732 23,732 23,732 23,732 23,732
Hydrogen:Known Projects (data) - - 3,704 3,704 3,704 3,704 3,704 3,704 3,704
Hydrogen:Debottlenecking (WORLD) - - 619 1,670 1,822 1,935 1,265 1,358 1,430
Hydrogen:Major New Units (WORLD) - - - - - - - - -
Hydrogen:Total Operating Capacity 23,635 24,402 28,055 29,106 29,258 29,371 28,701 28,794 28,866
Hydrogen:Throughput 17,093 18,111 20,976 22,311 22,469 22,591 21,957 22,057 22,120
Hydrogen:Utilizations 72.3% 74.2% 74.8% 76.7% 76.8% 76.9% 76.5% 76.6% 76.6%
Total Sulphur Plant STPD
Sulphur:Base Capacity (data) 128,181 128,181 128,181 128,181 128,181 128,181 128,181 128,181 128,181
Sulphur:Known Projects (data) - - 13,366 13,366 13,366 13,366 13,366 13,366 13,366
Sulphur:Debottlenecking (WORLD) - - 310 8,830 9,560 10,190 7,700 8,360 9,180
Sulphur:Major New Units (WORLD) - - - - - - - - -
Sulphur:Total Operating Capacity 128,181 128,181 141,858 150,378 151,108 151,738 149,248 149,908 150,728
Sulphur:Throughput n.r. 65,213 69,131 78,798 79,352 79,824 78,354 78,749 79,371
Sulphur:Utilizations n.r. 49.8% 48.7% 52.4% 52.5% 52.6% 52.5% 52.5% 52.7%
WORLD Global Premises & Results
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Exhibit 5-16 WORLD Premises & Results – Crude & Product Prices
Actual Prices, Projected Marginal
Prices / Supply Costs & Differentials
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
SAUDI LIGHT (input marker crude price) $49.50 $49.50 $76.03 $76.03 $76.03 $76.03 $76.03 $76.03 $76.03
WTI - Brent ($3.32) ($2.63) ($2.15) ($1.30) ($1.31) ($1.60) ($2.04) ($2.13) ($2.18)
Brent - Dubai $3.44 $2.97 $3.16 $5.96 $6.15 $6.39 $5.32 $5.50 $5.70
Brent - Mayan $8.56 $7.04 $10.04 $20.66 $21.70 $22.58 $15.88 $16.27 $16.74
US Gulf Coast $/barrel
Gasoline - CG Regular $67.28 $64.32 $100.42 $115.36 $118.12 $121.25 $108.85 $110.50 $113.53
Diesel ULS $67.96 $65.67 $109.92 $132.65 $137.05 $142.14 $128.53 $132.45 $137.39
MGO 1% / 0.5% $57.85 $56.53 $86.36 $95.25 $96.80 $99.80 $92.01 $93.15 $95.80
IFO380 HS $44.84 $45.76 $71.55 $57.05 $57.32 $58.47 $63.17 $63.94 $65.13
Gasoline - IFO380 HS $22.44 $18.56 $28.88 $58.32 $60.80 $62.78 $45.67 $46.56 $48.41
Diesel ULS - IFO380 HS $23.12 $19.91 $38.37 $75.61 $79.73 $83.66 $65.36 $68.51 $72.26
Marine Diesel - IFO380 HS $13.01 $10.78 $14.82 $38.20 $39.48 $41.33 $28.83 $29.22 $30.67
$/tonne (using standard gravities)
MGO 1% / 0.5% $413 $404 $617 $681 $692 $713 $658 $666 $685
IFO380 HS $287 $292 $457 $365 $366 $374 $404 $409 $416
Marine Diesel - IFO380 HS $127 $112 $160 $316 $325 $340 $254 $257 $268
Price Changes ($/barrel basis)
Gasoline vs 2020 Base Case 15% 18% 21% 8% 10% 13%
ULS Diesel vs 2020 Base Case 21% 25% 29% 17% 20% 25%
Marine Diesel vs 2020 Base Case 10% 12% 16% 7% 8% 11%
IFO380 HS % vs 2020 Base Case -20% -20% -18% -12% -11% -9%
Northwest Europe $/barrel
Gasoline - EURO V 95 RON $64.54 $61.24 $95.70 $109.86 $112.38 $115.57 $103.76 $105.29 $108.15
Diesel ULSD $67.22 $64.95 $109.00 $130.85 $135.25 $140.33 $126.75 $130.59 $135.77
MGO 1% / 0.5% $62.83 $61.31 $96.71 $108.63 $111.26 $114.21 $103.97 $105.81 $108.63
IFO380 HS $46.78 $47.26 $73.71 $62.07 $62.12 $62.97 $65.83 $66.70 $68.31
Gasoline - IFO380 HS $17.76 $13.98 $21.98 $47.79 $50.26 $52.60 $37.93 $38.59 $39.84
Diesel ULS - IFO380 HS $20.44 $17.69 $35.29 $68.77 $73.13 $77.36 $60.92 $63.89 $67.46
Marine Diesel - IFO380 HS $16.04 $14.05 $23.00 $46.56 $49.14 $51.24 $38.14 $39.11 $40.32
$/tonne (using standard gravities)
MGO 1% / 0.5% $449 $438 $691 $776 $795 $816 $743 $756 $776
IFO380 HS $299 $302 $471 $397 $397 $402 $421 $426 $437
Marine Diesel - IFO380 HS $150 $136 $220 $380 $398 $414 $322 $330 $340
Price Changes ($/barrel basis)
Gasoline vs 2020 Base Case 15% 17% 21% 8% 10% 13%
ULS Diesel vs 2020 Base Case 20% 24% 29% 16% 20% 25%
Marine Diesel vs 2020 Base Case 12% 15% 18% 7% 9% 12%
IFO380 HS % vs 2020 Base Case -16% -16% -15% -11% -10% -7%
Singapore $/barrel
Gasoline ULS Regular $66.10 $63.34 $101.21 $116.49 $119.33 $122.48 $109.94 $111.60 $114.65
Diesel LSD $68.04 $65.86 $108.98 $131.59 $136.28 $141.31 $127.14 $130.80 $136.07
MGO 1% / 0.5% $59.22 $58.37 $91.66 $101.82 $104.45 $108.06 $97.51 $99.38 $102.83
IFO380 HS $45.30 $46.59 $73.25 $60.20 $59.86 $61.04 $64.86 $65.71 $68.23
Gasoline - IFO380 HS $20.80 $16.76 $27.96 $56.29 $59.46 $61.45 $45.08 $45.89 $46.42
Diesel - IFO380 HS $22.75 $19.27 $35.72 $71.39 $76.42 $80.28 $62.27 $65.08 $67.84
Marine Diesel - IFO380 HS $13.92 $11.79 $18.41 $41.62 $44.59 $47.02 $32.65 $33.66 $34.60
$/tonne (using standard gravities)
MGO 1% / 0.5% $423 $417 $655 $728 $746 $772 $697 $710 $735
IFO380 HS $289 $298 $468 $385 $383 $390 $415 $420 $436
Marine Diesel - IFO380 HS $134 $119 $187 $343 $364 $382 $282 $290 $299
Price Changes ($/barrel basis)
Gasoline vs 2020 Base Case 15% 18% 21% 9% 10% 13%
ULS Diesel vs 2020 Base Case 21% 25% 30% 17% 20% 25%
Marine Diesel vs 2020 Base Case 11% 14% 18% 6% 8% 12%
IFO380 HS % vs 2020 Base Case -18% -18% -17% -11% -10% -7%
2015 Actual Prices from Bloomberg other than MGO $/tonne prices which are from Clarkson Research Services Shipping Intelligence Network (SIN)
WORLD Global Premises & Results
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Exhibit 5-17 WORLD Premises & Results – Price Differentials & Crack Spreads
Actual Prices, Projected Marginal
Prices / Supply Costs & Differentials 2015
Actual
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch
Low MDO
2020:
High
Switch
Low MDO
SAUDI LIGHT (input marker crude price) $49.50 $49.50 $49.50 $49.50 $76.03 $76.03 $76.03 $76.03 $76.03 $76.03 $76.03
DIFFERENTIALS $/barrel
USEC
Distillate - Gasoline $1.84 $0.62 $1.33 $8.76 $9.45 $17.22 $18.86 $20.81 $19.62 $21.88 $23.79
Gasoline (CG Regular) - Resid HS $22.80 $25.73 $20.51 $29.34 $32.54 $77.08 $81.64 $88.33 $51.55 $54.34 $57.98
Distillate (ULS) - Resid HS $24.64 $26.35 $21.83 $38.09 $41.99 $94.30 $100.50 $109.14 $71.18 $76.22 $81.77
USGC
Distillate - Gasoline $0.88 $0.67 $1.35 $8.80 $9.50 $17.29 $18.93 $20.89 $19.69 $21.95 $23.86
Gasoline (CG Regular) - Resid HS $22.16 $22.44 $18.56 $24.85 $28.88 $58.32 $60.80 $62.78 $45.67 $46.56 $48.41
Distillate (ULS) - Resid HS $23.04 $23.12 $19.91 $33.65 $38.37 $75.61 $79.73 $83.66 $65.36 $68.51 $72.26
NW EUROPE
Distillate - Gasoline $1.02 $2.69 $3.71 $12.59 $13.31 $20.99 $22.87 $24.77 $22.99 $25.30 $27.62
Gasoline (Regular) - Resid HS $25.06 $17.76 $13.98 $18.20 $21.98 $47.79 $50.26 $52.60 $37.93 $38.59 $39.84
Distillate (ULS) - Resid HS $26.07 $20.44 $17.69 $30.79 $35.29 $68.77 $73.13 $77.36 $60.92 $63.89 $67.46
Asia - Singapore
Distillate - Gasoline n.a. $1.95 $2.51 $6.97 $7.76 $15.10 $16.96 $18.83 $17.19 $19.19 $21.42
Gasoline (CG Regular) - Resid HS n.a. $20.80 $16.76 $22.37 $27.96 $56.29 $59.46 $61.45 $45.08 $45.89 $46.42
Distillate (ULS) - Resid HS $23.11 $22.75 $19.27 $29.34 $35.72 $71.39 $76.42 $80.28 $62.27 $65.08 $67.84
CRACK SPREADS $/barrel
USGC 3-2-1 WTI $16.86 $16.97 $14.30 $25.05 $24.96 $37.60 $40.59 $44.31 $33.47 $35.69 $39.19
USGC 2-1-1 WTI $17.01 $17.08 $14.53 $26.52 $26.54 $40.48 $43.75 $47.79 $36.75 $39.35 $43.16
USGC 3-2-1 Saudi Hvy $18.26 $20.86 $17.56 $28.73 $30.88 $51.77 $55.44 $59.46 $44.05 $46.41 $50.19
USGC 2-1-1 Saudi Hvy $18.41 $20.97 $17.79 $30.20 $32.46 $54.65 $58.60 $62.94 $47.33 $50.07 $54.16
USGC 3-2-1 Mayan $21.44 $22.21 $18.71 $29.37 $32.85 $56.96 $60.98 $65.29 $47.31 $49.83 $53.75
USGC 2-1-1 Mayan $21.58 $22.32 $18.94 $30.84 $34.43 $59.84 $64.14 $68.77 $50.59 $53.49 $57.72
NW Europe 3-2-1 Brent $13.64 $11.57 $9.38 $18.83 $19.35 $32.03 $34.85 $38.32 $27.44 $29.47 $32.88
NW Europe 2-1-1 Brent $13.81 $12.02 $10.00 $20.92 $21.57 $35.52 $38.66 $42.45 $31.27 $33.69 $37.48
NW Europe 5-2-2-1 Brent $8.70 $8.20 $6.83 $16.03 $15.84 $23.87 $26.32 $29.45 $21.39 $23.44 $26.75
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Exhibit 5-18 WORLD Premises & Results – Product Supply Costs
(excludes internal costs for refinery fuel
consumption)
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
LPG & Naphtha $1,002 $968 $1,310 $1,399 $1,425 $1,455 $1,361 $1,374 $1,407
Gasoline $1,645 $1,578 $2,576 $2,980 $3,052 $3,141 $2,801 $2,847 $2,928
Light Distilates (Jet/Kero) $454 $442 $787 $946 $978 $1,014 $914 $941 $977
Middle Distillates (excluding bunker fuels) $1,718 $1,670 $2,964 $3,565 $3,689 $3,826 $3,448 $3,551 $3,689
Residual Fuels (excluding bunker fuels) $171 $172 $276 $244 $246 $251 $269 $274 $282
Other Products $255 $253 $427 $439 $446 $459 $444 $453 $466
Marine Bunkers Fuels $282 $285 $487 $565 $619 $681 $552 $601 $660
Total $ million / day $5,528 $5,369 $8,828 $10,139 $10,455 $10,828 $9,789 $10,041 $10,410
Total $/bbl of world demand $59.01 $57 $89.00 $102.46 $105.24 $108.57 $98.93 $101.07 $104.38
(excludes internal costs for refinery fuel
consumption)
2015: Base
Case
Calibration
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
LPG & Naphtha $1,310 $89 $115 $145 $51 $64 $97
Gasoline $2,576 $404 $476 $565 $225 $271 $353
Light Distilates (Jet/Kero) $787 $159 $191 $226 $127 $153 $190
Middle Distillates (excluding bunker fuels) $2,964 $601 $725 $863 $485 $587 $725
Residual Fuels (excluding bunker fuels) $276 ($32) ($30) ($25) ($7) ($2) $6
Other Products $427 $11 $19 $31 $17 $26 $39
Marine Bunkers Fuels $487 $78 $132 $194 $64 $113 $172
Total $ million / day $8,828 $1,311 $1,627 $2,000 $962 $1,213 $1,582
Total $/bbl change vs Base Case $13.46 $16.24 $19.57 $9.93 $12.07 $15.38
Total $billion / year Change vs Base Case $479 $594 $730 $351 $443 $577
(excludes internal costs for refinery fuel
consumption)
2015: Base
Case
Calibration
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
LPG & Naphtha 7% 9% 11% 4% 5% 7%
Gasoline 16% 18% 22% 9% 11% 14%
Light Distilates (Jet/Kero) 20% 24% 29% 16% 19% 24%
Middle Distillates (excluding bunker fuels) 20% 24% 29% 16% 20% 24%
Residual Fuels (excluding bunker fuels) -12% -11% -9% -3% -1% 2%
Other Products 3% 4% 7% 4% 6% 9%
Marine Bunkers Fuels 16% 27% 40% 13% 23% 35%
Total Percent Impact 14.9% 18.4% 22.7% 10.9% 13.7% 17.9%
Projected Product Supply Costs 2015/2020
Projected Product Supply Costs - Changes vs 2020 Base Case
Projected Product Supply Costs - Changes vs 2020 Base Case
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5.2 Over/Under Optimisation Factors and Risks
WORLD is a detailed model of the global supply system, encompassing crudes and non-
crudes supply, (natural gas liquids, biofuels, CTL’s, GTL’s, petrochemical return streams),
refining, crude and product transportation, product demand and quality. Almost invariably,
it is run to simulate average conditions in a given year, such as 2020 or 2025. Also, in
simulating refining and trade activities – and thus economics – under a given
supply/demand/world oil price scenario and horizon, e.g. 2020, we are implicitly simulating
the industry once it has adapted to the scenario, i.e. has reached a relatively steady state.
Put another way, we are normally modelling and generating results for a situation in which
the industry has gravitated toward a relatively stable situation in terms of operations and
economics, under the scenario premises for global supply, demand etc.
In this Marine Fuels Study, the interest is, however, more particular. EnSys and Navigistics
understand that the primary interest centres on assessing how the global industry is likely to
operate and cope in early – or at least the first half of – 2020, given an assumed change to
the MARPOL Annex VI Global Sulphur Cap on January 1st 2020, and also assuming full
compliance. If the IMO goes ahead and makes a 2020 versus 2025 decision at MEPC70 in
October 2016, shippers and refiners will have been given three years’ notice of the
implementation of the rule – assuming 2020 is set as the date. This and other studies have
already helped to narrow the uncertainty regarding the outlook for scrubbers in 2020. As
time progresses to 2019, the situation with regard to scrubber penetration and hence
switch volume should become more sharply defined. Then, during especially the latter half
of 2019, refiners would build their expectations for the Global Sulphur Cap into their
refinery planning cycles – and shippers would be expected to reflect the impending rule in
their purchasing plans.
In undertaking cases which examine (a) a range of switch volume and (b) a range of MDO
use (versus heavier fuels), we have aimed to examine key uncertainties. Again, the High
MDO scenario can be considered as equating to a situation early in 2020 on the basis it will
take time for new heavy fuel formulations to be accepted or to a situation where
operational issues relating to heavier fuel formulations prove to be major such that their
acceptance remains low.40 The Low MDO scenario could be considered as capturing a
situation later in 2020 or even in 2021 wherein it has been possible for the shipping sector
to successfully prove and accept 0.5% sulphur IFO formulations (light and/or heavy) and for
refiners to have adapted to supplying them in large volumes.
40 Recent presentations and press reports have referred to operational difficulties on vessels relating to the use of heavier ECA fuel formulations while the standard was 1% sulphur and to their relative disappearance when the standard changed to 0.1% requiring use mainly of marine diesel.
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However, even though refiners would plan for the Global Sulphur Cap, and even though we
have covered different scenarios, we are using a model which intrinsically reacts instantly to
changes whereas it will take time for the refining and blending industry to react to the
Global Rule. The sections below review first factors within the modelling methodology itself
that could lead to our under or over estimating the challenges in meeting the rule and
second external parameters (which translate into Model premises) that could materially
impact the outlook.
5.2.1 Factors Intrinsic to the WORLD Model
5.2.1.1 Model Inherent Crude and Product Trade Flexibility
Section 5.1.4 showed Model results which highlighted the very substantial changes that
could occur to both crude oil and product trade and routings as part of the adaptation to
the Global Sulphur Cap. As noted in that section, such changes would take time. Further,
the WORLD Model is generally operated with only limited crude movements – and very few
product movements - ‘locked in’. Generally constrained or forced crude movements – other
than those limited by logistics – are only limited for a few known geopolitical situations and
otherwise where it is clear local crudes must be run in particular refineries. In reality crude
– and product – movements can be executed under term contracts, and can be affected by
ownership interests, both of which impart lag or inertia when there is a need to make
changes. Thus there is potentially more flexibility inherent in the WORLD Model cases to
reallocate crudes and products than exists in the real world, especially in the near term after
an event such as implementation of the Global Sulphur Cap. Therefore, if anything, the
Model results arguably overstate the ease with which the crude oil market could adapt (at
least in a period of a few months) and understate the difficulty and costs.
5.2.1.2 Model Inherent Refinery Operations & Blending Flexibility
WORLD, as other models, intrinsically responds totally to a new imposed scenario such as
the Global Sulphur Cap. The modelling results indicate the industry would need to
undertake a range of actions in order to optimally respond. As discussed in Section 5.1.4.1,
these actions would include altering operating rates, feedstock modes and
severities/conversion levels on key units throughout the refinery, also maximising
throughput on key units, notably cokers, in short a significant range of operational changes.
While much of the world’s refining industry operates at a very sophisticated level in terms of
economic planning, it is not necessarily the case either that the industry in total will react
(which is implicitly assumed in the Model) or that all affected refineries would react swiftly
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or fully. For these reasons, if anything, the Model results are also likely to overstate the
ease and speed with which the industry would react in terms of refining adjustments and
thus again understate the supply and market impacts.
5.2.1.3 Model Inherent Product Logistics Flexibility & Quality
A related factor is that refineries in WORLD are aggregated into large regional groups. Over
time, EnSys has applied methods to offset the resulting implicit risk of over-optimisation.
However, in the Model, all refineries within a region are implicitly inter-connected and can
share units, capacities and also blend streams. In reality, that is often not the case since
refineries may be dozens or hundreds of miles apart. Thus the Model intrinsically tends to
overstate the ease with which blendstocks can be shared or traded within a region and thus
may understate the costs of meeting a regulation such as the Global Sulphur Cap. Even to
the extent refineries are coastal and can ship blend stocks to other refineries, doing so adds
costs which are not reflected in the Model.41
In addition, the advent of the Global Sulphur Cap will tend to increase the number of
distillate and /or heavy fuel grades refiners need to supply and hence the number of grades
that need to be segregated and separately stored. These adjustments are likely to take time
and to raise storage and distribution costs. Local tankage and blending restrictions could
limit the number of marine blends that can be offered in specific locations, especially in the
short term after the Rule has come into effect.
5.2.1.4 Inland versus Coastal Refineries
EnSys conducted an evaluation of refineries worldwide by location to address a question
raised in the Terms of Reference of the IMO study – and applicable here – regarding the
extent to which refineries are inland and therefore may have a reduced or nil ability to
contribute to marine fuels production. However, it is a not a simple case of – if it is inland it
cannot supply. Many inland refineries are connected via waterways or pipelines to coastal
markets. (Examples include refineries along major waterways in Europe and the United
States.) In addition, refiners are adept at entering into geographic exchange type
arrangements which could enable inland refineries to indirectly contribute to coastal marine
41 The flexibility that is inherent in the Model is particularly relevant in this study with regard to vacuum residua streams. Model results have shown a clear incentive and need to maximize coker throughputs to meet the changes required under the Global Fuel cases. In the Model, we do not allow the transport of vacuum residua between regions (although we do allow movement of finished HFO products and atmospheric residua). Intrinsically, though, the Model does allow movement of vacuum residua within regions. Again, to the extent this is not achievable in the real world, the Model tends to overstate the ease and understate the challenge and cost of adapting to the Global Fuel Rule.
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fuel supply (e.g. by increasing inland diesel production under an exchange which frees the
coastal counter party to raise marine diesel production).
Clearly though, if a large proportion of refineries across the world could not contribute to
marine fuels production, that would have a significant impact on the sector’s ability to
respond to the Global Fuel Standard. To assess the degree of significance of this effect,
EnSys evaluated each refinery worldwide according to its location and assessed logistical
capability. Firstly, the many refineries that are coastal were identified as such. Then any
inland refinery was assessed in terms of its logistical ability to flow products to the coast.
Where refineries were clearly on major river systems or on product pipelines, they were
assessed as “Inland not Isolated”. Conversely, refineries that were clearly inland and had no
visible means to supply their products to anywhere other than local markets were assessed
as “Inland Isolated”. Inland refineries where the situation was unclear were initially placed
into an “Inland May Be Isolated” category. To be conservative, these were then added in to
a “Total Inland Isolated” category.
Finally, the WORLD Model contains relatively detailed logistics for the refineries that are
inland in the United States and Canada. These were identified as “Inland Isolated Captured
in WORLD”. In other words, the Model captures their ability – or lack thereof – to link to
coastal markets. These groups were, where appropriate, subtracted out of “Total Inland
Isolated” to arrive at a net category of “Total Inland Isolated Not Captured in WORLD”. In
short, it is the capacities in this category which, in WORLD, are implicitly counted as
effectively coastal and able to contribute to marine fuels production because of the regional
aggregation of refining capacity (e.g. Western Europe, China, etc.) whereas in reality, these
are sufficiently inland and isolated from coastal markets that they are extremely unlikely to
be able to contribute. Put another way, the limitations in the current Model formulation
lead to a potential for over-optimisation in this respect. The issue is whether this effect is
significant or small.
Exhibits 5-19 and 5-20 summarise our analysis. Nearly 12% of the world’s capacity was
assessed as Inland Isolated, with over 25% Inland Not Isolated and over 62% on the water
(coastal). The regions with the largest populations of Inland Isolated Capacity are the
United States, Europe, FSU and China. Allowing for the fact that the WORLD Model
explicitly captures the logistics of inland refineries in the United States and Canada, results
in a reduction to a net of 9 mb/cd of capacity, just over 9% of the global total, that is Inland
Isolated [but] Not Captured in WORLD. Thus, we are allowing in the Model for 9.2% of the
world’s refinery capacity to contribute to marine fuels production when in fact those
refineries cannot.
Since secondary capacity is critical in this study, we extended the assessment to cover
corresponding upgrading and desulphurization capacity. Per Exhibit 5-20, some 6% of total
upgrading and also of distillate and heavier desulphurization capacity is Inland Isolated. We
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did not attempt to isolate out secondary capacity in the Inland Isolated Captured in WORLD
category but, based on the impact on distillation capacity, we estimate the net Inland
Isolated Not Captured in WORLD secondary capacity would be around 4-5% of the global
totals.
The ‘bottom line’ of this assessment is that the effect of isolated inland refineries is small
but it nonetheless leads to a minor degree of over-optimisation in the WORLD Model
results. Restrictions of time and budget prevented EnSys from addressing this issue by re-
working the Model’s refining groups but this could be done in the future.
Exhibit 5-19 Isolated Refining Capacity - Distillation
Region On WaterInland Not
Isolated
Total Inland
Isolated
Inland
Isolated
Captured in
WORLD
Total
Inland
Isolated
Not
Captured
in WORLD
Total
Distillation
Capacity
On
Water
Inland
Not
Isolate
d
Inland
Isolated
Inland
Isolated
not
Captured
in
WORLD
United States 10,501,971 5,043,340 2,654,151 1,914,760 739,391 18,199,462 58% 28% 15% 4%
Canada 543,200 777,600 619,450 609,450 10,000 1,940,250 28% 40% 32% 1%
South America 5,774,692 1,804,934 387,700 - 387,700 7,967,326 72% 23% 5% 5%
Europe 10,715,812 2,880,481 1,853,300 - 1,853,300 15,449,593 69% 19% 12% 12%
FSU 1,317,113 4,607,533 2,100,941 - 2,100,941 8,025,587 16% 57% 26% 26%
Middle East 7,007,933 2,019,770 458,850 - 458,850 9,486,553 74% 21% 5% 5%
Africa 3,530,906 152,680 417,600 - 417,600 4,101,186 86% 4% 10% 10%
China 5,488,926 5,605,029 2,006,845 - 2,006,845 13,100,800 42% 43% 15% 15%
Other Asia-Pacific 15,791,269 2,084,640 972,853 - 972,853 18,848,762 84% 11% 5% 5%
WORLD 60,671,822 24,976,007 11,471,690 2,524,210 8,947,480 97,119,518 62.5% 25.7% 11.8% 9.2%
Capacity %Crude & Condensate Distillation Capacity - b/cd
Refining Capacity - Capability to Contribute to Marine Fuels Production - Distillation
Grand total global capacity differs slightly from base data used in WORLD as this analysis does not include a small number of corrections
EnSys applied within the Model
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Exhibit 5-20 Isolated Refining Capacity – Upgrading and Desulphurisation
5.2.2 External Factors Impacting Premises
Several other factors which impact primarily premises used should also be taken into
consideration when assessing the Model results obtained.
5.2.2.1 2020 Refinery Available Capacity
There is inevitably a degree of uncertainty as to what total refinery capacity will be available
three and a half years from now at the end of 2019 since this will depend on both projects
Region On Water Inland Not
Isolated
Total Inland
Isolated Total On Water
Inland Not
Isolated
Inland
Isolated
United States 6,748,063 2,770,085 237,630 9,755,778 69% 28% 2%
Canada 269,500 304,630 - 574,130 47% 53% 0%
South America 2,084,477 791,722 121,000 2,997,199 70% 26% 4%
Europe 4,343,389 1,268,841 680,028 6,292,258 69% 20% 11%
FSU 548,718 1,183,750 391,711 2,124,179 26% 56% 18%
Middle East 2,041,650 483,041 33,820 2,558,511 80% 19% 1%
Africa 616,709 10,000 47,774 674,483 91% 1% 7%
China 1,243,753 885,800 361,000 2,490,553 50% 36% 14%
Other Asia-Pacific 4,492,098 664,289 226,520 5,382,907 83% 12% 4%
WORLD 22,388,357 8,362,158 2,099,483 32,849,998 68.2% 25.5% 6.4%
Includes: coking, visbreaking, FCC, hydro-cracking
Region On Water Inland Not
Isolated
Total Inland
Isolated Total ACU On Water
Inland Not
Isolated
Inland
Isolated
United States 4,948,393 2,289,468 323,050 7,560,911 65% 30% 4%
Canada 108,000 256,900 - 364,900 30% 70% 0%
South America 1,405,367 449,238 147,000 2,001,605 70% 22% 7%
Europe 4,859,173 1,527,775 616,917 7,003,865 69% 22% 9%
FSU 454,659 1,210,975 544,386 2,210,020 21% 55% 25%
Middle East 1,864,220 350,000 17,600 2,231,820 84% 16% 1%
Africa 549,882 15,000 55,798 620,680 89% 2% 9%
China 666,000 327,800 58,000 1,051,800 63% 31% 6%
Other Asia-Pacific 7,509,928 440,789 95,000 8,045,717 93% 5% 1%
WORLD 22,365,622 6,867,945 1,857,751 31,091,318 71.9% 22.1% 6.0%
Excludes naphtha, gasoline and lubes hydro-treating capacity
Capacity %
Capacity %
Total Upgrading b/cd
Distillate / VGO / Resid Desulphurisation b/cd
Refining Capacity - Capability to Contribute to Marine Fuels Production - Total
Upgrading and Distillate/Heavy Desulphurisation
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and closures. We do see potential for some changes to projects in the next year or two but
we do not expect those to be of a scale that would substantially alter the total capacity in
2020. As and when the IMO does take a decision on 2020 versus 2025 timing, one major
uncertainty relating to the Global Sulphur Cap will be removed. However, the perception
that the rule’s entry into effect would bring a surge in scrubber installations, (our WORLD
Model results in this analysis reinforce this prospect because we assess a wide expansion in
diesel – IFO price differentials to result from the Global Sulphur Cap), is likely to curb
investments by refiners specifically for the marine fuels market.42
Also, our assessment of refinery projects assumed that the majority (75%) of the significant
number of projects that are at mid-status would go ahead and do so on time. Again, this
outlook could be affected either way by market developments such as world oil price level
and perceived economic and product demand growth. That said, we do not see scope for
the overall effect on 2020 installed capacity to be major. We are too close now to 2020 for
many large new projects to emerge that could be placed on stream by the end of 2019.
Conversely, there is still time for new minor projects to appear and be implemented. We
captured much of that possibility in our 2020 WORLD Model cases by allowing for modest
levels of capacity debottlenecking and revamping over and above assessed projects.
5.2.2.2 Impact on Crude Runs & Prices
As illustrated in the Model results, a key component in the refining industry adapting to the
Global Sulphur Cap is the indicated need to increase crude runs, potentially by of the order
of 0.25 to 1.25 mb/d (approx. 12.5 – 62.5 mtpa). In the Model cases, we held marker crude
price constant in order to maintain consistency across cases. Yet it is clear that a (relatively
rapid) increase in crude oil demand at a non-trivial level would almost certainly lead to an
increase in global crude oil prices. This is a factor we have not taken into account but it
would further raise supply costs across all products worldwide as a result of the
implementation of the Global Sulphur Cap. Extensive academic work has been undertaken
on short and long term price elasticities of demand for crude oil but today’s tendency for
crude prices to respond to limited changes in the market signifies this is an effect that
should not be ignored in the assessment of supply cost impacts of the Global Sulphur Cap.
42 One exception to this is that the Swedish refiner PREEM has just announced a cooperation agreement with a United States company to develop a design basis for a residue hydrocracker (a very high cost process unit) with one of the stated driving forces being the impact of the pending Global Sulphur Rule is reducing the market for heavy fuel oil (http://www.constructionboxscore.com/project-news/preem-signs-major-cooperation-agreement-with-beowulf-energy.aspx). We are adding this project into our database but at a low classification level because of its early stage. Moreover, the announcement states that analysis and permitting stages alone would take 2 to 3 years; so, if the project were to go ahead, it would not be on stream until after 2020 given necessary construction time.
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Again, by not including an estimate for this effect, our analysis understates the cost of
compliance with the Global Sulphur Cap.43 Even a $1/barrel increase in crude oil price
would add on the order of $35 billion/year to global petroleum product supply costs, a
$5/barrel increase around $180 billion / year to cost increases already assessed at $400 to
$600 billion / year per Model cases depending on the scenario. (See Section 5.1.3.2.) The
market would eventually adapt and price elasticity effects would bring supply costs down.44
However, the potential for damage to the world’s economies from petroleum product price
spikes is well known.
5.2.2.3 Level of Global Demand and Call on Refining
The level of total global demand in 2020 is clearly a key factor that will influence the ease or
difficulty in adopting the Global Sulphur Cap; the higher the demand the greater the
difficulty and vice-versa.
As discussed in Section 4.3.2, in March, EnSys selected the November 2015 WEO New
Policies outlook which had 2020 global demand at 98.8 mb/d. We noted that the more
recent February 2016 MTOMR projected 2020 demand at a much higher 100.5 mb/d but felt
at the time this single outlook might be an outlier and thus opted for the WEO as more
‘central’. In mid-May, the EIA released its 2016 International Energy Outlook (IEO). This
projects 2020 demand at 100.3 mb/d, i.e. almost identical to the MTOMR projection. The
EIA has also made public its 2016 AEO Early Release. This has 2020 demand at 101.5 mb/d.
In addition, in a May 16th Wall Street Journal article, Daniel Yergin stated that “by 2020
world oil consumption could be 5.7 million barrels per day higher than this year’s 95.6
million”. This would appear to refer to a current IHS forecast for 2020, one that would total
101.3 mb/d.
In short, the most recent demand outlooks are shifting toward higher global demand
projected for 2020. There is of course uncertainty in these but, were EnSys to re-run WORLD
43 The aggregate supply costs projected in Section 5.1.4.2 include the changes in costs for marine as well as other fuels. We would note though that these cost increases will be reflected as increases in freight rates. To give one example, for a VLCC carrying medium sour crude from the Middle East to Japan, the freight rate increase in going from the 2020 Base Case to the Mid Switch High MDO case would be of the order of $0.25/barrel. (EnSys did not adjust up freight rates in the Global Fuel cases since we considered this would have brought in potential for double-counting given we do report the increase in supply costs across marine and other fuels.) 44 The WORLD Model is run on a ‘deterministic’ basis, i.e. with nearly all supply and demands fixed. We are thus simulating how the global refining, blending and logistics system can be expected to operate under that scenario. We do not generally incorporate elasticity effects. That said, petroleum product demand is known for being relatively price inelastic. Thus the sharp open market price increases envisaged under the Global Fuel cases would be unlikely to lead to rapid reductions in demand. The strain on markets could therefore be expected to persist for an extended period of time.
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cases with 2020 demand in the 100 – 101 mb/d range to be more in line with the latest
agency outlooks, the higher demand level would further exacerbate the difficulties being
projected. Again, the implication is that the current WORLD Model results may be
understating the difficulty and challenge to implement the Global Sulphur Cap.
Potentially offsetting this is the fact that perspectives on 2015 ‘demand’, allowing for
product inventory builds as well as actual consumption, have also been revised upward; and
the same has occurred for assessed 2015 refinery crude runs. Had EnSys 2015 WORLD
Model case been calibrated to these revised higher assessments, we would have adjusted
upward selected allowed maximum utilization rates in order to ‘hit’ supply costs and
differentials that were closely in line with published price data for 2015. These higher
allowed utilisations would have carried through into the 2020 cases, reducing to some
degree the added economic impacts from the Global Sulphur Cap. Overall, our view is that
these two global demand / refinery runs effects broadly offset each other.
As mentioned in Section 4.4, lower oil prices are tending to curb growth in non-crudes
supplies, adding to the load on refining. Again, the latest projections have lower supply, at
least for biofuels, than the WEO figure we are using. Reduced biofuels availability versus
our assumptions slightly tighten the Base Case outlook and raise Global Fuel case costs, all
else being equal.
On the other side of the ledger, we note that the WORLD Model 2020 Base Case shows
appreciable tightening in diesel–IFO price differentials versus 2015, i.e. levels that are at the
high end of recent history. One implication is that we may be overstating inland
diesel/gasoil demand (and / or that for jet and kerosene). Several recent press articles have
referred to a ‘diesel glut’. For example, a December 2015 Report (Issue 115) by BMI
Research states, “We expect persistent oversupply in the global diesel market, sustained
weakness in the Chinese economy and weaker European consumption growth to keep a lid
on diesel prices up to 2018, before a gradual easing of the global oil supply glut leads to a
modest uptick in diesel prices over 2018-2019.” Conversely, recent publications, including
the IEA in its latest Oil Market Report, point to how demand in India is rising strongly, thus
offsetting the slower pace of demand growth in China. Secondly, the same diesel glut
articles have referenced the possibility that a perceived diesel glut could lead to refinery
project deferrals. In that event, any reduction in projected 2020 diesel demand could well
be offset by reductions in capacity to produce the diesel, leaving us rather back where we
started.
Versus our original (April) demand assessment, EnSys did introduce a 0.25 mb/d reduction
in inland diesel demand and a corresponding increase of 0.25 mb/d in 2020 gasoline
demand to reflect the trends for a softening in diesel demand growth and a strengthening
(short term) in gasoline demand. To test the sensitivity of results to the level of diesel
demand, EnSys undertook 2020 sensitivity cases in which we reduced total global (inland)
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diesel fuel demand by a further 0.25 mb/d and raised that for gasoline by a further 0.25
mb/d. Thus total global demand remained unchanged. Also no elements in supply, refining
capacity or other premises were changed. The demand shift did bring gasoline and diesel
supply costs projected by the Model more closely into line than in our main case series.
Distillate – Gasoline differentials narrowed from $10.19/barrel (US Gulf Coast, Northwest
Europe, Singapore average) in our main series 2020 Base Case to $5.30/barrel in the
Diesel/Gasoline Adjusted Demand case.
Correspondingly, in the Global Sulphur Cap cases the impacts on total distillate product
supply costs were moderately lessened versus those in the main series cases; this because
the reduction in diesel demand created a less tight situation in the Base Case which then
also affected the Global Fuel cases. However, product supply costs for gasoline (and also
naphtha) were higher than in the main series cases because the higher gasoline Base Case
demand created to tighter starting point for gasoline for the Global Fuel cases. The net
effect was that switching diesel demand to gasoline led to no overall benefit in terms of
total global supply costs across all products combined. This, in our view, is because the first
order impact in the Global Fuel cases is a shift from heavy material to light and total light
product demand was not altered between the main series and the adjusted cases.
5.2.2.4 Global Crude Slate
As also noted in Section 4.4, there is uncertainty surrounding the outlook for crude oil
production, and light/medium/heavy mix. Reductions versus current expectations in output
from Canada, Venezuela, Mexico and/or Brazil would cut the volumes of heavy sour crude
on the market, with replacement potentially by lighter but still sour Middle East crude
grades. A return to prices above those projected in the WEO for 2020 (around $80/barrel
for IEA average import price) could lead to a resurgence in output of United States light
sweet tight oil. However, US E&P companies are currently declaring bankruptcy at a rapid
pace and so a conservative outlook would arguably be that any price increase would be met
by a relatively guarded increase in resources and development, not the supply surges seen
in the past few years. Also, producers of light sweet crude in Africa are currently struggling.
These and other trends could appreciably impact the global crude slate in either direction
but we believe it would not be appropriate to optimistically assume and plan on a scenario
in which quality improves substantially from where it stands today.
5.2.2.5 Marine Fuel Total Demand
The Navigistics marine fuel demand projections are based on the IMO 3rd GHG study with
allowance for a degree of vessel speedup. The overall impact on Base Case global marine
fuel demand is, however, modest; an increase from 5.7 mb/d (311 mtpa) in 2015 to 6.244
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mb/d (341 mtpa) in 2020. Any further increases, as through added global maritime trade
and/or vessel speed-up, would raise both total 2020 marine fuel demand and switch
volumes. Based on our analysis, it appears there could be more scope to the upside for
demand and switch volume than to the downside, i.e. for added rather than reduced
impacts from the Global Sulphur Cap. (The IMO 3rd GHG study, which was the basis for our
marine fuels demand outlook, was undertaken when oil prices were still above $100/barrel,
arguably constraining assessed outlooks for vessel speed-up and economic and trade
growth versus an evaluation based on today’s lower oil prices.)
Overall, our assessment is that the majority of the factors either inherent in the modelling
analysis or which would impact key premises regarding the 2020 outlook point to these
current Model results if anything understating rather than overstating the challenges in
meeting the Global Sulphur Cap in 2020.
5.3 Summary of Findings & Conclusions
Our demand analysis projects that a limited fraction of ships will be running with onboard
scrubbers by end 2019 and therefore that the bulk of the compliance load will fall on
refiners to supply 0.5% sulphur Global Fuel.
Given this outlook, Model results point to extreme difficulty – and indeed potential
infeasibility - for the refining sector to supply the needed fuel under the Global Sulphur Cap
and to simultaneously meet all other demand without surpluses or deficits. Market impacts
are projected as very substantial across all products and regions worldwide, not just marine
fuels, and, consequently, to have potentially significant impacts across economies and
sectors. Moreover, as stated above, we see the Model results if anything understating
rather than overstating the challenges in meeting the Global Sulphur Cap in 2020.
The WORLD Model results themselves indicate the global refining industry is unlikely to be
able to meet the needed extra sulphur removal demand because 2020 sulphur plant (and
hydrogen plant) capacity will not be adequate based on current capacity plus projects. The
projection is that these capacity limitations would prevent the industry from supplying the
volumes (and qualities) needed to achieve full compliance with the Global Sulphur Cap.
The Model results further show that, even if sufficient added sulphur plant and hydrogen
capacity were to become available, the industry could potentially meet the Global Fuel
volumes but only with attendant severe economic impacts in the form of substantial
increases in supply costs not only for marine fuels but also for nearly all fuels (except high
sulphur HFO) across all regions of the world. Refining economics would also be impacted
with potential adverse consequences for simpler refineries that could lead to more closures.
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Should the shipping industry be able to accept relatively new IFO 0.5% sulphur fuel
formulations, (versus marine distillate), that would moderately alleviate the economic
impacts of the fuel switch but this would almost certainly take time and is not guaranteed
given recent ship operational issues with 1% sulphur fuels. It should be born in mind that
achieving compliance using a higher proportion of LS IFO fuels does little or nothing to
change the issue regarding potentially inadequate sulphur plant capacity; this because the
sulphur removal load is unchanged.
In summary, we conclude that a full-on switch to the Global Sulphur standard in January
2020 does not look to be workable.
This study has been focussed on one question – if the Global Sulphur Cap is implemented in
full in January 2020 what is the impact? Any rigorous analysis of the follow-on implications
of our findings on this question is beyond the scope of this assignment. However, our
findings clearly beg the question of what would or could happen. Our judgement and
experience indicate that, if the rule were in full force with all refiners and shippers
attempting to comply, the impacts across all products (not just marine) worldwide would be
severe. Refiners would not be able to put capacity in rapidly to resolve the market strain –
even minor projects take one to two years to implement and major ones often three to as
much as seven.
Also, investment decisions specifically to address the marine fuels market are not
straightforward since the projected extreme price differentials caused by the shift to 0.5%
sulphur marine fuel would greatly enhance the economics of and arguably orders for
scrubbers. This would create the prospect of the proportion of vessels able to use HS marine
fuel growing over time, in turn cutting the volumes of Global Fuel needed. An expectation
of such a scenario would create a perceived risk that marine-fuel-specific refinery
investments could become ‘stranded’. This, in its turn, would cut the justification for and
likelihood of such investments occurring. For these and the other reasons elaborated here,
the refining industry would need time to adapt to the Global Sulphur Cap and the adverse
market impacts from the rule would take time to fade, with potential widespread economic
consequences in the interim.
We do not see any easy resolution of this situation. Even the possibility of alleviating the
market strain through the expansion of markets for HS HFO is uncertain, would take time
and would bring its own consequences including increases in crude oil and – potentially -
product costs stemming from increased use of crude oil. Further, it could result in a
reallocation of HS fuel and emissions from ships to land rather than a net reduction in
sulphur emissions.
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6 Appendices
6.1 Background on the EnSys WORLD Model
The fuels availability analysis requires an advanced methodology which:
captures the producibility of marine fuels at different 2020 demand levels but also
the impacts on other fuels worldwide
correctly balances the whole global system while capturing the refining, blending
and trading flexibilities and interactions inherent in the system
i.e. is a fully integrated model of the complete global system and
enables different scenarios to be efficiently examined and quantified.
The methodology must also embody all the changes that are expected to occur between
today and 2020 encompassing: crude slate, non-crudes supply, refinery capacity, product
demand and quality shifts and logistics developments.
The EnSys WORLD Model embodies these capabilities and features. For over 27 years,
WORLD has been used to evaluate supply, demand, refining, trade and regulatory
developments in the global ”downstream” encompassing crude oils and non-crudes supply,
refining, trade and demand. Across at least 50 studies, WORLD clients and applications
include the following. For:
the European Commission, 2012 and 2015 assessments related to the Fuels
Quality Directive and to high biofuels scenarios
the OPEC Secretariat, a global downstream outlook every year since 2000 and
the downstream section of each OPEC World Oil Outlook since 2007
the United States Department of Energy, multiple studies since 1988 concerning
both reformulated fuels policies and disrupted markets (Office of Strategic
Petroleum Reserve)
the United States Department of State, 2010, 2011 and 2014 evaluations of the
United States and global refining and market impacts of Keystone XL and other
potential logistics scenarios
the American Petroleum Institute on studies of ultra-low sulphur diesel
regulations, climate bills (including Waxman-Markey in 2009) and of the United
States crude exports (2014)
the World Bank, a 2009 review of the ability of sub-Saharan African refineries to
meet tighter sulphur regulations for gasoline and diesel as part of a plan to
improve health in the region
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a European process technology supplier, 2010 evaluation of the outlook for
hydro-processing capacity additions and the associated regional and global
catalyst market
various major oil companies, assessments ranging from the impact on refinery
GHG emissions of processing more Canadian synthetic crude oil to the market
impacts of rising GTL liquids supply to detailed assessments and implications of
refining developments in the United States and in Asia.
Within this body of experience is contained an array of major projects focussed specifically
on marine fuels, notably:
for the United States EPA, 2006 through 2009 studies in support of the United
States ECA submission to the IMO. This was a landmark set of studies for EnSys
and Navigistics in terms of building the capability for rigorous marine fuels
demand and availability analyses which we have since applied. Navigistics led a
project to develop rigorous fleet and trade based projections of marine fuel
demand, an update for which was completed in 2015.
for the IMO as input to MARPOL Annex VI, an evaluation of a range of 2020
partial and total conversion (to distillate) scenarios with emphasis on the impacts
on incremental refining investments needed, total and incremental supply costs
across all petroleum products (not just marine fuels) and effects on marine fuel
and refinery CO2 emissions45,46
for the American Petroleum Institute and IPIECA, related studies at the same
time examining alternative regulations, including for a 1% instead of 0.5%
sulphur standard
a 2015 fuel supply evaluation in support of Mexico’s planned ECA submission
a 2015 initial assessment of alternative marine fuels supply/demand outlooks in
2020 and 2025 under the Global Sulphur Cap.
Unlike “refining” models, WORLD encompasses total “liquids” supply and demand; so
including the important contributions of biofuels, GTL/CTL liquids and Natural Gas Liquids
(NGL’s) as well as crude oil. The Model is designed to work with and to sum to the total
global “top down” projections produced by the IEA, EIA and others. New projections from
these institutions are integrated into the WORLD Model as a matter of course.
45 See Analysis of Impacts on Global Refining & CO2 Emissions of Potential Regulatory Scenarios for International Marine Bunker Fuels, Final Report, Prepared for International Maritime Organisation Expert Fuels Group, EnSys Energy & Navigistics, Nov 2007. 46 We note that the volume of IFO switched to marine distillate under the total conversion case was 6.75 million b/d.
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WORLD embodies “bottom up” detail on the global downstream, including nearly 200 crude
types, breakdown of NGL’s and biofuels, process capacity data on every refinery worldwide,
detailed representation of refinery investment options, detailed representation of inter-
regional crude, non-crudes, intermediates and product movements – pipeline, marine (with
freight based on WorldScale) and other modes such as rail, detailed representation of
products with grade breakdowns and associated qualities across key specifications. Every
WORLD case combines a top down global price/supply/demand outlook (e.g. from the IEA
MTOMR or WEO) for a given horizon, such as 2020, with the bottom up detail and generates
a simulation of how the industry is likely to operate under this scenario.
Key WORLD outputs include:
physical data on refinery throughputs and crude slates, secondary operations, product
blending, yields/production by product, CO2 emissions, refinery capacity additions by
process (for longer term cases), crude and products inter-regional trade and
economic data on cost of refinery investments, crude and product open market prices by
region by crude and product, (based on an input world marker crude price), hence price
differentials and refiner crack spreads/margins and regional and global product supply costs
with breakdown by major product group.
Inputs and results are presented for each of the current 23 regions in the model, with
facilities to aggregate reports to the “super region” and global levels.
Because WORLD integrates within one modelling framework all the elements in the global
downstream industry, it captures within every case the interactions between regions and
between products. Also, supply and demand must balance. Crudes and resulting blend
stocks have be dealt with / absorbed with the global system; they cannot be simply
rendered surplus or deficit. Such capabilities are essential in this study, as others, in order
to capture both the efficiencies and flexibility that can be present in the industry (which
depends largely on the balance existing at the time between crude slate, refinery capacity
and demand make-up) and the impacts that a change in regulations in one sector, in this
case marine fuels, can have on other sectors, notably product price differentials and supply
costs for non-marine fuels, especially diesel and other distillates.
WORLD is geared to be able to address a range of different horizons or scenarios efficiently.
This provides substantial power in enabling an array of sensitivity cases (variations in
premises / scenarios) to be evaluated off a base case. Again, such capability is critical in this
study since it is essential to provide not just one “centre line” case but a range of cases that
cover the spectrum of plausible fuels demand / switch volume and availability scenarios in
2020.
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The WORLD Model is capable of addressing questions related to essentially any aspect of
the global downstream but embodies specific features and capabilities regarding marine
fuels. As indicated above, EnSys built a series of key enhancements into the WORLD Model
during our 2006 – 2009 work for the EPA, API and IMO. As documented in our March 2009
report for the EPA47, these included:
o a major expansion of the detail with which WORLD represents marine
bunker fuels, their demand, types, specifications, and blending
o the ability to switch between “IEA” and “IMO” marine fuel demand bases
o a detailed review of actual marine bunker grades and qualities in the
marketplace
o blending and processing constraints to ensure bunker fuel stability
o extensions to compute CO2 emissions from refineries and from the
combustion of marine fuels, based on their type.
All these features have been maintained and underpin this study.
Additional information on WORLD is available from EnSys Energy. A Features brochure sets
out the detail of refinery processes and modes, product types and specifications and other
relevant factors.
47 Global Trade and Fuels Assessment— Additional ECA Modeling Scenarios Final Report, Prepared for Barry Garelick, Russ Smith, the United States Environmental Protection Agency, Office of Transportation and Air Quality, March 2009.
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6.2 Refinery Projects Detail
6.2.1 Projects 2016-2019 Included
The following table list the main refinery projects considered by EnSys as potentially being completed between the beginning of 2016 and the
end of 2019. As discussed in Section 4.10, these include projects we have assessed as Class 5, 4 or 3 and exclude less certain projects we have
classified as 2 or 1. Major projects are listed individually by region together with aggregate distillation capacity for minor projects. The totals
for each region sum to the unadjusted totals presented in Exhibit 4-17.
Region Country Company Location/Refinery Capacity ('000 bpcd)
Estimated Completion
Class 3 Projects (*)
Asia Pacific China Yatong Petrochemical Dongying 100 2016 Asia Pacific China CNOOC Zhongjie 70 2016 *
Asia Pacific China CNOOC Shandong Haihua 60 2016 Asia Pacific China CNOOC Taizhou 60 2016 *
Asia Pacific China CNOOC Huizhou 200 2017 Asia Pacific China PetroChina Anning, Kunming 200 2017 *
Asia Pacific Others(1) CPC Talin/Dalin (Kaohsiung City) 150 2017
Asia Pacific Republic of Korea Hyundai Oilbank
Daesan Refinery (south of Seoul) 140 2017
Asia Pacific India NOCL Cuddalore 120 2017 *
Asia Pacific India BPCL Kochi 120 2017 *
Asia Pacific China PetroChina Renqiu (Huabei) 100 2017 *
Asia Pacific Viet Nam Petrovietnam JV Nghi Son, Thanh Hoa 200 2018 Asia Pacific China Sinopec Hainan (Yangpu Zone) 100 2018 *
Asia Pacific China Huajin Petrochemicals Lianoning 80 2018 *
Asia Pacific China Sinochem Quanzhou 60 2018 *
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Asia Pacific China Hengli Petrochemical & Refinery Changxing Island, Liaoning 380 2019
Asia Pacific China Sinopec Caofeidian, Hebei 240 2019 *
Asia Pacific China Sinopec Shanghai Gaoqiao 140 2019 *
Asia Pacific China Sinopec Jingmen 100 2019 *
Asia Pacific India BPCL Numaligarh 120 2019 *
Asia Pacific India IOCL Koyali, Gujarat 86 2019 *
Asia Pacific Sri Lanka Ceylon Petroleum Sapugaskanda 50 2019 *
Minor Projects (aggregated) 219
Total Projects 3095 (1) Taiwan Province of China
Region Country Company Location/Refinery Capacity ('000 bpcd)
Estimated Completion
Class 3 Projects (*)
Europe Turkey SOCAR Izmir, Aliaga (STAR) 207 2018 *
Minor Projects (aggregated) 0
Total Projects 207
Region Country Company Location/Refinery Capacity ('000 bpcd)
Estimated Completion
Class 3 Projects (*)
FSU Russian
Federation Tatneft (Taneco) Nizhnekamsk 140 2017
Minor Projects (aggregated) 165
Total Projects 305
Supplemental Marine Fuel Availability Study
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Region Country Company Location/Refinery Capacity ('000 bpcd)
Estimated Completion
Class 3 Projects (*)
Middle East Qatar Laffan Refinery Co. Ltd. Laffan 139 2016
Middle East
Islamic Republic of Iran Persian Gulf Star Bandar Abbas 120 2016
Middle East
Islamic Republic of Iran Persian Gulf Star Bandar Abbas 120 2017 *
Middle East Oman Orpic Sohar 82 2017 Middle East Saudi Arabia Saudi Aramco Rabigh 50 2017 Middle East Bahrain BAPCO Sitra 93 2018 *
Middle East Iraq Quiwan Baizan 50 2018 *
Middle East Saudi Arabia Saudi Aramco Jizan (Jazan) 400 2019 Middle East Kuwait KNPC Mina al-Abdulla 184 2019
Middle East
Islamic Republic of Iran NIOC (Siraf Refinery) Assaluyeh 120 2019 *
Middle East Iraq KAR Oil Refining Erbil 60 2019 *
Minor Projects (aggregated) 60
Total Projects 1,478
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Region Country Company Location/Refinery Capacity ('000 bpcd)
Estimated Completion
Class 3 Projects (*)
Africa Egypt Midor Alexandria 60 2018 *
Angola Sonangol Lobito 120 2019
Algeria Sonatrach Tiaret 90 2019
Minor Projects (aggregated) 25
Total Projects 295
Region Country Company Location/Refinery Capacity ('000 bpcd)
Estimated Completion
Class 3 Projects (*)
Latin America Brazil Petrobas Pernambuco (Abreu e Lima) 115 2018
Minor Projects (aggregated) 61
Total Projects 176
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Region Country State Company Location/Refinery Capacity ('000 bpcd)
Estimated Completion
Class 3 Projects (*)
North America United States TX Phillips 66 Sweeny 100 2016 North America United States TX Valero Energy Houston 90 2016 North America United States TX Valero Energy Corpus Christi 70 2016 North America United States TX Buckeye and Trafigura Corpus Christi 50 2016 North America United States TX Magellan Corpus Christi 50 2016 North America United States TX Centurion Terminals Brownville 50 2016 North America United States TX Castleton Commodities Corpus Christi 100 2017 *
North America Canada - Northwest Redwater Redwater 50 2018 North America United States TX Marathon TexasCity/Galveston Bay 50 2019 *
North America Mexico - PEMEX Tula Hidalgo 40 2019 *
Minor Projects (aggregated) 195
Total Projects 845
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6.2.2 Projects Post 2019 Excluded
Region Country City or Project Name Company Capacity (thousand bpd) Completion Date* Comment
2020-2021 Total 2020-2021 3,450
Africa Nigeria Olokola Dangote Group 400 2020 reports vary from 400 to 650
Africa South Africa Mthombo
PetroSA /
Sinopec 360 2020
Asia Pacific China Zhanjiang, GD Sinopec / KPC 300 2020
Asia Pacific India Mumbai, MH BPCL 60 2020
Asia Pacific India Bhatinda (Bathinda)
HPCL / Mittal
Energy 50 2020
Asia Pacific India Mumbai, MH (Mahul) HPCL 70 2020
Asia Pacific Malaysia
Johor, Pengerang (RAPID
Project) Petronas 300 2020
Latin
America Ecuador Manabi (Pacific Refinery)
Petroecuador /
CNPC 200 2020
Middle East Saudi Arabia Ras Tanura and Rabigh Saudi Aramco 0 2020 Clean fuels program
Asia Pacific China Jieyang CNPC / PDVSA 200 2021
Asia Pacific Viet Nam Nhon Hoi, Binh Dinh
PTT / Saudi
Aramco 660 2021
Asia Pacific Viet Nam Dung Quat, Quang Ngai
Petrovietnam /
Gazprom Neft 70 2021
Latin
America Brazil
Rio de Janeiro (COMPERJ
project) Petrobras 165 2021
Middle East Kuwait Al Zour KNPC 615 2021
Selected Major Refinery Projects with Uncertainty ("Class 3")
Supplemental Marine Fuel Availability Study
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6.3 WORLD Model Results – Detail
6.3.1 Refinery Operations – 2020 Base Case
Supplemental Marine Fuel Availability Study
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REPORTS 2020 REFINERY INVESTMENT $BILLION ($2015)
Global United States CanadaLatin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
REVAMP 1.33$ 0.14$ 0.05$ 0.21$ 0.11$ 0.34$ 0.05$ -$ -$ 0.14$ 0.29$
DEBOTTLENECKING 2.92$ 1.68$ 0.08$ 0.03$ 0.48$ 0.44$ 0.05$ 0.03$ 0.02$ 0.06$ 0.04$
MAJOR NEW UNITS -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
API REVAMP -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
TOTAL REFINING 4.26$ 1.82$ 0.13$ 0.24$ 0.59$ 0.78$ 0.10$ 0.03$ 0.02$ 0.20$ 0.34$
REPORTS 2020 ATMOS DISTILLATION
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 95.66 18.23 1.83 7.97 15.27 8.03 4.21 9.15 3.73 13.15 14.10
Additions
Known Projects (data) 5.64 0.69 0.05 0.21 0.15 0.28 0.28 1.36 0.14 1.69 0.78
Debottlenecking (WORLD) 0.36 0.19 0.02 0.00 0.02 0.00 0.00 0.03 0.01 0.04 0.04
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 6.00 0.88 0.07 0.21 0.17 0.28 0.28 1.39 0.15 1.73 0.82
Total Operating Capacity 101.66 19.11 1.90 8.18 15.44 8.31 4.49 10.53 3.89 14.88 14.92
Crude Throughput 82.03 15.65 1.66 6.10 13.16 6.63 2.53 7.900 3.38 12.35 12.66
Refinery Utilisation 80.7% 81.9% 87.4% 74.6% 85.2% 79.8% 56.3% 75.0% 87.1% 83.0% 84.9%
Average API 33.86 32.17 33.03 29.40 35.84 33.84 35.75 35.10 35.87 33.25 34.16
Average Sulphur 1.22% 1.4% 1.0% 1.1% 1.0% 1.3% 0.9% 1.6% 1.2% 0.9% 1.4%
REPORTS 2020 VACUUM DISTILLATION
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 36.88 8.56 0.60 3.59 6.49 3.21 1.04 2.51 1.68 5.17 4.04
Additions
Known Projects (data) 1.41 0.02 - 0.23 0.08 0.01 0.10 0.36 - 0.51 0.10
Debottlenecking (WORLD) 0.04 0.00 0.00 0.00 0.00 - 0.00 0.01 - 0.02 0.01
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.44 0.02 0.00 0.23 0.08 0.01 0.10 0.36 - 0.53 0.11
Total Operating Capacity 38.33 8.58 0.60 3.82 6.56 3.22 1.15 2.87 1.68 5.70 4.15
Throughput 25.45 5.42 0.40 2.26 4.65 2.00 0.52 1.95 0.81 4.32 3.12
Utilizations 66.4% 63.2% 67.3% 59.2% 70.8% 62.2% 45.2% 67.8% 48.4% 75.8% 75.1%
Supplemental Marine Fuel Availability Study
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REPORTS 2020 TOTAL COKING
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 8.03 3.00 0.05 0.80 0.70 0.32 0.08 0.29 0.09 1.85 0.84
Additions
Known Projects (data) 1.14 0.04 0.05 0.26 0.08 0.17 0.02 0.28 - 0.16 0.07
Debottlenecking (WORLD) 0.02 0.02 0.00 0.00 0.00 0.00 0.00 - 0.00 - 0.00
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.16 0.06 0.05 0.26 0.08 0.17 0.02 0.28 0.00 0.16 0.07
Total Operating Capacity 9.19 3.06 0.11 1.06 0.79 0.49 0.10 0.57 0.09 2.01 0.91
Throughput 6.18 2.55 0.09 0.67 0.57 0.32 0.06 0.16 0.08 1.14 0.54
Utilizations 67.3% 83.3% 88.4% 63.3% 72.3% 66.1% 58.6% 27.8% 82.4% 56.6% 59.9%
REPORTS 2020 TOTAL FCC
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 17.57 5.66 0.50 1.63 2.17 0.77 0.25 0.81 1.02 2.97 1.78
Additions
Known Projects (data) 0.75 0.02 - 0.05 - 0.13 0.05 0.10 0.04 0.23 0.12
Debottlenecking (WORLD) 0.09 0.06 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.01 0.01
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.84 0.08 0.00 0.06 0.01 0.14 0.05 0.10 0.04 0.24 0.13
Total Operating Capacity 18.41 5.74 0.50 1.68 2.18 0.91 0.31 0.92 1.06 3.20 1.91
Throughput Total million bpd 14.03 4.81 0.40 1.12 1.78 0.67 0.16 0.60 0.83 2.22 1.44
Utilizations 76.2% 83.8% 78.9% 66.6% 81.6% 74.1% 52.2% 65.2% 77.8% 69.4% 75.7%
As % of Nameplate Calendar Day Capacity
Resid feed million bpd 3.49 1.25 0.12 0.29 0.13 0.19 0.03 0.19 0.26 0.71 0.32
Resid as % Total 25% 26% 30% 26% 7% 29% 21% 31% 31% 32% 22%
Conversion bbls mb/d 1,021.95 350.17 29.44 81.72 128.16 47.43 11.52 42.86 60.03 166.70 103.92
Conversion % 72.8% 72.8% 73.9% 72.9% 72.1% 70.3% 72.3% 71.7% 72.6% 75.0% 72.0%
REPORTS 2020 TOTAL HCR (VGO+RESID)
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 8.78 1.94 0.16 0.23 1.92 0.40 0.16 0.86 0.16 1.58 1.36
Additions
Known Projects (data) 1.02 0.14 0.02 0.03 0.10 0.25 0.07 0.12 - 0.28 0.01
Debottlenecking (WORLD) 0.02 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.04 0.15 0.02 0.03 0.10 0.25 0.07 0.12 0.00 0.29 0.01
Total Operating Capacity 9.82 2.09 0.18 0.27 2.02 0.65 0.24 0.97 0.16 1.87 1.37
Throughput 7.66 1.83 0.15 0.18 1.58 0.50 0.13 0.67 0.13 1.43 1.07
Utilizations 78.0% 87.6% 87.4% 66.3% 78.1% 75.8% 52.7% 68.8% 80.5% 76.3% 78.1%
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REPORTS 2020 TOTAL DISTILLATE DESULFURIZATION
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 27.33 5.50 0.53 2.12 5.26 2.04 0.82 2.21 2.27 2.96 3.63
Additions
Known Projects (data) 1.81 0.11 0.04 0.26 0.07 0.33 0.14 0.40 0.03 0.24 0.20
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.81 0.11 0.04 0.26 0.07 0.33 0.14 0.40 0.03 0.24 0.20
Total Operating Capacity Net 29.14 5.60 0.57 2.38 5.33 2.37 0.96 2.61 2.30 3.20 3.84
Throughput 22.47 5.10 0.50 1.34 4.28 1.77 0.51 1.80 1.52 2.57 3.08
Utilizations 77.1% 91.0% 88.7% 56.3% 80.2% 74.8% 53.8% 69.1% 66.1% 80.2% 80.3%
REPORTS 2020 VGO/FCC FEED HDS
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 7.05 2.65 0.13 0.37 1.61 0.27 0.03 0.11 0.72 0.19 0.96
Additions
Known Projects (data) 0.41 - - 0.04 - 0.08 - 0.18 0.01 0.04 0.06
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.41 - - 0.04 - 0.08 - 0.18 0.01 0.04 0.06
Total Operating Capacity Net 7.46 2.65 0.13 0.42 1.61 0.35 0.03 0.30 0.73 0.23 1.02
Throughput 5.23 2.06 0.08 0.27 1.08 0.23 0.02 0.21 0.40 0.15 0.73
Utilizations 70.0% 77.8% 57.0% 63.7% 67.4% 66.7% 53.2% 70.7% 54.4% 65.7% 71.8%
REPORTS 2020 TOTAL RESID HDS
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 1.85 0.18 0.04 - 0.13 - 0.01 0.26 0.46 0.20 0.57
Additions
Known Projects (data) 0.19 - - 0.01 - - - 0.15 - 0.01 0.01
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.19 - - 0.01 - - - 0.15 - 0.01 0.01
Total Operating Capacity 2.04 0.18 0.04 0.01 0.13 - 0.01 0.41 0.46 0.22 0.58
Throughput 1.25 0.16 0.03 - 0.07 - - 0.26 0.14 0.16 0.44
Utilizations 61.4% 89.1% 86.5% 0.0% 50.3% 0.0% 0.0% 62.7% 29.3% 74.8% 75.3%
Supplemental Marine Fuel Availability Study
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REPORTS 2020 TOTAL HYDROGEN PLANT
million SCFD Basis
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million SCF/cd nameplate capacity
Base Capacity (data) 23,732 5,879 414 1,413 4,302 1,107 407 2,405 956 2,656 4,193
Additions
Known Projects (data) 3,704 138 53 285 140 314 112 840 - 1,303 519
Debottlenecking (WORLD) 619 400 10 - 127 75 7 - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 4,323 538 62 285 267 389 120 840 - 1,303 519
Total Operating Capacity 28,055 6,417 476 1,698 4,569 1,496 527 3,244 956 3,959 4,712
Throughput 20,976 5,567 393 666 4,334 1,106 225 1,817 830 3,084 2,956
Utilizations 74.8% 86.7% 82.6% 39.2% 94.9% 73.9% 42.7% 56.0% 86.8% 77.9% 62.7%
base capacity adjusted to include known or estimated merchant plant capacity
REPORTS 2020 SULFUR RECOVERY ST/D
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
STPcd nameplate capacity
Base Capacity (data) 128,181 38,865 1,874 7,738 18,050 6,514 3,634 12,940 8,354 8,594 21,619
Additions
Known Projects (data) 13,366 230 175 1,061 163 1,441 575 2,913 - 4,865 1,944
Debottlenecking (WORLD) 310 - - - 60 220 30 - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 13,676 230 175 1,061 223 1,661 605 2,913 - 4,865 1,944
Total Operating Capacity 141,858 39,095 2,049 8,799 18,272 8,175 4,239 15,853 8,354 13,459 23,563
Throughput 69,131 21,700 1,177 3,460 9,374 4,070 739 7,260 3,516 6,224 11,611
Utilizations 48.7% 55.5% 57.4% 39.3% 51.3% 49.8% 17.4% 45.8% 42.1% 46.2% 49.3%
REPORTS 2020 TOTAL CAT REFORMING
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 13.65 3.81 0.35 0.67 2.31 1.17 0.50 1.01 0.93 1.13 1.77
Additions
Known Projects (data) 0.59 0.00 - 0.03 0.02 0.02 0.06 0.21 - 0.18 0.06
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.59 0.00 - 0.03 0.02 0.02 0.06 0.21 - 0.18 0.06
Revamps RFH/RFC Net - - - - - - - - - - -
Total Operating Capacity 14.23 3.82 0.35 0.71 2.33 1.19 0.56 1.22 0.93 1.31 1.82
Throughput 9.84 2.81 0.27 0.44 1.70 0.76 0.26 0.78 0.57 0.92 1.33
Utilizations 69.1% 73.6% 78.1% 61.7% 72.7% 64.1% 47.1% 63.8% 61.5% 70.3% 72.8%
Supplemental Marine Fuel Availability Study
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6.3.2 Refinery Operations – 2020 Mid Switch High MDO Case
Supplemental Marine Fuel Availability Study
July 15, 2016
150
REPORTS 2020 REFINERY INVESTMENT $BILLION ($2015)
Global United States CanadaLatin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
REVAMP 1.93$ 0.15$ 0.05$ 0.25$ 0.53$ 0.35$ 0.04$ 0.09$ -$ 0.18$ 0.29$
DEBOTTLENECKING 11.84$ 2.47$ 0.13$ 0.13$ 3.50$ 1.38$ 0.24$ 0.94$ 0.79$ 1.25$ 1.00$
MAJOR NEW UNITS -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
API REVAMP -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
TOTAL REFINING 13.77$ 2.62$ 0.19$ 0.38$ 4.03$ 1.73$ 0.28$ 1.03$ 0.79$ 1.42$ 1.30$
REPORTS 2020 ATMOS DISTILLATION
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 95.66 18.23 1.83 7.97 15.27 8.03 4.21 9.15 3.73 13.15 14.10
Additions
Known Projects (data) 5.64 0.69 0.05 0.21 0.15 0.28 0.28 1.36 0.14 1.69 0.78
Debottlenecking (WORLD) 0.45 0.22 0.02 0.02 0.04 0.02 0.00 0.03 0.01 0.04 0.04
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 6.09 0.91 0.07 0.23 0.20 0.30 0.28 1.39 0.15 1.73 0.82
Total Operating Capacity 101.75 19.14 1.90 8.20 15.47 8.33 4.49 10.53 3.89 14.88 14.92
Crude Throughput 82.73 16.32 1.66 6.12 13.15 6.68 2.49 7.900 3.38 12.37 12.66
Refinery Utilisation 81.3% 85.2% 87.3% 74.7% 85.1% 80.2% 55.4% 75.0% 87.0% 83.1% 84.9%
Average API 34.05 31.53 33.75 29.73 35.00 33.99 36.95 35.95 34.84 32.74 35.66
Average Sulphur 1.21% 1.4% 0.9% 1.1% 1.1% 1.3% 0.8% 1.6% 1.3% 1.0% 1.3%
REPORTS 2020 VACUUM DISTILLATION
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 36.88 8.56 0.60 3.59 6.49 3.21 1.04 2.51 1.68 5.17 4.04
Additions
Known Projects (data) 1.41 0.02 - 0.23 0.08 0.01 0.10 0.36 - 0.51 0.10
Debottlenecking (WORLD) 0.06 0.01 - 0.00 0.01 0.00 0.00 0.01 - 0.02 0.01
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.47 0.03 - 0.23 0.08 0.01 0.10 0.36 - 0.53 0.12
Total Operating Capacity 38.35 8.59 0.60 3.82 6.57 3.22 1.15 2.87 1.68 5.70 4.16
Throughput 26.50 5.67 0.41 2.43 4.74 2.25 0.60 1.95 0.94 4.32 3.20
Utilizations 69.1% 66.0% 68.4% 63.7% 72.1% 69.7% 52.4% 67.8% 55.8% 75.8% 77.1%
Supplemental Marine Fuel Availability Study
July 15, 2016
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REPORTS 2020 TOTAL COKING
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 8.03 3.00 0.05 0.80 0.70 0.32 0.08 0.29 0.09 1.85 0.84
Additions
Known Projects (data) 1.14 0.04 0.05 0.26 0.08 0.17 0.02 0.28 - 0.16 0.07
Debottlenecking (WORLD) 0.06 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.20 0.08 0.05 0.26 0.09 0.17 0.02 0.28 0.00 0.17 0.07
Total Operating Capacity 9.23 3.08 0.11 1.07 0.79 0.49 0.10 0.57 0.09 2.02 0.91
Throughput 7.32 2.74 0.09 0.74 0.64 0.36 0.06 0.40 0.08 1.49 0.71
Utilizations 79.4% 88.8% 88.4% 69.8% 81.5% 74.7% 58.6% 70.8% 82.4% 73.8% 77.9%
REPORTS 2020 TOTAL FCC
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 17.57 5.66 0.50 1.63 2.17 0.77 0.25 0.81 1.02 2.97 1.78
Additions
Known Projects (data) 0.75 0.02 - 0.05 - 0.13 0.05 0.10 0.04 0.23 0.12
Debottlenecking (WORLD) 0.10 0.07 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.01 0.01
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.85 0.09 0.00 0.06 0.01 0.14 0.05 0.10 0.04 0.24 0.13
Total Operating Capacity 18.42 5.75 0.51 1.68 2.18 0.91 0.31 0.92 1.06 3.20 1.91
Throughput Total million bpd 14.04 4.85 0.40 1.13 1.74 0.67 0.16 0.60 0.90 2.19 1.41
Utilizations 76.2% 84.3% 78.9% 67.0% 79.9% 74.1% 51.1% 65.1% 84.2% 68.4% 73.9%
As % of Nameplate Calendar Day Capacity
Resid feed million bpd 4.67 1.44 0.12 0.32 0.47 0.19 0.04 0.18 0.28 1.07 0.56
Resid as % Total 33% 30% 31% 28% 27% 28% 28% 31% 31% 49% 39%
Conversion bbls mb/d 1,018.33 354.37 29.55 80.82 123.14 47.60 11.32 44.17 61.20 164.36 101.80
Conversion % 72.5% 73.1% 74.2% 71.6% 70.8% 70.6% 72.6% 74.0% 68.4% 75.0% 72.3%
REPORTS 2020 TOTAL HCR (VGO+RESID)
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 8.78 1.94 0.16 0.23 1.92 0.40 0.16 0.86 0.16 1.58 1.36
Additions
Known Projects (data) 1.02 0.14 0.02 0.03 0.10 0.25 0.07 0.12 - 0.28 0.01
Debottlenecking (WORLD) 0.02 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.05 0.15 0.02 0.03 0.10 0.25 0.07 0.12 0.00 0.29 0.01
Total Operating Capacity 9.82 2.09 0.18 0.27 2.02 0.65 0.24 0.97 0.16 1.87 1.37
Throughput 7.77 1.83 0.15 0.18 1.60 0.50 0.13 0.68 0.13 1.43 1.15
Utilizations 79.1% 87.8% 87.4% 66.3% 79.1% 75.8% 52.7% 69.9% 80.5% 76.3% 83.8%
Supplemental Marine Fuel Availability Study
July 15, 2016
152
REPORTS 2020 TOTAL DISTILLATE DESULFURIZATION
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 27.33 5.50 0.53 2.12 5.26 2.04 0.82 2.21 2.27 2.96 3.63
Additions
Known Projects (data) 1.81 0.11 0.04 0.26 0.07 0.33 0.14 0.40 0.03 0.24 0.20
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 1.81 0.11 0.04 0.26 0.07 0.33 0.14 0.40 0.03 0.24 0.20
Total Operating Capacity Net 29.14 5.60 0.57 2.38 5.33 2.37 0.96 2.61 2.30 3.20 3.84
Throughput 22.27 5.12 0.51 1.37 4.24 1.75 0.51 1.77 1.56 2.44 3.01
Utilizations 76.4% 91.4% 89.8% 57.5% 79.4% 73.9% 53.7% 67.9% 68.0% 76.2% 78.4%
REPORTS 2020 VGO/FCC FEED HDS
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 7.05 2.65 0.13 0.37 1.61 0.27 0.03 0.11 0.72 0.19 0.96
Additions
Known Projects (data) 0.41 - - 0.04 - 0.08 - 0.18 0.01 0.04 0.06
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.41 - - 0.04 - 0.08 - 0.18 0.01 0.04 0.06
Total Operating Capacity Net 7.46 2.65 0.13 0.42 1.61 0.35 0.03 0.30 0.73 0.23 1.02
Throughput 5.58 2.11 0.08 0.26 1.19 0.25 0.02 0.21 0.56 0.17 0.74
Utilizations 74.8% 79.4% 56.8% 61.9% 74.2% 72.9% 53.9% 70.7% 76.1% 74.5% 72.6%
REPORTS 2020 TOTAL RESID HDS
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 1.85 0.18 0.04 - 0.13 - 0.01 0.26 0.46 0.20 0.57
Additions
Known Projects (data) 0.19 - - 0.01 - - - 0.15 - 0.01 0.01
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.19 - - 0.01 - - - 0.15 - 0.01 0.01
Total Operating Capacity 2.04 0.18 0.04 0.01 0.13 - 0.01 0.41 0.46 0.22 0.58
Throughput 1.32 0.16 0.03 0.01 0.10 - 0.00 0.18 0.21 0.16 0.46
Utilizations 64.8% 89.1% 86.5% 66.5% 77.4% 0.0% 63.8% 45.2% 44.5% 74.8% 79.1%
Supplemental Marine Fuel Availability Study
July 15, 2016
153
REPORTS 2020 TOTAL HYDROGEN PLANT
million SCFD Basis
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million SCF/cd nameplate capacity
Base Capacity (data) 23,732 5,879 414 1,413 4,302 1,107 407 2,405 956 2,656 4,193
Additions
Known Projects (data) 3,704 138 53 285 140 314 112 840 - 1,303 519
Debottlenecking (WORLD) 1,822 482 17 - 589 166 21 - 233 314 -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 5,526 620 70 285 729 481 134 840 233 1,617 519
Total Operating Capacity 29,258 6,499 483 1,698 5,031 1,588 541 3,244 1,189 4,273 4,712
Throughput 22,469 5,621 401 673 4,783 1,181 237 1,996 1,032 3,495 3,050
Utilizations 76.8% 86.5% 83.0% 39.6% 95.1% 74.4% 43.8% 61.5% 86.8% 81.8% 64.7%
base capacity adjusted to include known or estimated merchant plant capacity
REPORTS 2020 SULFUR RECOVERY ST/D
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
STPcd nameplate capacity
Base Capacity (data) 128,181 38,865 1,874 7,738 18,050 6,514 3,634 12,940 8,354 8,594 21,619
Additions
Known Projects (data) 13,366 230 175 1,061 163 1,441 575 2,913 - 4,865 1,944
Debottlenecking (WORLD) 9,560 220 20 - 2,700 1,140 190 1,970 - 1,180 2,140
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 22,926 450 195 1,061 2,863 2,581 765 4,883 - 6,045 4,084
Total Operating Capacity 151,108 39,315 2,069 8,799 20,912 9,095 4,399 17,823 8,354 14,639 25,703
Throughput 79,352 23,652 1,226 3,810 11,140 4,621 1,000 8,160 4,264 7,876 13,603
Utilizations 52.5% 60.2% 59.3% 43.3% 53.3% 50.8% 22.7% 45.8% 51.0% 53.8% 52.9%
REPORTS 2020 TOTAL CAT REFORMING
Capacity & AdditionsGlobal United States Canada
Latin
AmericaEurope FSU Africa Middle East Pac Ind China Other Asia
million bpcd nameplate capacity
Base Capacity (data) 13.65 3.81 0.35 0.67 2.31 1.17 0.50 1.01 0.93 1.13 1.77
Additions
Known Projects (data) 0.59 0.00 - 0.03 0.02 0.02 0.06 0.21 - 0.18 0.06
Debottlenecking (WORLD) - - - - - - - - - - -
Major New Units (WORLD) - - - - - - - - - - -
Total Additions 0.59 0.00 - 0.03 0.02 0.02 0.06 0.21 - 0.18 0.06
Revamps RFH/RFC Net - - - - - - - - - - -
Total Operating Capacity 14.23 3.82 0.35 0.71 2.33 1.19 0.56 1.22 0.93 1.31 1.82
Throughput 9.97 2.91 0.28 0.44 1.71 0.78 0.26 0.78 0.54 0.92 1.36
Utilizations 70.1% 76.2% 80.9% 61.8% 73.3% 65.7% 47.1% 64.0% 57.5% 70.3% 74.4%
Supplemental Marine Fuel Availability Study
July 15, 2016
154
6.3.3 Refinery CO2 Emissions
2015: Base
Case
Calibration
2015: Base
Case
Adjusted
2020: Base
No 0.5%
Fuel
2020: Low
Switch High
MDO
2020: Mid
Switch High
MDO
2020: High
Switch High
MDO
2020: Low
Switch Low
MDO
2020: Mid
Switch Low
MDO
2020: High
Switch
Low MDO
Global Refinery CO2 Emissions million tonnes / year
ex H2 Plant 104 110 127 135 136 137 133 134 134
ex RFO 0 0 0 0 0 0 0 0 0
- Natural Gas 249 253 261 266 267 268 262 264 265
- Process Gas 373 375 385 397 397 397 393 392 392
- Resids 68 68 59 59 59 59 59 59 59
- FCC Coke 125 122 126 137 139 139 132 132 133
- Other 0 0 0 0 0 0 0 0 0
Total ex RFO 814 818 831 859 862 864 846 847 848
ex Sulfur Plant Tail Gas Unit 3 3 3 3 3 3 3 3 3
ex Flare Loss 43 43 46 46 46 46 46 46 46
Total ex Refinery 964 973 1006 1043 1048 1050 1028 1030 1032
Total ex Petroleum Coke 362 356 354 447 447 447 428 424 421
Total ex Refinery Incl Petroleum Coke 1326 1329 1360 1490 1495 1498 1455 1454 1453
Change vs 2020 Base Case million tonnes / year (excl pet coke) 37 41 44 21 24 25
Change vs 2020 Base Case % 3.7% 4.1% 4.4% 2.1% 2.4% 2.5%
Change vs 2020 Base Case million tonnes / year (incl pet coke) 130 134 137 95 94 92
Change vs 2020 Base Case % 9.5% 9.9% 10.1% 7.0% 6.9% 6.8%
WORLD Global Premises & Results
Supplemental Marine Fuel Availability Study
July 15, 2016
155
6.3.4 Crude and Product Movements – 2020 Base Case
Supplemental Marine Fuel Availability Study
July 15, 2016
156
Case Horizon: 2020 Description: 2020: Base No 0.5% Fuel
Crude Oil Movements MILLION BPD
Total
Exports
Total
Local +
Exports
Producing Regions 43.03
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.98 9.00 8.01 0.29 0.20 0.00 0.00 0.00 0.00 0.49 0.00 0.00
Canada 3.10 4.01 2.37 0.91 0.00 0.00 0.25 0.00 0.00 0.13 0.35 0.00
Latin America 5.53 10.12 2.46 0.16 4.59 0.01 1.44 0.00 0.00 0.00 0.58 0.89
Africa 4.80 6.40 0.10 0.24 1.22 1.60 2.59 0.00 0.00 0.21 0.33 0.11
Europe 0.58 3.04 0.00 0.00 0.00 0.00 2.46 0.00 0.00 0.58 0.00 0.00
FSU 5.98 12.73 0.00 0.06 0.00 0.23 3.25 6.75 0.10 0.00 2.34 0.00
Middle East 20.99 28.81 2.70 0.00 0.11 0.72 3.19 0.00 7.82 1.86 3.90 8.50
PacInd 0.67 0.72 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.05 0.24 0.43
China 0.00 4.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.36 0.00
Other Asia/Pac 0.38 3.15 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.29 2.76
Total Imports 43.03 7.65 0.75 1.54 0.96 10.73 0.00 0.10 3.35 8.03 9.93
82.35 15.67 1.66 6.13 2.56 13.19 6.75 7.92 3.40 12.39 12.69
NON CRUDES PRODUCTS & INTERMEDIATES TOTAL TRADE - MILLION BPD
Total
Exports
Total
Local +
Exports
Producing Regions 19.74
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 3.86 25.13 21.28 0.32 2.06 0.39 0.43 0.00 0.00 0.15 0.29 0.20
Canada 1.31 2.66 0.58 1.36 0.04 0.04 0.18 0.00 0.00 0.29 0.06 0.12
Latin America 1.25 7.76 0.37 0.16 6.51 0.08 0.22 0.00 0.00 0.10 0.13 0.19
Africa 0.78 3.33 0.31 0.00 0.04 2.55 0.33 0.00 0.00 0.00 0.00 0.11
Europe 3.33 14.75 0.65 0.19 0.82 1.07 11.42 0.14 0.04 0.07 0.12 0.23
FSU 3.28 7.11 1.01 0.00 0.00 0.26 1.52 3.82 0.00 0.06 0.01 0.42
Middle East 3.24 10.11 0.01 0.10 0.10 0.29 0.04 0.00 6.86 0.17 0.00 2.54
PacInd 0.40 3.95 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.55 0.06 0.34
China 0.43 12.45 0.00 0.00 0.00 0.00 0.00 0.00 0.33 0.11 12.01 0.00
Other Asia/Pac 1.87 13.96 0.07 0.02 0.00 0.08 0.01 0.00 1.03 0.47 0.19 12.10
Total Imports 19.74 3.00 0.78 3.06 2.22 2.72 0.14 1.40 1.41 0.85 4.16
101.20 24.28 2.14 9.57 4.77 14.14 3.96 8.27 4.96 12.86 16.26
REFINERY PRODUCTS & INTERMEDIATES + NON CRUDES PRODUCTS & INTERMEDIATES
(INCLUDING US PETCOKE EXPORTS)
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
157
Refined Products Movements MMBPD PETCHEM NAPHTHA
Total
Exports
Total
Local +
Exports
Producing Regions 1.93
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.23 0.43 0.20 0.02 0.00 0.00 0.09 0.00 0.00 0.12 0.00 0.00
Canada 0.00 0.06 0.00 0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.01 0.43 0.00 0.01 0.42 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.15 0.20 0.00 0.00 0.00 0.06 0.12 0.00 0.00 0.00 0.00 0.02
Europe 0.15 0.91 0.00 0.00 0.00 0.00 0.75 0.00 0.00 0.00 0.00 0.15
FSU 0.08 0.46 0.00 0.00 0.00 0.00 0.05 0.38 0.00 0.00 0.00 0.04
Middle East 0.90 1.07 0.00 0.00 0.00 0.00 0.00 0.00 0.17 0.00 0.00 0.90
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 1.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.37 0.00
Other Asia/Pac 0.41 1.81 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.41 0.00 1.41
Total Imports 1.93 0.00 0.03 0.00 0.00 0.26 0.00 0.00 0.53 0.00 1.11
6.74 0.20 0.09 0.42 0.06 1.01 0.38 0.17 0.53 1.37 2.52
Refined Products Movements MMBPD FINISHED GASOLINE - TOTAL
Total
Exports
Total
Local +
Exports
Producing Regions 4.38
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 1.31 9.24 7.93 0.25 0.94 0.08 0.00 0.00 0.00 0.00 0.00 0.04
Canada 0.23 0.61 0.22 0.38 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.07 1.55 0.07 0.00 1.49 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.05 0.57 0.02 0.00 0.03 0.52 0.00 0.00 0.00 0.00 0.00 0.00
Europe 1.65 3.76 0.44 0.15 0.31 0.56 2.11 0.12 0.00 0.07 0.00 0.00
FSU 0.28 1.42 0.10 0.00 0.00 0.00 0.00 1.14 0.00 0.00 0.01 0.17
Middle East 0.00 1.61 0.00 0.00 0.00 0.00 0.00 0.00 1.61 0.00 0.00 0.00
PacInd 0.20 1.42 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.22 0.00 0.20
China 0.00 2.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.58 0.00
Other Asia/Pac 0.59 2.62 0.00 0.00 0.00 0.00 0.00 0.00 0.58 0.00 0.00 2.04
Total Imports 4.38 0.85 0.39 1.29 0.65 0.00 0.12 0.58 0.07 0.01 0.41
25.38 8.78 0.77 2.78 1.17 2.11 1.26 2.19 1.28 2.59 2.45
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
158
Refined Products Movements MMBPD JET/KERO
Total
Exports
Total
Local +
Exports
Producing Regions 1.21
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.17 1.51 1.35 0.00 0.02 0.11 0.00 0.00 0.00 0.00 0.00 0.04
Canada 0.12 0.18 0.09 0.06 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.08 0.34 0.01 0.05 0.27 0.01 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.03 0.17 0.03 0.00 0.00 0.14 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.28 1.47 0.00 0.00 0.15 0.11 1.19 0.00 0.00 0.00 0.00 0.01
FSU 0.14 0.51 0.14 0.00 0.00 0.00 0.00 0.37 0.00 0.00 0.00 0.00
Middle East 0.20 0.77 0.00 0.00 0.00 0.00 0.00 0.00 0.56 0.10 0.00 0.11
PacInd 0.09 0.64 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.55 0.00 0.09
China 0.00 0.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.60 0.00
Other Asia/Pac 0.11 1.26 0.00 0.00 0.00 0.05 0.00 0.00 0.06 0.00 0.00 1.15
Total Imports 1.21 0.28 0.06 0.20 0.29 0.00 0.00 0.06 0.10 0.00 0.23
7.45 1.62 0.12 0.47 0.43 1.19 0.37 0.62 0.65 0.60 1.39
Refined Products Movements MMBPD DISTILLATES - TOTAL
Total
Exports
Total
Local +
Exports
Producing Regions 3.93
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.83 5.37 4.54 0.02 0.54 0.16 0.07 0.00 0.00 0.02 0.00 0.02
Canada 0.06 0.59 0.04 0.53 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.12 2.34 0.00 0.03 2.21 0.03 0.07 0.00 0.00 0.00 0.00 0.00
Africa 0.06 0.98 0.02 0.00 0.00 0.92 0.04 0.00 0.00 0.00 0.00 0.00
Europe 0.53 5.29 0.00 0.00 0.32 0.19 4.76 0.00 0.01 0.00 0.00 0.01
FSU 1.15 2.10 0.00 0.00 0.00 0.08 1.01 0.94 0.00 0.06 0.00 0.00
Middle East 0.52 2.58 0.00 0.00 0.09 0.23 0.00 0.00 2.05 0.00 0.00 0.19
PacInd 0.00 0.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.86 0.00 0.00
China 0.42 5.16 0.00 0.00 0.00 0.00 0.00 0.00 0.33 0.09 4.75 0.00
Other Asia/Pac 0.23 4.35 0.00 0.00 0.00 0.03 0.00 0.00 0.17 0.03 0.00 4.12
Total Imports 3.93 0.06 0.05 0.96 0.74 1.19 0.00 0.51 0.20 0.00 0.22
29.62 4.60 0.58 3.17 1.66 5.95 0.94 2.57 1.06 4.75 4.34
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
159
Refined Products Movements MMBPD Distillate Bunkers All (MGO, ECA MGO, Gl.obal MDO)
Total
Exports
Total
Local +
Exports
Producing Regions 0.41
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.17 0.45 0.27 0.02 0.04 0.02 0.07 0.00 0.00 0.02 0.00 0.00
Canada 0.00 0.01 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.16 0.00 0.00 0.15 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.03 0.29 0.00 0.00 0.00 0.01 0.26 0.00 0.01 0.00 0.00 0.01
FSU 0.17 0.22 0.00 0.00 0.00 0.02 0.09 0.05 0.00 0.06 0.00 0.00
Middle East 0.01 0.10 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.00 0.00 0.01
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21 0.00
Other Asia/Pac 0.03 0.29 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.27
Total Imports 0.41 0.00 0.02 0.04 0.05 0.16 0.00 0.01 0.11 0.00 0.02
1.75 0.27 0.03 0.19 0.08 0.42 0.05 0.09 0.11 0.21 0.29
Refined Products Movements MMBPD RESIDUAL FUELS - TOTAL
Total
Exports
Total
Local +
Exports
Producing Regions 0.71
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.03 0.50 0.47 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.02 0.09 0.00 0.07 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.11 0.88 0.00 0.02 0.77 0.03 0.04 0.00 0.00 0.00 0.00 0.02
Africa 0.00 0.43 0.00 0.00 0.00 0.43 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.09 0.95 0.00 0.00 0.00 0.06 0.86 0.00 0.03 0.00 0.00 0.01
FSU 0.26 0.61 0.00 0.00 0.00 0.04 0.12 0.36 0.00 0.00 0.00 0.10
Middle East 0.06 1.50 0.00 0.00 0.00 0.00 0.00 0.00 1.44 0.00 0.00 0.06
PacInd 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.20 0.00 0.00
China 0.02 0.65 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.63 0.00
Other Asia/Pac 0.13 2.39 0.00 0.00 0.00 0.00 0.00 0.00 0.13 0.00 0.00 2.26
Total Imports 0.71 0.00 0.02 0.03 0.14 0.15 0.00 0.16 0.02 0.00 0.19
8.21 0.48 0.10 0.80 0.57 1.01 0.36 1.60 0.21 0.63 2.45
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
160
Refined Products Movements MMBPD RESID Bunkers HS IFO 180+380
Total
Exports
Total
Local +
Exports
Producing Regions 0.23
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.03 0.39 0.36 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.03 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.01 0.27 0.00 0.00 0.26 0.01 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.00 0.20 0.00 0.00 0.00 0.20 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.66 0.00 0.00 0.00 0.00 0.66 0.00 0.00 0.00 0.00 0.00
FSU 0.12 0.31 0.00 0.00 0.00 0.00 0.12 0.20 0.00 0.00 0.00 0.00
Middle East 0.06 0.51 0.00 0.00 0.00 0.00 0.00 0.00 0.45 0.00 0.00 0.06
PacInd 0.00 0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.11 0.00 0.00
China 0.02 0.64 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.62 0.00
Other Asia/Pac 0.00 1.38 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.38
Total Imports 0.23 0.00 0.00 0.03 0.01 0.12 0.00 0.00 0.02 0.00 0.06
4.49 0.36 0.03 0.29 0.21 0.77 0.20 0.45 0.13 0.62 1.44
Summation of 2 products HS IFO 180 and HS IFO 380
Refined Products Movements MMBPD LS VGO/IFO TO GLOBAL FUEL
Total
Exports
Total
Local +
Exports
Producing Regions 0.00
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China Other Asia/Pac
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Asia/Pac 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Imports 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Summation of 2 products LS Hybrid and LS IFO
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
161
6.3.5 Crude and Product Movements – 2020 Mid Switch High MDO Case
Supplemental Marine Fuel Availability Study
July 15, 2016
162
Case Horizon: 2020 Description: 2020: Mid Switch High MDO
Crude Oil Movements MILLION BPD
Total
Exports
Total
Local +
Exports
Producing Regions 44.03
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 1.30 9.00 7.69 0.37 0.33 0.00 0.00 0.00 0.00 0.38 0.23 0.00
Canada 3.15 4.01 2.05 0.86 0.00 0.00 0.26 0.00 0.00 0.00 0.77 0.07
Latin America 5.41 10.12 2.76 0.09 4.72 0.00 1.01 0.00 0.00 0.00 0.98 0.57
Africa 4.86 6.40 0.18 0.24 0.99 1.54 2.55 0.00 0.00 0.21 0.47 0.22
Europe 0.43 3.04 0.00 0.00 0.00 0.00 2.61 0.00 0.00 0.43 0.00 0.00
FSU 5.93 12.73 0.14 0.10 0.00 0.23 3.02 6.80 0.10 0.00 2.34 0.00
Middle East 21.70 29.52 3.49 0.00 0.10 0.74 3.74 0.00 7.82 2.20 2.68 8.74
PacInd 0.67 0.72 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.05 0.19 0.49
China 0.04 4.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.04 4.32 0.00
Other Asia/Pac 0.54 3.14 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.09 0.44 2.60
Total Imports 44.03 8.64 0.79 1.43 0.97 10.57 0.00 0.10 3.35 8.09 10.09
83.05 16.33 1.66 6.15 2.52 13.18 6.80 7.92 3.39 12.41 12.69
NON CRUDES PRODUCTS & INTERMEDIATES TOTAL TRADE - MILLION BPD
Total
Exports
Total
Local +
Exports
Producing Regions 22.44
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 4.50 25.75 21.25 0.33 2.19 0.58 0.57 0.00 0.00 0.20 0.35 0.29
Canada 1.32 2.65 0.59 1.33 0.05 0.04 0.18 0.00 0.00 0.31 0.04 0.11
Latin America 1.62 7.79 0.34 0.18 6.17 0.11 0.31 0.00 0.00 0.10 0.10 0.47
Africa 0.95 3.30 0.33 0.00 0.08 2.35 0.44 0.00 0.00 0.00 0.00 0.09
Europe 3.64 14.64 0.72 0.18 0.93 0.97 11.00 0.14 0.13 0.18 0.12 0.28
FSU 3.30 7.13 0.84 0.00 0.00 0.20 1.54 3.83 0.00 0.12 0.01 0.59
Middle East 3.55 10.04 0.11 0.10 0.18 0.32 0.03 0.00 6.49 0.06 0.00 2.74
PacInd 0.58 3.86 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.28 0.05 0.53
China 0.31 12.33 0.00 0.00 0.00 0.00 0.00 0.00 0.22 0.09 12.02 0.00
Other Asia/Pac 2.68 13.93 0.19 0.02 0.00 0.24 0.04 0.00 1.45 0.55 0.19 11.25
Total Imports 22.44 3.12 0.80 3.44 2.45 3.12 0.14 1.80 1.61 0.85 5.11
101.40 24.37 2.13 9.61 4.80 14.12 3.97 8.29 4.88 12.87 16.36
REFINERY PRODUCTS & INTERMEDIATES + NON CRUDES PRODUCTS & INTERMEDIATES
(INCLUDING US PETCOKE EXPORTS)
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
163
Refined Products Movements MMBPD PETCHEM NAPHTHA
Total
Exports
Total
Local +
Exports
Producing Regions 2.14
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 0.27 0.47 0.20 0.02 0.00 0.00 0.13 0.00 0.00 0.11 0.00 0.00
Canada 0.00 0.04 0.00 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.03 0.45 0.00 0.03 0.42 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.17 0.23 0.00 0.00 0.00 0.06 0.15 0.00 0.00 0.00 0.00 0.03
Europe 0.05 0.71 0.00 0.00 0.00 0.00 0.66 0.00 0.00 0.00 0.00 0.05
FSU 0.11 0.49 0.00 0.00 0.00 0.00 0.07 0.38 0.00 0.00 0.00 0.04
Middle East 1.00 1.17 0.00 0.00 0.00 0.00 0.00 0.00 0.17 0.00 0.00 1.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 1.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.37 0.00
Other Asia/Pac 0.51 1.91 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.51 0.00 1.40
Total Imports 2.14 0.00 0.05 0.00 0.00 0.35 0.00 0.00 0.62 0.00 1.12
6.83 0.20 0.09 0.42 0.06 1.01 0.38 0.17 0.62 1.37 2.52
Refined Products Movements MMBPD FINISHED GASOLINE - TOTAL
Total
Exports
Total
Local +
Exports
Producing Regions 4.98
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 1.40 9.30 7.90 0.25 0.94 0.16 0.00 0.00 0.00 0.00 0.00 0.05
Canada 0.24 0.62 0.22 0.38 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.10 1.50 0.10 0.00 1.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.12 0.59 0.04 0.00 0.06 0.47 0.02 0.00 0.00 0.00 0.00 0.00
Europe 1.70 3.79 0.51 0.14 0.36 0.41 2.09 0.10 0.00 0.18 0.00 0.00
FSU 0.25 1.41 0.01 0.00 0.00 0.00 0.00 1.17 0.00 0.00 0.01 0.23
Middle East 0.13 1.60 0.00 0.00 0.00 0.12 0.00 0.00 1.47 0.00 0.00 0.01
PacInd 0.31 1.41 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.10 0.00 0.31
China 0.00 2.58 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.58 0.00
Other Asia/Pac 0.74 2.59 0.00 0.00 0.00 0.01 0.00 0.00 0.72 0.00 0.00 1.85
Total Imports 4.98 0.88 0.39 1.38 0.70 0.02 0.10 0.72 0.18 0.01 0.60
25.38 8.78 0.77 2.78 1.17 2.11 1.26 2.19 1.28 2.59 2.45
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
164
Refined Products Movements MMBPD JET/KERO
Total
Exports
Total
Local +
Exports
Producing Regions 1.42
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 0.21 1.55 1.34 0.00 0.03 0.11 0.00 0.00 0.00 0.00 0.00 0.06
Canada 0.12 0.19 0.09 0.07 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.11 0.35 0.02 0.05 0.25 0.01 0.03 0.00 0.00 0.00 0.00 0.00
Africa 0.04 0.17 0.00 0.00 0.00 0.13 0.04 0.00 0.00 0.00 0.00 0.00
Europe 0.28 1.40 0.00 0.00 0.16 0.12 1.12 0.00 0.00 0.00 0.00 0.00
FSU 0.18 0.54 0.18 0.00 0.00 0.00 0.00 0.36 0.00 0.00 0.00 0.00
Middle East 0.22 0.74 0.00 0.00 0.00 0.01 0.00 0.00 0.51 0.05 0.00 0.17
PacInd 0.10 0.71 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.60 0.00 0.10
China 0.00 0.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.60 0.00
Other Asia/Pac 0.16 1.20 0.00 0.00 0.00 0.05 0.00 0.00 0.11 0.00 0.00 1.05
Total Imports 1.42 0.29 0.05 0.22 0.29 0.07 0.00 0.11 0.05 0.00 0.34
7.45 1.62 0.12 0.47 0.42 1.19 0.37 0.62 0.65 0.60 1.39
Refined Products Movements MMBPD DISTILLATES - TOTAL
Total
Exports
Total
Local +
Exports
Producing Regions 4.94
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 1.12 5.92 4.80 0.02 0.60 0.23 0.15 0.00 0.00 0.08 0.00 0.04
Canada 0.07 0.63 0.05 0.56 0.01 0.02 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.48 2.77 0.00 0.02 2.29 0.05 0.14 0.00 0.00 0.00 0.00 0.26
Africa 0.08 1.03 0.02 0.00 0.00 0.95 0.06 0.00 0.00 0.00 0.00 0.00
Europe 0.56 5.73 0.00 0.00 0.35 0.20 5.17 0.00 0.01 0.00 0.00 0.00
FSU 1.23 2.34 0.01 0.00 0.00 0.04 1.03 1.11 0.00 0.12 0.00 0.03
Middle East 0.46 2.77 0.00 0.00 0.18 0.12 0.00 0.00 2.31 0.00 0.00 0.16
PacInd 0.01 0.87 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.86 0.00 0.01
China 0.31 5.58 0.00 0.00 0.00 0.00 0.00 0.00 0.22 0.09 5.27 0.00
Other Asia/Pac 0.62 5.38 0.00 0.00 0.00 0.18 0.04 0.00 0.40 0.00 0.00 4.76
Total Imports 4.94 0.08 0.04 1.13 0.85 1.41 0.00 0.63 0.28 0.00 0.51
33.03 4.88 0.60 3.42 1.81 6.58 1.11 2.94 1.14 5.27 5.27
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
165
Refined Products Movements MMBPD Distillate Bunkers All (MGO, ECA MGO, Gl.obal MDO)
Total
Exports
Total
Local +
Exports
Producing Regions 1.19
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 0.34 0.89 0.55 0.02 0.10 0.01 0.14 0.00 0.00 0.08 0.00 0.00
Canada 0.00 0.03 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.31 0.66 0.00 0.00 0.34 0.03 0.02 0.00 0.00 0.00 0.00 0.26
Africa 0.00 0.13 0.00 0.00 0.00 0.13 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.06 0.84 0.00 0.00 0.00 0.05 0.78 0.00 0.01 0.00 0.00 0.00
FSU 0.24 0.45 0.00 0.00 0.00 0.00 0.12 0.21 0.00 0.12 0.00 0.00
Middle East 0.02 0.27 0.00 0.00 0.00 0.00 0.00 0.00 0.25 0.00 0.00 0.02
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.74 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.74 0.00
Other Asia/Pac 0.21 1.15 0.00 0.00 0.00 0.00 0.00 0.00 0.21 0.00 0.00 0.94
Total Imports 1.19 0.00 0.02 0.10 0.10 0.28 0.00 0.22 0.20 0.00 0.28
5.16 0.55 0.06 0.44 0.22 1.05 0.21 0.47 0.20 0.74 1.22
Refined Products Movements MMBPD RESIDUAL FUELS - TOTAL
Total
Exports
Total
Local +
Exports
Producing Regions 0.89
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 0.13 0.34 0.21 0.00 0.09 0.02 0.00 0.00 0.00 0.00 0.00 0.02
Canada 0.02 0.08 0.00 0.07 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.06 0.54 0.00 0.01 0.47 0.03 0.00 0.00 0.00 0.00 0.00 0.03
Africa 0.02 0.29 0.00 0.00 0.00 0.28 0.02 0.00 0.00 0.00 0.00 0.00
Europe 0.23 0.57 0.00 0.00 0.00 0.08 0.34 0.02 0.11 0.00 0.00 0.03
FSU 0.23 0.42 0.00 0.00 0.00 0.00 0.02 0.19 0.00 0.00 0.00 0.21
Middle East 0.14 1.24 0.00 0.00 0.00 0.02 0.02 0.00 1.10 0.00 0.00 0.10
PacInd 0.03 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.13 0.00 0.03
China 0.00 0.13 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.13 0.00
Other Asia/Pac 0.03 1.17 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.00 1.13
Total Imports 0.89 0.00 0.01 0.09 0.16 0.06 0.02 0.14 0.00 0.00 0.42
4.93 0.21 0.07 0.56 0.44 0.40 0.20 1.24 0.13 0.13 1.55
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
166
Refined Products Movements MMBPD RESID Bunkers HS IFO 180+380
Total
Exports
Total
Local +
Exports
Producing Regions 0.15
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 0.01 0.08 0.07 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.05 0.00 0.00 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.11 0.00 0.00 0.00 0.00 0.11 0.00 0.00 0.00 0.00 0.00
FSU 0.02 0.06 0.00 0.00 0.00 0.00 0.02 0.04 0.00 0.00 0.00 0.00
Middle East 0.11 0.19 0.00 0.00 0.00 0.02 0.02 0.00 0.09 0.00 0.00 0.07
PacInd 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.00
China 0.00 0.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.12 0.00
Other Asia/Pac 0.00 0.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21
Total Imports 0.15 0.00 0.00 0.01 0.02 0.04 0.00 0.00 0.00 0.00 0.07
0.85 0.07 0.00 0.06 0.04 0.15 0.04 0.09 0.02 0.12 0.27
Summation of 2 products IFO 180 and IFO 380
Refined Products Movements MMBPD LS VGO/IFO TO GLOBAL FUEL
Total
Exports
Total
Local +
Exports
Producing Regions 0.00
United
StatesCanada
Latin
AmericaAfrica Europe FSU
Middle
EastPacInd China
Other
Asia/Pac
United States 0.00 0.03 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.01 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Asia/Pac 0.00 0.27 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.27
Total Imports 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.36 0.03 0.00 0.00 0.03 0.01 0.00 0.00 0.02 0.00 0.27
Consuming Regions
Consuming Regions
Supplemental Marine Fuel Availability Study
July 15, 2016
167
6.3.6 Crude Movements by Type – 2020 Base Case
2020: REF-WEO - Base No 0.5% Fuel Crude Oil Imports United States million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports United States million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 8.00 0.53 4.23 1.97 0.81 0.46 0.00 0.00 United States 8.00 0.53 4.23 1.97 0.81 0.46 0.00 0.00
Canada 2.37 0.00 0.15 0.00 0.25 0.00 0.67 1.30 Canada 0.29 0.01 0.28 0.00 0.00 0.00 0.00 0.00
Latin America 2.46 0.00 0.00 0.49 1.16 0.59 0.00 0.21 Latin America 0.20 0.11 0.09 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 2.70 0.00 0.00 2.23 0.47 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.49 0.08 0.31 0.10 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Asia 0.02 0.00 0.02 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 15.65 0.53 4.50 4.68 2.71 1.05 0.67 1.52 Total Supplied 8.98 0.72 4.91 2.07 0.81 0.46 0.00 0.00
Total Imports 7.65 0.00 0.27 2.72 1.89 0.59 0.67 1.51 Total Exports 0.98 0.19 0.69 0.10 0.00 0.00 0.00 0.00
2020: REF-WEO - Base No 0.5% Fuel Canada million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports Canada million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.29 0.01 0.28 0.00 0.00 0.00 0.00 0.00 United States 2.37 0.00 0.15 0.00 0.25 0.00 0.67 1.30
Canada 0.91 0.00 0.24 0.12 0.00 0.00 0.26 0.29 Canada 0.91 0.00 0.24 0.12 0.00 0.00 0.26 0.29
Latin America 0.16 0.00 0.00 0.16 0.00 0.00 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.25 0.00 0.25 0.00 0.00 0.00 0.00 0.00
FSU 0.06 0.00 0.00 0.06 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.24 0.00 0.21 0.03 0.00 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.13 0.00 0.00 0.00 0.00 0.00 0.00 0.13
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.35 0.00 0.00 0.00 0.00 0.00 0.12 0.23
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 1.66 0.01 0.74 0.37 0.00 0.00 0.26 0.29 Total Supplied 4.01 0.00 0.64 0.12 0.25 0.00 1.04 1.95
Total Imports 0.75 0.01 0.49 0.25 0.00 0.00 0.00 0.00 Total Exports 3.10 0.00 0.40 0.00 0.25 0.00 0.79 1.66
Supplemental Marine Fuel Availability Study
July 15, 2016
168
2020: REF-WEO - Base No 0.5% Fuel Latin America million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports Latin America million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.20 0.11 0.09 0.00 0.00 0.00 0.00 0.00 United States 2.46 0.00 0.00 0.49 1.16 0.59 0.00 0.21
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.16 0.00 0.00 0.16 0.00 0.00 0.00 0.00
Latin America 4.56 0.00 0.62 1.92 1.21 0.74 0.00 0.08 Latin America 4.56 0.00 0.62 1.92 1.21 0.74 0.00 0.08
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 1.44 0.69 0.05 0.46 0.00 0.24 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 1.22 0.09 1.11 0.00 0.03 0.00 0.00 0.00 Africa 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.01
Middle East 0.11 0.00 0.00 0.11 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.58 0.00 0.00 0.00 0.00 0.06 0.00 0.52
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.89 0.00 0.00 0.00 0.00 0.89 0.00 0.00
Total Refined 6.10 0.20 1.82 2.03 1.23 0.74 0.00 0.08 Total Supplied 10.10 0.69 0.67 3.02 2.37 2.52 0.00 0.82
Total Imports 1.54 0.20 1.20 0.11 0.03 0.00 0.00 0.00 Total Exports 5.53 0.69 0.05 1.10 1.16 1.78 0.00 0.74
2020: REF-WEO - Base No 0.5% Fuel Europe million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports Europe million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.25 0.00 0.25 0.00 0.00 0.00 0.00 0.00 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 1.44 0.69 0.05 0.46 0.00 0.24 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 2.43 0.16 1.70 0.51 0.06 0.00 0.00 0.00 Europe 2.43 0.16 1.70 0.51 0.06 0.00 0.00 0.00
FSU 3.25 0.00 0.47 2.74 0.04 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 2.59 0.32 2.03 0.00 0.24 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 3.19 0.15 0.00 3.05 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.58 0.00 0.58 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 13.16 1.32 4.50 6.76 0.34 0.24 0.00 0.00 Total Supplied 3.01 0.16 2.28 0.51 0.06 0.00 0.00 0.00
Total Imports 10.73 1.16 2.80 6.25 0.28 0.24 0.00 0.00 Total Exports 0.58 0.00 0.58 0.00 0.00 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
169
2020: REF-WEO - Base No 0.5% Fuel FSU million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports FSU million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.06 0.00 0.00 0.06 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 3.25 0.00 0.47 2.74 0.04 0.00 0.00 0.00
FSU 6.63 0.19 1.27 4.72 0.45 0.00 0.00 0.00 FSU 6.63 0.19 1.27 4.72 0.45 0.00 0.00 0.00
Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Africa 0.23 0.00 0.00 0.00 0.23 0.00 0.00 0.00
Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Middle East 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 2.34 0.00 1.52 0.64 0.18 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 6.63 0.19 1.27 4.72 0.45 0.00 0.00 0.00 Total Supplied 12.61 0.19 3.36 8.16 0.90 0.00 0.00 0.00
Total Imports 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Exports 5.98 0.00 2.09 3.44 0.45 0.00 0.00 0.00
2020: REF-WEO - Base No 0.5% Fuel Africa million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports Africa million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.24 0.00 0.21 0.03 0.00 0.00 0.00 0.00
Latin America 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.01 Latin America 1.22 0.09 1.11 0.00 0.03 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 2.59 0.32 2.03 0.00 0.24 0.00 0.00 0.00
FSU 0.23 0.00 0.00 0.00 0.23 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 1.57 0.06 1.32 0.19 0.00 0.00 0.00 0.00 Africa 1.57 0.06 1.32 0.19 0.00 0.00 0.00 0.00
Middle East 0.72 0.00 0.00 0.71 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.21 0.00 0.21 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.33 0.00 0.31 0.00 0.02 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.11 0.00 0.10 0.00 0.01 0.00 0.00 0.00
Total Refined 2.53 0.06 1.32 0.91 0.23 0.00 0.00 0.01 Total Supplied 6.37 0.47 5.38 0.22 0.29 0.00 0.00 0.00
Total Imports 0.96 0.00 0.00 0.71 0.23 0.00 0.00 0.01 Total Exports 4.80 0.41 4.06 0.03 0.29 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
170
2020: REF-WEO - Base No 0.5% Fuel Middle East million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports Middle East million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 2.70 0.00 0.00 2.23 0.47 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latin America 0.11 0.00 0.00 0.11 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 3.19 0.15 0.00 3.05 0.00 0.00 0.00 0.00
FSU 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Africa 0.72 0.00 0.00 0.71 0.00 0.00 0.00 0.00
Middle East 7.80 0.73 0.09 6.38 0.61 0.00 0.00 0.00 Middle East 7.80 0.73 0.09 6.38 0.61 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 1.86 0.04 0.01 1.81 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 3.90 0.40 0.20 3.30 0.00 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 8.50 0.19 0.00 7.35 0.97 0.00 0.00 0.00
Total Refined 7.90 0.73 0.19 6.38 0.61 0.00 0.00 0.00 Total Supplied 28.79 1.50 0.30 24.94 2.05 0.00 0.00 0.00
Total Imports 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00 Total Exports 20.99 0.77 0.21 18.56 1.44 0.00 0.00 0.00
2020: REF-WEO - Base No 0.5% Fuel PacInd million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports PacInd million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.49 0.08 0.31 0.10 0.00 0.00 0.00 0.00 United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.13 0.00 0.00 0.00 0.00 0.00 0.00 0.13 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.58 0.00 0.58 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.21 0.00 0.21 0.00 0.00 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 1.86 0.04 0.01 1.81 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.04 0.04 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.04 0.04 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.24 0.00 0.24 0.00 0.00 0.00 0.00 0.00
Other Asia 0.08 0.00 0.08 0.00 0.00 0.00 0.00 0.00 Other Asia 0.43 0.32 0.11 0.00 0.00 0.00 0.00 0.00
Total Refined 3.38 0.15 1.18 1.92 0.00 0.00 0.00 0.13 Total Supplied 0.71 0.36 0.35 0.00 0.00 0.00 0.00 0.00
Total Imports 3.35 0.12 1.18 1.92 0.00 0.00 0.00 0.13 Total Exports 0.67 0.32 0.35 0.00 0.00 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
171
2020: REF-WEO - Base No 0.5% Fuel China million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports China million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.35 0.00 0.00 0.00 0.00 0.00 0.12 0.23 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.58 0.00 0.00 0.00 0.00 0.06 0.00 0.52 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 2.34 0.00 1.52 0.64 0.18 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.33 0.00 0.31 0.00 0.02 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 3.90 0.40 0.20 3.30 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.24 0.00 0.24 0.00 0.00 0.00 0.00 0.00 PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 4.32 0.23 3.67 0.00 0.43 0.00 0.00 0.00 China 4.32 0.23 3.67 0.00 0.43 0.00 0.00 0.00
Other Asia 0.29 0.00 0.29 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 12.35 0.63 6.23 3.94 0.63 0.06 0.12 0.75 Total Supplied 4.32 0.23 3.67 0.00 0.43 0.00 0.00 0.00
Total Imports 8.03 0.40 2.56 3.94 0.20 0.06 0.12 0.75 Total Exports 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2020: REF-WEO - Base No 0.5% Fuel Other Asia million pbd 2020: REF-WEO - Base No 0.5% Fuel Crude Oil Exports Other Asia million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.02 0.00 0.02 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.89 0.00 0.00 0.00 0.00 0.89 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.11 0.00 0.10 0.00 0.01 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 8.50 0.19 0.00 7.35 0.97 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.43 0.32 0.11 0.00 0.00 0.00 0.00 0.00 PacInd 0.08 0.00 0.08 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.29 0.00 0.29 0.00 0.00 0.00 0.00 0.00
Other Asia 2.73 0.94 1.79 0.00 0.00 0.00 0.00 0.00 Other Asia 2.73 0.94 1.79 0.00 0.00 0.00 0.00 0.00
Total Refined 12.66 1.45 2.00 7.35 0.98 0.89 0.00 0.00 Total Supplied 3.12 0.94 2.17 0.00 0.00 0.00 0.00 0.00
Total Imports 9.93 0.51 0.21 7.35 0.98 0.89 0.00 0.00 Total Exports 0.38 0.00 0.38 0.00 0.00 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
172
6.3.7 Crude Movements by Type – 2020 Mid Switch High MDO Case
2020: REF-WEO - Mid Switch MDO Crude Oil Imports United States million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports United States million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 7.68 0.35 4.07 1.97 0.81 0.46 0.00 0.00 United States 7.68 0.35 4.07 1.97 0.81 0.46 0.00 0.00
Canada 2.05 0.00 0.17 0.00 0.18 0.00 0.46 1.24 Canada 0.37 0.01 0.36 0.00 0.00 0.00 0.00 0.00
Latin America 2.76 0.00 0.01 0.55 1.13 0.81 0.00 0.26 Latin America 0.33 0.10 0.23 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 0.14 0.00 0.00 0.00 0.14 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.18 0.00 0.17 0.00 0.01 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 3.49 0.02 0.00 3.00 0.47 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.38 0.03 0.25 0.10 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.23 0.23 0.00 0.00 0.00 0.00 0.00 0.00
Other Asia 0.02 0.00 0.02 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 16.32 0.37 4.44 5.52 2.75 1.27 0.46 1.51 Total Supplied 8.98 0.72 4.91 2.07 0.81 0.46 0.00 0.00
Total Imports 8.64 0.02 0.36 3.55 1.93 0.81 0.46 1.50 Total Exports 1.30 0.37 0.84 0.10 0.00 0.00 0.00 0.00
2020: REF-WEO - Mid Switch MDO Canada million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports Canada million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.37 0.01 0.36 0.00 0.00 0.00 0.00 0.00 United States 2.05 0.00 0.17 0.00 0.18 0.00 0.46 1.24
Canada 0.86 0.00 0.22 0.12 0.07 0.00 0.30 0.16 Canada 0.86 0.00 0.22 0.12 0.07 0.00 0.30 0.16
Latin America 0.09 0.00 0.00 0.09 0.00 0.00 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.26 0.00 0.26 0.00 0.00 0.00 0.00 0.00
FSU 0.10 0.00 0.00 0.10 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.24 0.00 0.21 0.03 0.00 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.77 0.00 0.00 0.00 0.00 0.00 0.28 0.48
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.07
Total Refined 1.66 0.01 0.78 0.34 0.07 0.00 0.30 0.16 Total Supplied 4.01 0.00 0.64 0.12 0.25 0.00 1.04 1.95
Total Imports 0.79 0.01 0.57 0.22 0.00 0.00 0.00 0.00 Total Exports 3.15 0.00 0.42 0.00 0.18 0.00 0.75 1.79
Supplemental Marine Fuel Availability Study
July 15, 2016
173
2020: REF-WEO - Mid Switch MDO Latin America million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports Latin America million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.33 0.10 0.23 0.00 0.00 0.00 0.00 0.00 United States 2.76 0.00 0.01 0.55 1.13 0.81 0.00 0.26
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.09 0.00 0.00 0.09 0.00 0.00 0.00 0.00
Latin America 4.69 0.00 0.60 2.20 1.21 0.58 0.00 0.10 Latin America 4.69 0.00 0.60 2.20 1.21 0.58 0.00 0.10
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 1.01 0.47 0.05 0.18 0.03 0.27 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.99 0.01 0.96 0.00 0.02 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 0.10 0.00 0.00 0.10 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.98 0.22 0.00 0.00 0.00 0.29 0.00 0.46
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.57 0.00 0.00 0.00 0.00 0.57 0.00 0.00
Total Refined 6.12 0.11 1.80 2.30 1.23 0.58 0.00 0.10 Total Supplied 10.10 0.69 0.67 3.02 2.37 2.52 0.00 0.82
Total Imports 1.43 0.11 1.19 0.10 0.02 0.00 0.00 0.00 Total Exports 5.41 0.69 0.06 0.82 1.16 1.94 0.00 0.73
2020: REF-WEO - Mid Switch MDO Europe million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports Europe million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.26 0.00 0.26 0.00 0.00 0.00 0.00 0.00 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 1.01 0.47 0.05 0.18 0.03 0.27 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 2.58 0.16 1.85 0.51 0.06 0.00 0.00 0.00 Europe 2.58 0.16 1.85 0.51 0.06 0.00 0.00 0.00
FSU 3.02 0.00 0.41 2.57 0.04 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 2.55 0.24 2.07 0.00 0.24 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 3.74 0.00 0.00 3.74 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.43 0.00 0.43 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 13.15 0.86 4.64 7.01 0.38 0.27 0.00 0.00 Total Supplied 3.01 0.16 2.28 0.51 0.06 0.00 0.00 0.00
Total Imports 10.57 0.70 2.79 6.50 0.31 0.27 0.00 0.00 Total Exports 0.43 0.00 0.43 0.00 0.00 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
174
2020: REF-WEO - Mid Switch MDO FSU million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports FSU million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.14 0.00 0.00 0.00 0.14 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.10 0.00 0.00 0.10 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 3.02 0.00 0.41 2.57 0.04 0.00 0.00 0.00
FSU 6.68 0.19 1.33 4.85 0.31 0.00 0.00 0.00 FSU 6.68 0.19 1.33 4.85 0.31 0.00 0.00 0.00
Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Africa 0.23 0.00 0.00 0.13 0.10 0.00 0.00 0.00
Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Middle East 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 2.34 0.00 1.52 0.51 0.31 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 6.68 0.19 1.33 4.85 0.31 0.00 0.00 0.00 Total Supplied 12.61 0.19 3.36 8.17 0.90 0.00 0.00 0.00
Total Imports 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Exports 5.93 0.00 2.03 3.31 0.59 0.00 0.00 0.00
2020: REF-WEO - Mid Switch MDO Africa million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports Africa million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.18 0.00 0.17 0.00 0.01 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.24 0.00 0.21 0.03 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latin America 0.99 0.01 0.96 0.00 0.02 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 2.55 0.24 2.07 0.00 0.24 0.00 0.00 0.00
FSU 0.23 0.00 0.00 0.13 0.10 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 1.51 0.06 1.26 0.19 0.00 0.00 0.00 0.00 Africa 1.51 0.06 1.26 0.19 0.00 0.00 0.00 0.00
Middle East 0.74 0.06 0.00 0.66 0.02 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.21 0.00 0.21 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.47 0.14 0.31 0.00 0.02 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 0.22 0.02 0.20 0.00 0.01 0.00 0.00 0.00
Total Refined 2.49 0.13 1.26 0.98 0.12 0.00 0.00 0.00 Total Supplied 6.37 0.47 5.38 0.22 0.29 0.00 0.00 0.00
Total Imports 0.97 0.06 0.00 0.79 0.12 0.00 0.00 0.00 Total Exports 4.86 0.41 4.12 0.03 0.29 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
175
2020: REF-WEO - Mid Switch MDO Middle East million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports Middle East million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 3.49 0.02 0.00 3.00 0.47 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latin America 0.10 0.00 0.00 0.10 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 3.74 0.00 0.00 3.74 0.00 0.00 0.00 0.00
FSU 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Africa 0.74 0.06 0.00 0.66 0.02 0.00 0.00 0.00
Middle East 7.80 0.92 0.09 6.39 0.40 0.00 0.00 0.00 Middle East 7.80 0.92 0.09 6.39 0.40 0.00 0.00 0.00
PacInd 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 2.20 0.00 0.01 2.12 0.06 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 2.68 0.11 0.20 2.36 0.00 0.00 0.00 0.00
Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Other Asia 8.74 0.38 0.00 7.26 1.10 0.00 0.00 0.00
Total Refined 7.90 0.92 0.19 6.39 0.40 0.00 0.00 0.00 Total Supplied 29.50 1.50 0.30 25.64 2.05 0.00 0.00 0.00
Total Imports 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.00 Total Exports 21.70 0.58 0.21 19.26 1.65 0.00 0.00 0.00
2020: REF-WEO - Mid Switch MDO PacInd million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports PacInd million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.38 0.03 0.25 0.10 0.00 0.00 0.00 0.00 United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.43 0.00 0.43 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.21 0.00 0.21 0.00 0.00 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 2.20 0.00 0.01 2.12 0.06 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.04 0.04 0.00 0.00 0.00 0.00 0.00 0.00 PacInd 0.04 0.04 0.00 0.00 0.00 0.00 0.00 0.00
China 0.04 0.00 0.00 0.00 0.04 0.00 0.00 0.00 China 0.19 0.00 0.19 0.00 0.00 0.00 0.00 0.00
Other Asia 0.09 0.00 0.09 0.00 0.00 0.00 0.00 0.00 Other Asia 0.49 0.32 0.17 0.00 0.00 0.00 0.00 0.00
Total Refined 3.38 0.06 0.99 2.23 0.10 0.00 0.00 0.00 Total Supplied 0.71 0.36 0.35 0.00 0.00 0.00 0.00 0.00
Total Imports 3.35 0.03 0.99 2.23 0.10 0.00 0.00 0.00 Total Exports 0.67 0.32 0.35 0.00 0.00 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
176
2020: REF-WEO - Mid Switch MDO China million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports China million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.23 0.23 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Canada 0.77 0.00 0.00 0.00 0.00 0.00 0.28 0.48 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.98 0.22 0.00 0.00 0.00 0.29 0.00 0.46 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 2.34 0.00 1.52 0.51 0.31 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.47 0.14 0.31 0.00 0.02 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 2.68 0.11 0.20 2.36 0.00 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.19 0.00 0.19 0.00 0.00 0.00 0.00 0.00 PacInd 0.04 0.00 0.00 0.00 0.04 0.00 0.00 0.00
China 4.28 0.23 3.67 0.00 0.39 0.00 0.00 0.00 China 4.28 0.23 3.67 0.00 0.39 0.00 0.00 0.00
Other Asia 0.44 0.00 0.44 0.00 0.00 0.00 0.00 0.00 Other Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Refined 12.37 0.94 6.32 2.87 0.72 0.29 0.28 0.95 Total Supplied 4.32 0.23 3.67 0.00 0.43 0.00 0.00 0.00
Total Imports 8.09 0.71 2.66 2.87 0.33 0.29 0.28 0.95 Total Exports 0.04 0.00 0.00 0.00 0.04 0.00 0.00 0.00
2020: REF-WEO - Mid Switch MDO Other Asia million pbd 2020: REF-WEO - Mid Switch MDO Crude Oil Exports Other Asia million pbd
Source Region
Refinery
Crude
Oil
Inputs
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
Destination
Region
Crude
Oil
Supply
CONDEN
SATE
SWEET
<0.5S
LT/MD
SR >29
API >.5S
HVY SR
20-29 API
>.5S
XHVY SR
<20 API
>.5 S
SYN
CRUDE
LIGHT
SYN
CRUDE
HEAVY
United States 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 United States 0.02 0.00 0.02 0.00 0.00 0.00 0.00 0.00
Canada 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.07 Canada 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Latin America 0.57 0.00 0.00 0.00 0.00 0.57 0.00 0.00 Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Africa 0.22 0.02 0.20 0.00 0.01 0.00 0.00 0.00 Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Middle East 8.74 0.38 0.00 7.26 1.10 0.00 0.00 0.00 Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PacInd 0.49 0.32 0.17 0.00 0.00 0.00 0.00 0.00 PacInd 0.09 0.00 0.09 0.00 0.00 0.00 0.00 0.00
China 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 China 0.44 0.00 0.44 0.00 0.00 0.00 0.00 0.00
Other Asia 2.57 0.94 1.63 0.00 0.00 0.00 0.00 0.00 Other Asia 2.57 0.94 1.63 0.00 0.00 0.00 0.00 0.00
Total Refined 12.66 1.66 2.00 7.26 1.10 0.57 0.00 0.07 Total Supplied 3.12 0.94 2.17 0.00 0.00 0.00 0.00 0.00
Total Imports 10.09 0.72 0.37 7.26 1.10 0.57 0.00 0.07 Total Exports 0.54 0.00 0.54 0.00 0.00 0.00 0.00 0.00
Supplemental Marine Fuel Availability Study
July 15, 2016
177
6.3.8 Marine Fuels Blends – 2020 Base and Mid Switch Cases
million bpdTotal HS
IFO
Total
0.5% IFO
/ Hybrid
Total
Original
MDO
Total ECA
MDO
Total
Global
0.5%
MDO
Total
Marine
Distillate
Total
Marine
Fuel
(DMA) (DMA) (DMB)
kerosenes 0.00 0.00 0.37 0.10 0.00 0.48 0.48
middle distillates 0.37 0.00 0.69 0.23 0.00 0.92 1.29
cracked stocks 0.65 0.00 0.12 0.02 0.00 0.13 0.78
VGO SR (non HDS) 0.23 0.00 0.00 0.08 0.00 0.08 0.31
VGO HDS 0.00 0.00 0.00 0.14 0.00 0.14 0.14
resid SR LS / HDS < 1% 0.04 0.00 0.00 0.00 0.00 0.00 0.04
resid SR MS 1-2% 0.07 0.00 0.00 0.00 0.00 0.00 0.07
resid SR HS > 2% 2.99 0.00 0.00 0.00 0.00 0.00 2.99
resid visbroken 0.13 0.00 0.00 0.00 0.00 0.00 0.13
Total 4.49 0.00 1.18 0.57 0.00 1.75 6.25
Total distillates (incl cracked stocks) 1.02 0.00 1.18 0.35 0.00 1.53 2.55
Total VGO 0.23 0.00 0.00 0.22 0.00 0.22 0.46
Total resid 3.24 0.00 0.00 0.00 0.00 0.00 3.24
Total 4.49 0.00 1.18 0.57 0.00 1.75 6.25
Total distillates (incl cracked stocks) 23% 0% 100% 61% 0% 87% 41%
Total VGO 5% 0% 0% 39% 0% 13% 7%
Total resid 72% 0% 0% 0% 0% 0% 52%
Total 100% 0% 100% 100% 0% 100% 100%
of which
atmos resid HS > 3% 2.30 0.00 0.00 0.00 0.00 0.00 2.30
vacuum resid HS > 3% 0.69 0.00 0.00 0.00 0.00 0.00 0.69
visbroken resid HS > 3% 0.12 0.00 0.00 0.00 0.00 0.00 0.12
Total resid HS > 3% 3.12
HS resid as % of total resid 96% 0% 0% 0% 0% 0% 96%
Marine Fuel Pool Blends 2020 Base Case
Supplemental Marine Fuel Availability Study
July 15, 2016
178
million bpdTotal HS
IFO
Total
0.5% IFO
/ Hybrid
Total
Original
MDO
Total ECA
MDO
Total
Global
0.5%
MDO
Total
Marine
Distillate
Total
Marine
Fuel
Change
vs. Base
Case
(DMA) (DMA) (DMB)
kerosenes 0.00 0.00 0.20 0.09 0.07 0.35 0.35 (0.12)
middle distillates 0.07 0.02 0.86 0.22 0.53 1.61 1.70 0.41
cracked stocks 0.19 0.04 0.12 0.04 0.43 0.58 0.82 0.03
VGO (non HDS) 0.09 0.09 0.00 0.07 0.70 0.77 0.95 0.64
VGO HDS 0.00 0.00 0.00 0.16 0.16 0.32 0.32 0.18
resid LS / HDS < 1% 0.00 1.48 0.00 0.00 0.00 0.00 1.49 1.45
resid MS 1-2% 0.01 0.17 0.00 0.00 0.00 0.00 0.18 0.11
resid HS > 2% 0.46 0.00 0.00 0.00 0.00 0.00 0.46 (2.54)
resid visbroken 0.03 0.00 0.00 0.00 0.00 0.00 0.03 (0.10)
Total 0.86 1.81 1.18 0.57 1.89 3.64 6.30 0.05
Total distillates (incl cracked stocks) 0.26 0.06 1.18 0.34 1.03 2.55 2.87 0.32
Total VGO 0.09 0.09 0.00 0.23 0.86 1.09 1.27 0.82
Total resid 0.50 1.65 0.00 0.00 0.00 0.00 2.16 (1.09)
0.86 1.81 1.18 0.57 1.89 3.64 6.30 0.05
Total distillates (incl cracked stocks) 31% 3% 100% 60% 54% 70% 46%
Total VGO 11% 5% 0% 40% 45% 30% 20%
Total resid 59% 91% 0% 0% 0% 0% 34%
Total 100% 100% 100% 100% 100% 100% 100%
of which
atmos resid HS > 3% 0.33 0.00 0.00 0.00 0.00 0.00 0.33 (1.97)
vacuum resid HS > 3% 0.13 0.00 0.00 0.00 0.00 0.00 0.13 (0.57)
visbroken resid HS > 3% 0.03 0.00 0.00 0.00 0.00 0.00 0.03 (0.09)
Total resid HS > 3% 0.49 (2.63)
HS resid as % of total resid 97% 0% 0% 0% 0% 0% 23%
Marine Fuel Pool Blends 2020 Mid Switch Volume Low MDO Case
Supplemental Marine Fuel Availability Study
July 15, 2016
179
million bpdTotal HS
IFO
Total
0.5% IFO
/ Hybrid
Total
Original
MDO
Total ECA
MDO
Total
Global
0.5%
MDO
Total
Marine
Distillate
Total
Marine
Fuel
Change
vs. Base
Case
Change
vs. Low
MDO
Case
(DMA) (DMA) (DMB)
kerosenes 0.00 0.00 0.30 0.09 0.20 0.59 0.59 0.11 0.23
middle distillates 0.06 0.00 0.76 0.22 1.00 1.98 2.04 0.75 0.34
cracked stocks 0.17 0.02 0.12 0.03 0.62 0.76 0.95 0.17 0.13
VGO (non HDS) 0.10 0.01 0.00 0.06 1.42 1.48 1.59 1.28 0.64
VGO HDS 0.00 0.00 0.00 0.17 0.18 0.36 0.36 0.21 0.03
resid LS / HDS < 1% 0.00 0.30 0.00 0.00 0.00 0.00 0.30 0.26 (1.19)
resid MS 1-2% 0.02 0.03 0.00 0.00 0.00 0.00 0.05 (0.02) (0.13)
resid HS > 2% 0.48 0.00 0.00 0.00 0.00 0.00 0.48 (2.51) 0.02
resid visbroken 0.03 0.00 0.00 0.00 0.00 0.00 0.03 (0.11) (0.00)
Total 0.86 0.36 1.18 0.57 3.41 5.17 6.38 0.14 0.08
Total distillates (incl cracked stocks) 0.23 0.02 1.18 0.34 1.81 3.33 3.58 1.03 0.71
Total VGO 0.10 0.01 0.00 0.23 1.60 1.83 1.95 1.49 0.68
Total resid 0.53 0.33 0.00 0.00 0.00 0.00 0.86 (2.38) (1.30)
0.86 0.36 1.18 0.57 3.41 5.17 6.38 0.14 0.08
Total distillates (incl cracked stocks) 26% 5% 100% 59% 53% 65% 56%
Total VGO 12% 3% 0% 41% 47% 35% 31%
Total resid 61% 92% 0% 0% 0% 0% 13%
Total 100% 100% 100% 100% 100% 100% 100%
of which
atmos resid HS > 3% 0.39 0.00 0.00 0.00 0.00 0.00 0.39 (1.91) 0.06
vacuum resid HS > 3% 0.09 0.00 0.00 0.00 0.00 0.00 0.09 (0.61) (0.04)
visbroken resid HS > 3% 0.02 0.00 0.00 0.00 0.00 0.00 0.02 (0.10) (0.01)
Total resid HS > 3% 0.50 (2.62) 0.01
HS resid as % of total resid 95% 0% 0% 0% 0% 0% 58%
Marine Fuel Pool Blends 2020 Mid Switch Volume Low MDO Case
Supplemental Marine Fuel Availability Study
July 15, 2016
180
6.3.9 Marine Fuels Global Average Densities – 2020 Base and Mid Switch Cases
Densitiesbbl /
tonnes.g.
API
Gravity
mmbpd mmtpa mmtpa mmbpd
2020 Base Case
3.5% IFO380 6.4589 0.9737 13.8 1 56.51 100 1.77
3.5% IFO180 6.5531 0.9597 15.9 1 55.70 100 1.80
0.1% ECA DMA 7.2163 0.8715 30.9 1 50.58 100 1.98
1%/0.5% DMA 7.2756 0.8644 32.2 1 50.17 100 1.99
2020 Mid Switch High MDO Case
3.5% IFO380 6.4509 0.9749 13.6 1 56.58 100 1.77
3.5% IFO180 6.5723 0.9569 16.4 1 55.54 100 1.80
0.5% Global IFO 6.5929 0.9539 16.8 1 55.36 100 1.81
0.5% Global IFO/VGO 6.7334 0.9340 20.0 1 54.21 100 1.84
0.1% ECA DMA 7.2271 0.8702 31.1 1 50.50 100 1.98
1%/0.5% DMA 7.2579 0.8665 31.8 1 50.29 100 1.99
0.5% Global DMB 7.0870 0.8874 28.0 1 51.50 100 1.94
WORLD Results - Global Weight Average Marine Fuel Densities &
Conversion Factors
mmbpd to mmtpa mmtpa to mmbpd