SINOPEC and IMO

Hydrocarbon Processing, 3/4/2019, announced the following …

///////
Sinopec's Hainan refinery delivers first low-sulfur bunker fuel cargo
Sinopec Corp’s subsidiary refinery in the southern island province of Hainan delivered its first shipment of low-sulfur bunker fuel that meets the new International Maritime Organization (IMO) emission rules, state media reported.
A vessel carrying 2,200 tons of the fuel left the Hainan refinery in late February heading to Ningbo on the east coast. The fuel will be put to pilot use at a maritime institution in Shanghai, China Securities Journal reported
The Hainan plant is the second refinery under Sinopec to produce the low-sulfur marine fuel that meets IMO standards. In January, Sinopec Shanghai Petrochemical Corp shipped 6,000 tons of the fuel
IMO will ban ships from using fuel oil with sulfur content above 0.5 percent, compared with 3.5 percent now, unless they are equipped with exhaust “scrubbers” to clean up sulfur emissions, starting 2020
Reporting by Chen Aizhu; Editing by Rashmi Aich
source: https://www.hydrocarbonprocessing.com/news/2019/02/sinopecs-hainan-refinery-delivers-first-low-sulfur-bunker-fuel-cargo

///////
WHY THIS MATTERS
“The International Maritime Organization (IMO) will enforce a new 0.5% global sulphur cap on fuel content from 1 January 2020, lowering from the present 3.5% limit. The global fuel sulphur cap is part of the IMO’s response to heightening environmental concerns, contributed in part by harmful emissions from ships.”
Source: source: http://www.seatrade-maritime.com/images/PDFs/SOMWME-whitepaper_Sulphur-p2.pdf

///////
TIP: Google® imo bunker fuel regulations 2020

A sample search result …

 ///////
Seatrade Maritime News
What You Need to Know: The 2020 IMO Fuel Sulphur Regulation
[ EXCERPT ]
What It Means for the Refiners
It is without doubt that the 0.5% sulphur rule will have huge implications for the global refining sector in terms of refinery configuration and operations. Simple refineries that produce a substantial share of their crude run into HFO may face margins pressure, while complex refineries may potentially boost margins with a larger production of low-sulphur products.
The International Energy Agency (IEA) mentioned that by 2020 the price of fuel oil is expected to drop in tandem with demand. This will in turn put pressure on (fuel oil) cracks and simple refineries with high fuel oil yields. On the other hand, it could become more attractive to modern, complex refineries who have the secondary units capable of upgrading fuel oil into higher value lighter products.
The IEA stated: “Global refiners will be put under enormous strain by the shifting product slate. If refiners ran at similar utilisation rates to today, they would be unlikely to be able to produce the required volumes of gas oil. If they increased throughputs to produce the required gas oil volumes, margins would be adversely affected by the law of diminishing returns. In order to increase gas oil output, less valuable products at the top and bottom of the barrel would be produced in tandem, which would likely see cracks for these products weaken and weigh margins down.”
The world’s three leading oil majors – BP, ExxonMobil and Shell – have not mentioned anything on a mass production of 0.5% blends, neither have they announced commitments to invest in reconfiguring their crude runs on a global scale to produce 0.5% fuels. “At present, we have not heard of new refinery investments announced as a result of this regulation. It is too early to have that, as IMO’s decision in July will influence many of these uncertainties,” said Serena Huang, research analyst-downstream, Asia Pacific, Wood Mackenzie.
In general, oil majors and refiners are looking to support the shift in bunker fuel demand arising from the new sulphur regulation in various ways. Firstly, refiners can increase ULSFO production by extracting low sulphur fuel oil streams that are currently blended into LSFO or HSFO to be made available to the market as ULSFO. ExxonMobil, for instance, has launched a relatively new product, Heavy Distillate Marine ECA 50 (HDME 50), that can be handled onboard like HFO and has only 0.1% sulphur content.
Secondly, refiners in general have an issue of managing their surplus residue. “In some instances, exploring residue destruction investments may make sense, but this option comes with higher risk on returns of investment, as gas oil demand is predicated on shippers’ uptake of alternative options such as scrubber installation and LNG bunkering,” said Huang.
Thirdly, refiners can raise LNG bunker supplies in major bunkering hubs. In Singapore, Shell and ExxonMobil are working with Maritime and Port Authority of Singapore (MPA) to supply LNG as fuel. In Rotterdam, Shell this year launched a LNG bunker tanker to supply LNG from Rotterdam’s Gate Terminal.
source: http://www.seatrade-maritime.com/images/PDFs/SOMWME-whitepaper_Sulphur-p2.pdf
///////