Sulphur Industry News

NIGERIA

Tecnimont to refurbish Port Harcourt refinery

Tecnimont has been awarded a $1.5 billion contract by Nigeria’s Federal Executive Council to carry out rehabilitation works at the Port Harcourt refinery in Rivers State, run by the state-owned Nigerian National Petroleum Company (NNPC). The contract covers engineering, procurement and construction (EPC) activities for a full rehabilitation of the Port Harcourt refinery complex, aimed at restoring the complex to a minimum of 90% of its 210,000 bbl/d nameplate capacity. Tecnimont says that the project will be delivered in phases from 24 and 32 months and the final stage will be completed in 44 months from the award date.

Pierroberto Folgiero, Maire Tecnimont Group CEO, commented: “With this great result we confirm the soundness of our business strategy on geography diversification, as one of its key elements is to grow and assist our clients in their revamping initiatives, leveraging on our technological know-how to ensure more efficient and environmentally better performing processes and products.”

SAUDI ARABIA

Aramco reports 44% fall in profits

Saudi Arabia’s state-owned oil giant Aramco reported in March that its profits fell almost by half in 2020 to $49 billion, a drop of 44%. Much of the fall was caused by low oil prices due to the pandemic. Aramco says that in spite of the fall of net income, it will maintain its promise of paying quarterly dividends of $18.75 billion; $75 billion a year, due to commitments the company made to shareholders in the run-up to its initial public offering. However, as the Saudi government still owns 98% of the company, the actual net payout to non-government shareholders will actually be only $1.5 billion/year.

Saudi Aramco’s profit was $88.2 billion in 2019 and $111.1 billion in 2018. It remains one of the world’s most valuable companies.

“In one of the most challenging years in recent history, Aramco demonstrated its unique value proposition through its considerable financial and operational agility,” President and CEO Amin H. Nasser said in a statement. “As a result, our financial position remained robust.”

The company produced the equivalent of 9.2 million bbl/d per day of crude oil in 2020. Capital expenditure was down in 2020 to $27 billion compared to $32.8 billion the year before. Aramco expects to spend $35 billion this year, some $5-10 billion lower than previous estimates.

UNITED ARAB EMIRATES

Nuclear plant begins commercial operations

The Unit 1 reactor at the new Barakah nuclear power plant in Abu Dhabi has begun full commercial operations, Crown Prince Mohammed bin Zayed al-Nahyan has announced. The reactor was completed last year and began producing electricity in August, after which a comprehensive series of tests and safety checks has been made. Unit 1 will generate 1,400MW of electricity, and will be followed by three more of a similar size. Unit 2 has completed fuel loading and is due to start up later this year. With a new 3.6 GW coal-fired power station coming on-stream in Dubai later this year, and 6 GW of new solar projects under construction by 2025, the UAE is aiming to diversify up to 50% of its power requirements away from natural gas in a few years, as part of plans to achieve net zero carbon emissions by 2050 in the energy-hungry desert kingdom, where the heat and humidity produces year-round demand for energy to run air conditioning.

The impact is likely to be felt on UAE gas demand, running at 76 billion cubic metres per year in 2019, with 20.6 of that coming from imported gas from Qatar and as LNG, balancing 7.7 bcm of LNG exports from Abu Dhabi. The UAE uses natural gas for 97% of its electricity needs, and this has driven its major expansion in sour gas drilling and processing. However, if gas demand for electricity is halved by 2025, not only will this eliminate the need for imports, it also puts the need for some new sour gas expansions in doubt.

UNITED STATES

US gasoline demand still down on 2019 levels

Year-on-year gasoline sales in the United States have moved into positive territory for the first time as the pandemic passes its first anniversary of major demand declines resulting from covid-induced stay at home orders. However, demand still trails pre-pandemic levels by a considerable margin, according to the latest data from IHS Markit. Sales in March 2021 were 10% higher than the same period for 2020, but 16% below pre-pandemic levels. March 2020 saw volumes trail 2019 levels by 23%, as US gasoline sales plummeted to levels not seen since the Nixon Administration.

GERMANY

Partnership to develop electrically heated steam crackers

BASF, SABIC and Linde have signed a joint agreement to develop and demonstrate solutions for electrically heated steam cracker furnaces. The partners have jointly worked on concepts to use renewable electricity instead of the fossil fuel natural gas typically used for the heating process, to contribute to the reduction of CO2 emissions within the chemical industry. The project aims to reduce CO2 emissions by powering the process with electricity from renewable sources, potentially reducing emissions by as much as 90%. The parties are evaluating construction of a multi-megawatt demonstration plant at BASF’s Ludwigshafen site, targeted for start-up as early as 2023, subject to a positive funding decision.

“This technology leap will be a milestone on the path to a low-emission chemical industry. We have not only developed the world’s first electrical heating concepts for steam crackers, but also want to demonstrate the reliability of key components for use in this type of high-temperature reactors. To be able to drive a timely scale-up and industrial implementation of this technology, investment support and competitive renewable energy prices will be important prerequisites,” said Dr Martin Brudermüller, Chairman of BASF. The project is part of BASF’s Carbon Management R&D program with which it aims to significantly further reduce its CO2 emissions beyond 2030.

Yousef Al-Benyan, Vice-Chairman and CEO of SABIC said: “Our industry thrives on innovation and collaboration which enable us to come up with and deliver important contributions to urgent global challenges like resource efficiency and CO2 reduction. This agreement brings together the deep technical knowledge and implementation focus that can help transition energy-intensive processes within our industry to be low carbon emitting processes. This flagship sustainability initiative forms part of SABIC’s long-term vision and climate change strategy to transform our business through the concept of circular carbon economy.”

CHINA

New alkylation units pass performance tests

DuPont Clean Technologies says it has achieved successful performance tests for the new STRATCO® sulphuric acid catalysed alkylation units at the Zhenhai Refining and Chemical Company (ZRCC) refinery in Ningbo, Zhejiang, and the Yangzi (YPC) refinery in Nianjing, Jiangsu. The ZRCC and YPC alkylation units both process MTBE raffinate feeds and are designed to produce 7,700 bbl/d and 7,500 bbl/d (300,000 t/a) of alkylate, respectively, and will enable Sinopec to generate low-sulphur, high-octane, low-Rvp alkylate with zero olefins that meets the criteria of the China VI standard.

“This endeavour of designing and building seven alkylation units over the last several years has created strong relationships with each of the refineries. We are grateful for this opportunity to provide Sinopec with our reliable technology that enables them to produce high quality alkylate, improving the quality of the refinery gasoline pool,” said Kevin Bockwinkel, global business manager, STRATCO® Alkylation Technology.

CANADA

Criticism over sour gas flaring at gas plant

Canadian Natural Resources Ltd (CNRL) subsidiary Sukunka Natural Resources Inc (SNRI) has faced criticism for flaring sour gas from the plant near Chetwynd, British Columbia. The plant was shut down after a strike by union Unifor for better pay and conditions at the plant began on March 9th . As a result, the company says it was obliged and permitted to flare remaining sour gas in the pipes. However, local residents complained about smells resulting from the flaring, and Unifor says that the flaring was due to “poor planning” by plant managers at the site. The union and company remain at loggerheads over a proposed move from a ‘safe idle’ state to temporary decommissioning, which SNRI insists would need to be performed as a safety measure in June if the dispute continues, and which would involve removing chemicals from the site. Unifor has dismissed this as an attempt to put pressure on its members.

INDIA

BHEL wins order for sulphur recovery unit from IOCL

Bharat Heavy Electricals Ltd has been awarded an order for a new 525 t/d sulphur recovery unit (SRU) from the Indian Oil Company Ltd (IOCL) for IOCL’s Paradip refinery in Odisha state. BHEL says that it won the $53 million contract “against stiff international competitive bidding”. BHEL’s scope in the contract includes project management, residual process design, detailed engineering, procurement, manufacturing, supply, testing, erection, construction, commissioning and performance guarantee tests. The project is scheduled for completion in 25 months. BHEL says that this is part of the company’s diversification strategy into non-coal based business areas. The company offers solutions for transportation, transmission, renewables, energy storage systems and e-mobility, water management, defence & aerospace, captive power generation and mechanical and electrical industrial products.

UNITED KINGDOM

Petrofac reaches agreement for credit facility extension

Petrofac has extended $700 million of its banking facilities, which it says came “with the unanimous support of lenders.” The extensions include a $610 million extension of its existing revolving credit facility to 2 June 2022, with the option extend for a further six months; and a $90 million extension of its bilateral term facility with the Abu Dhabi Commercial Bank to 1 April 2022. Previously, both facilities were due to be repaid or prepaid by 2 June 2021. Petrofac expects to report a net debt of $116 million as of 31 December 2020.

The company has faced financial difficulties since it was banned from new contracts in Abu Dhabi due to an ongoing corruption investigation; approximately 10% of Petrofac’s contract revenue came from the UAE in 2019 and the nation was its third largest market at that time, after Oman (25%) and Kuwait (15%). A former Petrofac executive pleaded guilty to offering and making or planning to make a total of $30 million in payment to influence the award of an engineering, procurement, and construction (EPC) contract in 2013 for the Upper Zakum UZ750 Field Development Project, in addition to a variation to that contract in 2014, and a FEED contract in 2014 for the Bab Integrated Facilities Project.

The former executive had already pleaded guilty to 11 bribery charges brought forth by Britain’s Serious Fraud Office (SFO) relating to projects in Iraq and Saudi Arabia in February 2019. Those charges concerned contracts in Iraq worth more than $730 million and contracts in Saudi Arabia worth more than $3.5 billion.

IRAQ

Axens to supply technologies for refinery upgrading project

Axens will license technology to upgrade the Shuaiba refinery near Basra. The refinery’s gasoline and diesel fuel production capacity will be increased in order to reduce the country’s gap in supply and demand for petroleum products. The upgrade project involves installation of new refining units adjacent to the existing refinery facility to increase processing capacity at the site from 210,000 bbl/d to 280,000 bbl/d. Axens will deliver technologies required for the new units including a diesel hydrotreatment unit; a vacuum gas oil (VGO) hydrotreating unit; a VGO fluid catalytic cracker (FCC) unit; and an oligomerisation unit. Axens will also be responsible for providing proprietary equipment, trainings and technical services.

Axens process licensing conversion & clean fuels business line director Jacques Rault said: “The Basrah refinery is expanding its operations by increasing its gasoline and diesel production while improving the fuels quality. This will help to solve one of the main challenges to lower national petroleum products imports revitalising the Iraqi refining sector damaged by war and deterioration.”

JGC is serving as the overall EPC contractor for the $3.8 billion upgrading project at the state-run South Refineries Co site, including a 55,000 bbl/d FCC unit, a 31,000 bbl/d naphtha hydrotreater unit and a new 17,000 b/d Continuous Catalytic Reforming unit, which will be the first of its kind in Iraq and will allow the country to produce 100 RON gasoline. The project is scheduled to be completed in 2025.