IMO 2020

In 2020 the International Maritime Organisation will impose limits on sulphur in marine fuels. Roads & Infrastructure talks to Puma Energy about its flow on effects for bitumen.

To reduce global shipping emissions, the International Maritime Organisation (IMO) will implement a 0.50 per cent global sulphur limit for marine fuels from 1 January 2020, reducing the existing 3.5 per cent limit.

Many ship owners have been preparing for this change, either investing in scrubbers to remove sulphur from exhaust gases, or by switching to low-sulphur fuels like marine gas oil, an ultra-low-sulphur fuel oil.

This regulation will also impact the global refinery industry, which needs to meet a surge in demand for gas, oil and distillates and manage the lost demand for high-sulphur fuel oil and the onwards supply chain.

Erik Denneman from Puma Energy says this has shaken the shipping and refinery industries, and is one of the largest single specification changes experienced globally.

He says currently many refineries, especially the ones with simple configurations, direct their residues to fuel oil, bitumen or base oil for lubricants production.

Other complex refineries direct the residue to upgrading units like cokers, vacuum residuum desulphurisation units and hydrocrackers to produce middle and light end products.

“Due to the mandated IMO regulation, there are a number of approaches refiners may look to take,” Dr. Denneman says.

Some refineries may decide to invest and upgrade facilities in order to produce more low-sulphur products. This will enable them to meet an increase in demand for ultra-low-sulphur fuel oil but is both time and capital intensive.

Others may change crude feedstocks to sweeter crudes, which have a naturally lower sulphur content. Dr. Denneman says this might structurally change the sweet-sour crude price differentials.

Some refineries will have to sell more of the heavy products including bitumen. This could put the quality of bitumen at risk as more residual streams are directed into bitumen production.

There are still uncertainties about where – geographically – we will see these shifts at refineries, so the ability to quickly source high-quality bitumen from different refineries across the world will be critical in ensuring product availability is matched with high product quality.

“Puma Energy, through its unique global set-up, will be able to manage the impact of IMO 2020 on the quality and supply of bitumen to our customers,” Dr. Denneman says

“Puma has the largest bitumen shipping fleet in the world and a global network of 28 terminals across five continents. Puma has the flexibility to rapidly respond to any potential supply disruptions.”

He says Puma Energy’s global infrastructure is complemented by a quality assurance program at its certified laboratories in the UK, Spain, Malaysia and Australia.

The company uses the latest technologies in bitumen testing to ensure it is able to source the highest quality bitumen for customers.

“Puma Energy is committed to ensuring customers continue to receive the highest quality and fit-for-purpose bitumen during this period of global change,” Dr. Denneman says.

At the AAPA International Flexible Pavements Conference to be held in Sydney this August, Dr. Denneman will present a keynote address providing more detail on the implications of IMO 2020 for bitumen quality and consistency in Australia.

Related stories:

Interesting? Share this article