Local feedstock cost advantages have made the Middle East region the most exciting refining destination on Earth
The Middle East Downstream Week 2012, organized by the World Refining Association, attracted major national and international refining companies, and service providers who sahred the joint aim of getting closer to the local refining market.
Experts spoke out on what is currently happening and how the future looks, with specific attention to the Middle East region.
The two-day conference served as a platform for industry leaders from NOC, IOC and service providers to share their knowledge and expertise, along with forecasts for the future of the industry.
Luther Kissam, president and CEO, of Albemarle delivered a keynote speech highlighting how to drive refining profitability through catalyst technology.
“The Middle East is significant as a fertile base for the refining industry, especially with changes in the refinery landscape in North America and Europe,” said Kissam. “Middle East refinery strength exposes relatively higher cost positioning of Western refiners.”
Kissam said that the refining sector is facing several challenges mainly related to heavier crude and higher sulfur content, which will increase as regional and international fuel sulfur regulations continue to tighten.
“Saudi Arabia is shifting to reduce the content of sulfur to 10 ppm in diesel by the end of 2012 from 500+, while other GCC members are moving to 50ppm,” he noted. “Using FCC cracking, hydrocracking or isomerization processes allows refiners to produce the desired product mix from crude oil,” Kissam recommended.
Many FCC units have already experienced stricter SO2 emission regulations, especially refiners operating close to large population centers, said Eugenio Macaluso, refinery business manager, Middle East at Intercat.
“Many other refiners are now beginning to face such restrictions. These refiners may benefit from what has been learned by other refiners” he said.
“We have crystallized this experience into a set of best practices for SO2 reducing additive usage, through several stages including full combustion, two stage regeneration, maximum LCO operations and from SO2 trimming to ultralow emissions” he claimed.
The shift towards a much needed transformation, either through vertical integration of refineries and petrochemical plants or through the exit from the downstream sector of few oil majors, is proving challenging for international and national companies, therefore, companies are trying to be smart and innovative in their shift.
In this regard, the event focused on the strategic role of research and development for the industry.
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Dr Mohamed Nader Amin Abdel Sammad, quality control and Lab department manager, at ADNOC Distribution, talked about hydro processed base oil, fuel specifications and their impact on lubricants performance and emissions.
In his presentation, Dr Abdel Sammad highlighted the difficult environmental regulations that dictate the production of refined products, and how R&D centres are working hard to find suitable solutions to meet the required standards.
“Throughout the world, tightening environmental legislation is moving lubricant marketers to demand higher performance from base oils,” he said. “All hydroprocessing technologies are the only economical solution for meeting the challenge of future requirements,” he added.
“These specifications mainly call for lighter viscosity grades for increased fuel economy, lower volatility for reduced oil consumption, improved oxidation and thermal stability for longer drain intervals,” , Dr Abdel Sammad added. “The last specification is through improving lubricant performance at low and high temperatures to meet the needs of modern engine designs.”
Olivier Alexander, vice president of refining and chemicals at Total talked about the refining and petrochemicals outlook for the Middle East and Asia. Alexander said that there is an increasing demand for light products. “Demand on naphtha from petrochemicals sector and gasoline and diesel for transportation is boosting demand,” he added.
Alexander also highlighted the new trend of the downstream sector saying most of new Asian and Middle East refining projects are integrated with petrochemical units, which is beneficial for project owners.
“Integrated projects allow the exchange of products between refineries and petrochemical units, and also benefits from common infrastructure like utilities and tank forms, as well as shared services like maintenance, operations and inspection,” Alexander added.
Jose Antonio Alberich, VP at A.T. Kearney Middle East presented a paper on what operating models for future success in refining sector, both globally and from Middle Eastern perspectives.
“While substantial growth continues in emerging markets, refinery activity is under pressure in developed countries,” he said. “As a result, major global players are in the process of reevaluating downstream positioning and refocusing on growth,” he added.
“Downstream players chose participation structure based on the opportunities available in the market,” Alberich noted. “Each of the participation structures can leverage integration with petrochemicals to improve profitability and optimize margins,” Alberich said.
Alberich said in his presentation that dominating integration structure is highly dependent on the regional context and market attractiveness shifting East.
“Petrochemicals integration will contribute to refining value generation and will impact economic development in the Gulf,” Alberich said.
The 2012 Global Petroleum Executive Summit
On the sideline of the downstream week, Honeywell Process Solutions organised its first Global Petroleum Executives Summit. The event attracted CEOs of major downstream companies to discuss ways of reducing future risk, maximising investments and transforming businesses.
The main theme of the event was how to how to anticipate risk, improve performance and operate efficiently, in an era of increasing global and political instability, conflicts and financial meltdowns.
