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Trends and challenges in fuel-oil quality Dr Frans van den Berg Shell Global Solutions International BV Introduction In 2002, fuel oil supplied 13% of the world’s oil-product demand. This puts fuel oil in third place – following gasoline and distillates (gasoil) – in order of economic importance for major oil products. Moreover, the 9.2 million barrels of fuel oil produced each day exceeds the worldwide kerosene production. Fuel oil is an important product in terms of volume and as a strategic outlet for the refinery.
Figure 1: World oil-product demand in 2002.
Trends in fuel-oil production A close look at the fuel-oil business reveals a number of trends that are influenced mainly by increasing demand on the refining industry to produce more high-value products, for instance by cracking, and by blending heavy-end products as close to the specification as possible.
Shell Global Solutions These pressures have also led to refinery planners switching crude-oil feedstock more frequently. Feedstock changes disrupt the smooth running of unit operations and can affect the quality of the end product. The small profit margins achievable by refineries have led to a strong emphasis on reducing operating costs. Thus, quality management of fuel-oil products tends to have a low priority. Furthermore, there is a shortage of qualified and experienced personnel available for fuel-oil blending, laboratory testing and product quality control. Investment in research and development for product-quality procedures, standards and test equipment has dwindled to an absolute minimum.
Trends in fuel-oil distribution Refiners traditionally sold and distributed their heavy-end products locally, as this was easy and cost-effective. Their customers bought fuel-oil products from them, and received a product with relatively consistent quality that met local specifications. However, with growing fuel-oil demands and the globalisation of oil markets, fuel-oil products are now being transported all over the world. As a result, an active market for fuel-oil components has developed – the trade in so-called cutter stocks. The exchange market provides customers with a larger choice of fuel-oil products, but, at the same time, reduces assurance of product quality. Cost reductions have also led to outsourcing of fuel-oil distribution to third parties. But, as refiners no longer manage the entire distribution chain, it is more difficult to guarantee the product quality to fuel-oil end users. Distribution companies must have clear guidelines and well-managed procedures in place to ensure the quality of the blended product. These measures should include prevention of contamination. All these issues highlight the need to improve fuel-oil quality management without returning to increased production costs. To do this, refiners are looking for tools that help them to tailor fuel-oil product specifications to customer needs. Customers also need to be able to verify the quality of the products they buy.
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End-user characteristics and requirements A basic requirement for improving fuel-oil quality management is a clearer understanding of the end users. •
Who are they?
What are their quality requirements?
What is their definition of a quality product?
Figure 2: End-user characteristics.
Roughly one-third of the world’s fuel-oil production is used as bunker fuel for marine diesel engines. Most of the remaining two-thirds is used as fuel for power plants and in heavy industries such as glass, paper and cement. These industries are important fueloil consumers who need to keep their heavy-duty furnaces burning constantly, making them relatively insensitive to variations in fuel-oil quality. Marine diesel engines, however, are more vulnerable than industrial furnaces. Cargo ships aim to transport goods all over the world with minimal delay. To do so, they take in bunker fuel, when required, from the nearest refinery or distribution point. This implies that marine engines are expected to cope with a wider variety of fuel-oil grades and contaminants. Although some contaminants may not affect the performance of marine 3
Shell Global Solutions engines when running at full speed, they could affect motor performance significantly when running at lower speeds. Therefore, fuel-oil suppliers must be able to provide uncontaminated products that do not cause their customers’ engines to fail, resulting in lost opportunities and income. Comparing customer needs reveals that different end users require different fuel-oil qualities. There appears to be scope for a further differentiation in fuel-oil qualities. Moreover, it should be realised that all fuel-oil customers are professional buyers. They want to buy ‘calories’ at the price that will help them meet their business goals, and they rightfully assume that the fuel will be fit for purpose.
On-specification, but is it fit for purpose? Product-quality management for fuel oil is still in its infancy compared with the productquality management of kerosene, gasoline and diesel. With numerous fuel oil specifications and standards – ASTM, ISO, CIMAC, original equipment manufacturer’s, as well as national and suppliers’ specifications – the fuel-oil business may appear to be a regulated segment of the industry. Alas, the reality is different. The large number of standards, specifications and procedures makes productquality assessment and management complex and confusing to producers as well as to consumers. The wide-ranging variety in fuel-oil grades and applications complicates standardisation. The fuel-oil business would benefit from further standardisation of fueloil specifications, but there are other matters that challenge suppliers. Take, for example, the case of a fuel-oil customer buying an on-specification fuel oil but ending up with a product that was not fit for purpose. What went wrong? This is an example of a customer who blended two stable fuels from different sources and ended up with an unstable fuel.
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Figure 3: Unstable fuel.
Unstable fuels are fuels that are subject to asphaltene settlement in tanks and filters. The resultant deposits can cause blockages and engine failure. An on-specification fuel oil may also be unfit for purpose because of contaminants such as •
discarded lube oils, fatty acids and other waste streams
hydrogen sulphide (H2S)
polypropylene, organic chlorides, strong acids and other trace contaminants
high-molecular-weight waxes – passing filter tests at 100°C, but blocking filters at 50°C.
On the other hand, the fuel-oil blend might have been a gap fuel that did not combust completely, producing soot. Traditional fuel-oil specifications are based on chemical and physical properties and may not be appropriate or accurate enough to guarantee proper combustion performance.
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Figure 4: A typical refinery fuel-oil specification.
Clearly, there is a gap that needs bridging between a fuel oil being on specification and being fit for purpose.
What are the challenges? With increased pressure on the industry, refiners constantly look for ways to improve their overall performance and add to their bottom line. The successful implementation of quality control for kerosene, gasoline and diesel products has been instrumental to improvements in these areas. To enable refineries to produce fuel oil to exacting specifications, quality control is the next item on the agenda that needs fully developing and implementing. Fuel-oil end users are offered products with variable qualities. Ideally, they would like to manage and balance engine or furnace combustion performance with fuel prices. Unfortunately, current specifications are not sufficiently transparent to allow this approach, leaving customers to focus only on price. Worldwide, there are ambiguous definitions for fuel-oil quality, and there is a lack of alignment on distribution procedures and guidelines among fuel-oil producers, distributors and users. These challenges call for the development of internationally recognised and standardised fuel-oil specifications and tests. 6
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What is Shell Global Solutions doing? Shell Global Solutions’ representatives are actively involved in setting relevant specifications and standards – they are striving for standardisation under the International Standards Organization. Additionally, as part of a larger research and development programme, the organisation’s fuel-oil quality experts support and promote the development of standard tests, including performance assessments.
Figure 5: Automated stability analyser.
In recognition of the need to deliver quality fuel-oil products that are fit for purpose and meet customer requirements, Shell Global Solutions’ and Shell Marine Products’ quality experts have defined a range of steps to improve fuel-oil quality management. They have formulated a rigorous quality-assurance strategy and are currently implementing this at key operations throughout the Royal Dutch/Shell Group. Furthermore, they have developed a fuel-oil training course, and facilitate workshops around the world to help customers improve their fuel-oil quality management and create a culture of quality awareness among fuel-oil producers and customers.
Looking to the future Fuel-oil producers and distributors need to understand the product-quality demands of their markets. They have to appreciate their customers’ needs for fuel oil of the right and most appropriate quality to sustain or improve furnace and engine performance. A 7
Shell Global Solutions quality mismatch between fuel-oil production and demand can significantly affect the bottom line of producers, distributors and their customers. Rigorous, performance-orientated fuel-oil quality management with additional, relevant international specifications and tests, and clearly defined quality procedures will help refiners to produce fuel oil to exacting specifications. This will allow proactive management of the effects of market changes on refinery operations. It will provide fueloil end users with a better basis for selecting the appropriate and most cost-effective product. In general, improved fuel-oil quality management will result in better alignment of all stakeholder requirements.