Once upon a time (not so long ago), sulfur was simple. Most sulfur was mined in the US, Poland, Mexico and France using the Frasch method, in which wells are drilled into sulfur deposits and super heated steam injected at 160 °C. The steam melts the sulfur, which can then be pumped to surface. Production could be controlled in order to meet demand, smoothing out cycles and ensuring a price sufficient to cover costs and maintain a profit.
The sector changed when oil companies began to tap into large reservoirs of sulfur rich oil and gas, however. The sulfur, which comprised up to 3% in sour oilfields and 25% in sour gas fields, was stripped away during processing, creating huge amounts of by product that were aggressively marketed to users. By the early 2000s, most Frasch mines had closed. The US Geological Survey (USGS) notes that the vast majority of sulfur now comes from processing in the oil and gas sector. Approximately 70 million t of elemental sulfur was produced worldwide in 2012, down slightly from 70.5 million t in 2011. The leading producers were China (9.7 million t), the US (9 million t), Russia (7.3 million t), and Canada (6.6 million t). The Middle East nations of Saudi Arabia, Kuwait, Qatar and the UAE contributed 8.4 million t.
The vagaries of sulfur affect the fortunes of refiners and gas processors in a number of ways. On the legislative front, laws have been enacted in the last decade to reduce sulfur in on road gasoline and diesel fuels. Since 2004, sulfur in gasoline has dropped from an average of 300 ppm to 30 ppm. Earlier this year, the US Environmental Protection Agency (EPA) proposed to reduce sulfur content in gasoline to 10 ppm, beginning in 2017. The Tier 3 regulations (which also call for a cut in tailpipe and evaporative emissions) will match standards that are legislated in the EU, Japan and Korea.
Industry associations have cited their opposition to the proposal. In order to meet Tier 3 sulfur levels, refiners would have to add hydro treating capacity to fluid catalytic crackers and new inputs of hydrogen. The American Petroleum Institute (API) estimated that refiners would have to invest almost US$ 10 billion in new equipment.
The US Environmental Protection Agency (EPA) has said that the new regulations will raise the price of gas by 1 cent/gal., yet dramatically improve public health by making vehicle catalysts more efficient, thus reducing NOX, volatile organic compounds and air toxics.
Normally, a refiner can sell the sulfur and recover some the costs of removal. Currently, sulfur is selling at approximately US$ 150/t , which generates a cash flow of almost US$ 40 million/y for a 200 000 bpd refinery. There is some concern that prices may soften significantly over the next year or two, but that is not a major refinery concern. ‘As far as producers in the oil and gas sector are concerned, any loss in revenues from sale of sulfur can be offset by a modest increase in their revenue stream,’ said Parekh.
Unfortunately, extreme gyrations in the price can have unintended, knock on effects. At the beginning of 2008, the price for sulfur stood at approximately US$ 200/t. By the middle of the year, it had risen to over US$ 800/t. Within a further 12 months, however, the market had almost completely collapsed to near zero, and some refiners were scrambling to clear sulfur from their facilities.
Industry specialists note that the primary sulfur concern for refinery management is not profit, but that the sulfur does not accumulate onsite to the point where it jeopardises the functioning of the refinery. Although a rail strike or ship delays can cause disruptions, they are not common, and most refiners have systems in place where they can ship liquid sulfur by various means to a central forming facility. These are often fee based, third party plants that have the ability to ship to buyers by truck, rail or cargo vessel, or, if the market is weak, to pelletise or block the sulfur in solid form. ‘Devco has operations in California, Texas, Louisiana and Illinois,’ said Parekh. ‘The facilities and equipment are extremely reliable, and refinery operators do not have to worry about disruptions.’
Much of the volatility surrounding sulfur has to do with the fact that a small number of uses form most of the demand. According to ICIS, a UK based petrochemical data consultancy, industry and mining have need for elemental sulfur, but the biggest single use, almost half, is consumed in agriculture. ‘Sulfur has only one significant market, and that is to use it to make sulfuric acid which is used to leach phosphate out of rock for use in fertiliser,’ said Hyne. ‘There are no other major uses that offer buffers to supply and demand. This leads to non-market factors affecting the price. India frequently changes its tax policy on imported phosphate fertiliser in order to control the country’s food supply. This causes the sulfur price to fluctuate up and down.’
Clearly, the sulfur sector needs to diversify, and some oil companies are looking for new markets. Shell, which has historically produced large quantities of sulfur in Canada, has been investigating sulfur enhanced asphalt modifier (SEAM), in which sulfur in pellet form displaces a portion of the asphalt as a binding agent. Studies show that SEAM increases road durability and saves on greenhouse gas (GHG) emissions during construction. Widespread use could consume 2 million tpy, but there is a great deal of municipal culture and contractor resistance to overcome before its use becomes widespread.
Researchers have mixed elemental sulfur and polymers into concrete to create a compound that exhibits very high resistance to corrosion, high strength, low water permeability and fast curing time. Sulfur concrete has an ecological advantage over Portland cement; the production of the latter requires the emission of approximately one ton of CO2 for every ton of cement produced. The Sulphur Institute, an advocacy group based in Washington, DC, sees the potential for 1 million tpy of sulfur in North America alone. But, like SEAM, the material has been slow to gain acceptance among municipal consumers.
The Sulphur Institute is also promoting sulfur enhanced fertiliser (SEF). Fertilisers primarily contain nitrogen, phosphorous and potassium nutrients, but plants also need sulfur to grow well. Adding sulfur to fertiliser makes plant roots more efficient, which increases field yields. Sulvaris Inc. recently announced plans to construct a sulfur fertiliser plant in Alberta. The facility will produce 217 000 tpy for sale in North America. The Sulphur Institute has also been working with Asian governments for the last decade to promote the usage of SEF, and estimates that the there is a potential for 4 million tpy for China and India within the decade.
Energy utilities are investigating the use of lithium sulfur and sodium sulfur batteries. The batteries have a much higher energy density than lithium ion batteries, and can be used to store electricity produced by solar power. Earlier this year, Pacific Gas and Electric launched a battery energy storage systemWW pilot project in Buena Yerba, California. The project uses utility scale sodium sulfur batteries to store up to 4 MW/h capacity. Oxis Energy, a UK based company, is developing lithium sulfur batteries for use in cars and other vehicles.
Polythiophene, a polymer made from sulfur that captures sunlight and turns it into electricity, holds great potential. ‘If you were to turn it into slate roofing, it would add 8% to the cost of a house, but would supply energy to that house forever,’ said Hyne. ‘It would consume 10 million tpy of sulfur, or about 1/7th world production. That would be enough to create a new alternate use that would buffer the market.’
The full article can be found in Hydrocarbon Engineering's October issue.
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