Six steps for success

Demand for transportation fuels has peaked in some developed economies, due to a combination of more efficient engine technology, low population growth, and the continued adoption of electric vehicles. Fuel demands in emerging economies, on the other hand, continue to rise as a result of growth in commercial transportation and demand for personal transportation – both signs of economic growth.

The introduction of MARPOL has resulted in a decline in high-sulfur fuel oil in favour of low-sulfur fuel oil and diesel, and this will continue throughout 2020. Refineries built in the last five years are largely capable of full conversion of bottoms material. Assets that were historically designed to maximise diesel production – particularly in Northeast Asia and China – are now being reconfigured for the production of petrochemical feedstocks. Indeed, naphtha and jet fuel exhibit the highest growth rates, with naphtha growth reflecting increased demand for petrochemicals.

While globally the market for petrochemicals is smaller than that of fuels, demand for petrochemicals is growing roughly three times faster than fuels demand, led by capacity additions in olefins and aromatics. Furthermore, this is directly correlated to emerging regions, where a rapidly growing middle class is driving demand for consumer goods based on plastic resins, films and fibres and other petrochemical products.

In regards to cost-advantaged natural gas, there is a greater capital discipline in the North American midstream market as customers are concentrating on returns from the investments they have made over the last couple of years. At the same time, investments in gas processing capacity continues to grow outside North America. In both cases, customers are emphasising technology innovation in operations involving high recovery and energy efficiency, as well as the rapidly growing global LNG supply chain, which is driven by rising demand for electrical energy and the desire to reduce carbon emissions.

Many of the world’s largest energy companies are also placing serious emphasis on the development of renewable energy technologies, making it the fastest growing source of energy, and accounting for half of the current growth in global energy supplies. If this continues, renewables will be the largest source of power within the next 20 years.

Globally, the centre of demand for all hydrocarbons – for fuels, petrochemicals and energy – continues to shift towards Asia, where most of the 3 billion people who are expected to achieve middle class status over the next two decades live and work…

Written by John Gugel, Honeywell UOP, USA.

This article was originally published in the March 2020 issue of Hydrocarbon Engineering. To read the full article, sign in or register for a free trial.

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/17032020/six-steps-for-success/