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- N┬░1 - March 2015
VeryOne Newsletter Issue n┬░3
Use of Cetane Improver during the Winter Period
EURENCO New Member of ATC
BUSINESS NEWS DIESEL
Rise of Diesel Fuel Consumption in the USA
In 2014, diesel cars and SUV in operation increased by 14% in the USA.
Although diesel cars currently represent a little less than 3% of the market (or 5 million diesel cars and trucks), the consensus among car manufacturers is that it will rise to 7% by 2020 to reach a little more than 10 million diesel cars and trucks on the road.
The graph below features the US states with the most important growth:
However, as it can be expected, this increase is not evenly distributed among the states. While those 10 states witnessed the biggest rise in diesel cars and SUV in 2014, the states actually hosting the most diesel cars are not exactly the same:
One can notice that these two tables do not share any state in common. Moreonver, while the states with the most diesel cars (in percentage) are Wyoming, Montana and Idaho, none of them are listed above. It seems that the current market in the US is transitioning into a more diesel-friendly state of mind, and that it is rather a general momentum towards this than some isolated cases cross the country.
From what we see, one can expect the diesel market to quit being a niche market in the US in the next few years.
The analysis of the diesel consumption emphasizes this rise. Between 2012 and today, distillate fuel supply shows a rise of 9%, for only 3% in gasoline.
Heavy Oil Outlook
Heavy crude oil contains every crude oil with an API degree of less than 23┬░. Its density is often related to the presence of aromatics and naphtenes.
Although the production of heavy crude oil represents only 19% of the global production in 2015, heavy crude oil constitutes 66% of the world’s oil reserves. This can be explained by the rise of production of shale oil in the US. However, things will inevitably change in years to come.
Today, unconventional heavy crude oil (crude oil with an API degree of less than 10┬░) represents 18% of the global heavy crude oil production. However, it is expected to reach 50% by 2025, and 70% by 2040.
Main producers of heavy crude oil and bitumen are Canada, Mexico, Saudi Arabia and Venezuela, with production averaging 1.6 million barrels per day, and growing. Canada and Venezuela are expected to be the producers with the most potential, with an increase of production of 150% and 80%, respectively.
However, heavy crude oil is also more expensive to process. It requires special equipment to pump, such as steam injection facilities, high powered electric pumps, and often equipment and additives in order to be transformed into usable fuel.
4th Latin American Refining Technologies Conference
(Miami, June 10-11)
On June 10th and 11th, 2015, Marcos Perello (EURENCO Inc. CEO), Pierre Elmerich (EURENCO Sales & Marketing Director) and Martin Torrez (North America Market Development) have attended the 4th edition of the Latin American Refining Technologies Conference (LARTC) in Miami (USA).
The LARTC has fast become the leading event for refining and petrochemical professionals from across the Latin American downstream sector. This year, the major subject was the opening of the Mexican Oil & Gas market to private companies. More generally, the conference have covered 3 decisive dimensions, namely macroeconomic overviews, management to optimize production and new technologies mostly related to FCC catalyst.
The VeryOne team found a good value in attending the conference that presented very positive outlooks for the Cetane Improver market. Among the subjects that have attracted most of our attention:
Two new agencies have been created for the transition: the Comisi├│n Nacional de Hidrocarburos (CNH) for upstream, and the Comisi├│n Reguladora de Energia (CRE) for the midstream, downstream and electricity.
The first moves have begun first quarter of 2015, with the first biddings in the exploration and production activity. They are now aiming for the liberalization of the price for finished products – like gasoline and diesel – within 3 years.
Production-Wise, Pemex refineries will operate a shift that will directly increase the production of diesel by 23 bbl/d. We assume that diesel will need Cetane Improver, as an increase of the FCC (Fluid Catalytic Cracking) to get more valuable gasoline is also scheduled, and the latter has a negative impact on diesel quality. The rise in diesel production (not only triggered by the shift of production) would reach 645 bbl/d by 2027. And as Brent-price related sales are more attractive, Pemex is now willing to sell to Europe, where diesel sp├ęcifications are the most demanding.
The Administraci├│n Nacional de Combustibles, Alcoholes y Portland (ANCAP)┬áhas reshaped its Grassroot refinery into a low-sulfur diesel plant. They presented the highlights of design work: from robustness and flexibility of the proces layout and control, through selection criteria for material and equipment, down to the choice of instrumentation and trip groups.
The desulfurization process of the diesel has a negative impact on the Cetane Number. In other words, the choice to get their fuel cleaner brings them to use more and more Cetane Improver.
The reshaping comes from the will of Uruguay to increase their diesel fuel standards to reach Euro IV. The latter has a Cetane Number specification of 51, versus 45 currently.
Diesel represents now 45% of the fuel market in Uruguay, accounting for Latin America becoming a growth target for EURENCO.