Americas News
IMO2020: US Refineries 'Well Placed' to Take up Higher Distillate Demand
Refineries in the United States are well placed to meet an increase in marine demand for low sulfur fuel oil following the International Maritime Organisation (IMO) rule change on sulfur content in force from 2020, a US-based consultant has said.
"Because of regulations that have been made [here in the United States], these new IMO regulations already set up [domestic refiners] well," John Auers of Turner Mason consultants was quoted as saying by industry news provider ICIS.
Auers pointed to distillates as the principal replacement for high sulfur fuel oil with low-sulfur vacuum gasoil (LSVGO) also making the grade as a suitable substitute.
Vacuum gasoil is used as feedstock in the refining process.
"LSVGO will be just as useful as replacement as distillate, but it can also be burned by ships," Auers said.
While the amount of distillate supplied will likely be reduced over time, the value of all low-sulphur fuels will go up, the consultant added.
In an earnings call, US refiner Phillips 66 has said that diesel production would be maximised during the summer months (the US driving season) while Exxonmobil said that a hydrocracker at its Rotterdam refinery would pave the way for a move from lower-value to higher-value refined products.
From January 1, 2020 all ships must use bunker fuel with 0.5% sulfur unless they have emission abatement technology installed.
