Shell Eyes Desulphurization Upgrades at German Refinery to Make 2020 Bunker Fuels

SHell's Rheinland Refinery. Image Credit: Shell

Royal Dutch Shell (Shell) Thursday said that, in response to the 0.50% sulfur cap on marine fuel coming into effect in 2020, it was investigating the possibility of upgrading the residue processing facilities at its Rheinland Refinery in Wesseling, Germany.

The aim would be to enable the desulphurization of heavy residues and, via further processing, to produce more light products, the oil major said.

Over the past few days, members of the refinery group were said to have held initial talks with local officials as well as representatives of environmental associations to present preliminary plans for the potential investment project.

Further discussions are planned.

The proposed expansion of the residue processing facilities would be part of a series of measures aimed at securing the future of the refinery "in a radically changing energy market" based increasingly on the principles of sustainability, the oil major added.

As previously discussed on Ship & Bunker, to comply with the new sulfur rules the vast majority of vessels are currently expected to switch to burning compliant MGO products, leaving refiners with serious questions over how they should handle a drop in fuel oil demand that could amount to some 4 million barrels per day.

Stephen George, Chief Economist at energy consultancy KBC, recently told Ship & Bunker that concerns over the durability of demand for product from land-based sectors made the issue particularly problematic for European refiners.

Indeed, a recent European-focused poll by KBC also revealed only 15 percent of respondents had a plan of how to cope with the impact of the 2020 sulfur cap.

Still, Shell said it welcomes IMO's decision to lower the sulfur cap for marine fuel but must adapt to the fact that the high sulfur residues previously used for the production of bunker fuels would no longer be marketable in the future.

"We want to present our new investment project at an early stage, that is to say clearly before the official documents for an approval procedure, even if we cannot answer all the questions now," Dr. Jörg Dehmel, head of technology at the Rheinland Refinery, said in a statement published on Shell's website (translated from German).

"At first we do not want to provide detailed information, but rather to listen and to get to know the opinions of others."

Shell says the Rheinland Refinery is the largest in Germany, processing more than 15 million tonnes of crude oil every year and producing 2.4 million tonnes of fuel oil.