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Asia: ExxonMobil Singapore to switch to mainly ULSD output 2014

https://www.chemnet.com   Mar 11,2011 Platts
ExxonMobil's 605,000 b/d Singapore Refinery in Jurong will produce mainly low sulfur diesel from 2014 when its diesel hydrotreater is expected to be ready, industry sources said this week.

Once the hydrotreater is ready, the refinery will move away from producing high sulfur gasoil, which it mainly produces and exports now, to production of low sulfur diesel, including 50 ppm and 10 ppm sulfur gasoil, they said.

With the addition of the hydrotreater, the 605,000 b/d refinery's total low sulfur diesel capacity will increase to about 25 million liters/day, or about 157,233 b/d, by 2014, a company spokeswoman told Platts Wednesday.

Of this, 9 million liters/day or 56,604 b/d will be 10 ppm sulfur diesel, with the rest to be 50 ppm sulfur diesel, she said.

She declined to comment on whether the refinery will continue to produce high sulfur gasoil, but according to market sources, Singapore Refinery will phase out the production of high sulfur gasoil.

The exact production of gasoil yield currently from the refinery is not known, but sources based in Singapore estimate that about 30% of total output from the refinery is gasoil. This works out to about 180,000 b/d currently.

ExxonMobil is Singapore's largest producer of the high sulfur gasoil grade of 0.5% sulfur. Once supplies of the high sulfur gasoil are curbed, it is expected to have an impact on the market, traders said.

HIGH SULFUR GASOIL MARKETS DIMINISHING

As Asian countries impose stricter sulfur standards on gasoil imports, the physical market for 0.5% sulfur gasoil itself is dwindling as the years pass.

Indonesia is currently the biggest buyer of 0.35% sulfur gasoil in Asia, with state-owned oil and gas company Pertamina importing about 4 million-6 million barrels/month from the term and spot market and AKR Corporindo, a publicly listed company, buying about 1 million barrels/month.

There are very limited outlets left for the 0.5% sulfur gasoil, with Myanmar, Pakistan, Bangladesh, Madagascar, Cambodia, Somalia, Sudan and Ethiopia still using the grade for their domestic markets. The rest of the exports from refiners producing the 0.5% sulfur gasoil usually end up in the marine gasoil market in South China and Singapore, for storage or blending, traders in Singapore said.

As for 0.25% sulfur gasoil, Vietnam and China use it in the industrial sector, while Egypt imports 0.1% sulfur gasoil. Most countries appear to be shifting toward lower sulfur grades like 500 ppm, 50 ppm and 10 ppm as part of a cleaner fuels program.

Saudi Aramco was the latest to import 500 ppm sulfur into the Red Sea region from early this year, a change from 0.5% (5,000 ppm) sulfur gasoil earlier.

Kenya and Tanzania also recently moved from using 0.5% sulfur gasoil to 500 ppm sulfur material, which has further dampened demand, as these were two of the biggest remaining markets for high sulfur gasoil.

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