European refineries are the least prepared as IMO 2020 regulation looms large

Digital investment outweighs capital expenditure to help ride the storm

Ron Beck, industry marketing director at Aspen Technology.
Ron Beck, industry marketing director at Aspen Technology.

European refineries expect the largest impact from new IMO 2020 regulation, yet just 23% of these refineries are focussing on operational improvements targeting higher availability to make low sulphur fuels, according to a global study of senior employees in the refining industry, commissioned by Aspen Technology.

The survey also revealed a shortfall globally in refineries with this focus on clean fuels, with just 37% claiming to be doing that as a result of IMO 2020.

However, four out of ten (43%) refineries globally are focusing on operational improvements targeted at improved overall utilisation, relying on digital investment to secure operational efficiency improvements, with mid-sized refineries focussing on this most, in a ‘survival of the fittest’ battle in the lower quartiles.

Nearly two-thirds of oil refineries, globally, (64%) have not made any capital expenditure against IMO 2020 regulations.

The study also found that refineries expect fuel oil production is likely to fall as a result of IMO 2020, with more than a third (34%) of refineries globally expecting to produce less fuel oil in 2020, while just 24% expected to increase production.

Ron Beck, industry marketing director at Aspen Technology, said: “We are in a challenging period, but there are still many margin improvement opportunities refineries can make. There are two clear options to help them compete: operational improvements to increase utilisation, or increased availability. Today’s technology can improve both.”

Beck added: “Given the overall reduction in production that IMO 2020 is likely to bring, fuels that enable shippers to comply will be comparatively more valuable in the market. It is concerning that most refineries are failing to focus on improved utilisation. Such investment is becoming ever more urgent as IMO 2020 approaches. Digital approaches can significantly help operators who have yet to decide on capital investments.”

The study also discovered that a third of refineries (33%) are upgrading equipment to process higher sulphur oil. Only 29% of plants are shifting to use lower sulphur crude slates to help cope with the regulation.

It appears likely that fuel oil production could fall as a result of IMO 2020, with more than a third (34%) of refineries globally expecting to produce less fuel oil in 2020, while just 24% expected to increase production.

BPCL Mumbai refinery in India achieved 90% improved sulphur recovery in under six months in 2018 by implementing digital twinning on their sulphur removal processes.

For the latest refining and petrochemical industry related videos, subscribe to our YouTube page.

For all the latest refining and petrochemical news from the Middle East countries, follow us on Twitter and LinkedIn, like us on Facebook.

You may also like

Building strong teams: Interview with Tareq Kawash, SVP for EMEA, McDermott
“If you look at a career of 30 years, it is a pretty long time, but what I have done throughout my career is build strong teams. I am proud to say that I have a formidable leadership team in the EMEA region, many of whom I have worked with for years,” says Tareq Kawash, senior vice president for Europe, Middle East and Africa, McDermott
Emerson unveils workplace dstancing, contact tracing technology to help manufacturers protect workers
Location Awareness technology helps manage workplace density, improve worker safety and ensure business continuity during global pandemic
AVEVA prioritises cloud strategy in order to respond to the demands of the new normal
Company expands core capabilities with new cloud-based solutions designed to enable increased collaboration in a transforming world
Will hydrogen be the next ‘oil’, fuelling the global economy?
The transition to a cleaner energy system, diversifying the fuel mix, and improving energy security are all energy policy goals that can be addressed by hydrogen. The cleanest one of all is ‘green’ hydrogen, which is generated by using renewable energy sources without producing carbon emissions in the first place, comment Ekaterina Kalinenko and Sonia Sanchez

MOST POPULAR