Middle Distillate Refining Market Analysis by Global Segments, Growth, Size and Forecast 2019
Globally
refiners continue to face several challenges as environmental
policies are becoming increasingly stringent. The profitability of
refiner’s is influenced because of strict regulations on sulphur
content of gasoline & diesel oil and curbs on refinery emissions.
Agencies such as the International Maritime Organizationhas already
proposed changes in specifications of bunker fuel oil. These
regulations will drastically impact the refinery’s profitability
which would then have a tough time increasing or maintaining current
refining margins.
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Thus
those refineries which currently produce a substantial amount of
residual oil and lack the complexity to upgrade it to middle
distillates will face difficulties. They either have to invest in
commercially proven and reliable solutions to convert residual oil to
more valuable liquid products or face a threat to shut down the
refinery as the operation becomes uneconomicalto continue. With the
increasing crude oil prices and growing demand for middle distillates
refiners have felt the need to invest in this segment.
The
increasing demand for middle distillates is one of the primary driver
for this market. With strict environmental norms, the need to install
upgradation units is becoming a necessity if refiners want to stay in
the market. Globally the production of sweet grade crude oil has
declined and is costly if compared to sour grade crude. Thus to
maintain the refining margins the refineries need to install
upgradation units and increase the productivity of middle
distillates.The decision on which technique to use must be arrived at
before installation of such upgradation units. Some of the market
restraints hindering adoption of such units include huge capital
investments, high replacement lead time of the new unit with the
older one. However as the demand for high sulphur products is in a
downtrend due to strict environment policies, refiners need to invest
in conversion units in future. Thus there is definitely an
opportunity for players who wish to providerefiningsolutions in this
market segment.
Middle
distillates can be obtained using a number of process units. The
common processes are: Distillate hydrotreater, Fluid catalytic
cracking, Reforming, Hydrocracker, and Visbreaking. The decision on
which process to adopt depends on the sulphur content of the crude
oil and the configuration of end products desired. All these
techniques are adopted by refineries to break down heavy fractions
into more valuable lighter products. These refining processes are
also used to remove or lower the impurity content present in the
refined products, depending upon the market needs.
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The
current demand for middle distillates is not only expected to grow in
the US, Europe but also in the emerging markets. Currently refining
investment is mainly made in Asia-Pacific especially China and India,
theMiddle East, Russia and LatinAmerican regions. This is because of
increasing demand for refined products in these regions. Existing
refineries in these areas have to invest in deep conversion units to
comply with the strict product qualityspecifications. Some of the
major players present in this market segment are Warren Letzch,
Honeywell UOP and Grooves Equipments.
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