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South Africa—Africa’s clean fuels leader?

07.01.2014  |  Nichols, L.,  Gulf Publishing, Houston, TX

In response to new legislation, refiners around the world are implementing operational and processing changes to reduce sulfur levels in their transportation fuels.

Keywords: [clean fuels] [refining] [sulfur]

Around the world, legislation mandating decreased emissions and lower levels of airborne pollutants is coming into effect. In response, refiners are implementing operational and processing changes to reduce sulfur levels in transportation fuels.

Notable clean fuels projects are already being constructed in Saudi Arabia and Kuwait. To comply with mandatory sulfur specifications for gasoline and diesel between 2013 and 2016, Saudi Arabia plans to spend billions of dollars to construct multiple clean fuels projects. Saudi Arabia is seeking to reduce sulfur content in diesel and gasoline to 10 parts per million (ppm), and to lower benzene content in gasoline to 1%.

Kuwait National Petroleum Co. (KNPC) is investing $31 billion (B) in projects to modernize the country’s Mina Abdullah and Mina Al-Ahmadi refineries, as well as to construct the region’s largest refinery, the Al-Zour plant. The Clean Fuels Project and the New Refinery Project are ambitious plans to overhaul Kuwait’s refining sector.

South Africa is also implementing its own clean fuels program. South African Petroleum Refineries (Sapref), a joint venture (JV) between Shell SA Refining and BP Southern Africa, and National Petroleum Refiners of South Africa (Natref), a JV between Sasol and Total, are each planning their own clean fuels projects. Sapref’s Clean Fuels 2 and Natref’s Clean Fuels 2 projects will help improve the quality of transportation fuels by reducing levels of sulfur, benzene and aromatics, thereby meeting enhanced legislative requirements for cleaner-burning transportation fuels.

To develop clean fuels, and to prevent a fuel shortage, South Africa’s national oil company, Petroleum Oil and Gas Corp. of South Africa (PetroSA), along with partner Sinopec, plan to construct one of Africa’s largest refineries. Project Mthombo is a $10-B, 300-thousand-barrel-per-day (Mbpd) refinery that will be constructed near Port Elizabeth. Project Mthombo, along with Natref’s and Sapref’s Clean Fuels 2 projects, have the ability to ensure that South Africa modernizes its refining industry to reach international transportation fuel standards. These initiatives have the ability to make South Africa the continent’s new clean fuels leader.

Refining operations

South Africa has the third-largest refining capacity in Africa, surpassed only by Algeria and Egypt. About 95% of South Africa’s crude oil requirements are met by imports from the Middle East and Africa. Major domestic refining operations are located at four refineries (Fig. 1). These include Sapref and Enref (Engen Petroleum), both located in Durban; Chevref (Caltex Oil SA/Chevron), located in Cape Town; and Natref, located in Sasolburg. Total domestic refining capacity is 485 Mbpd (Table 1). With the addition of Project Mthombo, domestic refining capacity could climb to nearly 800 Mbpd.

 
  Fig. 1. Operating and proposed
  South African refineries.


 

South Africa also produces synthetic fuels from low-grade coal and natural gas, using coal-to-liquids (CTL) and gas-to-liquids (GTL) technologies. Sasol’s Secunda CTL plant consists of two production units. The Secunda CTL plant produces 160 Mbpd of liquid fuels, making it one of the largest CTL plants in the world.

Sasol also operates the Mossel Bay GTL plant. The GTL plant utilizes Fischer-Tropsch technology to produce 45 Mbpd of synthetic liquid fuels, of which more than half is gasoline.

Clean fuels mandate

South Africa lags behind many developed nations in fuel quality standards. Presently, the majority of South African transportation fuels are graded at Euro 2 specifications. These fuels contain anywhere from 300 ppm to 500 ppm of sulfur. The country’s ultimate goal is to develop Euro 5-specification fuels. This would entail developing fuels to contain 10 ppm or less of sulfur, the lowering of benzene from 5% to 1% and the reduction of aromatics from 50% to 35%.

Achievement of Euro 5 fuel specifications would allow the country to import more modern, low-emissions vehicles. Most modern cars cannot be imported into South Africa because the lower quality of local fuels would damage the cars’ engines. Importeed cars with sophisticated engines must be reverse-engineered to accept the inferior fuels. To combat this issue, South Africa is implementing higher fuel standards to reach Euro 5-specification fuels by the end of the decade.

The South African government is implementing new regulations to curb sulfur in transportation fuels. The initiative, Cleaner Fuels Program 2 (CF2), was announced in 2012. The new fuel standards call for upgrades to all of the country’s existing refineries. The CF2 program has several major objectives:

  • Raise the quality of South Africa’s fuels
  • Reduce emissions
  • Encourage trade with the global market
  • Allow for greater access to new vehicle technology
  • Protect jobs in the value chain, including refining, car manufacturing and related sectors.

The CF2 program was initially designed to begin in 2017, but it has been pushed back to 2020. The extended deadline provides South African refiners with time to make the necessary upgrades to produce cleaner fuels and is a more realistic timetable for the program’s implementation—one that could cost South African refiners billions of dollars in upgrade costs.

Natref Clean Fuels 2

Natref is a JV between Sasol and Total South Africa. Natref operates an 88-Mbpd refinery in Sasolburg. The refinery is designed to process heavy, high-sulfur crude oils. To meet future government requirements mandating increasingly strict emission standards, the company is implementing the Clean Fuels 2 project. The ultimate goal of the Clean Fuels 2 project is to upgrade the refinery to reduce the concentration of sulfur in both gasoline and diesel, thereby meeting Euro 5 specifications for transportation fuels.

The project will add, revamp or upgrade the following units:

  • A new C6/C7 splitter will be added to minimize benzene precursors to the catalytic reformer
  • A new naphtha hydrotreater and a new isomerization unit will be added
  • A new reformate splitter column will be added downstream of the catalytic reformer
  • The existing diesel hydrotreating unit will be revamped
  • A new desulfurization unit will be added
  • A new amine system for new unit offgases will be installed
  • A new sour water stripper will be added
  • A new hydrogen plant will be built to increase hydrogen production.

Additional construction includes new cooling towers, a new steam and condensate recovery system, a new flare system, new electricity substations and new storage tanks.

Fluor was awarded a basic engineering services contract for the project in June 2013. The award followed Fluor’s work on the feasibility study and conceptual engineering for the project. The project is scheduled to be completed by 2017.

Sapref Clean Fuels 2

The Sapref refinery is the country’s largest refinery. The 169-Mbpd refinery is located in Durban, on the east coast of South Africa. The refinery accounts for nearly 35% of the total domestic refining capacity. As with the Natref clean fuels project, Sapref is conducting its own clean fuels project.

The Clean Fuels 2 project is a substantial upgrade to the existing refinery. The modernization program aims to improve the quality of transportation fuels through a reduction in the levels of sulfur, benzene and aromatics. The project was scheduled to be completed by 2017 to adhere to new government regulations, but Sapref has pushed back the completion date to be more in line with the South African government’s 2020 deadline.

Fluor has completed the project’s front-end engineering design (FEED) phase. A detailed design and engineering package has also been compiled. The project’s next step is the award for engineering, procurement and construction management (EPCM). With the deadline for the clean fuels mandate pushed back to 2020, the EPCM contract is likely to be awarded in the next few years.

Project Mthombo

The Mthombo plant, if built, will be one of the largest refineries in Africa. The $10-B, 300-Mbpd refinery will be constructed in the Coega Industrial Development Zone near Port Elizabeth. The construction of the refinery will accomplish two goals. The first goal is to prevent a shortfall of domestic refined fuels. The country’s growing demand for transportation fuels is outpacing the country’s refining capacity. Demand for transportation fuels is forecast to grow to more than 400 Mbpd by 2020. If no investment is made, the country will be forced to import almost 200 Mbpd by 2020 to satisfy demand. Additional refining capacity is needed to address domestic supply challenges and reduce imports.

Secondly, the modern refinery will have the ability to process medium-sulfur and high-sulfur crude oils to produce higher-grade fuels, thereby meeting the government’s mandate for Euro 5-specification fuels.

If greenlighted, the massive refinery project is scheduled to be completed by the end of the decade. HP



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Reggie Seshoene
07.24.2014

Currently we do have both 50ppm and 10ppm fuels in South Africa but the former is mainly imported and the latter produced by SASOL. This company uses CTL technology (due the low sulfur content in coals) and it would take a lot of capital investment for other South African refineries to upgrade their infrastructure (desulfurization units and so on). As a result CF2 programme start-up has been pushed over to 2017. This gives the companies time to plan and phase their respective investment with due diligence

Hirak Dutta
07.21.2014

Good that lot of investment is planned in SA including enhancing refinery capacity. Yes, South Africans must reduce the S content in HSD from the current level of 300-500 ppm to 50 ppm and then move towards 10 ppm. It would require lot of investment for SA to reduce S from the current level of 300 ppm to 10 ppm & to reduce the benzene content of MS. in India, at all major cities, the current S level is 50 ppm in HSD. Benzene in MS is less than 1%. Kudos!!

purnasekhar
07.17.2014

good project

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