De-Sul®

Frequently asked Questions

Are blended fuels competition?

Blending can be done to quite literally dilute the Sulphur, by mixing high Sulphur fuel with other fuel materials with low or no Sulphur content. The only materials that can be used as a dilutents are either HFO with less than 0.1% Sulphur or with a virtually zero Sulphur distillate (MDO /MGO). In order to produce <0.5% Sulphur HFO using 0.1% Sulphur fuel requires a 6:1 ratio of low Sulphur fuel to the HFO (30 Mt:5Mt) if the HFO has contains 3.5% Sulphur in the feedstock.

Hence the ratio of MDO to High Sulphur HFO will be 35:1 If a fuel of <0.1% is required. This all but completely removes the financial advantage of using this method to produce fuel. However, if the natural starting point of the Sulphur in the HFO is 1.5% then it will only take 15 tons of MDO to make a single ton of HFO into a compliant fuel.

In the past, problems have been encountered with blends as the materials tended to stratify and separate when left to stand in fuel tanks and ship board bunkers. This inconsistent mixing causes wear on scraper and fire rings on pistons and bores. Uneven combustion running of the engine and has been noted resulting in complete power loss in some instances.

Millions of dollars are currently being spent by the Oil Majors, (Shell, BP, Exxon, and Aramco, etc.) to solve these problems.

The other option for blending is to use ULSFO as the dilutent. This requires a very special Fuel produced from specifically low Sulphur crude oil.

What is the cost of production (Op-Ex)?

The Op-Ex cost of processing a single ton of fuel varies with the amount of Sulphur that must be removed from the feed stock. The required amount of reactant, and electrical power dictate this cost, with a slight increase in operational cost for higher amounts of Sulphur.

What is the production Capacity of a De-Sul® unit?

The system is designed to process 588 Metric tons per day. A utilization rate of approximately 95% allows ample time for preventative maintenance and best practice operational safety checks. The result is a process rate of 205,000 tons of fuel per year.

What is the Delta?

The “Delta” is the difference in prices between HFO and ULSFO. These prices are listed daily as a 20-port average between HFO/IFO 380 and MGO as per “Ship and Bunker” at www.shipandbunker.com The Net Delta is the difference between the two fuels minus the cost of processing.

How do we know the price of ULSFO will rise?

On the first of January 2020, the new Sulphur cap will come into place globally. The affect effect of this will be a massive change from ships burning HFO to burning ULSFO. Which will also increase demand for Ultra Low Sulphur fuel from a very low rate at this point in time to an unprecedented rate. Simply on the basis of supply and demand the price will rise for ULSFO. This will also increase the Delta between HFO and ULSFO not only because the price of ULSFO will rise, but also because demand for HFO will fall with a likely corresponding fall in that price as well.

How do we know the price of HFO will fall after 2020?

As the demand for HFO falls the price of this product will also be reduced. The only ships that will be permitted to use HFO as a fuel OR transport HFO will be the 1% of Vessels that are fitted with IMO approved scrubbers to remove Sulphur from the exhaust gas before the gas is released into the atmosphere however, with open-loop scrubbers the Sulphur salts will still be released into the ocean.

What is the difference between ULSFO and MGO/MDO?

ULSFO (Ultra Low Sulphur Fuel Oil) is a highly refined and treated version of HFO (Heavy Fuel Oil). This is black or dark brown in color and is within specification for HFO except for the Sulphur content which is below 0.1% as required by IMO 2020.

MDO/MGO (Marine Diesel / Gas Oil) is light color and has virtually no Sulphur content. At the outset of 2020 the main replacement fuel for HFO will be MGO/MDO as they comply with the regulatory requirements; however, it is likely that ULSFO will become more available at a lower price as if the larger refineries bring on new capacity to meet demand over the next 3-4 years.

At the outset of 2020 the main replacement fuel for HFO will be MGO/MDO as they comply with the regulatory requirements. However, it is likely that ULSFO will become more available at a lower price as the larger refineries bring on new capacity to meet demand over the next 3-4 years.

What is the specification of the finished fuel?

It is imperative that the processed fuel meet the specification laid out by the IMO through ISO 8217. This ensures the fuel can be handled by all marine equipment and is in specification for all Classification Societies standards. Fuel processed by The De-Sul® system not only meets these specifications but exceeds them.

What affect is there of removing Sulphur from fuel oil?

Sulphur is a very effective lubricant in fuel oil. By removing it there is a drop in the ability of fuel to lubricate the bore and injectors. The De-Sul® system corrects for this loss by adding a balancing agent which not only restores the lubricity of the fuel but also conditions the fuel and reduces particulate formation while reducing emissions. The De-Sul® system will monitor lubricity to ensure all specifications for the fuel are constantly met.

Why are the big refiners not going to use De-Sul®?

The large refiners have made a very strategic decision to only supply the ongoing demand for fuel in accordance with the IMO 2050 initiative, (a reduction in total carbon produced by shipping by 50%) This in essence means that the investment by the refiners will be sufficient to supply the majority of the shipping requirements for fuel for the next 30 years; however, it does mean that there is a significant opportunity for the next 20 years to take advantage of the undersupply by using the De-Sul® equipment.

Why does the feedstock HFO need to be within specification?

By ensuring all the elemental components of the original feed stock fuel going into the De-Sul® system are in range, critical metals and other materials are guaranteed to be in range in the final processed fuel. The De-Sul® unit is specifically designed to work with the existing HFO specification.

The De-Sul® unit is specifically designed to work with the existing HFO specification and is not a refining process that can work to replace refining Crude oil.

What is the attraction for Bunker suppliers?

Bunker suppliers are a global distribution network of fuel suppliers to all shipping, without which shipping would grind to a complete halt. This essential service industry supplied fuel from refineries or other fuel distributors and bunkers ships directly. By sharing the Net Delta produced by the De-Sul® units with the Bunker companies, the profits are retained in this area of the supply chain independent of the refiners.

How many units will be built?

If the entire world requirement for ULSFO were to be met by De-Sul® units 1800 units would be needed. It is understood that the large refineries are going to build enough strategic capacity to supply about 50% of this amount. This leaves 900 De-Sul® units. Due to governmental regulation and high-risk areas such as war zones embargo areas, and slow to change shipping interests, the number of De-Sul® units’ market is reduced by a further 500 units to 400 units in total. Approximately 100 units in 2020 and 140 units will be built in 2021 meet this demand.

Why are the big refineries only building capacity for half the market?

The large refiners have made a very strategic decision to only supply the ongoing demand for fuel in accordance with the IMO 2050 initiative, (a reduction in total carbon produced by shipping by 50%) This in essence means that the investment by the refiners will be sufficient to supply the majority of the shipping requirements for fuel for the next 30 years; however, it does mean that there is a significant opportunity for the next 20 years to take advantage of the undersupply by using the De-Sul® equipment.

What is the biggest competition to De-Sul®?

Recent reports show that individual governments are taking steps to ban ships with scrubbers from their territorial waters as the open-loop type require the chemicals scrubbed from the exhaust to be flushed into the ocean (further industrialization pollution.) This is also under close scrutiny by the IMO and will most likely result in changes in legislation and further curtail the numbers of scrubbers being installed. As of July 2019 China has banned open loop scrubbers from its territorial and inland waters.

How long does it take from the time of order to get my De-Sul® installed?

A site survey and foundations as well as piping, power and communications should be prepared while your unit is in build and be ready for receipt of the unit as soon as possible. Delivery of the unit will depend on site location and the ability to secure ship transport to your dock. Cranes and heavy lift crawler (55 ton) is required for the unit transport to the site. Overall it will take up to 8 months to deliver your unit from the start of build.

How many units are available per year?

Our initial build goal is 100 units in the year of 2020, with the intent to increase to 140 units in 2021.

How many staff will be required by customers to run a De-Sul® unit?

De-Sul® trained technicians will be on site 24/7 to provide hands on operation and maintenance as well as security for the unit and the IP. This means that the bunker supplier can operate the business of supplying fuel as if there was no difference to their business. There is no requirement to supply engineers or maintenance crews. This will be managed by the De-Sul® team.

Are there test results proving the effectiveness of the De-Sul® system?

Test reports are available that show conclusively that the system removes Sulphur from HFO. These reports can be requested from our contact page. . Customers should strongly consider a visit to our pilot plant to see for themselves.

What is the financial benefit to the customer installing and running a De-Sul® system?

At the current net Delta each De-Sul® unit utilized to its design potential will generate in the region of $16 Mil per year to the Customer using a cost of approximately $65 per ton processing on the global average Sulphur of 2.78%.

This return is likely to increase for a period after January 2020 as the delta widens, and then later when the value of HFO falls which will once again widen the spread.

What is the possibility of the Delta Spread Narrowing?

Analysis shows the delta will widen not because the price of ULSFO increases dramatically, but, rather than the cost price of HFO, our feedstock, will decrease. Evidence of this in the potential uses of the inevitable byproduct from the refining process, in the areas of carbon black production, multi-cycle refining and the production of electrical power. The backstop for the price of HFO is the current ton equivalent price for coal (the most utilized carboniferous fuel) at $30 per ton; a likely use for the overproduction of HFO after 2020.

Will There continue to be a supply of HFO?

HFO is a residual material which is what remains after all other useful chemicals and fuels are distilled off Crude oil. As such HFO will continue to be produced as long as gasoline, diesel, jet fuel, kerosene and solvents are being made. HFO was a very convenient way for the refineries to dispose of the refining waste bottoms product for many years to the shipping industry. The post 2020 uses for HFO will continue for ships that are fitted with scrubbers and allowed into permitted waters, and onshore electrical power production plants. Power production plants that are now fired with coal, may elect to also burn HFO if the price drops to or below the price equivalent of Coal which is currently at $30 per ton.

This value is likely to increase for a period after January 2020 as the delta widens, and then later when the value of HFO falls which will once again widen the spread.

Can the IMO change their mind on 2020 Sulphur cap?

uring MEPC 73 the IMO have roundly rejected the proposal put forward by the US government and shipping groups asking for a learning period.

This situation is somewhat stabilized further by the number of ships that have already been fitted with scrubbers and whose investments would be wasted if the Sulphur cap did not go into place.

De-Sul

Locations

Green Framework LLC
Huntington, New York 11743, USA
P: +1-631-683-8467
E: Info@green-framework.com

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