GLOBAL REFINERY UPDATES
Oil refining is one of the largest markets for hydrogen, accounting for about 32 Mtpa or 30-35% of global hydrogen demand in 2020. Hydrotreating and hydrocracking are the major refinery processes consuming over 90% of hydrogen in the refining sector, and they are used to reduce sulphur from finished products, and to increase yield of transport fuels, respectively. Wood Mackenzie research director Sushant Gupta said:
“Low-carbon hydrogen has the potential to replace on-purpose hydrogen as a feedstock if low-carbon hydrogen becomes cost competitive and policy support develops over time. Potential global market size for low-carbon hydrogen in this segment could be up to 10 Mtpa by 2050 delivering a 10% or 100 Mtpa reduction in overall scope 1 and 2 global refinery carbon emissions. But the real game-changer is in replacing fossil fuels in combustion applications to generate heat and steam.”
By 2025, Saudi Aramco and Sabic expect to have a facility that will make 9 million metric tons (t) of petrochemicals directly from 400,000 barrels (bbl) per day of Arabian light crude oil. Whereas most refineries convert just 5–20% of incoming oil into petrochemicals, some 45% of the output of the Yanbu facility will be chemicals, including olefins, aromatics, glycols, and polymers. By 2030, demand for gasoline and other fuels will be on the decline.
The petrochemical sector, in contrast, still has room to grow. Oil companies and engineering firms have noticed. They are installing new equipment and even designing new processes to seize on the trend. According to BP’s 2018 Energy Outlook, the share of the average oil barrel dedicated to transportation fuel will peak at 58% in 2025 and begin to decline. Oil consumed by industry, buildings, and power will also slump. Chemicals, however, will continue to grow, from 16% of oil demand in 2020 to 20% by 2040.
Industry giant Shell plans to build a major hydrogen plant in the Netherlands. This facility would be “Europe’s largest renewable hydrogen plant” when operations begin in 2025. According to Shell, the 200 megawatt electrolyzer will be located in the Port of Rotterdam,
Europe’s largest seaport, generating as much as 60,000 kilograms of renewable hydrogen every day. Hydrogen has a diverse range of applications, and can be produced in a number of ways, with one method including using electrolysis, with an electric current splitting water into oxygen and hydrogen.
First announced in 2019, QatarEnergy and its partner Chevron Phillips Chemical – a joint venture between Chevron and Phillips 66 – awarded a contract for early site works for a petrochemicals project in Ras Laffan that is expected to boost Qatar’s polyethylene production capacity by more than 60%. The project will feature the Middle East’s largest ethane cracker, with 2.08 million mt/year capacity, along with two high-density polyethylene units.
Meanwhile, Japan’s ENEOS and Mitsui agreed with the UAE’s Abu Dhabi National Oil Co. to launch a joint study to evaluate the development of a large commercial 200,000 mt/year clean hydrogen supply chain between the UAE and Japan, the companies said in a joint statement.