Companies hope to adopt advanced technology to meet new regulations

TIANJIN - Shell Global Solutions International BV (SGSI), a division of the energy giant Royal Dutch Shell PLC, said an increasing number of Chinese oil refineries are looking to use its platform to lower the sulfur content in low-grade oil and achieve quicker returns.

As Chinese demand for cleaner energy resources grows, energy players are exploring business opportunities to gain a share in the market.

SGSI says its platform helps refineries to improve operational performance, revamp equipment, and meet growing governmental product specifications and the differing global and regional regulations on emissions, said the company.

"China has a big market for high-end technologies in the refining industry because of the stricter carbon-emission standards which are due to come into force in 2012," said Suleyman Ozmen, vice-president of the refining and chemicals licensing department at SGSI. "They (refiners) have to make a profit in a difficult market, so they are urgently in need of the advanced technology."

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He declined to release the names of the companies that currently are in talks with his team, but noted, "We already have some clients, including CNOOC, PetroChina, and Sinopec, for the sulfur-technology platform."

China is facing the challenge of carbon-emissions reduction, and Beijing's municipal government will apply stricter requirements for gasoline next year.

The new sulfur content must be less than 10 milligrams for each milliliter of oil, which will require refineries to adopt advanced technology in order to achieve those standards, said Li Desheng, account executive of Shell Global Solutions (China).

"The new requirement will provide business opportunities for our platform," Li said.

China's processing market for residual oil (a low-grade form produced during the initial refining process) is also attracting the attention of foreign companies.

At present, the country produces 12 million tons of residual oil annually, but the production capacity will rise to 60 million tons by the end of 2020, said David McNamara, technological manager of the residue and upgrading department at CRI/Criterion Marketing Asia Pacific Pte Ltd.

"However, the current technology is not capable of processing the rapidly increasing amount of residual oil. The refineries will need a higher conversion rate for the production of gas and diesel," McNamara said.

Ozmen said refiners will benefit from his company's diagnostic approach, in which a configuration study is carried out to assess the customer's options in the short, medium and long term and then provide solutions according to the refiner's priorities for their technologies.

He didn't outline the exact cost of the diagnosis process, pointing out that it differs from refinery to refinery, but industry insiders said the price is likely to be high.