New Fuels?

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Madzng
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New Fuels?

Post by Madzng »

We've started talking about LNG as a fuel, but what other alternatives are out there for cheap fuel?

Fancy burning Bitumin in your engines? This was in Lloyds list just over 1 month ago.

NEXT month the boxship Sorø Maersk will make history by becoming the first commercial vessel that will burn a fuel that is 30% water.

The Danish vessel will embark on sea trials of a new type of marine propellant, known rather formally as Multiphase Superfine Atomised Residue. Approximately 70% of this fuel is made up of the bottom-most fraction of crude oil distillate, a sticky goo which is mostly compromised of bitumen and used only in its pure form to make asphalt. The rest is water, which mixes freely with the bitumen thanks to the judicious addition of emulsifying agents.

“We are trying to get the marine industry to switch to a completely new kind of fuel,” says Ian Williams, executive chairman of Quadrise, the London-based company hoping to bring the fuel to market next year.“The last time that happened was when the maritime industry switched from coal to diesel.”

Quadrise has a number of partners in refining, power generation and the maritime industry, including Maersk, which is investing in the technology in return for a royalty sharing agreement.

MSAR has one major advantage over other bunker fuels: it is cheaper. Quadrise International chief operating officer Jason Miles estimates the hydrocarbon fraction of MSAR could be sold at a 5% to 10% discount compared to normal heavy fuel oil. In a market worth more than $100bn annually, small numbers like these add up to massive savings. For a large marine company like Maersk, which spends approximately $3bn a year on bunker fuel, according to ASX Marine data, cost reductions amount to hundreds of millions of dollars annually.

Refining economics are the key to MSAR’s low price. Bitumen has already been fuelling the marine industry for decades. Heavy fuel oil is produced by mixing this gummy material up with distillate fuels to lower its viscosity. Distillate fuels sell for more on the open market than heavy fuel oil does, meaning the refinery can save money by using water as a solvent instead.

The discount does not come without trade-offs. For one, according to Matts Friis, a senior development manager at Finnish engine maker Wärtsilä, who has run tests on MSAR, the fuel leaves its mark. “You will need to service more frequently,” he says.

According to Mr Friis, MSAR performs particularly poorly at low engine loads, meaning a switch to conventional heavy fuel oil can be required under those circumstances.

Last, because the substance, which has similar calorific value as a heavy fuel oil, is diluted with 30% water, a ship needs more of it to pack the same amount of energy.

Whether it is worth the trouble is all a matter of pricing. “At a 10% discount, I believe it becomes interesting,” says Mr Friis. “There is definitely potential here.”

MSAR is not the first oil-in-water, or emulsified oil, maritime fuel to hit the market. BP developed a similar product, Orimulsion, with a Venezuelan state oil company in the 1990s . At its peak, Orimulsion sold some 4m tonnes annually, before being closed down. BP took another shot at creating a similar product five years ago at a Sicilian refinery, but discontinued its efforts when it reportedly ran into technical difficulties.

MSAR also has some limited environmental benefits. However, those hoping for a magic bullet to solve the sulphur emissions problem will be disappointed. Sulphur tends to collect at the bottom of the refining column, meaning the residue has higher sulphur content than heavy fuel oil from the same refinery. However, Quadrise is not competing with 0.1% sulphur distillates. “It is best for use with an onboard scrubber,” says Mr Williams.

According to Quadrise, MSAR emits no black soot. There are no current maritime exhaust regulations governing this type of pollution yet, but they are being considered in emissions control areas.

How MSAR will be brought to market is still uncertain. Quadrise hopes to set up its own production plants next year and is currently installing a small manufacturing plant in a Lithuanian refinery, which will produce fuel for the Maersk sea trials. The Danish container shipper is working with US class society ABS and Lloyd’s Register’s Fobas to ensure proper certification of the new product. Once done Quadrise will focus on commercialising the product, though the company knows it may take some time to get a significant market presence.

“We are working with clients that need to tick a lot of due diligence boxes,” say Mr Miles, but the company’s forecast for maritime sales is just shy of 2m tonnes per year by 2018 — a bit less than 1% of the global market, but still enough to generate approximately $1bn in bunker sales. What happens on board Sorø Maersk in the coming months will be crucial to its success in the maritime market.


Heres the link to Quadrise http://www.quadrisecanada.com/fcs-low-cost.php
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Sébastien
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Re: New Fuels?

Post by Sébastien »

Most oil majors are already converting their old refining lines so that all fractions below diesel fuel are reformed into petroleum coke. Soon most refineries will no longer have bunkers and bitumens because 'pet coke' is worth a lot more per ton and more light fractions can be produced in the modern lines anyway. I don't see the long-term benefit of these trials.
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Madzng
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Re: New Fuels?

Post by Madzng »

If the refineries are producing more profitable products the amount of fuel available to ships will reduce and prices will rise further.

The combined fuel bill for Maersk Line (Containers) and Maersk Tankers last year was in the region of 4,5 Billion USDs.

Almost all of the cost per container moved goes towards paying the fuel bill - this is why container companies are building bigger and bigger container vessels, to reduce this cost per container.

The tanker freight rates are also low at the moment.

If the trials go as well as expected, then there is a potential here to save up to 1 Million USD per day.
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Sébastien
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Re: New Fuels?

Post by Sébastien »

With those astronomic numbers I guess I would be the first to try anything.
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