Looming Clean Fuels Deadline Boosts Oil & Gas Industry Construction: Focus Now is on Time- and Cost-Efficient Partners
Oct 21, 2005
With U.S. refiners well into the final implementation stage of complying with mandates for producing ultralow sulfur gasoline (ULSG), the industry is now gearing up for an even bigger investment to meet demands for ultralow sulfur diesel (ULSD) by June 2006. And in a recent review of diesel fuel pre-compliance reports by over 120 refineries, the U.S. EPA expects that 95% of highway diesel fuel produced by that date will meet the new standard of 15 ppm sulfur content.
The cleaner air gains (expected to help combat ground-level ozone) primarily come through the use of catalytic converters, which are being required for the first time in new diesel vehicles. The converters require the use of lower sulfur fuels to operate effectively.
In addition to the new fuels that will reduce an additional 2.6 million tons/year of nitrogen oxide emissions from our air, this new formula also spells out a challenging schedule for the engineering and construction of the new and adapted process units necessary for their production.
Global refining operations say that spending over the next few years will be dominated by such conversions. Adopted in 2000, the diesel industry has been moving toward these standards for years through investment in research and new technologies. But now the push is on to construct new or retrofit existing systems capable of producing them. The EPA anticipates 21 new units will be constructed and 60 refineries will retrofitted in order to meet the deadline.
These technologies have depended on the type of site producing them, but most around the world are hydrogen-based, using hydrotreaters instead of hydrocrackers. In the U.S., costs for such conversions are estimated at $8 billion for ULSG and between $9-15 billion for USLD. The typical cost for a new 30,000 b/d hydrotreater alone at a refinery on the Gulf Coast is estimated at between $35-45 million.
But the twin challenges of high costs and an increasingly tight timeframe for the industry are precisely what Jeff Latture of Barnhart Crane & Rigging feel give his company the edge in helping to meet these needs. "We've long been know as problem-solvers in the engineering and construction industry, but I can't think of a better use for our patented Modular Lift Tower [symbol]. Efficiency in terms of both costs and time are so critical to the oil & gas industry right now in meeting these low sulfur diesel mandates, and that's precisely the reason behind the innovation of the MLT. This flexible equipment is an extraordinary alternative to the traditional heavy lift crane, with its ability to quickly pull out old equipment and install new technologies."
Barnhart has already assisted a number of refiners with the challenge, but expects this business to peak next year. This tracks with EPA's survey which revealed that only a little over half of all estimated construction needed in order to reach the mandate has yet been reported by refiners.
Barnhart Crane and Rigging (www.barnhartcrane.com) is leading supplier of specialized heavy rigging and transportation solutions. Through its US network of branches, they provide a full range of crane and rigging services, project cargo logistics and heavy equipment storage at their Heavy Lift Terminal at the Port of Memphis. In addition to branches in the US, Barnhart also has a facility in Sao Paulo, Brazil.
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