With the IMO regulations coming in 2020 about the sulphur cap, US refiners are preparing for the shift in the ship fuel supply. That change will increase demand for low sulphur fuels, and US refiners are ready to capture about 3m bbl/day global marine fuel market.
John Auers, vice president at consultant group Turner Mason & Company, said that distillates, such as low-sulphur vacuum gasoil (LSVGO), can be a key replacement, as the value of all low-sulphur fuels will increase.
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Refiners with heavy coking capacity will have an advantage. However, every refinery has different capabilities, something that will also play an important role, Mr. Auers mentioned.
The importance of distillates is confirmed by many officials, who say that across many US refiner’s earnings, distillate yields will be increased.
As Phillips 66 CEO ,Greg Garland noted, the company will convert its refineries from maximum production of gasoline in the summer months, to focus on diesel production.
Finally, ExxonMobil also said that a hydrocracker at its refinery in Rotterdam will reduce the use production of high sulphur marine fuel oil and will force the company to focus to fuels with higher value, such as Ultra-low-sulfur diesel (ULSD) .
