Sulphur Industry News Roundup

Sulphur Industry News

GERMANY

Shell to build green hydrogen plant for refinery

Shell Deutschland has taken a final investment decision (FID) to progress REFHYNE II, a 100 MW renewable proton-exchange membrane (PEM) hydrogen electrolyser at the Shell Energy and Chemicals Park Rheinland in Germany. Using renewable electricity, REFHYNE II is expected to produce up to 44 t/d of renewable hydrogen to partially decarbonise site operations. The electrolyser is scheduled to begin operating in 2027. Renewable hydrogen from REFHYNE II will be used at the Shell Energy and Chemicals Park to produce energy products such as transport fuels with a lower carbon intensity. Using renewable hydrogen at Shell Rheinland will help to further reduce Scope 1 and 2 emissions at the facility. In the longer term, renewable hydrogen from REFHYNE II could be directly supplied to help lower industrial emissions in the region as customer demand evolves.

Shell says that the REFHYNE II project has been enabled by supportive policies, including the European Union’s (EU) binding targets for the use of renewable hydrogen, and the German Federal Government’s regulatory framework. The project has also received funding from the EU’s Horizon 2020 research and innovation programme.

“Today’s announcement marks an important milestone in delivering our strategy of more value with less emissions. Investing in REFHYNE II is a visible demonstration of our commitment to the hydrogen economy, which will play an important role in helping to decarbonise Shell’s operations and customer products,” said Shell’s Downstream, Renewables and Energy Solutions Director Huibert Vigeveno. “Our decision to invest illustrates what can be achieved with the right enabling conditions to deliver competitive projects.”

Shell plans to invest $10-$15 billion across 2023-2025 to support the development of low-carbon energy solutions including e-mobility, low-carbon fuels, renewable power generation, hydrogen, and carbon capture and storage. In the Netherlands, Shell is currently constructing Holland Hydrogen I with a capacity of 200 MW, one of Europe’s largest renewable hydrogen plants.

SAUDI ARABIA

Aramco to acquire majority stake in Petro Rabigh

Aramco has signed a definitive agreement to acquire an additional stake of approximately 22.5% in the Rabigh Refining and Petrochemical Company, the refining and petrochemical complex located on Saudi Arabia’s west coast, from Sumitomo Chemical for $702 million. Aramco and Sumitomo Chemical currently each own 37.5% of shares in Petro Rabigh, which was listed on the Saudi Exchange in 2008. Upon completion of the transaction, which is priced at 7 riyals per share, Aramco will become Petro Rabigh’s largest shareholder with an equity stake of approximately 60%, while Sumitomo Chemical will retain an equity stake of 15%.

Under the terms of the agreement, all proceeds received by Sumitomo Chemical from the sale will be injected into Petro Rabigh, through a mechanism to be agreed with Petro Rabigh. Aramco will also provide additional funds to Petro Rabigh, via a mechanism also to be agreed, matching the $702 million from Sumitomo Chemical, to improve Petro Rabigh’s financial position and support the company’s future strategy. In addition, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans of $750 million each, which will result in a $1.5 billion direct reduction in Petro Rabigh’s liabilities. The move will keep Rabigh afloat after it had accumulated a reported 8.87 billion riyals ($2.36 billion) in accumulated losses according to a statement issued in June this year. Aramco and Sumitomo also plan to upgrade the refinery with the aim of helping improve the profitability of the business.

BAHRAIN

BAPCO funding for oil and gas expansions

Bahrain’s state-owned BAPCO Energies has secured $500 million from the United States Export-Import Bank (US EXIM) to develop its energy resources. The funding will be used to expand operations at the Bahrain Field Expansion and Development Programme in the southern part of the country, the company said in a statement. The medium-term development programme comprises several oil and gas projects to maximise onshore oil and gas production as well as recovery. The programme includes the drilling and commissioning of new gas wells and appraisal of the newly discovered resources. It also involves drilling and commissioning new oil wells and developing additional oil production facility enhancements.

ARGENTINA

Low sulphur fuel programme

Argentina’s state owned oil company Yacimentos Petroliferos Fiscales (YPF) is reportedly moving ahead with a modernisation programme for its Luján de Cuyo refinery in Mendoza province. The refinery currently produces 100,000 bbl/d of fuels, but increased deliveries of light crude to the refinery from the Neuquén basin following expansions of the Puesto Hernández-Luján de Cuyo and Vaca Muerta Norte pipelines have prompted the site’s proposed capacity expansion. The $600 million modernisation programme includes construction of a hydrogen plant and a 20,000 bbl/d diesel hydrotreater at the Luján de Cuyo industrial complex, aligning the refinery with Argentina’s fuel specifications by reducing the sulphur content of the fuel from 50 ppm to 10 ppm.

NIGERIA

Dangote in row over sulphur content of fuel

Aliko Dangote, the president of Dangote Industries Limited (DIL) has found himself in a row with the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) over the sulphur content of fuels produced by the new Dangote refinery in Nigeria. Africa has long lagged the rest of the world on regulations for sulphur content of fuels, and until March Nigeria permitted imported fuels to contain up to 3,000 ppm of sulphur. Even then, some fuels were reportedly higher still at up to 7,000 ppm, and Africa had become something of a ‘dumping ground’ for refiners unable to sell high sulphur fuel into other markets. However, Nigeria moved to a 200 ppm domestic sulphur limit in March 2024. The NMDPRA had said that Dangote was, like other Nigerian refineries, producing fuels with between 650-1200 ppm sulphur, but Aliko Dangote was able to prove that a sample from the Dangote refinery clocked in at 87 ppm sulphur, and said that as sections of the refinery continued to come on stream, he expected to move to 50 ppm in the near future and down to 10 ppm by 4Q 2024.

KAZAKHSTAN

Chevron says Tengiz growth project is on track

Chevron CEO Mike Wirth said in the company’s 2Q conference call that commissioning continues for the $47 billion upgrade projects at the Tengiz oilfield, the largest in Kazakhstan. Chevron has a 50% stake in the Tengizchevroil (TCO) joint venture, along with partners ExxonMobil (25%), KazMunayGas (20%) and Lukoil (5%), and is leading the development. Commissioning of the two-phase expansion started with high-to-low pressure conversions at the field’s facilities under the Wellhead Pressure Management Project (WPMP), with the second phase, the Future Growth Project (FGP), due to begin later in 3Q 2024. FGP will boost the field’s crude production by 260,000 bbl/d to a target of 1 million bbl/d. The current production sharing agreement runs to 2033, but there is as yet no news of an extension.

KPO achieves gas reinjection

Meanwhile, at the Karachaganak field, the Karachaganak Petroleum Operating company, (KPO), a joint venture between Shell (29.25%), Eni (29.25%), Chevron (18.0%), Lukoil (13.5%) and KazMunayGas (10.0%), says that it has achieved first acid gas reinjection at the KEP-1A Project, enabling gas from the Karachaganak Processing Complex (KPC) to be reinjected into the reservoir through the new KEP-1A gas reinjection system for the first time. This milestone, the most critical in the KEP-1A Project, was safely completed one month ahead of schedule. The compressor is set to significantly boost gas reinjection volumes, maintaining reservoir pressure and extending the field’s liquid production plateau. The project has progressed successfully despite external challenges such as geopolitical tensions, logistical restrictions, and supply chain crisis.

It is also reported that KPO is preparing an engineering, procurement and construction (EPC) contract award for constructing a gas processing facility at Karachaganak which would feed about 3.6 billion cubic metres per annum of dry gas to the Kazakhstan and exterior markets.

ANGOLA

Cabinda refinery aiming for end of year

Commissioning for the first phase of the new Cabinda refinery is expected to begin by the end of 2024, according to Gemcorp Holdings, the developer and 90% majority shareholder in the project (the remining stake is held by state oil producer Sonangol). The 30,000 bbl/d facility is expected to reach full capacity by July 2025. The first $473 million phase of the modular refinery will produce naphtha, jet fuel, diesel and heavy fuel oil (HFO), with the naphtha and HFO destined for export markets. Overall, the refinery will supply around 10% of Angola’s domestic fuel market.