Clariant aims to make UK’s Bradford lab for cleaner fuels a global hub – exec

Jonathan Lopez

24-Jan-2020

BRADFORD, UK (ICIS)–Clariant’s refinery services division aims to make a newly opened laboratory in Bradford in northern England its global hub for research on cleaner fuel oils and marine fuels, according to the global head of refinery services at the Swiss chemicals producer.

Kay Kutschbach added that the IMO 2020 regulations mandating the shipping industry to use cleaner fuels was a “challenge for the entire industry” and represented an opportunity for Clariant’s additives to make more environmentally friendly fuels.

IMO 2020 implementation has been mixed across the board. While the mandate of reducing sulphur content from 3.5% to 0.5% has dominated the headlines and shipping companies have made advances, they are much more behind with the mandate for cleaner fuels.

Installing scrubbers in the vessels to clean up the fuel is an option, but each scrubber has a cost of $5-10m, according to Clariant.

The advantage would be they can still use heavy fuel oil (HFO), but retrofit capacities are limited globally and there remains a problem with the waste disposal.

A second option would be to use low sulphur fuel oil, but production capacities are not fully there yet and costs for that are high.

A third option would be to use liquid gas (LNG), which is a cheap fuel, but this option also means retrofitting new technologies and there is currently still a lack of LNG bunkering infrastructure globally.

All in all, Clariant said transportation costs may increase between 10% and 20% in 2020-2021 as many vessels may end up using more expensive marine gasoil. Moreover, transportation duration may increase by 30% as greener vessels travel slower.

Cleaner fuels is the business Clariant aims to tap into with its new additives. Refinery Services falls in the Oil and Mining business, part of the Natural Resources division, which in the January-September 2019 period posted Swiss francs (Swfr) 1.4bn ($1.44bn) in sales, out of the company’s total Swfr3.27bn.

Clariant’s Bradford laboratory will conduct tests replicating real field conditions and will be able to analyse any crude oil sample form all over the world.

The company believes there is a business opportunity in the change of crude slates in the downstream industry toward sweeter paraffinic crudes to reduce the sulphur at the beginning.

That is where Clariannt hopes the Bradford laboratory could play a role in those crudes with additive technology to allow better handling in the refineries.

IMO 2020: MIXED PICTURE
Regarding the mixed implementation of IMO 2020 regulations, Kutschbach said that while the lower sulphur content specifications were a clearer mandate, the shipping industry got to the deadline unprepared regarding cleaner fuels due to the lack of knowledge of what the final specification would be.

“While the sulphur content mandate was clear, fuel specifications regarding percentages or what it should look like was less clear. And if you are a ship owner and you have a multi-million euro-worth engine that is five storeys high and 20 metres long, you are hesitant about what to do,” he said.

“For old ships, they have to be out of action for five or six weeks [to retrofit scrubbers] so they are not earning money during that period. In an industry with low margins, ship owners delayed the changes as much as they could.”

It is this lack of clarity and delay that Clariant aims to tap into with its additives. Kutschbach would not disclose sales for those products, although said the company is getting many enquiries from customers all over the world about the additives for cleaner fuels.

Kutschbach, who is based in Frankfurt where Clariant has its main research and development (R&D) facilities, called Clariant Innovation Center (CIC), flew to the UK for the opening of the expanded laboratory installations in Bradford on 23 January.

UK THE RIGHT PLACE TO BE
According to Clariant, Bradford – sitting right in the middle of the UK – was a perfect location for the laboratory due to its proximity to key refineries in the country, as well as the proximity to Aberdeen, the hub for crude oil production in the UK coming from the North Sea.

Bradford would also be close to Europe’s largest port, Rotterdam.

“We wanted to use the expertise we already had here, and we wanted to use a central location for the whole world – Frankfurt is our global centre of excellence for lighter fuels like diesel, and Bradford will be our new centre of excellence focusing on heavier oils and crudes in transport and storage” said Kutschbach.

“While in Rotterdam you have a lot of terminals, we want to talk to the refineries. Taking this laboratory to Frankfurt would also have meant to relocate employees, and we didn’t want to do that. We also like the entrepreneurial spirit of our employees here in Bradford.”

Kutschbach (centre) cuts the ribbon at the Clariant laboratory opening in Bradford, UK, on 23 January
Source: Clariant 

Interview article by Jonathan Lopez

(Swfr1 = $1.03)

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