Europe's refiners are holding back spending as they await completion of European Community Commission legislation to tighten diesel fuel sulfur level requirements and cut environmental emissions (OGJ, Jan. 25, p. 29).
But there has been enough work around to keep engineering contractors interested, as Pierre Hibble, manager of the refining division at Stone & Webster Engineering Ltd., Milton Keynes, U.K., explained.
"In a lull, refiners always want a study," Hibble said. "Added value projects such as small revamps also are in demand, especially those that give a rapid return on capital. "
Fluid catalytic crackers (FCCs) have been the linchpin of Stone & Webster's refining operations in recent years. In Europe, the move to FCC technology took place in the 1970s. Stone & Webster claims more than 1 million b/d of installed capacity worldwide.
RIPE FOP UPGRADE
"Now there are lots of refineries ripe for upgrading," Hibble said. "I see a great future in revamping FCCs throughout Europe."
Improvements to feed injection and riser termination equipment on installed FCCs can bring significant yield increases and rapid paybacks, he said.
In this way, a number of U.S. refiners have improved gasoline yield by 2%, to give a payback period of 3 months on an upgrade. A few were able to boost gasoline yield by as much as 9%.
"Some U.S. FCC installations are very old," Hibble explained.
Hydroprocessing and environmental projects also will see big spending in the next few years, he said. Current debate centers on distillate hydrotreating as Europe prepares for low sulfur diesel fuel regulations.
COMMIT CAPITAL
If refiners want to bring low sulfur diesel production on line for early 1996, when EC sulfur limits are likely to become mandatory, they will have to commit capital to basic engineering on projects "about now."
Refiners need to be ready to move to the detailed engineering stage in 1994. But Hibble said refiners are trying to delay spending, particularly because forthcoming EC environmental legislation would cost refiners an average 4750 million ($78 million)/site just to stay in business.
Recently, for the first time, Stone & Webster was asked to provide an environmental policy document before it could reach the prequalification stage for a U.K. power plant project.
This may be a sign of things to come in refining, too. "You cannot function these days without an environmental policy," Hibble said.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
