Will the producers of octane-increasing components be able to satisfy demand for MTBE, TAME and other fuel additives with respect to forthcoming change-over to Euro Class 5 gasoline? With refinery modernization falling behind, and with banning the use of MMA from 2015, will Russia face the shortage of fuel?
The Second International «Fuel Additives» Conference was organized by CREON Energy in Moscow on September 16. The Conference was supported by VNII NP, Nalco Champion and Chemservice companies were the Partners of the event.
Growth of fuel and lubricants consumption, as well change-over to production of new ecological classes of gasoline and diesel, have triggered the demand for fuel additives. General Director of CREON Energy Sandjar Turgunov suggested that the participants of the event evaluate perspectives and voice the problems of the growing Russian market, and discuss new technological developments and types of fuel components.
Development Director of Russian Automotive Market Research Alexander Kozlov presented an overview of Russian vehicle fleet. In general, the largest share of the market is held by transport aged over 20 years in passenger cars, trucks and buses segments. Pick-up trucks, minibuses and special light commercial vehicles (so-called LCV segment) in most cases are aged under 10 years.
38.4 million passenger cars are registered in the Russian Federation as of January 1, 2013. The largest part of these are aged between 11 and 20 years. Taken together with cars older than 20 years, this makes over 50% of the fleet. Brand leaders are VAZ, Toyota and Nissan. Vehicles aged 20 years and more are mostly represented by foreign brands. LCV vehicle fleet is 3.6 million units large, and its structure differs from that of passenger cars, because commercial vehicles are used with higher load and in business purposes, thus do tear out faster. Vehicles of local production are currently dominating the LCV segment (leaders are GAZ and UAZ), although the situation may change over the years and arrive to a 50/50 ratio with foreign vehicles.
Speaking about the fleet of trucks and buses in general, Mr. Kozlov noted that the rates of renewal in the sector were practically frozen during the crisis period, so currently the vehicles are very old, and it is impossible to replace them at one time due to practical and economic reasons.
The number of trucks with 5 tons weight and travel speed of over 50 km p/h is 3.6 million units. Almost 55% are aged 20 years and more, 20% are in the age of 11 to 20 years, and only 25% are under 10 years old. The leaders in the segment are local brands – GAZ, KAMAZ, ZIL, Ural and Belarusian MAZ. Russian trucks have the majority share among the aged vehicles, however many foreign trucks have also reached the scrapping edge.
The fleet of small, medium, large and extra large buses stands at 460 thousand units, where 36% is aged over 20 years, and every year we witness the growth of this share. Russian brands prevail in the segment: PAZ, KAVZ and LiAZ hold the leading positions, while the number of foreign buses smoothly increases.
Touching upon the tighter environmental standards of consumed fuel, the expert noted that the share of transport working on Euro Class 4 and 5, unfortunately, is very low: such vehicles have 12% share in passenger cars segment, 6% in LCV, 3% and 1% in trucks and buses segments, respectively. Transport working on Euro Class 1 and 0 has the 57% share in passenger cars fleet, 64% in LCV, 79% in trucks and 78% in buses. However, according to the speaker, the situation is changing. By replacing the aged vehicles, the Euro class 4 and 5 fleet can reach 26% in passenger cars, 15% in LCV, 12% in trucks and 11% in buses by the end of 2015.
Evgeny Pushik, Power Projects Director of Technostandart Corporation, presented an overview of European Market of fuel additives and components. Currently European gasoline market has fallen from 111 million tons to 86 million tons. Diesel market, on the contrary, has increased considerably to 211 million tons from 198 million tons. 6 million tons of fuel ether, 4 million of fuel ethanol and 350 thousand tons of different additives are applied for production of the above volume of fuels.
The global leaders of additives consumption are North America, Asia and Europe. African region is very attractive, too, as additives are not produced here, but are in demand due to fuel consumption growth (2% annually). The global market volume for fuel additives is approximately 4 billion dollars. The European market is estimated at 1.3 billion dollars.
European plants are able to produce about 6 million tons of ether. This includes 2.8 million tons of ETBE, 2.6 million tons of MTBE and 0.6 million tons of TAME. The plants are working at reduced operation rates. In addition, Europe imports around 0.8 million tons of additives, mainly from the USA and Brazil.
The price regulation policy is in place for ether and gasoline in Europe. Practically it is based on ether/gasoline ratio factor which stands at 1.17-1.11 for MTBE and 1.2 for ETBE. Over the past year, the ETBE premium compared to MTBE has been falling from 150-200 dollars to 10-50 dollars, which is logically connected with price levels on feedstock for its production. But the Russian price on MTBE is clearly excessive (about 35%) which is reflected by the 1.52 MTBE/gasoline ratio.
With respect to changeover to Euro Class 5 fuel, consumption of MTBE in the Russian Federation will grow to 2 million tons, while its own production stands at 1 million tons only, according to the speaker. There is a possibility to import the ether from Europe in the amount of 100-200 thousand tons per year. The rest of the demand, according to Mr. Pushik, will be easily met by the Arab producers.
The expert considers the ban on N-methylaniline in Russia to be unreasonable. By compounding MMA with alcohol (ethanol) and stabilizers, it is possible to produce the additive that can compete with MTBE. Such additive was tested at refineries in Poland and Romania in 2006-2007, and was applied at refineries in Ukraine. The use of this additive in Russia will be able to solve the problem of oxygen in gasoline and preserve the Russian MMA production facilities.
Alexander Danilov, Deputy General Director of VNII NP, believes that the main objective of the Russian oil refining industry is to ensure import substitution in fuel additives and ingredients. As for now, local production is falling behind industrialized countries by 5 to 15 years depending on the component, therefore additives are mainly supplied from overseas. However, the Russian companies are developing advanced, competitive products including anti-wear, anti-static, depressant and dispersant additives, ignition promoters and hydrogen sulfide scavengers.
The expert also spoke out against the ban on MMA application in gasoline. According to the data presented, about 2.5 million tons of MTBE will be needed to complete transition to Euro Class 5 fuels, if applied in its pure form. If the same is recalculated for MMA, about 250 thousand tons will be needed annually, while Russia produces up to 100 thousand tons. The optimal solution for production of gasoline-95 and higher classes is the use of MTBE and MMA compositions. Mr. Danilov estimates that there will be sufficient supply of both components in that case.
Vyacheslav Emelyanov, Head of Automotive and Aviation Gasoline Department at VNII NP, said that the ban on N-methylaniline had political grounds. The first ban on MMA application was introduced in Belarus to stop the import of Russian gasoline. This regulation then was copied to the rules of the Customs Union directly from the Belorussian national legislation. According to Mr. Emelyanov, there is no unbiased proof of extreme toxicity of MMA today, there is just some kind of speculation without concrete data.
Natalia Schular, Head of Motor Fuels Subcommittee at the Chamber of Commerce and Industry of the Russian Federation, presented information regarding special proposals developed by the working group with respect to modification of technical rules of the Customs Union. In particular, it is proposed that the maximum levels of iron, manganese and MMA are introduced instead of prohibiting the use of these substances. However introduction of changes to the technical rules of the Customs Union is extremely difficult. At present, the proposals made by Kazakhstan in May 2012 are under consideration, and it is difficult to imagine when shall it come to reviewing the proposals on additives.
Mikhail Levinbuk, Member of the Board of Experts of CREON, presented the results of research of utilization properties of high-octane gasoline additives: TAME, MTBE and alkylates. The tests showed that blending TAME to commodity gasoline has considerably better results than that of alkylates, and in the long term TAME can become a cheaper and safer alternative product. TAME is also capable of replacing MTBE in cases when it is required to improve octane number of gasoline according to motor characteristics. Influence of blending TAME to high-octane gasoline requires additional study.
Currently TAME is not traded as a separate product in the world markets, it is supplied on individual orders as a component of various chemicals instead. There is certain interest to apply TAME in the fuel sector; however high prices are complicating its use. As long as the market belongs to MTBE, TAME will be sold at a lower price. Therefore, it is important to create its own separate market for TAME.
Three other papers were devoted to diesel fuel. Marina Lobashova, Head of Laboratory at VNII NP, presented a joint paper with Lukoil-Nizhegorodnefteorgsintez company. She spoke about compound diesel fuels and specifics of producing Euro Class diesel at LUKOIL-Nizhegorodnefteorgsintez Oil Refinery. Depressor and dispersive, antiwear, cetane improver, washing and antistatic additives are applied for bringing fuel quality to the requirements. The expert paid special attention to Clariant combined additive improving low-temperature properties of diesel fuels. She also added that it is possible to guarantee high consumer properties of additive-improved diesel only by carrying out special cold storage tests.
When answering a question by Mikhail Gaivoronsky, Director of Promnickel Company, concerning the detailed comparative analysis of Clariant additives properties and qualities of diesel additives of other brands, Mrs. Lobashova noted that such tests had not been performed. The choice of an additive was done based on its high performance, confirmed, in particular, by total absence of claims for diesel fuel since 1996.
Paper devoted to innovative solutions for quality improvement was presented by Maxim Peretolchin, Global Manager for Marketing and Solutions Development for Fuel Additives, Fuels and Lubricants at BASF. The company developed a new generation of additives for diesel fuel and many participants of the market have been already using it in their production. Modern diesel additives possess multifunction properties for improvement of different fuel qualities. Kerocom DCA 100 is a key component that controls formation of deposits and provides excellent purity of all types of diesel engines.
The expert found it difficult to answer the question asked by Marina Knyazkova, Head of Commodity Oil Products Group at Slavneft-Yanos. It was about Russian enterprises that have been using these additives. When asked about the method of determining the presence of washing additive in a ready fuel, Mr. Peretolchin said that such method exists; it is possible to determine the presence, however not the exact percentage as the share of a washing component is very small.
Maria Kalinina, Head of Diesel Fuel Test Laboratory at VNII NP, presented the paper devoted to additives for diesel fuels of Euro Class 3 and higher. She also spoke about production of diesel fuels in accordance with the new standard set by technical rules of the Customs Union to come in force since December 31, 2013. The rules will sharply restrict production of diesel fuels with high sulfur content which will cause more active application of additives demanded for low-sulfur fuels.
Mikhail Ershov, Head of Perspective and Special Gasoline Development Laboratory at VNII NP, spoke about additives and components for automotive and aviation fuels and about perspectives for their application in Russia.
According to the expert, the ban on MMA application is not justified and is absolutely inappropriate. Banning the use of tetraethyl lead has already led to inability to produce the aviation gasoline in Russia, bringing the situation to the point of absurdity, when the Air Force of the Russian Federation depends on supplies from NATO countries. However, the expert added, it is unlikely that the ban on the use of N-methylaniline will be lifted completely. As an alternative solution, Mr. Ershov proposes to introduce a joint valuation of benzene and monomethylaniline content in motor gasoline, reducing the proportion of benzene in favor of MMA. VNII NP has developed the export standard for Euro Class 6 motor gasoline, which sets the joint limit for benzene and monomethylaniline at 1%. Such a pattern could be an important competitive advantage of Russian gasoline.
Touching upon the European gasoline market, the speaker suggested that there will be increased ETBE consumption at the expense of MTBE share in gasoline blending. As a result, Europe can arrive to restrictive standards for MTBE.
Among the possible MTBE alternatives Mr. Ershov also named TAME, isopropyl alcohol, biobutanol and bioethanol. The latter is absolutely not applied in Russia, although its consumption globally exceeds MTBE consumption practically two times.
Pavel Sukhinin, Adviser to General Director for Production Technology at Synthetic Spirit Plant (Orsk) in his paper confirmed that the role of alternative oxygenates, such as isopropyl alcohol, will be growing along with the increasing demand for MTBE. IPA is approved for application in gasoline in high concentrations, including Euro Class 5. Research of its application showed that isopropanol can be used in conjunction with MTBE in high-octane gasolines, reducing the volume of MTBE. Both individually and in admixture with monomethylaniline, IPA is effective as stabilizing component in motor gasoline. Combination of IPS and MMA increases stability phase of gasoline-alcohol mixtures.
Alexander Bocharov, Deputy Technical Director and Head of Research and Control Center at Angarsk Plant of Catalysts and Organic Synthesis, shared the experience of creation and operation of modern catalysts for Rosneft’s oil refining facilities. Main emphasis was done on hydrotreating and reforming catalytic agents. The expert also noted the Baykat antiwear additive developed by AZKiOS, intended for improving lubricating properties of low-sulfur diesel fuels.
The Conference organizers expressed special gratitude to Sibur Company for its significant contribution to the industry of fuel components and awarded the representatives of Sibur a special prize for supporting Russian fuel industry.
Commenting on the results of the Conference, Fares Kilzie, Head of CREON Group, noted that taking into consideration the gasoline production and consumption forecast by the Ministry of Energy (correctness of the forecast is under question), there are two development scenarios for fuel additives consumption in Russia. The first scenario, hardly probable, presumes that all the modernization plans are completed by the oil companies according to the quadripartite agreements, and production of high-quality fuels is further ramped up, thus significantly decreasing specific consumption of octane- and cetane-increasing additives and ingredients. The second scenario does not assume well-timed completion of modernization plans, which means a double-digit growth of additives consumption, while maintaining a strong demand for high-octane gasoline fuels. In both scenarios there is no need to introduce any bans, MMA in particular, because this product will always find its niche. TAME will also be in demand, but only in case it is properly positioned in the market: not as a competitor to any other components but as a niche product, with its own group of customers, summarized Mr. Kilzie.
