Low sulphur 'green' diesel in Abu Dhabi pumps by 2012

The contract to supply desulphurising equipment for Adnoc's new Ruwais refinery was awarded today.

The Abu Dhabi National Oil Company (Adnoc) moved to provide cleaner fuel at the pump yesterday, awarding a contract to a US firm to enable it to remove sulphur from crude at a new refinery in Ruwais. The contract with UOP for equipment to remove the sulphur is a big step towards Adnoc's goal of providing ultra low-sulphur "green" diesel by 2011. Sulphur is a potent pollutant that forms sulphur-dioxide - a contributor to smog and acid rain - when burnt, and has been linked to asthma and other respiratory ailments. Adnoc's diesel has a sulphur content of 500 parts per million (ppm) but the company wants to slash that figure to 10 ppm, in line with strict clean-air standards in Europe. "This facility will help us to meet the growing demand for clean fuels and chemicals in the Middle East and around the world," said Jasem al Sayegh, the general manager of Takreer, Adnoc's refining unit. An expansion at Adnoc's refinery in Ruwais has been in the works for years, and is scheduled to be completed by 2014. The new facility will have a capacity to process 417,000 barrels per day (bpd), complementing Adnoc's current refining capacity of 485,000 bpd. The new refinery will boost Abu Dhabi's exports of oil products, which have steadily declined as domestic demand for petrol, diesel and fuel oil has ballooned. In 2005, the Emirate exported 250,000 bpd of product, according to figures provided by PFC Energy, a US energy research firm. This year it exported 144,000 bpd. "Domestic demand has gone through the roof in the past few years," said Raja Kiwan, an analyst for PFC who is based in Dubai. He noted that last year was the first year in which Adnoc did not export any petrol. The move to green diesel is part of a drive to reverse the downwards trend in exports, as it will upgrade Abu Dhabi's diesel to international specifications, making it more competitive on world markets, Mr Kiwan said. "That's a trend across the region to produce ultra low-sulphur diesel, not only for the domestic market, but also to export," Mr Kiwan said. "It's part of a push to extract more value from crude farther downstream." Abu Dhabi has long been a big exporter of jet fuel, diesel and naphtha, most of which goes to markets in east Asia. The Ruwais refinery was initially built as an export facility, with domestic demand satisfied by the Umm al Nar refinery on the outskirts of the capital. As Abu Dhabi's economy has grown, however, a larger proportion of oil products from Ruwais has been redirected to the home market. Adnoc and UOP, an Illinois-based refinery supply firm that is a subsidiary of Honeywell International, did not disclose the value of yesterday's contract. UOP's equipment will also remove sulphur from liquid petroleum gas and kerosene at Ruwais. The company will also supply equipment to regulate the benzene content in petrol. [e-mail]