Middle East white paper
Quadrise has been active in the Middle East region for over 10 years, with a particular focus on the Kingdom of Saudi Arabia. The potential economic and environmental benefits of adopting MSAR® technology in the Kingdom are significant, and would benefit refiners, power and water utilities and ultimately the Kingdom itself.
To provide an overview of the challenges currently faced by the oil and utility sectors in the region and how the adoption of MSAR® would address these, saving utilities >$800m per year in fuels costs (and refiners a similar increase in refinery profitability) whilst reducing harmful emissions, Quadrise have produced the following White Paper. The highlights from the paper are as follows:
Quadrise’s MSAR® technology enables production of a proprietary oil-in-water emulsion fuel oil – MSAR® that reduces energy costs for consumers and improves refinery profitability and yield.
Implementation in power generation in the KSA can deliver annual fuel cost savings of ~$0.8 Billion.
Refinery margins where MSAR® is being produced would increase by a comparable amount.
Delivers significant environmental benefits to consumers, 30% reduction in NOx emissions and 50% lower ash emissions – and is the most cost effective and cleanest upgrading technology for refiners.
Oil in water emulsions have been used worldwide, with over 60m tons consumed in power generation. The latest generation, MSAR®, is now on the verge of being implemented in the Americas, Africa, Europe and the Middle East.
Strong synergies with metals recovery from ash – including vanadium, a critical component for the manufacture and deployment of renewable energy storage batteries in the KSA and the region.
With over 10 years of working in the KSA, Quadrise is now poised to progress its first regional commercial implementation.
The Heavy Fuel Oil Problem
The oil industry has a problem. There are supply and demand imbalances from both quantity and quality perspectives; with crude oils and refined products invariably not where they are needed and not of the quality that the market wants.
Refineries are designed to address these imbalances, but their requirements change over time due to market forces and legislation, resulting in suboptimal operations. As the world demands more cleaner oil products, the costs of producing them increase.
If energy industry participants are unable to economically configure their infrastructure to produce lighter, cleaner products, whilst efficiently transitioning to renewables, then they stand to lose billions of dollars of revenue, thousands of jobs, and they will be left behind by their peers and competitors.
Despite being one of the world’s leading producers of oil and gas products, the Middle East is driving a transformation to renewables, with substantial investments and advancements being made across the region. During this transition, which will last generations, it is vital that fossil fuel resources are used as efficiently as possible in order to maximise revenues and minimise emissions.
In parallel with the transition to renewables there is also an underlying shift in demand from heavy, sour to lighter, sweet oil products, accelerated by new International Maritime Organisation (“IMO”) regulations on marine fuel that became effective on January 1, 2020.
Conventional Solutions are not always the Answer
Conventional methods of shifting oil production and refining to match new regulations and market demands are expensive, time consuming and energy intensive – leading to increased greenhouse gas emissions. In a low oil price environment where permanent shifts in demand have already taken place, these methods are typically not a viable solution and risk being outmoded before they are commissioned.
Regions which require substantial imports of heavy oil products and/or distillates to meet local energy demands (due to production and refinery configurations) have felt this shift harder than most. The Middle East is one such region; with the Kingdom of Saudi Arabia (‘KSA’) and Iraq being heavily impacted. Whilst the costs of these imports have reduced in the short-term, this still represents a significant balance of trade issue for the affected countries, including the KSA.
The MSAR® Solution
Quadrise’s MSAR® technology offers a unique, proven solution to these problems. For refineries producing fuel oil, MSAR® technology adds value by improving refinery yields and margins by reducing manufacturing costs. Economic value is delivered for the consumers through lower fuel costs enabled by the increased refinery efficiency. At the same time, environmental benefits of significantly reduced NOx and particulate emissions are realised due to the composition of the fuel.
MSAR® technology comprises a low-cost, modular process to create an oil-in water emulsion fuel oil (MSAR® fuel) that reduces energy costs for producers and consumers. It uses refinery water-streams to dilute the heavy oil residues as micro-droplets, which frees up valuable distillates to be sold as premium fuels by refiners.
MSAR® systems can be operational in under one year, which significantly and rapidly increases refinery profits whilst producing a cheaper, cleaner fuel that uses existing fuel oil infrastructure. This is in stark contrast to the expensive, conventional refinery upgrading solutions, that take many years to implement.
MSAR® technology and fuel also embeds improved environmental and societal benefits for refiners and utilities. It is the cleanest way of upgrading heavy oil value in a refinery, delivering significant savings and lower CO2 emissions vs alternatives. MSAR® fuel:
- Generates 30% fewer emissions of NOx gases.
- Reduces particulates, with no black carbon/soot, lowering global warming potential.
- Lowers ash disposal costs, improving metals recovery economics, and enabling local vanadium redox battery manufacture for sustainable renewable energy growth.
In markets where volatile pricing, shifting regulatory regimes and unpredictable demand are creating existential challenges, MSAR® offers a unique, economic and environmentally superior solution.
The Middle East and the KSA in particular are ideally placed to benefit – with adoption of MSAR® fuel by KSA utilities able to deliver savings of c$0.8 billion per annum, together with significant IKTVA and export opportunities from new specialised industries. The increase in refinery margin associated with MSAR® production, through the increase in high value premium fuels is of the same order of magnitude as the fuel cost savings or c$0.8 billion per annum.
MSAR® technology enables existing oil resources and assets to be used efficiently and economically, addressing the heavy fuel oil problem, hence smoothing the path to a sustainable future.
The KSA and the wider region are planning a major shift to the use of renewables. However, in the medium-term, oil will continue to be of significant value to the economy as a source of revenue generation and job retention. During this transition, it will be important to manage the use of existing oil-based facilities to minimise costs, maximise asset values and drive further improvements in environmental performance. There are several ways in which the region’s oil and power industries can respond to the challenges, although most solutions are complex, multibillion dollar projects that take many years to implement.
The KSA is poised to be at the vanguard of the transition to renewable energy with the use of Quadrise’s MSAR® technology; a simple, low-cost, modular technology that can be implemented within one year. MSAR® technology delivers rapid returns alongside significant improvements in environmental performance, creating a sustainable pathway to renewables – optimising the use of existing fossil-fuel resources.