Challenges facing capacity in the supply of bitumen

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Challenges facing capacity in the supply of
bitumen

• Basil Jonsson
• Total Oil SA

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Overview

• Bitumen demand
• Bitumen manufacturing
• Bitumen manufacturing capacity
• Factors influencing future supply

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Refinery
Supply
Chain
Transporting
Storage
Mixing
Spraying
Drumming
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Annual global bitumen demand in 2000
Global consumption - 103 million tons (RSA
0.25)
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RSA bitumen demand vs road expenditure
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Bitumen manufacture

• Bitumen is 100 locally manufactured product
• Produced from the residue of crude distillation
• 100 of the crude is imported
• 75 of the crude is refined into white fuels eg
  petrol, diesel etc
• The residue not used for bitumen manufacture is
  further processed as bunker fuel oil (coastal
  refineries)

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Petroleum products
Distillation of crude oil produces
LPG
Petrol
Paraffin
Diesel
Lubricants
Heavy fuel oil
Bitumen
Bitumen is - 2.5 of crude oil consumption
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Typical bitumen manufacture
Atmospheric Distillation
Vacuum Distillation
Heavy crudes
Air Blowing
Bitumen grades
Bunker Fuel Oil
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Crudes suitable for bitumen
1500 known crudes 100 suitable for bitumen
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Variability of crude oil
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Bitumen supply in Southern Africa
Messina
Windhoek
Pietersburg
Gaborone
Pretoria
Maputo
Johannesburg
Mbabane
Richards Bay
Kimberly
Bloemfontein
Pofadder
Maseru
Durban
Saldanha
East London
Port Elizabeth
Cape Town
Mossel Bay
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Production capacity
Refinery Crude Bbls/day Bitumen Tons/day Bitumen crude
Calref 100,000 500 3
Enref 120,000 1000 5
Natref 100,000 500 3
Sapref 180,000 600 2
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Production capacity cont

• Production capacity exceeds local demand
• 262,000 ton demand in 2005 vs 780,000 ton/annum
  production capacity
• Therefore RSA is a net exporter of bitumen -
  150,000 ton/annum

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Factors influencing bitumen supply

• Growth in fuels demand vis-à-vis bitumen will
  result in
• Increased refinery throughput (debottle necking
  vs expansion)
• Increase in quantity of residue
• More bitumen available
• Increase in visbreaking of vacuum distilled
  residue for fuels
• Increase demand for lighter crudes
• Investment in coking plants

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Factors influencing bitumen supply

• Environmental compliance will result in
• Cleaner fuels
• Increase demand for low sulphur crudes
• Investment in
• desulphurisation units for fuels refining
• dedicated bitumen non fuels refining
• Lower fuming bitumen technology
• Replacement of coal tar binders with bituminous
  binders

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Factors influencing bitumen supply

• Tankage and loading capacity at refineries
• Road tanker congestion at peak demand
• Delays incurred due to testing reduce turnaround
  time of tankage
• Blending dispatch facilities configured for JIT
• Ageing work force
• Diminishing skills and experienced operators
• Right first time production

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Factors influencing future bitumen supply

• End consumer requirements with respect to
• Performance grade specifications eg SHRP
• Compatibility requirements of secondary producers
  with polymers and modifiers
• Hard penetration grades for high modulus asphalt
• Blending of volatile cutback bitumen

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Conclusion

• RSA has the manufacturing capacity to exceed the
  local demand for bitumen into the foreseeable
  future
• There is no known reason to believe that this
  situation should change