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FOR IMMEDIATE RELEASE

STRICT ENVIRONMENTAL REGULATIONS COMPEL PETROLEUM REFINERS TO OPT FOR CATALYTIC PROCESSES
Technical Insights Vertical Industry Report: Emerging petroleum refining technologies

PALO ALTO, CA, July 14, 2004 --/WORLD-WIRE/--
Oil refiners across the world are struggling or soon will be to meet tighter product quality specifications mandated by stern environmental legislations. This is likely to affect the production of gasoline and diesel transportation fuels, two of the most profitable petroleum products, in the short term.

"The impact of stringent environmental directives is already evident from the escalating operating costs of oil refineries," says Technical Insights Analyst Peter Savage. "These changes in rules were in fact the initial impetus for soaring gasoline prices in the U.S. during spring 2004."

Categorical laws mandating low sulfur levels are already coming into force in the U.S. and Europe. This is compelling refineries and technology suppliers and licensors to invest heavily in revamping their refining techniques, which remove sulfur and other unwanted components including excess aromatics and surplus volatiles present in gasoline.

Many improvements in refining operations designed to deal with high sulfur content involve sophisticated new approaches to catalysis. Catalysts throughout the refinery are generally easily poisoned by sulfur and concerted efforts are on to devise pre-treatment methods to prevent sulfur from affecting the highly sensitive catalysts during upgrading processes.

"Raising the overall efficiency of a catalytic process can significantly boost revenue margins," says Savage. "Hence, refiners will be more than willing to invest in such processes if they are assured of even marginal improvements."

Established catalytic processes such as hydrotreating and desulfurization along with conversion routes such as alkylation and isomerization are likely to benefit directly from these developments. Already, there is a surge in investment in these areas.

Isomerization and alkylation are likely to receive greater impetus because of the anticipated ban on the gasoline additive methyl tertiary-butyl ether (MTBE). Ironically, MTBE itself was introduced as a solution for octane shortage problems caused by an earlier legislation implemented to deal with urban smog.

"Despite the omnibus 'Energy Bill' being stalled in the U.S., a 'rolling ban' on the use of MTBE in gasoline has begun, compelling refiners to seek alternative oxygenates and high-octane blending components," says Savage.

Growing concerns about large-scale use of sulfuric and hydrofluoric acid as a catalyst in alkylation units are further encouraging the development and commercialization of new catalytic processes that use superacids or solid-state alkylation.

Declining availability of 'sweet' crudes is spurring research efforts on the use of heavier crude oil. However, the processes to crack heavy crude also need to deal with issues such as sulfur and other contaminants that are produced abundantly in the lighter fractions after cracking.

Greater investment in desulfurization technology will be required as treatment of heavy crude is likely to create a telling impact on the refinery's hydrogen balance.

"Heavy crudes are 'hydrogen poor,' necessitating greater care in conserving and recovering hydrogen in offgases," explains Savage. "This can be done by improving processes such as pressure swing adsorption and membrane separation which, though effective, need to be tailored and scaled up considerably for more demanding refinery use.

Refineries are eager to adapt to changing circumstances though rarely inclined to try new technologies that are radically different in character. However, ultrasonic technology and novel separation methods show great promise.

"A deeper understanding of how catalysts work both chemically and physically is providing greater scope for technological improvements," says Savage. "Nanotechnology and combinatorial chemistry are among the main techniques that are likely to drive research at the frontiers of efficiency and selectivity."

Emerging Petroleum Refining Technologies, a part of the Oil and Gas Vertical Subscription, examines the evolution of new petroleum refining technologies and their impact on the oil industry. The study analyzes the key regulatory factors influencing technology evolution and adoption, discussed from the standpoint of gasoline, diesel, petrochemicals, and intra-refinery issues. Various catalytic processes (such as isomerization, alkylation, desulfurization, and hydrotreating) and the role of catalytic cracking and reforming are discussed in detail. Executive summaries and interviews are available to the press.

If you are interested in an analysis overview which provide manufacturers, end-users and other industry participants an overview, summary, challenges and latest coverage of Emerging Petroleum Refining Technologies - then send an email to Julia Paulson North American Corporate Communications at jpaulson@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Contact Fax Number, Email. Upon receipt of the above information, an overview will be emailed to you.

Technical Insights is an international technology analysis business that produces a variety of technical news alert, newsletter, and report services.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff, spans the globe with offices in every major country.

Vertical Industry Report: Emerging Petroleum Refining Technologies
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