Special Report: Demand helps sulphur market growth
With demand for sulphur rising, the UAE, KSA and Kuwait are launching new or expanding on existing sour gas projects. The region could account for up to 35% of sulphur production within the next decade
Gone are the times when sulphur used to be viewed as a by-product of the oil and gas industry. Sulphur is now coming to the fore as its versatility and potential is realised by businesses around the world. Sulphur is also the primary source in producing sulphuric acid, the world’s most used chemical – which is used in a multitude of applications from fertiliser production through to steel, wind turbines and electronics.
The sulphur industry has seen a change of fortunes in recent years, reversing the perception that sulphur simply accounted in the cost of production in oil and gas processing. However, as the market becomes more competitive across the globe, the Middle East can lead by example in providing a long-term, sustainable business framework.
“Sulphur demand in traditional sectors has grown significantly over recent years. In future these applications will grow further but new sulphur demand, such as use as a fertiliser nutrient in its own right, will also add to global consumption,” Dr Peter Harrisson, senior consultant and Sulphur team leader at CRU, said.
Harrisson spoke on the sidelines of the Middle East Sulphur Conference organised by CRU Events in Abu Dhabi from February 12th-16th. “Supply growth in the Middle East will make the region one of the most influential origins for the global sulphur market. As the sulphur market moved into surplus in 2016, the existence of efficient and flexible logistics infrastructure to move sulphur to market is more important than ever,” he said. “The UAE has succeeded in developing this infrastructure to mean that sulphur will offer a real opportunity to add value whether the global market is in surplus or deficit over the coming years.”
The widening use and recognition of sulphur is of significant importance to the UAE, which at an output of around 18,000 tonnes a day, is one of the biggest sulphur producers in the world. This figure may increase in the coming years as the Abu Dhabi National Oil Company’s (ADNOC) current production sites in Shah and Habshan could be joined by a number of gas fields that are yet to be utilised for sulphur extraction. With the country’s impending targets for economic diversification, sulphur’s alternative uses puts it high up on the agenda of paths that businesses in the UAE could take.
An example of that is the recent announcement from Austrian energy major OMV Group which says it plans to step up investments in the UAE by building on its strong, existing partnerships with Abu Dhabi’s state-owned energy companies, the CEO of OMV said. “We are ready to increase our investments and further intensify our partnership with IPIC and ADNOC. OMV has a clear vision about its business in Abu Dhabi. We would like to build step-wise, an integrated business as an investor and as a strong partner of ADNOC,” Rainer Seele, OMV’s CEO, was quoted as saying in a media report.
“And this is just in the UAE. There are projects going on in Saudi and Kuwait,” Angie Slavens, managing director of UniverSUL Consulting, said. “Most of the gas in the region is sour. So we are saying that Middle East accounts for 20% of the world’s sulphur production, based on the current projects. Looking into the next decade, the Middle East could account for 30-35% of sulphur production.”
On the question of how big the sour gas processing and sulphur producing market in the region can be estimated to be worth, Peter D Clark, senior research advisor at Canada-based Alberta Sulphur Research Ltd told Oil & Gas Middle East, “The question of the magnitude of the sour gas and sulphur processing market in the Middle East in terms of financial value is difficult to answer. If we try to answer the question as to how valuable is sulphur, it is indispensable in terms of industrial operations, because not only is it used in food production but also numerous other usages. In some ways we are quite lucky that sulphur is co-produced as a by-product with sour gas and this is sold cheaply.”
He continued, “But its utilisation worldwide…..really if we did not have it most industrial operations could not have functioned as they function today. So the net economic benefit of producing sulphur is huge. It is in fact invaluable.”