Bitumen has moved from being a commodity to being a speciality

First published in Global Report: Construction Equipment 2016 as Bitumen is moving fast from commodity to speciality

Bitumen is produced and modifiedBecause there have been many changes to the way in which bitumen is produced and modified, the chemistry involved has never been so important, or so variable

Once upon a time bitumen was bitumen. Not anymore. Kristina Smith reports on why the chemistry of bitumen is more important than ever to the performance of pavements

In 2008, Indian company Zydex Industries, which started life making chemicals for textiles, launched the first in a series of nano-technology products for roads. Its bitumen additive Zycotherm works on aggregates to change their nature and helps prevent moisture damage once a pavement is laid.

“We focused on Zycotherm as a starting point because of the amount of spending around the world on black top,” said Zydex Industries’ VP for international markets Himanshu Agarwal.

Zycotherm changes the surface of an aggregate from hydrophilic (water-loving) to hydrophobic (oil-loving). Its particles capture and isolate the asphaltenes in bitumen and drag them to the surface of the aggregates.

Zydex is just one of many new players from the chemical industry to enter the bitumen market. With changes to the way bitumen is produced and modified, the chemistry of bitumen has never been so important – or so variable. Getting the chemistry right means longer-lasting roads, and lower lifetime costs.

“There’s a serious need for people from the chemical side in the sector,” said Agarwal. “For the refineries, bitumen is the last priority. But for the road industry, it’s the first. The industry needs guys who bridge that gap.”

The variability of bitumen and its makeup also means that supplying the right bitumen to the market is not simply a matter of finding the right source; it is now a far more complicated equation. Bernd Schmidt, CEO of bitumen group Bitumina sees a future where bitumen suppliers are expert alchemists, employing a whole box of tools in order to deliver the right binder to the market:

Bitumen production in Europe and USTOP: With increased use of RAP in markets such as the US and parts of Europe, there is a greater demand for special polymers to be included in asphalt mixes; BOTTOM: Bitumen production has dropped in a number of key markets with the closure of some plants but new suppliers could meet market needs

“Our years of experience have taught us that a single polymer or additive cannot compensate for all the weaknesses a base binder has,” he said. “Therefore hybrid formulations of a multitude of polymers and additives are required, although in smaller portions, to get the most cost-effective and best performing results – both from a technical performance and an economical performance.”

Federica Giannattasio, CEO of Iterchimica, which has been creating additives for bitumen since 1967, reports the same trend: “Different bitumens from different refineries have a wider and wider range of characteristics,” she said. “So what is needed are different additives with ‘customised’ characteristics that can close the growing gap between the expected and final performance of the mix.”

Frank Albrecht, managing director of Albr3cht Supply Concepts which works with refineries to find technical solutions to optimise the return on residues, agrees that bitumen supply will become a much more specialist affair.

“It’s extremely interesting to watch the bitumen industry changing,” he said. “Players are changing, bitumen is travelling further, big oil companies are losing interest, and that creates a vacuum for others to come in.

“Right now bitumen is seen as a commodity, traded as viscosity grade or penetration grade only. In another five years, bitumen will become a specialty product.”

A Growing Market

Global demand for bitumen has generally remained constant at around 100 million metric tonnes a year. However, according to analysts at The Freedonia Group, between 2009 and 2014 global annual demand rose by from 101 million tonnes to 107 million and will grow to 122.5 million tonnes between 2014 and 2019.

The Asia Pacific region accounts for the largest demand of around 40%, with North America taking 25% and Western Europe’s share at 14%. Asia Pacific will also see the greatest growth rate in demand of almost 20% between 2014 and 2019, according to Freedonia.

China overtook the US as the world’s largest consumer of bitumen in 2012 and in 2014 accounted for one-fifth of the global market. “Since 2000, production of bitumen has moved from North America, primarily the US, to the Asia Pacific region, led by China,” said Freedonia analyst Allison Blackburn.

“While the US is still the largest producer globally, China is rapidly gaining production capabilities, though it is not yet able to meet its domestic market. Going forward, it will continue to add capacity and is expected to become a net exporter of bitumen within the next ten years.”

Meanwhile, oil companies continue to review the operation of their refineries. While many – such as those in Western Europe – have closed down, others are investing in new coking and cracking technology which helps produce higher value products from the residue that would have gone to make bitumen.

“In 2015 we have been enjoying very healthy refining margins but everyone knows that’s temporary,” said Albrecht. “As profits come down, so do refinery margins. Everybody is looking to develop value in the long term.

“Refineries are questioning what to do with the residue to make it effective. Because crude oil is at a very low price, bitumen is at a low price too, and that is acting as a catalyst to accelerate some of the developments in residue upgrading. Coking projects or cracking projects are more capital intensive but much more lucrative than being stuck in bitumen production.”

The result of these changes is that bitumen supply is no longer a local affair, said Schmidt: “As major economies are slowing down and refinery upgrades are coming into force, supply and demand routes are changing dramatically on a global scale,” he said. “The bitumen game is becoming a global logistics challenge, with more companies investing in larger ships and larger terminals in regional hubs to enable economic movement of large cargoes across oceans and continents to meet supply and demand balances and to ride on the wave of arbitrage differentials.”

Schmidt highlights the ongoing expansion of firms such as Puma Energy and Vitol. Puma Energy has a network of storage terminals around the world and seven dedicated bitumen vessels, with four more on order. It opened its latest bitumen and fuel terminals in Matola, Mozambique, in November 2015 and supplies close to 80 bulk storage terminals around the world.

Vitol, which trades in energy products including bitumen, announced in December 2015 that it will be acquiring a 50% share in Sargent Marine, which describes itself as ‘the world’s largest asphalt trading, storage and transportation business’. The new, combined business expects to trade 1.3 million tonnes of asphalt a year operating a fleet of 13 specialist ships.

Bitumen prices will continue to fall over the next 12 months, said Schmidt: “Major hedge funds and rating agencies have downgraded their outlook for crude oil prices for 2016 and some indications show that crude might go to the 20’s.

This will have a huge impact on arbitrage possibilities, as tankers’ daily charter rates and the cost of operating the tankers will not change dramatically.”

However, nature and economics dictate that bitumen will move between three hemispheres – northern, southern and central – according to Schmidt: “The northern hemisphere accounts for the majority of the world’s bitumen production and mostly has a short summer and a long winter, while the southern hemisphere has its main paving season in the northern hemispheres’ winter season,” he said. “This allows for arbitrage differentials to move cargo from north to south. Countries around the equator usually have all-year-round paving, except for their monsoon or rainy seasons, and most of them are short of bitumen.”

In recent years, many small traders have entered the bitumen market, taking advantage of the differentials between prices of bitumen from different regions. But the falling bitumen prices are likely to discourage these small, non-specialist operators.

“If you want to be in this business, you have to have proper refineries, you have to be well-connected in the industry,” said Albrecht. “Word has spread that perhaps bitumen is not as easy as it seems. If it’s cheap, it’s cheap for a reason.”

So Many Variables

Refinery closures and upgrades do not just mean that bitumen is travelling further. They also mean that bitumen is less likely to be a single by-product of the oil refining process, and more likely to be a blend of residue products.

Penetration grading or viscocity grading are not sufficient to define bitumen in 2016. The tests may give you the right answer, but the resulting asphalt mix may not provide the right performance on the road.

Those in the know are asking for SARA analysis of bitumen, says Albrecht. Adapted from a test for crude oil, SARA looks at the components of bitumen: saturates, asphaltenes, resins and aromatics.

“It has been triggered by the Australians,” said Arlbrecht “One-and-a-half to two years ago, 10 – 12 refineries were shut down; a selfsupplied continent turned into an importer.

Most materials come from Singapore where specifications do not meet the Australian need. The whole of the knowledge and data collected over years in Australia is now obsolete and purely empirical.”

As well as the SARA index, the Australians – and others – use the Gaestel Index. This is an index of colloidal stability which looks at the proportion of saturates and asphaltenes compared to aromatics and resins. “You see these more and more now,” said Albrecht. “We have to have at least another level of ways to assess bitumen quality.”

The wide variety of bitumens, being moved and stored globally by the emerging dominant players, could cause problems for those laying roads, says Schmidt: “The most important factor to be taken into consideration is that the future will bring many different bitumens into a single storage, which will result in unstable binder materials for end-users,” he said. “Therefore we need technologies and plants that can produce unified binder blends that are stable and reliable.” This is something that Bitumina subsidiary DenimoTECH has been developing.

Another growing trend, which is effectively altering the chemistry and long-term behaviour of bitumens and mixes, is the inclusion of recycled material or RAP. As well as reducing costs, the use of RAP is considered a sustainable solution, with positive messages for politicians to send out to members of the public.

However there is concern, particularly in the US, that the nature of mixes containing RAP and their long-term performance is not yet fully understood. Some roads are not performing as predicted.

Bitumens extracted from mixes containing RAP or RAS do behave differently from virgin bitumen when put through certain tests, but as yet the impact of these differences has yet to be fully understood. Work is underway to understand the chemistry – and to develop new tests.

In Indianapolis last year [2015], for instance, officials reviewed 852 projects and found that 188 could be suffering from premature ageing and cracking with suggestions from the local press that the inclusion of RAP, allowed from 2010 by the state DOT, could be to blame.

The US has another issue to contend with, caused by the inclusion of shale oil or tar sands in the blends created by refineries. Shale oil is a light oil, whereas the crude oil required to produce bitumen is heavy. Tar sands are at the other end of the scale to shale oil, heavy.

“If you have heavy feedstock, for example Venezuelan crude, you could add shale oil as an extender,” explained Albrecht. “The good thing about shale oil is it is relatively cheap. If you have a heavy feedstock, you need a lighter one to get the balance right.”

The long-term impact of either shale oil or tar sands on road performance could be significant – but has yet to be discovered. The Federal Highway Administration expert test group has just begun research in this area.

Enter the Chemists

With a growing global bitumen market, and the challenges that ‘new’ bitumens are bringing, it’s not surprising that the chemical industry finds this an attractive sector. One such firm is Arizona Chemical, a biorefiner which makes chemicals from pine trees and is now working to carve a niche in the road construction sector.

Arizona Chemical has engineered its performance additive Sylvaroad RP1000 to allow a higher proportion of RAP to be used in mixes. Sylvaroad RP1000 has already been used on some projects in Europe, with Arizona Chemical hoping to see in commercialised in some states of the US this year [2016] and in Asia, according to global business director Bas Hennissen. Its latest trial with asphalt supplier KWS Infra sees the use of 100% RAP for a bicycle lane in Rotterdam, the first time 100% RAP has been used in all three layers of a road in the Netherlands. “For the city, this is a good way to be linked with the ‘circular economy’,” said Hennissen. “To explain to the public that you can take old asphalt from one part of the city and then reapply it in another part.”

The proportion of RAP used in the Netherlands is already high – up to 70% compared to a more usual 25 to 35% in the States. KWS Infra regularly uses Sylvaroad RP1000 for its 70% RAP mixes, says Hennissen.

Though Sylvaroad was conceived with RAP in mind, it may have wider applications, according to Hennissen. “We are focused on recycling but now we are seeing interest from customers that want to correct the properties of fresh bitumen. They are worried about the quality and they are looking at products like ours to modify them in the future.”

Arizona Chemical is in the process of joining forces with another chemical company that sees a future in bitumen. In September 2015, Kraton Performance Polymers announced that it was to acquire Arizona Chemical. Kraton launched its Highly Modified Asphalt (HiMA) in 2009 using a new type of SBS polymer it developed to allow higher proportions of polymer without mixes becoming unworkable.

Nano-products, like those from Zydex Industries, is a fast-growing area, said Schmidt. “The asphalt industry’s R&D experts, from the US to China, have been heavily focused on the nano portion of additives, testing many new additives and compensators for improving construction life-cycles, environmental impact of pavements and the ability to use more waste materials in asphalts,” he said. “Good advances have been made with nanoadditives, nano-polymers and nano-tubes.”

Nanoclay, which increases the stiffness of a mix and its resistance to rutting is perhaps the most widely researched and written about. Carbon nano-tubes, silica, alumina, magnesium, calcium and titanium dioxide have also all been shown to impact on the performance of bitumen.

Zydex’s technology, which includes a number of products, is based on silanes, the only one of its kind, says Argarwal. As well as success in its home market of India, Zydex has projects in North America, Holland and Sweden and trials underway in many other markets.

Fear of Failure

The challenge for any company offering new additives and solutions will always be convincing a road’s owner and the owner’s advisers to work with something that does not have a long and local track record.

“If you say you are looking at innovations, one of the primary requirements of innovation is the fact that you are ready to fail. If you don’t accept that you want to fail, how can you accept you are innovative?” Agarwal asked. “There has to be an institutionalised mechanism for allowing failure to happen.”

After long discussions between industry and the Indian Government, India introduced a rule two years ago which says that 10% of every road being surfaced should employ new technologies. “It’s perhaps not the best way, but it opens a window,” said Agarwal. “That’s very important.”

Where Zydex has found a greater openness to new technology is on public private partnership (PPP) projects, where the concessionaire has a vested interest in ensuring longevity of a pavement.

Schmidt sees the rise of PPP projects as a catalyst for change. “With the rise of concessions and PPP we see great advancements from the usually conservative oldstyled asphalt industries,” he said. “As we see more and more projects on global scale moving towards PPP, concession or tolling models, custom asphalts and additives that solve specific problems are becoming more and more popular.”