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Hydrogen: innovative business solutions

A systematic approach to the problems that follow from the increasing demand for hydrogen in the search for clean, low sulphur fuels

Graham Phillips, Foster Wheeler Energy
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Article Summary
Today’s refiner is operating in an extremely competitive environment where optimum use of capital and lowering of operating costs are key to survival. Deregulation and globalisation of markets have also resulted in increased pressures on refinery profitability – there are now fewer hiding places for the uncompetitive refiner and this trend is expected to continue.

These factors have resulted in particular focus on one refinery product – hydrogen. More than ever the availability of low cost hydrogen is pivotal to successful refinery operations.

Over the past decade the hydrogen balance has been influenced by many factors, principally the requirement for clean transportation fuels (especially ultra low sulphur fuels), an increase in the application of residue conversion technologies, often accompanied by heavier crude processing, together with a growth in demand for petrochemicals and a realisation of the potential benefits of refinery/petrochemical integration.

In addition, the need to abate refinery CO2 emissions is receiving increasing interest, therefore hydrogen production (being a significant CO2 producer) will come under scrutiny. Approximately, 10 tonnes of CO2 is produced per tonne of hydrogen. These influences will intensify in the new millennium as markets and tightening environmental standards become increasingly global in nature.

This article suggests an overall structured approach to hydrogen management and discusses some of the main issues involved:
- Future hydrogen demand
- Factors influencing the hydrogen balance
- Hydrogen management study methodology
- Opportunities over the refinery fence
- Technology developments.

In the hydrogen business, Foster Wheeler has formed two alliances. One with AspenTech relates to the provision of services, technology and modelling tools to the refining industry. The other between BOC and Foster Wheeler Power Systems aims to provide hydrogen over the fence from Build, Own and Operate hydrogen plants.

Future hydrogen demand
The introduction of more severe product specifications by 2005 is the main driver for increased hydrogen demand. Auto Oil I set the 2005 sulphur specification at 50 wtppm for both gasoline and diesel. However, there is now increased pressure to reduce product sulphur content much further – possibly encouraged by tax incentives, introduced by individual countries within the European Union, and the demands of the automotive industry based on engine performance/emissions considerations.

Forecasting overall future hydrogen demand and supply options is perhaps one of the most difficult tasks facing the industry. It should be emphasised that there is no single solution that will be appropriate for all refineries. Solutions will be site-specific, but will be influenced by many factors, for example: Light crude availability, cost and quality. European refiners may delay significant investment in desulphurisation if they believe that adequate supplies of low-sulphur crude are available and that the sweet-sour crude price differential will remain small.
There appears general consensus in the industry that there will be ample supplies of light crude available up to 2005-10, with any decline from existing North Sea fields made good by new oil field developments in the North Sea and other areas, such as North and West Africa and the Caspian Sea region.

Forecasting beyond 2010 is much more difficult, but by this time the availability of light, low acidity crudes may be in decline. Many refiners are still losing hydrogen in flare and fuel gas streams. Technology is available to recover valuable hydrogen, but this needs to be practicable and cost effective.

Increased growth in the petrochemical sector, which could result in opportunities for refinery/petrochemical integration. The German refining industry, for example, already obtains much of its hydrogen from this route. This experience could be followed by the former Soviet Union/Eastern Block nations as refinery/petrochemical sites are upgraded.

Many processing options are available to satisfy future product specifications. For example, to help meet gasoline sulphur the refiner may select FCC feed hydrotreating as this option can provide a positive return on investment. Alternatively, desulphurisation of FCC gasoline may be selected, which has no real return on capital, but allows the refinery to stay in business at relatively low capital cost.
The difference in hydrogen requirement between these two options is substantial (FCC hydrotreatment typically requiring 5–10 times more hydrogen per barrel of feed than product desulphurisation).

More refiners now appear to be prepared to move into non-traditional areas (eg power generation) and see this as an opportunity to address hydrogen production at the same time (through gasification of residue or coke).

CO2 abatement actions and legislation. Some refiners may seek a reduction in hydrogen production as part of an overall CO2 abatement strategy.

With more stringent product specifications introduced in Europe during 2000, many refiners will be able to obtain the relatively small quantity of incremental hydrogen needed from existing operations – for example, by increased hydrogen production from catalytic reforming operations, and improved hydrogen recovery from offgas streams containing hydrogen.
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