Oct-2014

Increasing distillate production at zero capital cost

Significantly increasing distillate production can at the earliest stages require no more than process tweaks before significant capital revamps are required

Joe Musumeci, Steven W Stupin, Stephanie Schlosser and THOMAS SCHOLTEN
Ascent Engineering

Article Summary

This is the first of two articles which discuss changes to the crude unit to help produce a higher percentage of distillate products from each barrel of crude processed. The discussion begins with a review of operational tweaks and changes that require zero capital investment. A second article for PTQ will discuss additional opportunities that exist for increased distillate yield, considering options that require minimal capital investment as well as major capital projects that can increase distillate yield.

Within the crude unit, optimisation of existing equipment for maximum distillate yield can bring increased profits with no capital investment and low technical risk. Because the modifications covered here are operational only, there is no need for additional equipment and the operational changes can be reversed if need be. Plant data and a simulation model of the unit combined with a thorough review of the existing equipment allow a refiner to highlight areas within the crude unit with the greatest opportunity to impact distillate recovery.

Diesel demand continues to rise
Most US refineries have been designed and operated to maximise gasoline production since the early 1940s in order to meet the demand from the mass produced, gasoline powered vehicles that dominated the consumer market. In addition, the advent of higher compression gasoline engines required additional refinery processing to keep up with gasoline quality and yield demands. However, current shifts in worldwide fuel consumption patterns are affecting demand for gasoline and diesel. Factors that contribute to the shift in consumption patterns include increased demand in developing countries, a focus on reducing greenhouse gas emissions that has led to more stringent automotive fuel efficiency standards, and increased blending of renewable fuels.

Future demand for diesel fuel is projected to continue to grow while refined gasoline demand is projected to continue to decline and this trend is projected to continue through 2040, as can be seen from the Annual Energy Outlook projections for the United States from the Energy Information Administration of the US Department of Energy (see Figure 1).

US total diesel fuel consumption is projected to increase from current demand of about 3.5 million b/d to 4.3 million b/d in 2040. Future US diesel exports are also projected to grow to meet the demands of emerging international markets. Exports of ultra-low sulphur diesel (ULSD) to Europe are on track to almost double in the first half of 2014 compared to 2013 as US refineries continue to benefit from cheap crude prices. Distillate fuel exports to Central and South America, the largest destination for US produced distillate fuel, increased by 12% in 2013. In addition, Latin America is importing more distillates as a result of tightening fuel regulations and limited refining capacity at existing refineries.

US consumption of finished motor gasoline is projected to decline by approximately 2.1 million b/d over the next 25 years as consumers transition to more fuel efficient and alternate energy vehicles. This is largely as a result of the Corporate Average Fuel Economy (CAFE) and Greenhouse Gas (GHG) emissions standards set by the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA). Also, the US has been a net exporter of finished motor gasoline, with average annual export volumes increasing from 0.07 million b/d in 2010 to roughly 0.44 million b/d to date.

Vehicle miles travelled (VMT) are projected to increase diesel fuel consumption by approximately 0.9 million b/d from 2012 to 2040, despite increases in renewable fuel blend volumes resulting from the Renewable Fuel Standard (RFS) programme. The RFS was established by the Energy Policy Act of 2005 and expanded by the Energy Independence and Security Act of 2007 (EISA2007). The RFS requires the EPA to set annual percentage standards for the renewable content of gasoline and diesel fuel. Refiners and importers of gasoline and diesel fuel are then obligated to blend renewable fuels in proportion to the volumes of non-renewable gasoline and diesel fuel sold. The proposed 2014 total blending requirement is 15.2 billion gallons of ethanol equivalent renewable fuel, with the mandate reaching 36 billion gallons by 2022.

The price differential between diesel and gasoline is driving the change at refinery level to target more diesel production. Since 2004, diesel prices have typically exceeded that of gasoline in US markets (see Figure 2). This is a reversal of the typical historical price relationship for diesel and gasoline and is driven by supply and demand for the two fuels.

It is projected that these worldwide consumption patterns will continue in response to increased demand in developing countries, tighter fuel efficiency and emissions standards, and rising RFS programme mandates. The US diesel to gasoline price spread is projected to grow to $0.75/gal by 2035 (see Figure 3). Also, as a result of new crude sources and fracking technologies, the US is expected to continue to be a net exporter of petroleum products. Although the nation will still consume gasoline as its primary transport fuel for the foreseeable future, refineries have begun to react to market conditions and will continue to increase middle distillate production. This trend will impact refinery operations and investment. Refiners who can adjust to these and future market conditions and produce higher yields of the most valuable distillate products will maximise refinery profitability.

Yet, because of uncertainties in the markets and slow economic recovery, many refiners have not allocated resources for major capital projects. Those refineries which are capital constrained should re-evaluate their gasoline and distillate products strategy to take advantage of many potential zero capital cost opportunities to maximise distillate yield with an eye to low cost projects for increased distillate yield.

Producing a base case simulation model matched to valid, mass balanced plant data should be the first step in the crude unit’s evaluation. The model’s accuracy should be checked against plant, lab and operating data, as well as known operating limits. From this simulation, optimisation cases can be analysed to increase distillate production and to help to identify bottlenecks and operational opportunities that can have excellent payout often with little or no capital investment. Also, economic evaluations can be made to help determine future capital projects. Key to identifying these opportunities is modelling and design experience as well as operational guidance, the responsibility for which usually falls on the shoulders of the often overwhelmed refinery process engineering staff. The authors have worked closely with staff at multiple refineries to perform these types of evaluations with results that have successfully increased profitability.

Optimise current operations: the zero capital investment
For most refineries, improving diesel recovery through operational modifications means starting with an examination of the operation of the atmospheric tower and its side strippers. Improved diesel recovery from the atmospheric tower requires improved separation of the diesel range material from the lighter and heavier fractions in the tower. In most typical units, a significant amount of diesel range material ends up in the atmospheric tower bottoms due to the vapour liquid equilibrium of the flash zone. The amount of diesel range material lost to the atmospheric bottoms is greater for heavy crudes due to the larger amount of lower vapour pressure, heavier components. The following discussion highlights operating variables that can be adjusted to improve diesel recovery.