Residue conversion options to meet marine fuel regulations

Slurry hydrocracking to match demand for lower-sulphur marine fuel oils and to maintain distillate production targets

Dan Gillis, Grant Yokomizo, Mark Van Wees, Rich Rossi and Ed Houde
UOP LLC, A Honeywell Company

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Article Summary

In 2008, amendments to marine pollution regulations (MARPOL Annex VI) were adopted, setting a framework for regional and global specifications for the environmental quality of marine fuel oil. In March 2009, the US and Canada announced the formation of a North American Emissions Control Area (ECA), which will require marine fuel sulphur content to be reduced to 0.1 wt% by 2015. Open seas sulphur specifications are to be reduced to 0.5 wt% in 2020, pending verification of availability. Much discussion has focused on reducing marine fuel sulphur content as a solution.

This article discusses the potential for residue conversion to meet the newly mandated marine fuel sulphur regulations, while considering the growing demand for middle distillates. The application of the UOP Uniflex process as a means of addressing potential future diesel and marine bunker fuel requirements is explored for new refinery applications and within refineries that have existing facilities for residue conversion.

Distillate and fuel oil demand
Estimates of total worldwide demand for refined liquid 
petroleum-based products reveal that, despite the current recession, demand for these products is expected to increase by ~6.0 million barrels per day (bpd) over the next decade.1 Meanwhile, demand for diesel and gas oil fuel is projected to increase by almost 5.4 million bpd over the same period, or nearly 90% of the total projected increase in demand for all liquid petroleum-based products.1

Conversely, global demand for fuel oil is projected to decrease by ~0.4 million bpd during the next decade.1 Further analysis of this projection reveals marine residual bunker fuel will be the only segment of the fuel oil market that will experience increased demand, growing at an annual rate of ~2.3%. Consequently, demand for residual bunker fuel is expected to increase by ~0.7 million bpd by 2020,1 with essentially all of the projected increase in global fuel oil demand resulting from increased marine bunker fuel consumption.

The new Annex VI bunker specifications (see Figure 1), besides having a significant impact on the residual bunker fuel market, will also certainly have an impact on the entire distillate market.

Although distillate-based bunker sales account for ~20% (0.4–1.0 million bpd) of total bunker sales,2 or less than ~5% of global middle distillate production, it has been suggested that technical and economic reasons may force shippers to switch from residual- to distillate-based bunker fuel in order to meet the new specifications. Much discussion and debate have ensued regarding the practicality of this switch, but a less aggressive assumption might be that all global coastal areas became designated as ECAs. In that case, more than two-thirds of current residual bunker consumption would have to be replaced by distillates.3

Let us assess the impact of the recent US/Canadian ECA proposal on North American product demand. If only distillate-based bunker fuel was used in this ECA, the switch would require an additional ~0.4 million bpd of diesel.4 In other words, the addition of this ECA alone would virtually double the world’s current demand for ECA-quality marine-based diesel fuel. As the above examples illustrate, Annex VI specifications could have far-reaching implications for the refining industry. In fact, it has been suggested that these new bunker specifications may have as large an impact on refinery operations as the introductions of low-sulphur gasoline and high-quality diesel fuels.

Refining options for producing diesel and bunker fuel
Since reformulation’s contribution towards meeting either proposed interim or future ECA bunker sulphur specifications will be limited, refiners could be forced to accept the role of producing sufficient quantities of lower-sulphur bunker components to satisfy both projected increased bunker demand and increased bunker quality. When evaluating their options, refiners will have to consider not only whether an option satisfies new bunker specifications, but also what the option’s impact will be on diesel and total distillate production.

A large portion of the current global fuel oil pool is straight-run vacuum residue (VR) and visbroken residues. These residues represent the hardest portion of the crude barrel to upgrade. As a result, solutions need to be focused on the processing of these difficult fuel oil components. For the purposes of this analysis, solutions have been based on residues from a typical Middle Eastern crude (see Table 1).
Historically, the refining community has relied on a handful of bottom-of-the-barrel technologies to process residues. These processes have approached residue upgrading from either a thermal, physical separation or catalytic perspective. The primary options for residue upgrading considered here include:
• Residue hydrotreating
• Solvent deasphalting plus residue hydrotreating
• Delayed coking
• Solvent deasphalting plus delayed coking
• Slurry hydrocracking.

The following sections discuss the impact these processes might have on both bunker specifications and distillate production.

Residue hydrotreating
Residue desulphurisation has been successfully used by refiners for decades to reduce the sulphur contents of residues. As Figure 2 illustrates, the processing severity required to desulphurise a given crude fraction is related directly to its boiling range.

Within a given boiling range, the quantity and type of sulphur-containing molecules tend to have the largest influence on hydrotreating severity. This is particularly evident when considering the crude’s vacuum gas oil (VGO) and residue fractions, where the presence, or absence, of sulphur-containing asphaltenes plays an important role in determining required processing severity.

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