Hydroprocessing to maximise refinery profitability

Low-cost changes in catalyst systems can significantly enhance operational flexibility and increase returns on investment

Chevron Lummus Global

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Article Summary

Refineries are continuously challenged to produce more and cleaner products from a broader range of feeds, preferably with limited or no capital investments.

In the short term, changes in spot market prices for both crude oil and products have forced refiners to re-evaluate their process options and planned investments in search of higher operational flexibility. This has led to investments in hydrocracking, as hydrocrackers are often a key factor in achieving greater refinery agility and in staying in sync with market fluctuations so as to maximise refinery margins.

In the medium term, the global demand for refined products continues to grow at about 1.4% per annum, and the demand for refined products continues to shift from gasoline to middle distillates. This has reinforced a drive to invest in hydrocracking, as hydrocrackers are capable of processing a wide variety of feedstocks and of producing environmentally benign products, particularly clean diesel.

We show that low-cost changes in catalyst systems can significantly enhance operational flexibility and increase returns on investment. Clearly, catalyst system selection is more important than ever before, because it is critical to proper unit utilisation and profit maximisation.

This article discusses recent examples of refinery margin enhancements that were achieved through the deployment of CLG processes and catalysts.

Isocracking history and factors affecting refining industry History
The history of Isocracking dates to the late 1950s, when the modern hydrocracking process was developed by the California Research Corporation, a research division of the Standard Oil Company of California (this later became the Chevron Corporation). Soon after that, numerous Isocracking units were licensed worldwide. The first Isocracking plant licensed to a US refinery was started up in 1962. Today, the technology is licensed by Chevron Lummus Global LLC (CLG), a joint venture of Chevron and Lummus Technologies.

Most of the hydrocracking units licensed in the US during the 1960s through the 1990s have been designed for the production of motor gasoline (mogas). This design allowed refiners to produce large quantities of heavy naphtha that was further reformed into gasoline and hydrogen. Since the light naphtha produced in these mogas-mode hydrocracking units using Chevron catalyst contained unusually high quantities of isoparaffins in relationship to normal paraffins (providing high octane values), the hydrocracking process was given its name — Isocracking. While the US market favoured gasoline, the international market demanded more middle distillates. Responding to that need, many Isocracking units maximising middle distillates have been licensed.

Factors affecting the refining industry
Since the initial inception of hydrocracking, the technology has expanded to cover a broad range of feedstocks, products and process configurations to meet market and customer requirements. These hydrocrackers are optimised to maximise profits for the refiner. Today, refiners are faced with new challenges based on ever-stricter product environmental regulations, higher throughput and poorer feed quality.

Increased demand, shift to diesel
Despite fluctuating oil prices, the global consumption of petroleum products continued to grow throughout the first decade of the 21st century (overall consumption in US and Europe has not increased). The growing demand has been dictated by expanding Asian economies. Economic development in China and India has resulted in an increased number of cars and trucks, causing escalating demand for gasoline and diesel (see Figure 1).

From 2000, and greatly influenced by European markets, global product demand shifted towards middle distillates. In the late 1990s, Europe led an effort to reduce greenhouse gas emissions. The automotive industry has signed a voluntary agreement with the European Commission to reduce CO2 emissions. This, in turn, led to a shift from gasoline- to diesel-fuelled vehicles. Aside from seasonal market fluctuations at times requiring more gasoline, from 2005 the differential between demand for middle distillates versus gasoline has been overwhelmingly in favour of middle distillates. Figure 2 shows the dominance of middle distillate demand in Europe and Asia and the rapid growth of middle distillates in Europe.

US refiners, whose hydrocracking processes were primarily designed for mogas, had to adjust to the new reality of growing demand for middle distillates. On the other hand, European refiners, who already owned and operated middle distillate-maximising technologies, had to quickly increase production using existing facilities. What is the least expensive way for a refiner to adjust to the changing market demand: invest in a new technology or modify an existing process? This article will show how one US refiner found an optimal solution.

New crude sources
Rising oil prices and shrinking profit margins have forced refiners to look for more economic crude sources. What may not have been economic a decade ago has become profitable today. Now refiners are presented with a variety of unconventional crude sources:
•    Bitumen
•    Extra heavy oil
•    Biofuel
•    CTL
•    GTL
•    Oil shale.

Each refinery’s situation is somewhat different and so is the crude source used there. The Isocracking process offers a variety of configurations that can be customised to particular crude compositions and product specifications.

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