Residue value upgrade opportunities

Overview of a process for upgrading residue to an emulsion-based fuel and the results of refinery manufacture, handling and combustion in a supercritical boiler

Bill Howe and Jason Miles
Quadrise Fuels International

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Article Summary

A number of leading oil companies, including Exxon, BP, Shell, Total and Petrobras, have given consideration to the manufacture of oil-in-water emulsion fuel from heavy refinery residues as a means of enhancing refining margins. The margin enhancement arises from recovery to the fuel pool of high-value cutter stock added to residue to meet heavy fuel oil viscosity specifications and to make a transportable fuel oil product.

In the summer of 2008, a commercial demonstration of Quadrise Fuels’ proprietary multiphase superfine atomised residue (MSAR) technology was successfully completed at Mazeikiu Nafta’s 200 000 bpd refinery 
in Lithuania. More than 140 000 barrels (22 000 mt) of MSAR fuel was manufactured in a joint initiative between the refinery, Quadrise Fuels International (QFI) and its technology licensor AkzoNobel. The fuel was subsequently transported over 300 km by rail and combusted at the 1800 MWe Elektrenai power plant owned by Lietuvos Elektrinė.

The commercial demonstration established the technical and commercial viability of MSAR technology in an operating refinery environment, and opens opportunities for refiners to add significant value to residue streams without incurring the high capital costs and extended schedules associated with conventional hydrogen addition or carbon rejection upgrading technologies.

Emulsion developments
Commencing in 1990, British Petroleum (BP) and Petróleos de Venezuela (PDVSA) successfully established a 6.5 Mtpa market for their proprietary emulsion fuel known as Orimulsion — a 70% bitumen in 30% water emulsion. The product, manufactured from 
8° API Orinoco bitumen, was exported worldwide as a boiler fuel for power generation.

By 2003, supply contracts with major generating companies (gencos) had been secured for power plants in North and Central America, Europe and Asia. A US Environmental Protection Agency (EPA) report established that under adequate safeguards Orimulsion could comply with all environmental legislation, and the technical success of Orimulsion for a 160 MWe Wärtsilä diesel generator plant in Guatemala opened new horizons for the 
application of the fuel. By 2006, more than 60 million tonnes of Orimulsion had been shipped to end users worldwide. However, production of the product ceased in December 2006.

In parallel to the Orimulsion development, a group of former BP experts were developing a low-cost emulsion technology alternative. In conjunction with AkzoNobel, modular licensed technology was developed that led to the MSAR fuel solution. The solution differs from Orimulsion in that it is applicable to refinery residues as well as extra-heavy crudes and is scaleable to lower throughputs. 
On-site refinery emulsion fuel manufacture is now an economically viable proposition utilising difficult to dispose of residues.

QFI and AkzoNobel have a strategic alliance to jointly implement the technology, principally seeking to add value through the refinery residue feedstock option. QFI acts as a sink for residues, which are purchased by QFI at a price above their intrinsic value. These are then processed to emulsion fuel in a QFI-owned facility on a build, own and operate (BOO) basis, and sold globally to energy consumers equipped with flue gas desulphurisation facilities. The technology is also available to refiners under licence from QFI/AkzoNobel.

Solution to the HFO dilemma
From a refiner’s perspective, MSAR offers a solution to the dilemma surrounding heavy fuel oil (HFO) production. HFO is sold at a discount to crude, consuming valuable diluents (used to reduce the viscosity and density of oil residues) and thereby reducing profitability.

The value add of MSAR over HFO production is that no diluents are needed (Figure 1) to produce a transportable fuel with similar physical properties. This advantage increases with heavier crudes or more severe refining conditions. Extra-heavy refinery residue is mixed with water and a surfactant package in a colloid mill to produce a stable emulsion fuel that behaves like a HFO (Figure 2). The MSAR solution can be integrated into existing refinery and HFO infrastructure. Hot residue is slipstreamed (or the whole stream is diverted) from the residue rundown system after maximum process heat has been recovered, but before expensive cutter stock is added (Figure 3).

The refiner is thus provided with a modular, low capex, short lead uplift pathway. The MSAR option is especially relevant in today’s climate of high project costs and extended delivery schedules, which increase risk and negatively impact conventional upgrading processes. The capex is low enough for the technology also to be considered as an interim value-adding residue disposal solution, pending the planning, approval, financing and implementation of major upgrading schemes. 

The technology leverages equipment perfected over 20 years for road emulsion application. MSAR systems can be installed within 6–12 months, utilising existing fuel oil infrastructure. More than 100 emulsion production modules have been supplied by AkzoNobel since 1980. 

Water for the emulsification process can be derived from a number of sources, including natural reserves, standard utility water, oil-contaminated wastewater or sour water streams.

Lithuanian commercial demonstration
The first large-scale commercial demonstration of MSAR technology involved the alignment of an MSAR production facility at the 200 000 bpd Mazeikiai refinery with the Elektrenai supercritical steam cycle power plant.

At the time of the trial, the Mazeikiai refinery was 90% owned by PKN Orlen through its subsidiary Mazeikiu Nafta (MN), with the remaining 10% owned by the Lithuanian government. Lietuvos Elektrinė (LE) owns the 1800 MWe thermal power plant situated less than one hour’s drive west of Vilnius. The plant consumed Orimulsion for over a decade up to 2004, when supplies were unilaterally terminated by PDVSA.

Integration options for MSAR technology were reviewed with the refinery in the context of their future reconfiguration plans. It became apparent that there was significant potential for the technology to add value around the existing visbreaker and that this could be substantially enhanced by the addition of a low capex vacuum flasher unit. 


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