Predicting future FCC operations via analytics

Data analysis enables a company to take advantage of patent information to unveil underlining development trends for formulating technology strategies for future markets

Hydrocarbon Publishing Company

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Article Summary

American writer Mark Twain’s famous misquotation, “Reports of my death have been greatly exaggerated” may well be applied to the current status of refinery fluid catalytic cracking technology and certain gasoline-centric FCC units operated in parts of the world.

Declining gasoline demand caused by bioethanol mandates and improving vehicle fuel efficiency, poor fuel demand because of a weak European economy, rising shale/tight oil processing in the US resulting in growing production of gasoline and naphtha, and diminishing outlets for naphtha as more steam crackers source cheaper ethane and propane feedstock are the major reasons for concerns among refiners, technology holders, and catalyst producers. On the other hand, the FCC unit has been continuing to perform ‘miracles’ for refiners in light of increasingly stringent fuel standards, changing market conditions, and competing technologies. Its role has expanded from a gasoline machine to an olefins maker, a sulphur remover, a residue upgrader, and a ULSD feedstock contributor by maximising LCO output. Furthermore, it is lending itself to two additional roles – biofeeds user and refinery CO2 emissions reducer – to alleviate growing concerns over energy security and global warming.

So, the question is: what is the future of FCC operations? One way to predict is by looking at where technology companies have been investing in research and development, especially patent applications. This article analyses the patenting trends of FCC technology around the world during the years 2008 to 2013, reviews the significance of the data, and explains how the analytics can be used to predict the future business opportunities and challenges for refiners and technology developers alike.

Big data analytics
Analytics, which is a term referring to the search for and use of patterns in data, has been applied in a variety of industries to help businesses gain a competitive edge. Marketing agencies, sales companies, and even sports teams have turned to analytics.

In the case of analysing patent data, the authors of a management handbook entitled Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition said, “Patent analysis is a unique management tool for addressing the strategic management of the firm’s technology and product or service development process. Translating patent data into competitive intelligence allows the firm to gauge its current competitiveness, to forecast technology trends, and to plan for potential competition based on new technologies.”

Analytics has become a powerful management tool for refiners and vendors to establish a competitive edge. A generalised combination of external and internal patent analysis can help companies assess their technology portfolios and directions in the context of the marketplace and enable them to strategically position their technologies, particularly at the time of changing crude slates and shift in product demand. Also, it is possible to identify areas that are not profitable and focus R&D investment elsewhere.

In analysing refining technologies, FCC seems to be a good place to start, because it produces high volumes of fuels and petrochemical feedstocks. In addition, the FCC unit is considered to be the workhorse of the refinery.

Trends and focus of FCC patent activities
According to Hydrocarbon Publishing’s database of patent literature for FCC there are 496 unique patents and patent applications with issue dates during the period 2008-2013. There are a number of different dates that can be associated with a given patent: filing date, issue date, priority date, and expiration date. The issue date denotes when the patent or patent application was published by the patent office.

Annual global patent counts
Figure 1 shows the annual global counts for FCC patents issued during the period 2008-2013. We see that this count dropped sharply from 2008 to 2009, then recovered somewhat in 2010 but fell again through 2011 to 2013. Overall, the count in 2013 was just 26% of that in 2008. Therefore, the general picture for FCC patents over the period 2008-2013 is that of a much lower level of activity at the end of the period than at the beginning.

Regional differences
Figure 2 shows a regional breakdown of the global FCC patents issued from 2008-2013. The five regions shown provided 491 of the 496 FCC patents issued during the period. Four patents had insufficient information to establish their origins and one patent was from Russia. Based on this data, North American companies had 42% of the issued patents, and Asian companies were somewhat lower at 38%. European, South American, and Middle Eastern companies contributed 12%, 4%, and 3%, respectively.

Almost all of the Asian patents (169 out of 186) originated from Chinese or Japanese companies, while US companies provided 206 of the North American patents, the other two coming from Mexico. As for South America, 20 of the patents have Brazilian origin, with two coming from Colombia. The majority (36) of the European patents was issued to companies in the Netherlands, and almost all (15) of the Middle Eastern patents are from Saudi Arabia.

Company comparison
Globally, 67 companies received issued patents for FCC technologies during 2008-2013. Figure 3 shows the identities and the counts for those companies that received five or more patents. Twenty-three companies are in this group, and it is easily seen that two of these – UOP and Sinopec – readily stand out from the rest in terms of the number of patents awarded. Clearly, these two companies by themselves contribute heavily to the regional counts for North America and Asia that are shown in Figure 2. Also, their combined total of 171 patents is more than one-third of the global total of 496.
Specific applications
Figure 4 shows the number of global FCC patents with issue dates during 2008-2013 that are found in each of the 17 application categories. These cover almost all of the subjects to which FCC patents apply. It must be noted that a patent may fall into more than one of these categories. Consequently, the sum of the numbers shown at the tops of the columns in Figure 4 is greater than the actual number of patents that are represented. These categories can be sorted into five general groups. Where an application is placed in these groups is indicated by the number in parentheses at the end of the category name.

Group 1 concerns FCC product yields and qualities, and the four application categories here appear 207 times in the FCC patents issued during 2008-2013. The foremost category at 123 counts is that of light olefins yield. Please note that a small number of patents deal with producing aromatics (BTX) from non-conventional catalytic cracking processes, and these patents are included in the sections that cover light olefins yield. The three remaining categories in this group, which cover fuels, have a combined total of 105 counts, with gasoline reformulation making up almost half of them.

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