You are on page 1of 39

Conversion Options for Clean Fuel Production

Jean-Paul Margotin
Refining Challenges & Way Forward
April 16 17, 2012, New Delhi
1

Agenda

Market Outlook
Conversion options to squeeze most of bottom of the barrel Grassroots case studies

Economic comparison
Review of hypothesis Financial analysis

Conversion Options for Clean Fuel Production April 2012

Agenda

Market Outlook
Conversion options to squeeze most of bottom of the barrel Grassroots case studies

Economic comparison
Review of hypothesis Financial analysis

Conversion Options for Clean Fuel Production April 2012

Global Oil Product Demand Outlook


2010-2030 AAGR by Product
Other* LPG Naphtha Motor Gasoline Jet/Kerosene On-road diesel Off-road diesel Fuel Oil 0.7% 0.5% 2.2% 0.8% 1.9% 1.7% 0.4% -0.5%

Market Structure 2010 vs. 2030


100% 13% 80% 60% 40% 20% 0% 9% 7% 27% 5% 16% 13% 10% 13% 8% 9% 26% 6% 19% 11% 7%

Global 2010-2030 AAGR: 0.9%

2010

2030

Demand growth driven by transportation fuel


88.2 Mbdoe

104.7 Mbdoe

mainly middle distillates Gasoline: lower growth than middle distillates, but main contributor by 2030

Naphtha growth driven by petrochemicals Heavy fuel oil demand = only 7% of the global demand by 2030
4

Source: Axens & Other sources (2011) Other* = Kerosene ( Jet Kerosene), Refinery Gas, Petroleum Coke, NGL, Lubricants, Bitumen, Paraffin Wax, Refinery Losses,

Conversion Options for Clean Fuel Production April 2012

Conversion Incentive
Price Differential with HSFO (3.5%S), US $ / ton
800 700 600 500 400 300 200 100 0 Jan-01

On-Road Diesel - HSFO

LSFO (1%S) - HSFO


Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan.11

Since 2010, (HSFO - On-Road Diesel) price differential increases improving the profitability of conversion projects (HSFO - LSFO) price differential is constant Fuel oil market tightening due to lower available volume on the market

Conversion Options for Clean Fuel Production April 2012

Agenda

Market Outlook
Conversion options to squeeze most of bottom of the barrel Grassroots case studies

Economic comparison
Review of hypothesis Financial analysis

Conversion Options for Clean Fuel Production April 2012

Glossary

Hyvahl R2R DC H-OilRC

= Residue hydrotreating = Residue (R)FCC = Delayed Coker = Ebullated bed technology for resid hydrocracking

Mild HCK = Mild conversion hydrocracking

HyK HDT

= High conversion hydrocracking = Prime-G+, Prime-D

Conversion Options for Clean Fuel Production April 2012

Option 1: Hyvahl + R2R


FG

AT

HDT

LPG C3= Naphtha

AR 649 t/h

Gasoline*

Hyvahl

R2R

Diesel

LSFO
46 40 27 6

LPG and C5+ throughput Total: 574 t/h


Conversion Options for Clean Fuel Production April 2012

* +alkylate
177 278

t/h

RDS: Hyvahl Characteristics


PRS Guard Reactors
Gas Treatment

R1A

R1B

Fixed bed RDS process from AR to 100% VR Can process feeds with high metals content using PRS technology (permutable Readtors

Feed AR / VR
Hydrogen

Fractionation Section

system
Low to medium diesel production: 20-25%

Hydrotreated residue applications:


Ultra low sulfur (S< 0.3 to 0.5 %) and stable fuel oil Excellent feed for resid FCC unit (R2R)

New HDM & HDS catalysts further improve economics


HF 858, HM 848 and HT 438
9

Conversion Options for Clean Fuel Production April 2012

Hyvahl References
Undisclosed 25,000 BPSD Undisclosed 8,000 BPSD S-Oil : 4 units 52,000 BPSD each VALERO 30,000 BPSD Undisclosed 40,000 BPSD QP 51,000 BPSD

NIOEC 81,000 BPSD

Conversion Options for Clean Fuel Production April 2012

10 Hyvahl Licensed Units Total Capacity for Hyvahl of 450,000 BPSD Over 20 Years of VRDS Operating Experience

10

Hyvahl + R2R Commercial Project n1


Project Context
AR feed quality API 17.5

Location: Middle East Crude: Middle East Feedstock: Atmospheric residue Capacity: 40,000 bpsd in one train Objectives: Maxi gasoline production No market for high sulfur coke

S, wt% Ni+V, wtppm

3.9 90

Conversion Options for Clean Fuel Production April 2012

11

Option 2: H-OilRC + Mild HCK + FCC


HDT

AT

FG LPG C3= Naphtha Gasoline* Diesel

AR 649 t/h

VT VGO VR

Mild HCK

FCC
Slurry

Before Fluxing

H-OilRC

HSFO
102 33 16 74

LPG and C5+ throughput Total: 605 t/h


t/h 272
Conversion Options for Clean Fuel Production April 2012

108

* +alkylate

12

H-OilRC Process Scheme Improvements


1st Stage 2nd Stage
3rd Stage

HP Mem

PSA

Fuel Gas

Make-Up H2
HP Air Cooler

HP Abs

Inter Stage Separator Heater


HP HT Separator HP LT MP Abs Separator

MP HT Separator

MP LT Separator Atmospheric & Vacuum Fractionation

Resid Feed
Heater

H-Oil Reactors

Sour Gas Naphtha Gasoil VGO VR

H-OilRC design features:

IS: Inter-Stage Separator Optimized Hydrogen management CU: Cascade Catalyst Utilization

Optimized catalyst systems Max Train Size New Reactor Internals Design
14

Conversion Options for Clean Fuel Production April 2012

H-OilRC and H-OilDC References


PKN ORLEN Plock 1.70 MTA JSC Mozyr Oil 3.00 MTA Shenhua 3.48 MTA Motiva Convent 1.75 MTA PEMEX Salamanca 0.93 MTA Lukoil Burgas 2.35 MTA Nassirya 3.00 MTA Lukoil Perm 3.52 MTA TONEN Kawasaki 1.25 MTA

Husky Lloydminster 1.60 MTA

Husky Lloydminster 1.95 MTA

PEMEX Tula 2.50 MTA PEMEX Tula 2.50 MTA

KNPC Shuaiba 1.44 MTA

6 H-OilRC Units and 3 H-OilDC Units in Operation 3 H-OilRC Units under Design/Construction Total Capacity of ~ 31 MTA 40 Years of Operating Experience

Conversion Options for Clean Fuel Production April 2012

15

FCC / RFCC Propylene solutions

Go for Propylene with Cat Cracking

` FlexEneTM for Higher Flexibility between Propylene / Gasoline and Distillate production World Total: 53 Licenses 31% 1% 8% Cumulative Capacity: ~ 2,294,500 bpsd
1%
Asia - Pacific Central & South America Europe Middle East - Africa North America CIS

High Propylene (HP) FCC for VGO Resid to Propylene (R2P) for Residue

PetroRiserSM for LCN Recycle

3% 56%
16

Conversion Options for Clean Fuel Production April 2012

Integrated H-OilRC + Prime-D Commercial Project n2


Project Context
VR feed quality API 11.0

Location: Eastern Europe Inland Feedstock: Ural VR capacity: 60,000 bpsd Objectives: On-road Diesel EURO V LSFO @1 wt% S demand No market for high sulfur coke Partial upgrading of heavy cycle oil required Existing refinery (VB, FCC)

S, wt% Ni+V, wtppm

2.7 214

Conversion Options for Clean Fuel Production April 2012

17

Option 3: H-OilRC + HyK


FG

HDT
AT AR 649 t/h
LPG Naphtha

VT

VGO HyK

Jet Diesel
UCO

VR H-OilRC
102 15

HSFO
127

Before Fluxing

LPG and C5+ throughput Total: 632 t/h


Conversion Options for Clean Fuel Production April 2012

62 102 225

t/h

18

Axens VGO Hydrocracking Keys Features

Full set of Process configurations


HCK Single stage W/Wo recycle, Two Stages

Very good knowledge of Difficult feedstock as Licensor of SDA, RDS and H-Oil Technologies

Top level set of catalysts: HRK, HDK and HYK series Single Source Supplier: R&D, Design, Catalyst, Start-up,
Services

Complete reference list from VGO HDT to MHC and HCK


High Reliability: 100 % of Guarantees Met
7% 26% 10%

World Total: 83 Licenses Cumulative Capacity: ~ 3,419,500 bpsd


Asia - Pacific Central & South America Europe Middle East - Africa North America CIS

16% 22% 19%


19

Conversion Options for Clean Fuel Production April 2012

Integrated H-OilRC + HyK Commercial Project n3


Project Context

Location: Eastern Europe Inland

VR feed quality API 8.3

Feedstock: Siberian
VR capacity: 47 000 bpsd VGO capacity: 37 000 bpsd

S, wt% Ni+V, wtppm

2.9 348

Objectives:
70% VR conversion Maximize diesel Euro V production LSFO @1 wt% S demand

No market for high sulfur coke

Conversion Options for Clean Fuel Production April 2012

20

Option 4: DC + HyK
FG

HDT

AT AR 649 t/h

LPG
Naphtha

VT

VGO
HyK

Jet

Diesel UCO

VR
DC
88 21 135

Coke

LPG and C5+ throughput Total: 625 t/h


Conversion Options for Clean Fuel Production April 2012

61

100 222

t/h

21

Option 5: HyK + Hyvahl + R2R


FG

AT

HDT

LPG
C3= Naphtha Gasoline*

AR 649 t/h

VT

VGO
HyK

Jet
Diesel

VR

Hyvahl

R2R
48 21 1129

LSFO

LPG and C5+ throughput Total: 596 t/h


Conversion Options for Clean Fuel Production April 2012

232

172

* +alkylate

t/h
81
22

Hyvahl+R2R Commercial Project n5


Project Context
VR feed quality

Location:

Middle East, Coastal

Feedstock: Al Shaheen VR capacity: 51,000 bpsd Refinery: Grassroots Objectives:


Supply domestic demand Produce export grade fuels EURO V Maximize synergy with petrochemical industry
Conversion Options for Clean Fuel Production April 2012

API S, wt% Ni+V, wtppm C7 Asph., wt%

6.4 5.5 160 11.0

23

Agenda

Market Outlook
Conversion options to squeeze most of bottom of the barrel Grassroots case studies

Economic comparison
Review of hypothesis Financial analysis

Conversion Options for Clean Fuel Production April 2012

24

Overview of Options: Bases for Economic Comparison

Feedstock: 100,000 b/d (649 t/h) of atmospheric residue Arabian Medium Crude
Arabian Medium Crude: API= 31.2, S= 2.56 wt%, CCR= 5.73 wt.%, Ni = 10.3 wppm, V = 34 wppm AR (4.4 wt %S) price was adjusted for viscosity content

Investment location: Middle East Vacuum distillation, HDT, SMR, PPS, SRU Amines and alkylation units included Hydrogen produced by SMR only
Note: HDT = hydrotreating, SMR = steam methane reformer, SRU = sulfur recovery unit, SWS = sour water stripping,
PPS = propane-propylene splitter

Conversion Options for Clean Fuel Production April 2012

25

Product Exportation & Pricing Considerations

Middle Distillates exported to Europe

Refinery in the Middle East

Gasoline, Naphtha & Fuel Oil exported to Asia

Refinery Located in the Middle East Brent price scenario: 112 $/bbl (Brent 2011)
Prices in the export area = Estimated Arabian gulf Prices + freight cost

Conversion Options for Clean Fuel Production April 2012

26

Product Price Considerations 2011 Scenario Base Case


Brent 112 $/bbl Scenario
Price Considerations
AR Arabian Medium Crude * Natural Gas LPG Propylene Naphtha Gasoline Kerosene Diesel FOD
LSFO HSFO
(n6, S cont. <3.5 wt%)

590 US $/tons

7 US $/MMBtu 857 US $/t 1 406 US $/t 906 US $/t 991 US $/t 1 006 US $/t 931 US $/t 892 US $/t
646 US $/t 628 US $/t 115 US $/t

* AR price estimated by considering that 108 * (AR price) = 100 * (Fuel Oil price) + 8 * (FOD price)

Included transport cost:


ME Europe = 29 US $/t ME Asia Pacific = 19 US $/t

Petcoke

Conversion Options for Clean Fuel Production April 2012

27

Agenda

Market Outlook
Conversion options to squeeze most of bottom of the barrel Grassroots case studies

Economic comparison
Review of hypothesis Financial analysis

Conversion Options for Clean Fuel Production April 2012

28

LPG and C5+ Liquid Yield


Liquid Yield *, wt%
100% 95% 90%
88.4% 93.1% 97.4% 91.8%

85% 80% 75% 70%


82.8%

N1 Hyvahl + R2R

N2 H-OilRC + Mild HCK + FCC

N3 H-OilRC + HyK

N4 DC + HyK

N5 Hyvahl + HyK + R2R

* Including LPG
Conversion Options for Clean Fuel Production April 2012 29

LPG, C5+ and Coke Throughput


Production Capacity, t/h
700 600 500 400
278 40 27 6 15 0 33 16 74 109 2 81 225 4 173 272 222 232 102 127 21 0 133 2 100 21 11 29

LPG C3= Naphtha Gasoline Jet Diesel FOD LSFO HSFO Coke

173

300 200 100 0


0 46 0

0 102

62 0 102 0

61 0 88 0 48 0

N1 Hyvahl + R2R

N2 H-OilRC + Mild HCK + FCC

N3 H-OilRC + HyK

N4 DC + HyK

N5 Hyvahl + 0 HyK + R2R


30

Conversion Options for Clean Fuel Production April 2012

Before Fluxing

LPG, C5+ and Coke Throughput


Production Capacity, t/h
700 600 500 400
278 40 27 6 15 0 33 16 74 109 2 225 227 222 62 0 136 0 232 61 0 88 0 48 0 4 173 0 144 81 124 3 68 21 0 133 2 100 21 11 29

LPG C3= Naphtha Gasoline Jet Diesel FOD LSFO HSFO Coke

173

300 200 100 0


0 46 0

N1 Hyvahl + R2R

N2 H-OilRC + Mild HCK + FCC

N3 H-OilRC + HyK

N4 DC + HyK

N5 Hyvahl + 0 HyK + R2R


31

Conversion Options for Clean Fuel Production April 2012

After Fluxing

Economic Assumptions & Methodology Arabian Gulf

Economic evaluations based on: Discounted Cash Flow (DCF) analysis Profitability index comparisons (NPV, IRR, NPV/TCI, POT)

Discounted Cash Flow (DCF) analysis 10% contingencies Depreciation period: 15 years Project duration: 20 years Discount rate: 12% Tax Rate: 20% Construction duration 3 years
Conversion Options for Clean Fuel Production April 2012

32

Total Capital Investment 2011 Scenario


Billion US$
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
N1 Hyvahl + R2R N2 H-OilRC + Mild HCK + FCC N3 H-OilRC + HyK N4 DC + HyK

TCI includes:
ISBL investment
Off sites Engineering fees Contractor fees

3.2 2.9 2.6 2.3

3.1

Interest on construction loan Start-up costs


Working capital

N5 Hyvahl + HyK + R2R

Conversion Options for Clean Fuel Production April 2012

33

Total OPEX Comparison Arabian Gulf Brent 112 $/bbl Scenario


US$/ bbl AR

14 12
4.7 4.1 5.0 5.2 3.7 Manpower + Maintenance, Taxes, Insurance & Overheads Utilities (incl. Natural Gas)

10 8 6

9.3 7.3 8.5 7.7 6.3

4 2 0

0.9

1.3
N2 H-OilRC + Mild HCK + FCC

1.4
N3 H-OilRC + HyK

0.2
N4 DC + HyK

0.8
N5 Hyvahl + HyK + R2R

Catalyst & Chemicals

N1 Hyvahl + R2R

Conversion Options for Clean Fuel Production April 2012

34

Product Revenues Arabian Gulf Brent 112 $/bbl Scenario


140 120 100
26

Product Revenues (US $/bbl AR)


8 9 1 3 7 5 16 1 16 66 1 4 27 29 1 24 20 50 1 51 50 52 39 13 22 21 13 2 41 4 4 6

LPG C3= Naphtha Gasoline Jet Diesel FOD LSFO HSFO Coke

80 60 40 20 0

N1 Hyvahl + R2R

N2 H-OilRC + Mild HCK + FCC

N3 H-OilRC + HyK

N4 DC + HyK

N5 Hyvahl + HyK + R2R


35

Conversion Options for Clean Fuel Production April 2012

Economic Results Arabian Gulf 2011 Scenario


n1
Hyvahl + R2R

n2
H-OilRC + Mild HCK + FCC

n3
H-OilRC + HyK

n4
DC + HyK

n5
Hyvahl + HyK + R2R

Options
NPV@12% (Billion US $)

2.13 0.66
21.5%

1.45 0.50
19.4%

2.03 0.78
23.1%

1.49 0.64
21.3%

2.28 0.72
22.4%

NPV/TCI
IRR

Conversion Options for Clean Fuel Production April 2012

36

IRR Sensitivity Study to Natural Gas Price / Arabian Gulf


IRR
29% 27% 25% 23% 21% 19% 17% 1 2 3
Opt 1: Hyvahl + R2R Opt 2: H-OilRC + Mild-HCK + FCC Opt 3: H-OilRC + HyK Opt 4: DC + HyK Opt 5: Hyvahl + HyK + R2R

Brent 112 $/bbl Scenario

Gas Price, $/MMBtu


Base Case Gas Price = 7 $/MMBtu

9 10 11

Conversion Options for Clean Fuel Production April 2012

37

IRR Sensitivity Study to FO Price


IRR
23% 21%
Opt 1: Hyvahl + R2R

Brent 112 $/bbl Scenario

19% 17% 15%


300 350 400 450 500 550 600 650

Opt 2: H-OilRC + Mild-HCK + FCC Opt 3: H-OilRC + HyK Opt 4: DC + HyK Opt 5: Hyvahl + HyK + R2R

13% 11% 9%
Base Case 100 US $/t

Base Case 300 US $/t

FO Price US $/t
Base Case HSFO = 628 US $/t LSFO = 646 US $/t

Conversion Options for Clean Fuel Production April 2012

40

Conclusion

Axens has an extensive experience on upgrading schemes and offer a unique conversion technologies portfolio
Covering all market demand type from maxi gasoline to maxi middle distillate Integrated solutions (HCK, HDT, etc) reducing the overall investment cost

With a Brent price scenario at 112 $/bbl, all 5 options studied are profitable (IRR > 20%)
Optimum solution depends on refinery specific constraints
Conversion path selection depends on the market demand

Conversion Options for Clean Fuel Production April 2012

41

Upgrading Options for Diesel Production

42