CEW Features

Technical Article

Slurry Phase Hydrocracking: Bottoms Upgrading

for Todays Market
The article focuses on the significance of resid processing methods which has emerged as a big concern for many
refineries as they struggle to improve product qualities and refinery margins simultaneously while dealing with
their large residuum pool. The authors shares insights into the Residuum Landscape and advocates Slurry Phase
Hydrocracking which has not enjoyed widespread acceptance as the technology of choice for resid upgrading.

n the face of high crude oil prices, low

natural gas prices, and ever increasing
product quality regulations, refiners
are presented with an unprecedented
situation of improving margins by reevaluating their resid processing
options. The ability to reliably eliminate
fuel oil production, maximise high quality
distillate yields, and achieve almost
complete conversion to high value
transportation fuels, is essential for
sustaining the value of installed assets
in the years to come.
In its simplest form, refining is a process
of changing the carbon to hydrogen
ratio of naturally occurring crude oils.
At a molecular level, the operation of
all refineries in the world is essentially
targeted at converting low hydrogen
to carbon ratio feed stocks into high
hydrogen to carbon ratio transportation
fuels. Changing the H/C ratio between
feedstocks and products can only be
accomplished through the rejection of
carbon molecules or the addition of
hydrogen molecules.

Figure 1: Hydrogen/Carbon mole ratio

52 March 2014

Figure 2: In the US shale gas production has had a dramatically reduced the price of natural gas

Carbon rejection is favoured by low crude

prices and high hydrogen prices. Under
these conditions it is more economical to
reject the residuum as petroleum coke,
while producing the required transport
fuel volumes by incremental crude
oil processing. Conversely, hydrogen
addition is favoured by high crude prices
and low hydrogen prices, when it is more
economical to upgrade nearly every
molecule of residuum to transport fuels,

while also maximising transport fuels

production from the base crude capacity.
In the United States shale gas production
has had a dramatically reduced the price
of natural gas, relative to crude oil, on
a comparable energy basis (see figure
2). This provides a relatively low cost
source of hydrogen in many geographical
regions. Converting inexpensive hydrogen
into high value liquid transportation fuels
by hydrogen addition to low H/C ratio
feedstocks provides a good economic
return. Economic analysis clearly points
to a transition from carbon rejection to
hydrogen addition at USD 50-60/barrel
crude, even when considering natural gas
prices of USD 10/MMBTU. Lower natural
gas prices provide an even more significant
tailwind to hydrogen addition economics. As
the new gas production techniques spread
to other parts of the world, projections
are that hydrogen addition economics will
remain favoured for many years.
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Figure 3: Projected comparison between Residual fuel demand and total petroleum demand

Another significant factor in bottoms

upgrading economics is the problem
of stranded streams. Many refineries
are littered with low value streams
that must be blended off, disposed or
sold at loss in order to accommodate
processing equipment limitations from
a different era. The bulk of operating
refineries around the world have little
or no residuum processing capability
and produce large volumes of high
sulfur fuel oil and bunker fuel. Falling
demand for these undesirable products
will continue into the future, and already
negative margins for these streams will
only get worse.

Figure 4: Regulatory pressures on residuum outlets such as marine bunker fuels are expected
to worsen in the future.

Regulatory pressures on residuum

outlets such as marine bunker fuels
are expected to worsen in the future.
As world governments move towards
cleaner bunker fuels, refiners will be
forced to find new ways to deal with
their large residuum pool. It is a task
that is becoming more pressing as oil
producers bring to market increasing
amounts of heavy crudes, which cost
less, but feature substantial increase
in resid content. While shale oil
production has provided a temporary
respite from declining average API
and rising sulfur contents, most
projections do not expect shale oil

production increases to offset the

increasingly heavy sources of crude oil
production from new discoveries and
reserve development.
Not only refinery products but also
by-products must be considered when
evaluating bottoms upgrading process
technology. The market for coke from
delayed cokers is highly dependent
on availability of local outlets for the
material, such as power plants. An
abundance of coke on the market
creates prices that only marginally
cover costs or are negative. Combined
with the economic considerations
are the environmental considerations
of burning or disposing of this
low H/C material.
On the product side of the economic
equation, the gasoline to distillate ratio
continues to move in favor of distillate
on a worldwide basis. Even in markets,
where FCC units are the primary
conversion process and gasoline the
predominant transportation fuel, rising
worldwide demand is driving investments
aimed at maximising production of high
cetane, ultra-low sulfur diesel.

Figure 4: Regulatory pressures on residuum outlets such as marine bunker fuels are expected to worsen in the future

Not only refinery products but also by-products must be considered

when evaluating bottoms upgrading process technology. The market
for coke from delayed cokers is highly dependent on availability of
local outlets for the material, such as power plants.
54 March 2014

The rising D/G ratio is forecast to

continue, with most of the incremental
increase in transportation fuel volume
for future years coming from distillate.
This is an important consideration
for refiners, when making long-term,
high CAPEX investment decisions.
Current economics clearly point to
hydrogen addition as opposed to carbon
rejection especially for increased
distillate production.
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CEW Features
residue processed in the RFCC while
keeping regenerator temperatures at
an acceptable level. Catalyst coolers
and other methods of heat removal
can improve the range of feedstock
processing possible but RFCC is still
very limited.

Figure 5: On the product side of the economic equation, the gasoline to distillate ratio continues to move in favor of distillate on
a worldwide basis.

Today, the market imposed challenge to

refiners is to find a hydrogen addition
based resid conversion technology
which supports the strong economics
of near complete conversion, high
selectivity towards diesel, Euro V quality
and high operating reliability all at
a reasonable capital investment and
strong ROI. A convincing case for slurry
bed hydrocracking as the technology
choice for todays market conditions will
be laid out in this paper.
The Residuum Landscape
Residuum oils can be broadly classified
by their contaminant metal (Ni +
V) and Conradson Carbon Residue
(CCR) content. These two parameters
broadly define the suitability and type
of conversion technology which can be
applied to these heavy oils.

Fixed bed hydroprocessing is suitable

for processing atmospheric or vacuum
residue with modest amounts of
metals and CCR, and mainly for
desulfurisation rather than conversion.
Conversion is typically 15-20 per
cent and further conversion of the
products in other units is necessary.
Nonetheless, operating pressures are
high, increasing investment costs and
operating costs can be high as well due
to catalyst deactivation from metals
and coke.
Resid FCC (RFCC) is a seemingly
attractive way to convert resid with
no unconverted product to deal with.
Unfortunately, the more hydrogen
deficient the feedstock the more of it
forms coke on catalyst. This sets a
limit on the amount or heaviness of the

More
recently,
ebullated
bed
hydrocracking technology has been
the choice for hydrogen addition to
residue with higher levels of metals
and CCR. Conversion is higher than
prior technologies but still limited to
less than 80 per cent conversion and
in some cases, significantly less. The
nature of the e-bed conversion process
creates an unstable asphaltene phase
which usually limits overall conversion
by causing severe fouling in downstream
equipment. Introducing aromatic solvents
and high recycle rates can help maintain
asphaltene solubility and reduce fouling
but these solutions have a cost, and
there is still an upper limit on the level
of asphaltene conversion which can
be achieved.
Slurry phase hydrocracking offers
the greatest potential for a robust
residue conversion technology which
encompasses
the
entire
residue
landscape. Only coking is as immune
to high levels of CCR or metals content
in the feed and, being a hydrogen
addition process, slurry hydrocracking
has the advantage over coking of near
complete conversion of the residuum to
high value products.
One such slurry phase technology
is Veba Combi Cracking (VCC),
a
commercially
proven
bottoms
upgrading technology suitable for
converting 95 wt% of residues into high
quality distillates.

Figure 6: Resid FCC (RFCC) is a seemingly attractive way to convert resid with no unconverted product to deal with.

56 March 2014

VCC: Veba Combi Cracking

The origin of slurry phase hydrocracking
and the VCC process dates back to 1913,
when Freidrich Berguis was awarded
his first patents for the process of
liquefying coal. The 1931 Nobel laureate
had demonstrated that liquid products
can be produced by simply subjecting
coal to a high enough temperature and
hydrogen pressure.
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Features CEW
were built for developing the technology.
Over its operating period, significant
improvements were made to the process
through equipment design modifications
and operational adjustments. Two
units were licensed by Veba to utilise
VCC technology, but, once again, oil
prices fell to levels which would not
support project economics. Bottrop
was decommissioned and shutdown in
2001 after a period of sustained low
oil prices.

oil prices and the end of government

subsidies forced the units to be shut
down and subsequently dismantled. Low
crude oil prices make it uneconomic to
add hydrogen to residue, in particular
for this period when outlets for
residue, such as fuel oil, existed. VCC
technology went dormant for a period
until viable economics would once
again surface.

Following BPs acquisition of Veba and

a rise in crude oil prices from increasing
market demand rather than exogenous
events, VCC was added to BPs Vision
2030 portfolio and the BP Advanced
Refining Programme. In 2008 a new 1
BPD VCC pilot plant was designed,
built and commissioned at BPs research
facilities in Naperville, USA. In 2010, BP
and KBR agreed to a marketing, licensing
and engineering alliance to promote
the technology.

The trigger for resurrection of VCC was

the hike in crude oil prices resulting
from the oil embargo of the 1970s.
Economics of hydrogen addition and high
conversion of residues turned positive
and Veba Oel constructed a 3500 BPD
in Bottrop, which started up in 1981. In
addition, 200, 3.5 and 1 BPD pilot plants

Slurry Phase Hydrocracking

While slurry phase hydrocracking has been
reliably practiced for several decades, it
has not enjoyed widespread acceptance
as the technology of choice for resid
upgrading. Even with its strengths of
high asphaltene conversion and distillate
selectivity, the specific set of economics

Figure 7: Veba Combi Cracking: A timeline

Using these principles, 12 commercial

units were built and operated in Germany
between 1927 and 1945, producing about
100,000 BPSD of transportation fuels from
coal and coal tar. After WWII, several of
these units were dismantled and sent to
Eastern bloc countries. The remaining
units, including the six operating trains at
Gelsenkirchen, were converted to 10,000
BPSD trains for processing refinery
vacuum residues. The first true VCC units
were developed in the 1950s when an
integrated second stage fixed bed reactor
was added to the slurry phase reactor.
It was realised that mild hydrofinishing
of the slurry phase products could result
in higher quality distillate. This integrally
coupled combination of slurry phase
hydrocracker and trickle bed hydrofinisher
was the origin of the VCC process as it is
known today.
These original VCC units operated on
residues until 1967 when very low crude

Figure 8: VCC Process Flow

Chemical Engineering World

In 2008 a new 1 BPD VCC pilot plant was designed, built and commissioned
at BPs research facilities in Naperville, USA. In 2010, BP and KBR
agreed to a marketing, licensing and engineering alliance to promote
the technology.
supporting VCC was elusive until recently.
Higher hydrogen consumption and CAPEX
compared to alternative resid conversion
technologies was not economically justified
without sustained higher crude and
product prices. The appropriateness of any
technology choice must be weighed against
the prevalent market conditions, and its
relevance is deeply rooted in the principles
of molecule management. Embedded in
this approach is the core belief that refining
margins are maximised by selectively
maximising the value of every molecule in
naturally occurring crude oils in every stage
of processing. Vacuum residues can
be broadly classified by SARA analysis
(Saturates,
Aromatics,
Resins
and
Asphaltenes). These properties set the
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CEW Features

Figure 10: Comparison of 1st Stage Yields

Figure 9: VCC Product Properties

severity of operation (pressure and temperature), hydrogen uptake,

and capital investment required to convert the material. Since
asphaltenes are the most hydrogen deficient part of the resid and
contain virtually all the impurities, the decision to convert them
or remove them can be complex. Following questions must be
answered prior to undertaking large investments:
1. Will crude oil prices remain high?
2. Are outlets for byproducts, such as pet coke or fuel
oil, available?
3. Is hydrogen inexpensive relative to crude?
4. Are markets for high quality distillate products growing?
The economics of not upgrading, partially upgrading or fully
upgrading high C/H molecules is substantially influenced by:
crude price, natural gas price, and capital investment. Historical
low crude oil prices, high natural gas prices, and until recently,
an acceptable margin for fuel oil relative to lighter products all
had an inhibiting effect on the value of upgrading asphaltene
molecules. It was both economical and convenient to discard
these molecules as coke or as unconverted residual fuel oil.
While slurry hydrocracking technology was sound, the market and
regulatory landscape did not support the additional capital and
operating cost to bring it to commercial application.
The past decade has seen a shift in the market dynamics affecting
residue upgrading crude oil prices have been sustainably higher,
natural gas prices are lower, the market for high quality distillate
is strong and growing and there is a shrinking market for fuel
oil and petroleum coke. Conversion of asphaltenic molecules to
lighter products can now be economically justified. Slurry phase
hydrocracking is the preferred choice for these new market
conditions and specifically VCC since it has been developed
through decades of innovation.
A comparison of the Net Present Value (NPV) of three technology
routes derived from upgrading a refinery residue as a function of
bench mark crude price shows a remarkable trend in favor of slurry
phase hydrocracking. Both the economic and regulatory trends are
heavily weighted in favour of VCC, and the current and future market
conditions are aligned with the inherent features of this technology.
58 March 2014

The economic evaluation for one North American refinery clearly

shows that the NPV of the ebullated bed process exceeds that
of the delayed coker at a bench mark crude price of USD 85/bbl.
This is primarily because of the lower conversion of e-bed, larger
volume of lower value unconverted residuum, and the production
of aromatic distillate products that need retreatment. On the other
hand, the net present value of VCC exceeds that of the delayed
coker at a bench mark crude price of USD 50/bbl, making it the
clear choice for hydrogen addition technology.
Reliability
The value of any technology can only be extracted if reliable
long term operations can be sustained. In the case of VCC, this
reliability can only be achieved if high asphaltenes conversion can
be accomplished without fouling the unit. A molecular evaluation of
residuum will reveal that the asphaltenes are held in solution by the
aromaticity of the solvent phase.
The basic conversion chemistry for slurry phase hydrocracking is
essentially thermal in nature and relatively similar to that seen in
other carbon rejection processes. The condensation chemistry
associated with these cracked molecules, which would normally
lead to coke formation, is interrupted by the high hydrogen partial
pressure. Therefore, unlike a typical thermal conversion processes;
the reaction system produces a very high level of lighter products
with little condensation or coke formation.
As conversion progresses, the side chains that hold asphaltenes
in solution are easily cracked causing them to lose solvency, and
eventually precipitate. An analogy can be made to the operation of
a solvent de-asphalting process. In that case, when the asphaltenes
are dissolved in a light paraffinic solvent, phase separation occurs,
resulting in precipitation as pitch.
Unconverted asphaltenes precipitate and adhere to equipment
surfaces the walls of the reactor, piping, heat exchanger, etc. This
severe fouling limitation leads other resid hydrocracking technologies
to reduce their per pass conversion or to resort to recycle with the
addition of a large volume aromatic solvent stream in an attempt to
keep these unconverted asphaltenes in solution.
VCC technology operates with stability and high conversion in
a mode that eliminates fouling. This issue has been researched
over several decades dating back to the origins of the technology.
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Features CEW
Over 1,000 patents and over 2,000 filings were made, covering the
entire landscape of catalytic and additive options. These efforts
lead to the discovery and commercialisation of a non-catalytic,
non-metallic additive which all but eliminates fouling tendencies
and allows unprecedented high asphaltene conversion.
Asphaltene molecules are adsorbed to the high surface area of
the additive where the required residence time is made available
for the asphaltenes to continue to crack. The lighter, cracked
products are released from the additive surface and the heavier,
unconverted asphaltenes, containing all the contaminant metals,
remain on the additive. Later, the additive is removed from the
process along with the captured unconverted asphaltenes and any
contaminant metals. This chemistry is possible because of the
higher operating pressures of VCC which allow the unit to operate
in a non-catalytic mode by inhibiting condensation chemistry.

reliability of the process has been proven by operating factors

that have consistently exceeded 90 per cent over many years
of operation.
Conclusion
Current market and regulatory conditions substantially favour
investment in hydrogen addition technologies. Slurry phase
hydrocracking in general and VCC technology in specific, are
ideally positioned to exploit the new market conditions. With VCC
near complete, once through, distillate selective conversion to high
quality finished products can be reliably achieved with high onstream factors.

This combination of high hydrogen partial pressure and

non-catalytic additive system is unique to VCC and is a major
reason it has decades of reliable operation at high (>95%),
once-though conversion, with no signs of fouling. Hydrogen
addition needed to meet final product quality is met by adjusting
the trickle bed hydrofinishing conditions. This separation of
thermal conversion of residue from the catalytic conversion of
converted material is the key to the technology. Each stage does
the job for which it was designed and this eliminates the issues
often seen when using catalysts for residue conversion. The

Authors' Details
Steve Mayo
Director
VCC Technology, KBR Technology
Email: steve.mayo@kbr.com
Mitra Motaghi
Business Development Manager
KBR Technology
Email: mitra.motaghi@kbr.com
Rahul Ravi
Senior Technical Professional Process
KBR Technology
Email: rahul.ravi@kbr.com

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