20th World Petroleum Congress, Doha 2011

Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

Increasing Refinery Flexibility: Innovative

Approaches for Manufacturing High Quality Products
from Heavy Sour Crudes
Ms Maria Aldescu, KBC Advanced Technologies plc, USA

Abstract
The closing of the light/ heavy crude spreads and generally high crude prices have made
production of very heavy crudes economically attractive. The next challenge refineries will
face is converting heavy, sour, and high metal content feedstocks into high quality
transportation fuels (e.g. Euro V). This paper will consider alternatives including traditional
configurations to be considered by new refineries, low-cost alternatives for implementing
higher conversion capacity in existing refineries, and some of the newer technologies which
will likely be considered in refineries of the future.

For grassroots refineries, depending on the heavy crude slate to be processed and the
specific market trends (maximum gasoline or maximum diesel production), there are several
traditional configurations that allow flexibility. These include a fluid catalytic cracker (FCC)
with a hydrocracker (HCU) and a delayed coker (DCU) or residue hydroprocessing unit
(RHP). Existing refineries without heavy-end conversion configurations can consider
evaluating the purchase of existing delayed coking capacity (or components from units never
built) at low prices rather than investing in new thermal upgrading capacity.

Non-traditional new or 'novel' technologies may consider over-cracking at the FCC unit to
produce larger quantities of light olefins that can be polymerized to produce a high quality
diesel product. Another newer approach is gasifying heavy residue or upgrading petroleum
coke to produce synthesis gas that can be converted into high quality diesel via Fischer-
Tropsch technology. Producing "green diesel" via hydrotreating or trans-esterification
vegetables oils will also make-up a portion of the future global diesel pool. Longer term,
bioengineered microbes may be produced to selectively convert heavy hydrocarbons into
diesel.

Introduction
Refiners have long faced a major dilemma in designing refineries to produce high quality
products: purchase high quality crudes to minimise investment or invest in expensive
technology to allow low quality crudes to be upgraded to meet product specifications. This
choice is driven by the relative costs and availability of low versus high quality feedstocks as
well as the current and anticipated future market demands for products. The continuing
depletion of high quality crude combined with the world market demand shifting toward higher
quality fuels and other products is putting renewed emphasis on this choice.

Many of the tried and proven technologies which have been employed for decades have seen
st
evolutionary improvements which will extend their usefulness well into the 21 century. These
offer the refiner a viable route to upgrade existing refineries to accept lower cost feedstocks
and/or produce additional high value products. The emergence of several revolutionary
technologies may have a dramatic effect on both the feedstocks to the refinery and the
process steps utilised within it.

This paper will review trends in products and product qualities, crude supplies, evolutionary
technology developments and some interesting revolutionary developments; all of which will
impact investment in future refineries.

© World Petroleum Council

 20th World Petroleum Congress, Doha 2011
Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

Evolutionary Developments
Market and environmental demand trends are continuing in the direction of lower sulfur and
higher hydrogen content of final products. Refineries are still trying to reduce fuel oil
production while increasing diesel and gasoline. At the same time, the quality of available
refinery feedstocks is decreasing.

Evolution in Crude Supplies

A basic fact: unconventional oil production is much more expensive than conventional oil
recovery.

The first Canadian producers of heavy bitumen known as ‘Athabasca oil sands’ used surface
mining with massive equipment to mine the oils sands, separate the bitumen from the sand
and return the sand to the excavation site. More recent bitumen production uses the Steam
Assisted Gravity Drainage (SAGD) method developed by the Alberta Oils Sands Technology
and Research Authority in the 1980’s. SAGD uses steam to heat the bitumen, allowing it to
flow by gravity to a reservoir where it can be recovered.

Other methods of recovering bitumen from oil sands are Cyclic Steam Stimulation (CSS) that
uses cycles of steam injection, soak and recovery, Vapor Extraction Process (VAPEX) which
is like SAGD but uses solvents instead of steam, Toe to Heel Air Injection (THAI) and
Combustion Overhead Gravity Drainage (COGD) processes which combust a portion of the
bitumen to generate heat and recover the bitumen.

Orinoco tar sand is the most common unconventional crude oil produced in Venezuela.
Typical qualities for Venezuelan unconventional crude oils are: 5°-15° API gravity, 4-6wt%
sulfur and 1-2wt% nitrogen. There are also some conventionally produced heavy crude oils
(e.g. Ku-Maloob-Zap) that are very similar in quality to unconventional heavy crudes. Some
other unconventional crude oils (Colorado shale oil and coal liquids) are much poorer in
quality and more difficult to produce.

Options for producing and distributing these very heavy crude oils vary, including:
• Selling directly to refineries that can handle less than 10° API crude oils
• Creating a heavy crude oil 20°-25° API, “Maya Crud e Equivalent” to be processed at
existing high conversion refineries
• Creating a higher quality, sweet 30°-40°+ API cru de oil that many refineries can
handle
• Produce high quality finished products

Historically, prices have favoured sacrificing quality in order to produce as much crude oil as
possible. Once a plant is built, recovering some high value finished products is often
desirable as long as it does not significantly reduce the total amount of heavy crude oil
produced. This is a way of effectively using excess heavy oil processing capacity to upgrade
unconventional oils. If this type of heavy oil production continues until there is no longer
excess heavy oil treating capacity available, it will become necessary for producers to build
additional upgrading capacity. Market prices for heavy crude oil might drop and producers
and refiners will have an incentive to maximise addition upgrading capacity. Some upgraders
may take advantage of price fluctuations to produce a higher quality product at the expense of
production until sufficient demand for synthetic crude matches the upgrading capacity. If
unconventional crudes are still in abundant supply it may be desirable to expand upgrading
facilities with additional residue conversion and hydrocracking capacity, especially if a strong
market materialises in China for synthetic crude. Expanding hydroprocessing unit capacity will
offer the upgrader the opportunity to produce either higher quality products, or additional
lower quality products based on heavy crude oil and finished product economics.

There is a wide range of crude oil upgrading options that can allow a large selection of
upgraded crude oil qualities, ranging from the simple process of diluting with light sweet crude
oil (naphtha or natural gas condensates) to produce a ‘Maya Crude Equivalent’ crude, to
complex flow schemes that include residue hydrocracking, delayed coking and multiple high
pressure hydrocracking units that generate 100% high quality finished products.

© World Petroleum Council

 20th World Petroleum Congress, Doha 2011
Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

The market for selling very heavy crude oil directly is extremely limited because very few
existing refineries are capable of receiving and/or processing such low quality crude oils. It is
likely that at most 50 kBPD can be sold to these refineries at distressed prices for short
periods of time.

Producing “Maya Crude Equivalent” is currently an attractive level of upgrading. Target

specifications for producing this type of crude are: gravity around 20°-25° API and sulfur
content around 3-4wt%. There is currently high demand for this quality crude oil because the
production of Maya and other similar heavy crude oils have been declining in recent years.
Exports of Maya crude oil have decreased by about 1 MMBPD over the last 7 years. Capacity
of processing heavy oils has increased significantly over the same time period (notably at
Reliance, Jamnagar India, Motiva, Port Arthur USA, and Marathon Garyville, USA).

Creating a higher quality sweet synthetic crude oil with API gravity between 30° and 40° API
opens up the potential market for upgraded crude oil by an order of magnitude because most
refineries are capable of processing crude oils of this quality. At the present time it may be
difficult for the producer to justify the cost of the additional upgrading required. However, this
level of upgrading could be phased in, if necessary, to accommodate potential market
changes in the future.

Creating high quality finished products from unconventional crude oils is possible but unlikely
to be economically viable unless the refinery is located either near a large high value market
for finished products, has very economic logistical options available for product movement or
has a unique specification it can meet. For example, ultra- low pour point diesel is a high
value product in western Canada, near the upgrader site, because of the cold winter.
Evolution in Processing
For grassroots refineries which depend on a heavy crude oil slate and specific market
demands (maximum gasoline or maximum diesel production), there are several traditional
configurations that allow flexibility. The following discussion should be considered applicable
to a traditional refinery processing heavy crude or a syncrude upgrading site.

Heavy oils are very hydrogen deficient and have high levels of contaminants, such as sulfur,
nitrogen, organic acids, vanadium, nickel, silica, asphaltenes, etc. Options for improving
quality to produce finished products or marketable crude oil include carbon rejection
processes like delayed coking and hydrogen addition processes like LC-Fining or H-Oil.

The lowest cost method of upgrading heavy oils is dilution with higher quality oil to produce a
product which can be upgraded further in another facility, as illustrated in Figure 1 below.

© World Petroleum Council

 20th World Petroleum Congress, Doha 2011
Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

Figure 1: EXTRA HEAVY OIL UPGRADING

The figure shows a simple heavy oil upgrader. Significant amounts of diluents are needed to
upgrade the heavy oil to the point where it can be processed in a conventional facility. Some
carbon and contaminants are rejected in the residue.

The imported diluents in this operation could be locally available light crude oil, the products
from a heavy crude oil upgrader, available light condensates. In fact, this is the option used
to upgrade low API Ku-Maloob-Zap crude oil to extend the supply of heavy crude oils.

All potential upgrader operations have a certain amount of high carbon content bottoms that
must be dealt with. Unless low enough cost logistics are available to move the bottoms, a
power plant is usually the most desirable option if there is a high local power demand.

From a capital investment point of view, the simplest upgrader configuration is a crude and
vacuum unit to produce diluents with vacuum residue going to a power plant. Adding a
visbreaker or a deasphalter would be an improvement over this configuration that will allow
additional heavy synthetic crude oil to be produced.

Existing refineries without heavy-end conversion configurations may consider evaluating the
purchase of existing delayed coking capacity (or components from units never built) at low
prices rather than investing in new thermal upgrading capacity.

The most common true upgrading configuration includes carbon rejection with a delayed
coker that produces a high carbon content product like petroleum coke. The petroleum coke
can be sold (if logistics options are economically available), burned locally to generate power,
or gasified to produce H2, high quality diesel via Fischer-Tropsch (F-T), petrochemical
products or as a last resort be simply inventoried in long term storage.
TM
Delayed coking has become the preferred option although fluid coking or Flexicoking are
also options that are sometimes considered. Cokers generate intermediate streams with high
aromatic and olefin content that must be upgraded via additional hydrotreating. There are
many possible hydrotreating configuration options. It is usually desirable to have at least two
hydrotreaters to separately treat lighter and heavier material because the hydrotreating
severities required vary significantly with boiling range (<800 psig versus >1,500 psig plus).
If the upgrader is going to produce some finished products or even high gravity synthetic
crude oil it is desirable to have additional hydrotreaters as shown in the following figure:

© World Petroleum Council

 20th World Petroleum Congress, Doha 2011
Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

Figure 2: FULL CONVERSION UPGRADING WITH HYDROCRACKING

LPG

Naph
CCR
HDS

Mogas
Jet HDS

Crude CDU
Jet

Diesel
HDS
Diesel ULS

VDU HCU

Coker
SRU H2 Plant

This configuration allows the upgrader to produce diesel, jet and gasoline products or to use
any of the intermediates to produce diluents that can be used to adjust the production for
different quality grades of crude oil based on market demand and price.

The next decision is whether to include Residue Hydrocracking to replace the delayed coker
unit.
TM TM
LC-Fining (Chevron- Lummus- Global) and H-Oil (Axens) ebulating bed units are two of
the most commercially proven technologies for hydrocracking residue. Other competing
technologies are sold by UOP, Veba, Headwaters and others. Reliability of residue
hydrocracking technologies has been poor in refinery operation but is somewhat better as an
upgrader because the feed is more consistent. Increasing conversion beyond 60-70% has
often caused incompatibility issues which can result in high sedimentation and reactor fouling.
As a result, residue hydrocrackers should not be operated at full (100%) conversion. These
technologies also produce a hydrogen deficient heavy residue product. Some upgraders
have blended this heavy residue product into the synthetic crude oil product but this causes
compatibility issues, usually furnace fouling at the crude units at the refineries that purchase
the synthetic crude oil. This will limit the value of the synthetic crude oil product. For this
reason it is recommended that a delayed coker should be included to upgrade the bottoms
from a residue hydrocracking unit. The following flow scheme shows this configuration:

© World Petroleum Council

 20th World Petroleum Congress, Doha 2011
Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

Figure 3: FULL CONVERSION H2 ADDITION REFINERY WITH RESIDUE

HYDROCRACKING

LPG

Naph
CCR
HDS

Mogas

Jet HDS

Crude CDU
Jet

Diesel
HDS
Diesel ULS

VDU HCU

Resid H/C
followed
by Coking SRU H2 Plant

This configuration is significantly more costly from capital investment and operating cost
perspective than the configuration without a residue hydrocracking unit, but the liquid yields
are much higher. Liquid yields from an upgrader with a delayed coker are typically 90-95 LV
% on feed. By adding a residue hydrocracker and additional severe hydrotreating, liquid
yields could be as high as 105-110 LV% on feed.

Adding a Fluid Catalytic Cracking Unit (FCCU) to the configuration will give additional
flexibility to produce larger quantities of gasoline as shown below:

Figure 4: FCCU INTEGRATION IN REFINERY CONFIGURATION

This configuration could be more desirable in locations where gasoline is valuable or where
there are some limits on the amount of H2 that can be economically produced.

Hydrogen is normally produced by Steam Methane Reforming of inexpensive natural gas.

However, natural gas is not always available for hydrogen production, particularly in areas
such as the oil sand or tar sand regions. In addition, most heavy oil upgraders produce larger
quantities of low value petroleum coke (petcoke). A portion of this petcoke can be used for
hydrogen, steam and power production. One option to use this petcoke is an Integrated
Gasification Combined Cycle (IGCC) power plant.

© World Petroleum Council

 20th World Petroleum Congress, Doha 2011
Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

The “Clean Syngas” stream in this configuration is a mixture of H2, CO, CO2 and CH4 that
could be sent to a Pressure Swing Adsorption H2 recovery unit to produce 99.9%+ purity H2
instead of producing power. Gasification unit reliability is lower than typical refinery units.
Therefore it is recommended that multiple trains of gasification should be used, with H2
production having the highest priority. Export power sales or, if possible, export petcoke sales
should act as the balance to consume all of the petroleum coke produced.

Another option for using the synthesis gas produced from petcoke gasification is Fischer-
Tropsch (F-T) synthesis to produce high quality diesel as follows:

Figure 5: FISCHER-TROPSCH FLOW SCHEME for GASIFICATION add into an EXISTING

REFINERY

If a large amount of power production is not a viable option and all petroleum coke must be
consumed on site, addition of a F-T reactor to produce high quality diesel may be a viable
option. Other options for use of synthesis gas produced via petroleum coke gasification are
methanol, ammonia, urea or other petrochemical products.
Revolutionary Developments
If current trends continue it is likely that diesel demand will significantly outpace gasoline
demand. As a result there could be a large excess of FCCU capacity. There are many
possible uses for this capacity if and when it eventually becomes available. Adjusting catalyst
formulation and severity to maximise light cycle oil (LCO) that can be hydrotreated and
blended into diesel is a possibility, but it is problematic because the gravity and cetane
numbers of LCO are poor.

UOP and others licensors have proposed using FCCU like units to convert biomass and
waste oils into fungible refinery products. This may be a viable option for a limited number of
refineries that are located near a large source of biomass feedstock.

Non-traditional new or ‘novel’ technologies may consider over-cracking at the FCC unit to
produce larger quantities of light olefins that can be polymerised to produce a high quality
diesel product.

Feeding light naphtha or liquefied petroleum gas (LPG) to FCCUs and adjusting severity to
maximise production of C2/C3/C4 and C5 olefins is also a possibility. Some of these olefins
will likely be used to produce petrochemicals but it is also possible that oligimerisation
reactors will be built to convert olefins into high quality products. Oligimerisation reactors
producing high quality diesel currently operate very reliably in South Africa.

© World Petroleum Council

 20th World Petroleum Congress, Doha 2011
Forum 12: New refinery technologies to meet feedstock flexibility, transportation fuel demand and quality

Biological technologies have been used in the refining industry for many years.
Microorganisms are routinely used in refinery water treatment plant. Ethanol has been
produced via microbial fermentation for centuries. The US Department of Energy has been
conducting a BioMass program for many years and recently started to target biochemical
production in a “biorefinery” that uses microorganisms to produce useful “building block”
chemicals. This development is still in its infancy but commercial a “bio-refiner” that
produces succinic acid (Myriant Technologies) and 1,3 propanediol (Dupont) from sugar
using microorganism are already in operation. There are plans for many other important
building block chemicals to be produced in “bio-refineries”.

Longer term it is envisioned that microorganisms will be developed to perform many reactions
that are currently being performed in refineries either thermally or catalytically. Bioengineered
microbes may be produced to selectively convert heavy hydrocarbons into diesel. One current
vision is that microbes will digest refinery byproducts like petroleum coke or vacuum residue
and excrete useful intermediates that can ultimately be transformed into transportation fuels,
first as feed stocks to existing refineries, and ultimately directly into finished products.

References
1. Massachusetts Institute of Technology,
Viruses harnessed to split water, David L. Chandler, MIT News Office, April 12, 2010
Solar power goes viral, April 25, 2011, David L. Chandler, MIT News Office
2. Debut of the First Practical 'Artificial Leaf', ScienceDaily (Mar. 28, 2011)
3. Synthetic Biology Explained, Biotechnology Industry Organization
4. Research on Biological Desulphurization of Biogas in Groningen, BioSulfurex, DMT
5. U.S Department of Energy, National Renewable Energy Laboratory, Energy
Efficiency and Renewable Energy, Biomass, Top Value Added Chemicals from
Biomass, T. Werpy and G. Petersen, Editors, August 2004
6. DuPont Tate & Lyle BioProducts, press, January 27, 2011
7. Myriant Technologies- site

© World Petroleum Council