Crude Oil Quality Group Meeting in Chicago on June 7, 2007

Latest Refining Advances to Process HACs and BOB

Presented by Thomas W. Yeung, P.E.

Hydrocarbon Publishing Company

The purpose of this presentation is to give an overview of the lThe purpose of this presentation is to give an overview of the latest atest technologies in processing opportunity technologies in processing opportunity crudescrudes, such as high, such as high--acid acid crudescrudes (HACs), and heavy and extra(HACs), and heavy and extra--heavy oils containing heavy oils containing disproportionate amounts of bottomdisproportionate amounts of bottom--thethe--barrel (BOB) fractions.barrel (BOB) fractions.

The presentation covers the followingThe presentation covers the following..

•• General concerns over HACsGeneral concerns over HACs•• HACs' impacts on individual processing units and the solutionsHACs' impacts on individual processing units and the solutions•• General concerns over heavy oils and extraGeneral concerns over heavy oils and extra--heavy oils heavy oils •• BOB upgrading technology advances:BOB upgrading technology advances:

Crude DistillationCrude DistillationSolvent Solvent DeasphaltingDeasphaltingCokingCokingVisbreakingVisbreakingResidResid FCCFCCResidResid HydroprocessingHydroprocessingUnconventional Treating and Upgrading TechnologiesUnconventional Treating and Upgrading Technologies

•• ConclusionsConclusions

The primary driving force for processing HACs and BOB is to achiThe primary driving force for processing HACs and BOB is to achieve eve consistently high refining margins in light of many uncontrollabconsistently high refining margins in light of many uncontrollable le factors, i.e. oil prices, economic conditions, and governmental factors, i.e. oil prices, economic conditions, and governmental regulations.regulations.

Light Sweet Crudes

•Expensive•Easy to refine

HACs and BOB

•Less expensive•Hard to refine

Basically, five types of Basically, five types of crudescrudes available to refiners around the world:available to refiners around the world:

>60 >60 >0.5 >0.5 <15 <15 Extra Heavy Extra Heavy ((from from oilsandsoilsands and and

bitumenbitumen) )

>50>50--60 60 >0.5 >0.5 ≤≤30 30 Heavy SourHeavy Sour

>50>50--60 60 ≤≤0.5 0.5 ≤≤30 30 Heavy SweetHeavy Sweet

<50<50--60 60 >0.5 >0.5 >30 >30 Light SourLight Sour

<50<50--60 60 ≤≤0.5 0.5 >30 >30 Light SweetLight Sweet

Bottoms, Bottoms, volvol% % S, wt% S, wt% °°API API Crude Type Crude Type

High-acid crudes: neutralization number or Total Acid Number (TAN) exceeding 0.5-1.0 mg KOH per gram of oil.

Qualities of Qualities of crudescrudes commonly processed in refineries commonly processed in refineries around the world.around the world.

Sulfur vs. API GravitySulfur vs. API Gravity

-2

-1.5

-1

-0.5

0

0.5

1

5 10 15 20 25 30 35 40 45 50

API Gravity

Log

[Sul

fur (

wt%

)]

Heavy Sour

Heavy Sweet

Light Sour

Light Sweet

Cerro Negro

WTIBrent

Cooper Basin

ANS

LegendreStag

Arabian Heavy

Arabian Light

Bonny Light

Cabinda

Lavan

Kole

Mars

Escravos

Marlim

Maya

Kerr RiverUrals

Leadon

Tapis

Troll Blend

Pilon

Oman

Roncador Syrian LightMurban

Al Jurf

Forozan

Minas

Duri

Captain

Clair

Doba

GryphonHeidrun

Es Sharara

Es Sider

Souedie

Marib Light

Tempe Rossa

[Sulfur content exceeds 0.5 wt%]

[Sulfur content is 0.5 wt% or less]

TAN (0.5 mg KOH/g) vs. API GravityTAN (0.5 mg KOH/g) vs. API Gravity

-2

-1.5

-1

-0.5

0

0.5

1

5 10 15 20 25 30 35 40 45 50

API Gravity

Log

[TA

N]

Heavy High TAN

Heavy Low TAN

Light High TAN

Light Low TAN

Cerro Negro

WTI

Brent

Cooper Basin

Legendre

ANS

Stag

Arabian Heavy

Arabian Light

Bonny Light

Cabinda

LavanKole

Mars

Escravos

Marlim

Maya

Kerr

Urals

Leadon

Tapis

Troll Blend

Pilon

Oman

Roncador

Syrian Light

Murban

Al Jurf

Forozan

Minas

Duri

Captain

Clair

DobaGryphon

Heidrun

Es Sharara

Es Sider

Souedie

Marib Light

Tempe Rossa

[TAN is 0.5 mg KOH/g oil or less]

[TAN exceeds 0.5 mg KOH/g oil]

TAN (1.0 mg KOH/g) vs. API GravityTAN (1.0 mg KOH/g) vs. API Gravity

-2

-1.5

-1

-0.5

0

0.5

1

5 10 15 20 25 30 35 40 45 50

API Gravity

Log

[TA

N]

Heavy High TAN Light High TAN

[TAN exceeds 1 mg KOH/g oil]

Heavy Low TAN

[TAN is 1 mg KOH/g oil or less]

Light Low TAN

Cerro NegroKerr River

Pilon

Leadon

Doba

Gryphon

Captain

Roncador

MarlimDuri Clair

Heidrun

Troll Blend

Stag Maya

Forozan

Souedie

ANS

Arabian Heavy

Tempe Rossa

Al Jurf

Kole

MarsOman

Escravo

Lavan

Bonny Light

Es Sider TapisWTI

Minas

Cabinda

Ural

BrentMurban

Syrian Light

Es Sharara

Cooper Basin

Legendre

Marib LightArabian Light

General Concerns over HACsGeneral Concerns over HACs

High concentrations of High concentrations of naphthenicnaphthenic acid (NA) can adversely impact the reliability and acid (NA) can adversely impact the reliability and

operations of the refinery. operations of the refinery.

Commonly reported problems are corrosion, Commonly reported problems are corrosion, desalterdesalter glitches, fouling, catalyst glitches, fouling, catalyst

poisoning, product degradation, and environmental discharge. poisoning, product degradation, and environmental discharge.

Diesel produced from HACs has a low Diesel produced from HACs has a low cetanecetane number. number.

Use methods to predict the corrosion behavior of Use methods to predict the corrosion behavior of crudescrudes and their relative risk levels.and their relative risk levels.

Inspect and monitor equipment to identify specific areas that arInspect and monitor equipment to identify specific areas that are at risk for NA e at risk for NA corrosion and to verify that control methods are being used effecorrosion and to verify that control methods are being used effectively.ctively.

Apply corrosion control methods, including crude blending, corroApply corrosion control methods, including crude blending, corrosion inhibitors, sion inhibitors, suitable metallurgy, process changes and modification or removalsuitable metallurgy, process changes and modification or removal of of naphthenicnaphthenicacids. acids.

Alloys like 316 SS and 317 SS are often used as upgrading metal,Alloys like 316 SS and 317 SS are often used as upgrading metal, but there are but there are others that are even more resistant to NA corrosion.others that are even more resistant to NA corrosion.

Modifying or removing Modifying or removing naphthenicnaphthenic acids through neutralization, acids through neutralization, decarboxylationdecarboxylation, , hydrotreatinghydrotreating, and extraction are means that are in use and/or being develope, and extraction are means that are in use and/or being developed d further.further.

Common Practices to Handle HACsCommon Practices to Handle HACs

Solutions to Mitigate HACs' Impacts Solutions to Mitigate HACs' Impacts on Individual Processing Units and productson Individual Processing Units and products

At the refinery, NAs are implicated in increased fouling in At the refinery, NAs are implicated in increased fouling in desaltersdesalters, corrosion of the , corrosion of the

distillation units, operational problems in downstream units likdistillation units, operational problems in downstream units like e hydrotreatershydrotreaters, , FCCUsFCCUs, ,

and lube plants, as well as hindrance to compliance with environand lube plants, as well as hindrance to compliance with environmental regulations via mental regulations via

undesirable impacts on waste water treatment facilities.undesirable impacts on waste water treatment facilities.

DesalterDesalter

• Remove NAs and calcium salts prior to desalter. Focus on ARN acids.

• Use a multi-component additive package to break the emulsion, solubilize calcium, and inhibit scale and corrosion.

• Blend HAC with a lower-density crude.

Poor salt removal andseparation of oil and water.

SolutionsImpacts

Crude Preheat Train Heat Exchanger

•Improve desalter performance.•Analyze crude blends for potential destabilization of asphaltenes.

•Fouling reduces plant capacity.•Reduced heat transfer increases operating costs.

SolutionsImpacts

•Upgrade metallurgy.•Use corrosion inhibiting additives.•Monitor susceptible areas (e.g. elbows) for corrosion.

Naphthenic acid corrosion.Distillation unit side cut piping

•Use metallurgy with at least 2.5% Mo.•Inject corrosion inhibitor into the HVGO return and into the spray oil return below the HVGO draw tray.

Naphthenic acid corrosion of structured packing in vacuum column.

Distillation columns

Improve desalter performance.Increased coking.

•Use asphaltene dispersant.•Improve desalter performance

Fouling of furnace tubes.

•Upgrade metallurgy.•Use corrosion inhibiting additives.•Monitor susceptible areas (e.g. elbows) for corrosion.

Naphthenic acid corrosion of furnace tubes and transfer lines.

Distillation unit furnace

SolutionsImpactsEquipment

Crude Distillation

Use dispersant.Fouling.Storage tanks for distillation tower bottoms

Remove naphthenic acids upstream of the distillation units.

Decomposition of naphthenicacids can lead to plugging by deposits of ammonium carbonate and/or bicarbonate.

Offgas lines in atmospheric units, vacuum unit gas compression systems, and coker gas recovery systems

Adequate desalting and water removal.Increased HCl corrosion due to NA-enhanced hydrolysis of chlorides.

•Imidazoline inhibitors for low concentrations of acid.•Modify tower trays to prevent accumulation of water.

Corrosion by light carboxylic acids and CO2 in condensate water.

Distillation column overheads

•Upgrade metallurgy.•Use corrosion-inhibiting additives.•Monitor susceptible areas (e.g. elbows) for corrosion.

Naphthenic acid corrosion.Lines for feeding vacuum column bottoms to other units

SolutionsImpactsEquipment

Crude Distillation (Continued)

Modify or remove the naphthenicacids from the resid.

Naphthenic acid corrosion due to NAs in the vacuum resid.

Coker unitIncreased coking.Coker furnace

SolutionsImpactsEquipment

Coker

Fluid Catalytic Cracking

Control naphthenic acid corrosion in the distillation unit.

Naphthenic acid corrosion in distillation unit increases metal content of FCCU feed, reducing both throughput and catalyst life.

Improve desalter performance.Degradation of catalyst activity by calcium.

SolutionsImpacts

Reduce or eliminate use of such inhibitors. Fouling and deactivation of hydrotreater catalyst by phosphorus-containing corrosion inhibitors.

•Use corrosion inhibitor upstream to reduce iron content in feed.•Eliminate fouling by injecting an organic polysulfide.•Use an upstream reactor vessel filled with catalyst as a filter.

Iron sulfide deposits can plug catalyst beds and promote dehydrogenation reactions.

•Upgrade metallurgy to Mo alloy.•Use recycle hydrogen with H2S.

Naphthenic acid corrosion in feed line upstream of hydrogen injection.

SolutionsImpacts

Hydroprocessing

Fixed-Bed Sweetening Unit for Distillates and Gas Oils

Neutralize and remove the naphthenic acids upstream.Plugging.SolutionsImpacts

Upgrade metallurgy.Naphthenic acid corrosion.SolutionsImpacts

Lube Extraction

Waste Water Treatment

Improve desalter performance.Crude oil carryover into desalter water effluent.SolutionsImpacts

Improve desalter performance.•High levels of calcium lower the product's value.

Coke

Improve desalter performance.•High levels of calcium lower the product's value.

Fuel oils

Apply hydrotreating, caustic extraction, or a solid extractant like silica gel.

•High acid content leads to color problems and haze.

Kerosene and jet fuels

Use cetane improver or blend in a higher-cetane gas oil.

•Low cetane index.

Control naphthenic acid corrosion in the distillation and hydroprocessingunits.

•Increased iron content.Diesel fuel

Use a cetane improver or blend in some gas oil with higher cetane.

•Diesel fractions have low cetane.

Apply hydrotreating, caustic extraction, or a solid extractant like silica gel.

•High acid content leads to color problems and haze.

Distillate fractionsSolutionsImpactsProduct

Refined Products

General Concerns with Heavy Oils and ExtraGeneral Concerns with Heavy Oils and Extra--Heavy OilsHeavy Oils

Major concerns are blending and mixingMajor concerns are blending and mixing

Many US refineries are short on crude Many US refineries are short on crude tankagetankage. It is common for . It is common for crudescrudes (e.g. LLS, (e.g. LLS,

WTI, and ANS) from multiple fields to be mixed in pipeline systeWTI, and ANS) from multiple fields to be mixed in pipeline systems. These ms. These crudescrudes have have

different compositions, and there are economic penalties for thadifferent compositions, and there are economic penalties for that variance. t variance.

Asian refiners that often process waxy Asian refiners that often process waxy crudescrudes may have problems accepting heavy may have problems accepting heavy

crudescrudes from Canada and Venezuela, because there are incompatibilities from Canada and Venezuela, because there are incompatibilities between the between the

highhigh--asphalteneasphaltene crudescrudes and the highand the high--paraffinicparaffinic crudescrudes. Heavy, aromatic . Heavy, aromatic crudescrudes are often are often

separated from light, separated from light, paraffinicparaffinic crudescrudes to avoid to avoid asphalteneasphaltene precipitation.precipitation.

General Concerns with Heavy Oils and ExtraGeneral Concerns with Heavy Oils and Extra--Heavy Oils Heavy Oils (Continued)(Continued)

Reported unit problems and common practices to handle incompatibReported unit problems and common practices to handle incompatibility ility

Catastrophic fouling and coking in the preheat train, caused by Catastrophic fouling and coking in the preheat train, caused by crude oil crude oil

incompatibility and the precipitation of incompatibility and the precipitation of asphaltenesasphaltenes on the blending of on the blending of crudescrudes, can, can

result in net economic loss. result in net economic loss.

Common problems are stable water emulsions in the Common problems are stable water emulsions in the desalterdesalter, fouled preheat , fouled preheat

exchangers, and/or coking in the exchangers, and/or coking in the pipestillpipestill furnace tubes. Use the oil compatibility furnace tubes. Use the oil compatibility

model and tests to predict the proportions and order of the blenmodel and tests to predict the proportions and order of the blending of oils. It helpsding of oils. It helps

prevent incompatibility prior to the purchase and scheduling of prevent incompatibility prior to the purchase and scheduling of crudescrudes..

BOB Processing Technology AdvancesBOB Processing Technology Advances

BOB upgrading can be undertaken using combinations of separationBOB upgrading can be undertaken using combinations of separations (distillation or s (distillation or

deasphaltingdeasphalting), thermal processing (coking or ), thermal processing (coking or visbreakingvisbreaking), fluid catalytic cracking, or ), fluid catalytic cracking, or

hydroprocessinghydroprocessing..

Crude DistillationCrude Distillation

•• When crude blends get heavier, atmospheric and vacuum tower dWhen crude blends get heavier, atmospheric and vacuum tower distillate cut points tend to istillate cut points tend to

suffer due to the increasing difficulty of vaporization.suffer due to the increasing difficulty of vaporization.

•• Changes can be made such as increasing the temperature and reChanges can be made such as increasing the temperature and residue stripping efficiency, sidue stripping efficiency,

lowering the pressure and flash zone oil partial pressure, alowering the pressure and flash zone oil partial pressure, and modifying the nd modifying the pumparoundspumparounds. .

•• For the atmospheric unit, other key areas include the oil preFor the atmospheric unit, other key areas include the oil preheat train and charge furnace, heat train and charge furnace,

column internals, and metallurgy of the unit exposed to highcolumn internals, and metallurgy of the unit exposed to higher sulfur and high TAN.er sulfur and high TAN.

•• For the vacuum towers, evaluations should be made regarding fFor the vacuum towers, evaluations should be made regarding furnace sizing and outlet urnace sizing and outlet

temperature, decoking capability, washtemperature, decoking capability, wash--zone capacity, and steam requirement (if it is a wet zone capacity, and steam requirement (if it is a wet

column).column).

•• One of the first and most attractive options is deepOne of the first and most attractive options is deep--cut vacuum distillation via a revamp of cut vacuum distillation via a revamp of

the unit to cut deeper into the the unit to cut deeper into the residresid to make additional FCC or to make additional FCC or hydrocrackerhydrocracker feed. feed.

Solvent Solvent DeasphaltingDeasphalting

Solvent Solvent deasphaltingdeasphalting (SDA) units separate the high(SDA) units separate the high--quality, lighter quality, lighter paraffinicparaffinic fraction fraction

from vacuum from vacuum residresid to be used as a feed for traditional FCC and to be used as a feed for traditional FCC and hydrocrackinghydrocracking units.units.

HACsHACs can processed directly from atmospheric tower bottoms.can processed directly from atmospheric tower bottoms.

The latest SDA unit designs include applicationThe latest SDA unit designs include application--specific extraction devices, the specific extraction devices, the

optimal design of heatoptimal design of heat--exchange systems, the lowest solventexchange systems, the lowest solvent--toto--oil ratios, oil ratios,

supercritical solvent recovery, and multiple product recovery. supercritical solvent recovery, and multiple product recovery.

LargeLarge--volume throughput to save both capital and operating costs is crvolume throughput to save both capital and operating costs is critical to itical to

achieve maximum efficiency. Therefore, the towers tend to have lachieve maximum efficiency. Therefore, the towers tend to have low length/diameter ow length/diameter

ratios and trays instead of ratios and trays instead of packingspackings. .

Solvent Solvent DeasphaltingDeasphalting (Continued)(Continued)

The The deasphalteddeasphalted oil yield is increased if butane or pentane is used instead of oil yield is increased if butane or pentane is used instead of

propane, though more metals and propane, though more metals and ConradsonConradson carbon are found in the product. carbon are found in the product.

It is advantageous to integrate It is advantageous to integrate deasphaltingdeasphalting with with visbreakingvisbreaking, coking, or , coking, or

hydrocoversionhydrocoversion due to a molecular limitation to heavy oils separation undertakdue to a molecular limitation to heavy oils separation undertaken by en by

deasphaltingdeasphalting. The result is a very heavy pitch, which is basically . The result is a very heavy pitch, which is basically asphaltenesasphaltenes and and

contains most of the metals, nitrogen, and coke precursors. contains most of the metals, nitrogen, and coke precursors.

Potential new outlets for the Potential new outlets for the asphaltenesasphaltenes are feedstock for gasification units and are feedstock for gasification units and

pelletizationpelletization for shipment as a solid fuel.for shipment as a solid fuel.

Delayed CokingDelayed Coking

This carbon rejection technology is the most popular way to upgrThis carbon rejection technology is the most popular way to upgrade residual oils. ade residual oils.

The pitfall of delayed coking is that only 70The pitfall of delayed coking is that only 70--80% of the total heavy oil barrels are 80% of the total heavy oil barrels are

converted into valuable transportation fuels, while the remaininconverted into valuable transportation fuels, while the remaining portion is g portion is

downgraded to less valuable coke.downgraded to less valuable coke.

There are three limitations to achieving higher liquid yields: (There are three limitations to achieving higher liquid yields: (1) secondary cracking of 1) secondary cracking of

valuable volatile liquid products, (2) a combination of smallervaluable volatile liquid products, (2) a combination of smaller--ring aromatics to form ring aromatics to form

polynuclearpolynuclear aromatics, and (3) the formation of aromatics, and (3) the formation of PNAsPNAs via via aromaticizationaromaticization of of

hydroaromaticshydroaromatics. .

Delayed Coking (Continued)Delayed Coking (Continued)

To minimize the secondary cracking of volatile liquid products, To minimize the secondary cracking of volatile liquid products, a a cokercoker reactor with a reactor with a

very short vapor residence time but a lengthy very short vapor residence time but a lengthy residresid residence time to achieve residence time to achieve

complete conversion to coke of 100% CCR is preferred. The lattercomplete conversion to coke of 100% CCR is preferred. The latter two limitations can two limitations can

be minimized by separating the higherbe minimized by separating the higher--quality fraction of the quality fraction of the residresid prior to coking.prior to coking.

The latest developments in conventional delayed coking technologThe latest developments in conventional delayed coking technology emphasize y emphasize

design and operation of major equipment (e.g. coke drums, heaterdesign and operation of major equipment (e.g. coke drums, heaters, and s, and

fractionators), coke quality and yield flexibility, and operabilfractionators), coke quality and yield flexibility, and operability and safety. ity and safety.

Research work and patent activity focus on the effect of feedstoResearch work and patent activity focus on the effect of feedstock quality on ck quality on cokercoker

product yields.product yields.

VisbreakingVisbreaking

Originally used to reduce the Originally used to reduce the residresid viscosity for meeting heavy oil specs. viscosity for meeting heavy oil specs.

Nowadays, it cracks straightNowadays, it cracks straight--run fuel oil into valuable gasoline and gas oil and run fuel oil into valuable gasoline and gas oil and

produces residual fuel oil to be sold as marine fuel.produces residual fuel oil to be sold as marine fuel.

As the operating severity is raised to maximize conversion, cokiAs the operating severity is raised to maximize conversion, coking and fouling also ng and fouling also

increase and the stability of the increase and the stability of the visbrokenvisbroken residresid and, consequently, the stability of the and, consequently, the stability of the

heavy fuel oil decrease. Research established that coke formatioheavy fuel oil decrease. Research established that coke formation is a function of the n is a function of the

production of condensed PNA hydrocarbons.production of condensed PNA hydrocarbons.

Two of the patented approaches for dealing with this problem incTwo of the patented approaches for dealing with this problem include the use of a lude the use of a

catalyst to activate existing hydrogen in catalyst to activate existing hydrogen in residresid feeds and the addition of hydrogenfeeds and the addition of hydrogen--

donor streams to the feed.donor streams to the feed.

ResidResid Fluid Catalytic CrackingFluid Catalytic Cracking

RFCC offers better selectivity to higher gasoline and lower gas RFCC offers better selectivity to higher gasoline and lower gas yields than coking or yields than coking or

hydroprocessinghydroprocessing, though it needs higher, though it needs higher--quality feeds (e.g. mixtures of VGO and quality feeds (e.g. mixtures of VGO and

atmospheric atmospheric residsresids and CCR limited to 3and CCR limited to 3--8 wt%) than the other two processes. 8 wt%) than the other two processes.

Nowadays, as many as 75% of Nowadays, as many as 75% of FCCUsFCCUs worldwide process feedstock consisting of worldwide process feedstock consisting of

some some residresid. From the standpoint of refinery profitability, the benefit of . From the standpoint of refinery profitability, the benefit of residresid upgrading upgrading

is that it offers a way to reduce fuel oil output and produce gris that it offers a way to reduce fuel oil output and produce greater volumes of eater volumes of

valuable products without processing larger amounts of crude. valuable products without processing larger amounts of crude.

Important operating parameters for Important operating parameters for residresid operations are feed temperature, reactor operations are feed temperature, reactor

temperature, dispersion steam, stripping steam, rate of heat remtemperature, dispersion steam, stripping steam, rate of heat removal, recycle rates, oval, recycle rates,

CO production, and catalyst selection.CO production, and catalyst selection.

RFCC Catalyst AdvancementsRFCC Catalyst Advancements

Catalyst matrices are being designed to provide cokeCatalyst matrices are being designed to provide coke--selective bottoms cracking and selective bottoms cracking and

reduction of the dehydrogenation activity of contaminant nickel reduction of the dehydrogenation activity of contaminant nickel and vanadium. and vanadium.

Certain pore structures do not limit access of large hydrocarbonCertain pore structures do not limit access of large hydrocarbon molecules to active molecules to active

cracking sites, but do permit rapid exit of product molecules socracking sites, but do permit rapid exit of product molecules so as to prevent as to prevent

secondary cracking to less valuable materials. secondary cracking to less valuable materials.

Catalyst suppliers have developed more sophisticated and controlCatalyst suppliers have developed more sophisticated and controlled ways of putting led ways of putting

their products together, even to the extent of being able to taitheir products together, even to the extent of being able to tailor catalysts for more lor catalysts for more

specific applications.specific applications.

The latest catalyst research shows interest in fThe latest catalyst research shows interest in fluoride salts, crystalline luoride salts, crystalline aluminosilicatealuminosilicate

zeolitezeolite in an inorganic oxide matrix, an outboard vessel containing a vin an inorganic oxide matrix, an outboard vessel containing a vanadium trap, anadium trap,

and so on. and so on.

Recent RFCC Process and Hardware DevelopmentsRecent RFCC Process and Hardware Developments

RFCC design includes twoRFCC design includes two--stage regeneration, mix temperature control, and/or stage regeneration, mix temperature control, and/or

catalyst coolers in order to control unit heat balance and to recatalyst coolers in order to control unit heat balance and to recover some of the heat cover some of the heat

for steam production. for steam production.

Other areas of focus include feed injection nozzles and catalystOther areas of focus include feed injection nozzles and catalyst strippers, along with strippers, along with

the riser (to minimize slip) and the termination device (to reduthe riser (to minimize slip) and the termination device (to reduce the secondary ce the secondary

reactions in the dilute phase).reactions in the dilute phase).

Improved injection and stripping are needed to meet the challengImproved injection and stripping are needed to meet the challenge of getting a high e of getting a high

conversion of heavier feeds to valuable products. conversion of heavier feeds to valuable products.

Recent RFCC Process and Hardware Developments (Continued)Recent RFCC Process and Hardware Developments (Continued)

High dispersion of feed maximizes cracking on the catalyst's actHigh dispersion of feed maximizes cracking on the catalyst's active sites. ive sites.

More effective stripping reduces the hydrocarbon load on the speMore effective stripping reduces the hydrocarbon load on the spent catalyst, keeps nt catalyst, keeps

the regeneration temperature down, and increases conversion.the regeneration temperature down, and increases conversion.

A vendor is working on a compact novel design that combines the A vendor is working on a compact novel design that combines the reactor and reactor and

regenerator in a single pressure vessel. regenerator in a single pressure vessel.

ResidResid HydroprocessingHydroprocessing

Hydroprocessing (or Hydroprocessing (or hydroconversionhydroconversion) offers better liquid yields (as high as 85%) ) offers better liquid yields (as high as 85%)

than commercial than commercial coking'scoking's 5050--60%.60%.

It makes up about 20% of global BOB upgrading capacity, and can It makes up about 20% of global BOB upgrading capacity, and can take several take several

forms depending on the purpose. forms depending on the purpose.

ResidResid hydrotreatinghydrotreating (RHT) improves quality for product blending or additional (RHT) improves quality for product blending or additional

processing, whereas processing, whereas residresid hydrocrackinghydrocracking (RHC) is the most rigorous form of (RHC) is the most rigorous form of

hydroconversionhydroconversion. .

ResidResid HydrotreatingHydrotreating

HydrotreatingHydrotreating of atmospheric of atmospheric residresid ahead of an RFCCU has gained popularity as a ahead of an RFCCU has gained popularity as a

way to reduce fuel oil production.way to reduce fuel oil production.

RHT and coking in combination may be a preferred route based on RHT and coking in combination may be a preferred route based on metals and metals and

concarbonconcarbon contents of the contents of the residresid..

HighHigh--conversion facilities with upgraded conversion facilities with upgraded hydrotreatinghydrotreating capabilities using highercapabilities using higher--

activity catalysts are the most effective plant configurations.activity catalysts are the most effective plant configurations.

RHT has several issues: high pressure (200 bar), high hydrogen rRHT has several issues: high pressure (200 bar), high hydrogen requirement, metal equirement, metal

contamination, a short catalyst life due to fast poisoning rate,contamination, a short catalyst life due to fast poisoning rate, diffusion of diffusion of asphaltenesasphaltenes

through small catalyst pores, and deposition of coke and sedimenthrough small catalyst pores, and deposition of coke and sediment downstream of the t downstream of the

reactor in hot and cold separators. Process designers are currenreactor in hot and cold separators. Process designers are currently focusing on tly focusing on

innovative, new technology to eliminate these drawbacks.innovative, new technology to eliminate these drawbacks.

ResidResid HydrotreatingHydrotreating (Continued)(Continued)

Several catalyst companies have introduced new Several catalyst companies have introduced new residresid HDM, transition, and HDS HDM, transition, and HDS

catalysts in the past few years.catalysts in the past few years.

Because of the importance of protecting downstream cracking cataBecause of the importance of protecting downstream cracking catalysts, particular lysts, particular

focus has been given to the development of HDM catalysts with opfocus has been given to the development of HDM catalysts with optimized alumina timized alumina

pore systems that provide high metals capacity and activity.pore systems that provide high metals capacity and activity.

Meanwhile, a research institute said its "Butterfly" Meanwhile, a research institute said its "Butterfly" extrudateextrudate RHT catalyst offers good RHT catalyst offers good

HDM and HDS activities as well as a long life in treating RFCC HDM and HDS activities as well as a long life in treating RFCC feedstocksfeedstocks..

ResidResid HydrocrackingHydrocracking

ResidResid hydrocrackinghydrocracking catalysts used in catalysts used in ebullatedebullated--bed processes need to be bed processes need to be

multifunctional, i.e. performing the simultaneous removal of metmultifunctional, i.e. performing the simultaneous removal of metals, sulfur, and als, sulfur, and

carbon residue as well as the carbon residue as well as the hydrocrackinghydrocracking of vacuum bottoms.of vacuum bottoms.

Recent work in RHC catalysis has focused on pore size distributiRecent work in RHC catalysis has focused on pore size distribution to maximize on to maximize

conversion and minimize sediment formation.conversion and minimize sediment formation.

Dispersed catalyst compositions have been patented for use in suDispersed catalyst compositions have been patented for use in suspensionspension--bed bed

reactors to prevent coke formation. The key to higher conversionreactors to prevent coke formation. The key to higher conversion is to design a is to design a

reactor to maximize the solubility of the converted reactor to maximize the solubility of the converted asphaltenesasphaltenes, and the economics , and the economics

depend on how the unconverted carbonaceous, highdepend on how the unconverted carbonaceous, high--PNA byproducts are used.PNA byproducts are used.

ResidResid HydrocrackingHydrocracking (Continued)(Continued)

Efforts are continuing to tackle a tendency for sediment to formEfforts are continuing to tackle a tendency for sediment to form when vacuum when vacuum residresid

conversion exceeds 50conversion exceeds 50--60%.60%.

A recent development in processing technology combines slurry A recent development in processing technology combines slurry hydrotreatmenthydrotreatment

conducted at mild conditions in the presence of a molybdenumconducted at mild conditions in the presence of a molybdenum--based dispersed based dispersed

catalyst with solvent catalyst with solvent deasphaltingdeasphalting. This slurry process is said to yield higher. This slurry process is said to yield higher--quality quality

products than delayed coking or products than delayed coking or visbreakingvisbreaking, offer greater feedstock flexibility than , offer greater feedstock flexibility than

fixedfixed--bed bed hydroconversionhydroconversion, and achieve higher conversion than , and achieve higher conversion than ebullatedebullated--bed bed

hydroconversionhydroconversion..

Integration of Integration of hydrotreatinghydrotreating and and residresid hydrocrackinghydrocracking offers significant investment offers significant investment

benefits to produce ULSD.benefits to produce ULSD.

Unconventional Treating and Upgrading TechnologiesUnconventional Treating and Upgrading Technologies

New process concepts for converting New process concepts for converting residsresids and other heavy feeds are at various and other heavy feeds are at various

stages of development ranging from patent coverage only to commestages of development ranging from patent coverage only to commercial application.rcial application.

These innovations have arisen in response to the criteria of ecoThese innovations have arisen in response to the criteria of economics, flexibility, and nomics, flexibility, and

selectivity, where the need for improvement over older processesselectivity, where the need for improvement over older processes is seen.is seen.

The new methods also suggest what to expect from future commerciThe new methods also suggest what to expect from future commercial processes in al processes in

terms of benefits.terms of benefits.

Some processes use an adsorbent to remove coke precursors and meSome processes use an adsorbent to remove coke precursors and metals from tals from

residsresids, and until recently, they have required the use of an added sol, and until recently, they have required the use of an added solvent or solvents vent or solvents

along with the along with the sorbentsorbent. . ExxonMobilExxonMobil Research & Engineering CompanyResearch & Engineering Company (EMRE) has (EMRE) has

developed a sorption process that it claims needs no additional developed a sorption process that it claims needs no additional solvent for the solvent for the

sorption itself.sorption itself.

Given the growing global importance of diesel as a transportatioGiven the growing global importance of diesel as a transportation fuel, cracking n fuel, cracking

processes that can produce additional amounts of this fraction fprocesses that can produce additional amounts of this fraction from heavy petroleum rom heavy petroleum

materials must be of special interest. Patent activity continuesmaterials must be of special interest. Patent activity continues to appear for newer to appear for newer

developments.developments.

A process has been patented for converting heavy fuel oils and vA process has been patented for converting heavy fuel oils and vacuum acuum residresid into into

stabilized oilstabilized oil--inin--water emulsions to mitigate problems with handling and emissionswater emulsions to mitigate problems with handling and emissions. .

Unconventional Treating and Upgrading Technologies (Continued)Unconventional Treating and Upgrading Technologies (Continued)

New New hydroconversionhydroconversion processes have appeared, including processes have appeared, including EMRE'sEMRE's OnceOnce--Through Through

Mild Slurry Hydroprocessing (OMild Slurry Hydroprocessing (O--T MSHP), T MSHP), Genoil'sGenoil's HydroconversionHydroconversion UpgraderUpgrader (GHU) (GHU)

and Kobe Steel/and Kobe Steel/SyncrudeSyncrude Canada's extension of a slurryCanada's extension of a slurry--phase phase hydrocrackinghydrocracking

technology formerly used for processing brown coal.technology formerly used for processing brown coal.

The heaviest development activity is in the area of thermal cracThe heaviest development activity is in the area of thermal cracking. These king. These

processes fall into four groups processes fall into four groups ---- one where H donors are involved (IOC acidone where H donors are involved (IOC acid--

enhanced separation of cracked products), a second where the craenhanced separation of cracked products), a second where the cracking is assisted cking is assisted

by the use of a heat transfer medium (EMRE SCT Thermal Cracking)by the use of a heat transfer medium (EMRE SCT Thermal Cracking), a third using , a third using

supercritical conditions (KBR Supercritical Cracking), and a fousupercritical conditions (KBR Supercritical Cracking), and a fourth where mechanical rth where mechanical

activation is employed (CPJ process). activation is employed (CPJ process).

Unconventional Treating and Upgrading Technologies (Continued)Unconventional Treating and Upgrading Technologies (Continued)

ConclusionsConclusions

Crude selection is the most important decision refiners must makCrude selection is the most important decision refiners must make on a daily basis. e on a daily basis.

The criteria to determine which The criteria to determine which crudescrudes to acquire includeto acquire include

oil source reliability and term deals,oil source reliability and term deals,

delivery advantages,delivery advantages,

discount versus other discount versus other crudescrudes,,

plant operational flexibility,plant operational flexibility,

potential processing problems and risks,potential processing problems and risks,

mitigation options and costs,mitigation options and costs,

environmental concerns, and environmental concerns, and

product demand mix.product demand mix.

WTI and WTI minus Maya in 1Q 2004 through 1Q 2007WTI and WTI minus Maya in 1Q 2004 through 1Q 2007

Source: Valero Energy Quarterly Earning ReportsSource: Valero Energy Quarterly Earning Reports

05

1015202530354045505560657075

1Q20

04 2Q 3Q 4Q1Q

2005 2Q 3Q 4Q

1Q20

06 2Q 3Q 4Q1Q

2007

Quarter

WTI

and

WTI

min

us M

aya,

$/b

bl

WTI

WTI minus Maya

WTI minus Maya in 1Q 2004 through 1Q 2007WTI minus Maya in 1Q 2004 through 1Q 2007

Source: Valero Energy Quarterly Earning ReportsSource: Valero Energy Quarterly Earning Reports

89

101112131415161718

1Q20

04 2Q 3Q 4Q1Q

2005 2Q 3Q 4Q

1Q20

06 2Q 3Q 4Q1Q

2007

Quarter

WTI

min

us M

aya,

$/b

bl

WTI minus Maya

High TAN High TAN CrudesCrudes Discount to Discount to BrentBrent

World BankWorld Bank’’s model to calculate the crude discount to Brent based on qualits model to calculate the crude discount to Brent based on quality differentialsy differentialsindicatesindicates

•• API gravity: 0.69API gravity: 0.69¢¢ x (Brent Price) x (Subject Crude API x (Brent Price) x (Subject Crude API –– Brent API)Brent API)

•• Sulfur: Sulfur: --5.65.6¢¢ x (Brent Price) x (Subject Crude Sulfur x (Brent Price) x (Subject Crude Sulfur ––Brent Sulfur)Brent Sulfur)

•• TAN: TAN: --5.15.1¢¢ x (Brent Price) x (Subject Crude TAN x (Brent Price) x (Subject Crude TAN –– Brent TAN).Brent TAN).

If one assumes that a crude has 21.1 If one assumes that a crude has 21.1 ººAPI, 1.77 wt% sulfur, and TAN of 1.80 mg API, 1.77 wt% sulfur, and TAN of 1.80 mg KOH/gram of oil, the discount of this crude to Brent (at $60/bblKOH/gram of oil, the discount of this crude to Brent (at $60/bbl) should be $17.11/bbl. ) should be $17.11/bbl.

Technological Advances in Processing

Opportunity Crudes

Increasingly Stringent Fuel Specifications

Consumption Uncertainty

Availability of Opportunity Crude

at “Low” Prices

Refining Trends& Competition

Consistently HighProfit Margins

Site Emission & Disposal Requirements, Permit

Approval

FACTORS INFLUENCING OPPORTUNITY CRUDE PROCESSINGFACTORS INFLUENCING OPPORTUNITY CRUDE PROCESSING

This presentation is an excerpt from a multiThis presentation is an excerpt from a multi--client strategic report entitledclient strategic report entitled

Opportunity Opportunity CrudesCrudes: Technical Challenges and Economic Benefits : Technical Challenges and Economic Benefits -- Strategies of processing high acid Strategies of processing high acid crudescrudes and the bottomand the bottom--ofof--thethe--barrel using advanced technologies.barrel using advanced technologies.

HYDROCARBON PUBLISHING COMPANYHYDROCARBON PUBLISHING COMPANY is an established consulting is an established consulting and knowledge management firm that has been serving the petroleuand knowledge management firm that has been serving the petroleum m refining industry around the world since 1987. refining industry around the world since 1987.

Our mission is to Our mission is to "Translate Knowledge Into Profitability""Translate Knowledge Into Profitability" for our clients. for our clients. We specialize in multiWe specialize in multi--client technology assessments and business client technology assessments and business strategic reports.strategic reports.

Our integrated service called Our integrated service called Refining Knowledge ManagementRefining Knowledge ManagementNetworkNetwork, encompasses:, encompasses:

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