Upgrading Options for
Diesel Production
Nicolas Thevenot
1
Agenda
•
•
•
•
•
Market characteristics
Axens heavy ends technologies
Overview of the different options
Global analysis
Economic evaluation
• European case
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
2
EU-25 Market Characteristics
Market Demand, kbpsd
Market Structure, %
8 000
100%
Middle Distillates
7 000
17.6
80%
6 000
5 000
Gasoline
3 000
Other*
40%
Fuel Oil
1 000
10.8
45.7
50.3
10.7
8.0
2005
2020
20%
Naphtha
0
1990
2000
10.5
17.6
60%
4 000
2 000
8.4
20.3
2010
2020
0%
Other* = LPG, asphalt, coke, lubricants, etc.
Source: IFP
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Latin America Market Characteristics
Market Demand, kbpsd
Market Structure, %
3 000
100%
2 500
80%
Middle Distillates
2 000
60%
23.2
23.6
3.4
3.7
23.3
25.1
Gasoline
1 500
Other*
1 000
40%
35.8
500
Fuel Oil
20%
Naphtha
0
1990
2000
38.9
2010
2020
14.3
8.8
2005
2020
0%
Other* = LPG, asphalt, coke, lubricants, etc.
Source: IFP
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
4
Argentina Market Characteristics
Market Demand, kbpsd
Market Structure, %
400
100%
Middle Distillates
300
29.8
28.9
1.4
15.0
0.9
16.9
50.0
51.0
3.8
2.2
2005
2020
80%
60%
200
Other*
40%
Gasoline
100
Naphtha
0
1990
2000
20%
Fuel Oil
2010
2020
0%
Other* = LPG, asphalt, coke, lubricants, etc.
Source: IFP
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
5
VGO & Resid Conversion Mapping
Topping
Unit
Crude
Oil
HyC-10
FCC
HyK
Vacuum
Distillation
Unit
Hyvahl
H-Oil RC
HDHPLUS®
Solvahl
R2R
H-Oil DC
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Resid Conversion
- Axens’ Offer 1000
1000
800
Ni + V
Content
in Feed,
ppm
H-OilRC
HDHPLUS
300
H-OilRC
200
100
Hyvahl + R2R
0
...
30
40
50
60
70
80
90
Net VR Conversion,%
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Resid Conversion Features
•
•
•
ARDS/VRDS TECHNOLOGY : HYVAHL
•
•
Low to Medium diesel production: 20-25%
Fixed bed process for VR hydrodesulfurization
Can process feeds with high metals content
using “PRS” technology
Hydrotreated residue applications:
• Ultra low sulfur (S< 0.3%) and stable fuel oil
• Excellent feed for resid FCC unit (R2R) : low metal
content reducing catalyst consumption + better
products at R2R outlet
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Resid Conversion Features
•
RESID FCC PROCESS : R2R
• 1- or 2-Stage Regeneration (to reduce catalyst
consumption from Va poisoning)
• Technology: Feed injection, Mix Temperature
Control, Riser Separator System RS2, Stripping
with Structured Packing, Catalyst Coolers
•
New technology features and catalysts permit
cracking of heavy feeds & high propylene
yields.
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
9
Resid Conversion Features
• RHCK PROCESS : H-OilRC
•
•
•
•
•
Ebullated bed process for VR Hydrocracking
On-line Addition/Withdrawal of Catalyst
• Constant Conversion and Product Quality
• Very long cycle length
VR Conversion range: 40 - 80%
Process VR feeds with high metals and CCR
Hydrocracked Residue application
• Low sulfur (S< 1%) and stable Fuel oil
• Feed for Coker or gasification units
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Resid Conversion Features
•
•
•
•
•
•
RHCK PROCESS : HDHPLUS®
Slurry technology for deep hydrocracking of VR
feeds
Alliance with PDVSA, Intevep and IFP for
improvement and marketing of the process
Very high VR Conversion level, more than 85% of
Vacuum Residue
Can process heavy refractory VR feeds regardless
of sulfur, metals, asphaltene and CCR contents
Integrated scheme with Sequential
Hydroprocessing of primary hydrocracked
products
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Overview of the Different Options:
Case Study Base
•
•
Arabian Medium Crude: API= 30.6, S= 2.4 wt.%
•
•
Investment : European location
Feedstock: 100,000 b/d (647.5 t/h) of Arabian
Heavy/Arabian Light (50/50) atmospheric
residue (S= 4 wt. %)
Vacuum distillation, HDT, SMR, PPS, SRU
Amines and alkylation units included
Note: HDT = hydrotreating, SMR = steam methane reformer,
SRU = sulfur recovery unit, PPS = propane-propylene splitter
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
12
Option 1: ARDS + RFCC
FG
HDT
AT
LPG
C3=
Naphtha
AR
647 t/h
ARDS
Gasoline
RFCC
MD
Fuel Oil
70
10 24 20
LPG and C5+ throughput
Total: 592 t/h
191
277
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Option 2: RHCK + Mild HCK + RFCC
FG
HDT
AT
LPG
C3=
Naphtha
AR
647 t/h
VT VGO
Mild
HCK
Gasoline
FCC
MD
VR
Fuel Oil
RHCK
126
LPG and C5+ throughput
Total: 616 t/h
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza238
2006
21 15
33
183
14
Option 3: RHCK + HP HCK
FG
HDT
AT
AR
647 t/h
LPG
Naphtha
VT
VGO
MD
HP-HCK
VR
HCK resid
RHCK
Fuel Oil
109
LPG and C5+ throughput
Total: 626 t/h
27
108
46
337
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Option 4: Delayed Coker + HP HCK
FG
HDT
AT
AR
647 t/h
LPG
Naphtha
VT
VGO
MD
HP HCK
VR
HCK resid
DC
Coke
109
30
115
LPG and C5+ throughput
Total: 626 t/h
46
325
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Option 5: RHCK + DC + HP HCK
FG
HDT
AT
AR
647 t/h
LPG
VT
VGO
Naphtha
MD
HP HCK
VR
HCK resid
RHCK
DC
Coke
49
38
33
122
LPG and C5+ throughput
Total: 621 t/h
379
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
17
Option 6: HP HCK + VRDS + RFCC
FG
AT
LPG
C3=
AR
647 t/h
Naphtha
VT
Gasoline
VGO
HP HCK
VR
MD
HCK resid
VRDS
RFCC
Fuel Oil
34
49
19 13
69
LPG and C5+ throughput
Total: 611 t/h
142
286 – Mendoza 2006
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion
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Products
•
•
•
•
•
Propane and butanes sold as LPG
C3= from FCC and RFC is extracted
(FCC/RFCC yield: ~ 5 wt%) in a PPS and sold as
C3= polymer grade, C4= alkylated with iC4
Naphtha, gasoline, kerosene & gasoil are
hydrotreated when required
Hydrocracked residue (HCK residue), low BMCI*
(high paraffinicity), used as a steam cracker feed,
but could be also a very good base for oils
Fuel oils:
•
•
Hydrotreated LCO sold as domestic fuel oil (DFO)
LSFO and HSFO
*BMCI = Bureau of Mines Correlation Index
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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AR Conversion
AR Conversion, wt%
100
90
80
70
89.2
86.6
80.6
76.1
87.2
76.0
60
50
40
30
20
10
0
N°2
N°3
N°1
ARDS + RHCK + Mild RHCK +
HCK + FCC HP HCK
RFCC
N°4
DC +
HP HCK
N°5
N°6
RHCK+DC HP HCK +
+ HP HCK VRDS +
RFCC
with iC4 import
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
with iC4 import
20
LPG and C5+ liquid Yield
LPG & C5+ Yield, wt%
100
90
80
91.4
95.2
96.8
90.1
93.3
79.7
70
60
50
40
30
20
10
0
N°2
N°3
N°1
ARDS + RHCK+ Mild RHCK +
HCK + FCC HP HCK
RFCC
N°6
N°5
N°4
RHCK + DC HP HCK +
DC +
VRDS +
HP HCK + HP HCK
RFCC
with iC4 import
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
with iC4 import
21
LPG, C5+ and Coke Throughput
Production Capacity, t/h
700
LPG
600
10
24
20
22
15
33
27
30
33
108
115
122
500
183
400
142
Naphtha
Gasoline
337
325
379
238
Middle distillates
279
HCK residue
191
100
70
0
Propylene
277
300
200
19
14
69
126
46
46
109
109
N°1
N°2
N°3
ARDS + RHCK + Mild RHCK +
RFCC HCK + FCC HP HCK
with iC4 import
49
38
34
49
Fuel Oil
Coke
N°4
N°5
N°6
DC + RHCK + DC HP HCK +
HP HCK + HP HCK VRDS +
RFCC
with iC4 import
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Objectives & Options
Options
N° 1
ARDS + RFCC
N° 2 RHCK + Mild HCK + FCC
N° 3
RHCK + HP HCK
N° 4
DC + HP HCK
N° 5 RHCK + DC + HP HCK
N° 6 VRDS + RFCC + HP HCK
AR
LPG + C5+
conversion Liquid
Yield
Main
product
++
+
G
+
++
MD/G
++
MD
MD
++
+
MD
+++
++
MD/G
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
Selection





23
Economic Assumptions
& Methodology (1)
•
Economic evaluations based on:
• Discounted Cash Flow (DCF) analysis
• Profitability index comparisons (NPV, IRR, NPV/TCI, POT)
• Net realization calculation ($/bbl of AR)
= Total product sales – Total operating costs
•
Total operating costs = Exploitation costs (raw materials + utilities,
catalyst, chemicals & manpower) + fixed costs (capital charge equal
to ~ 20% of total capital investment + maintenance, taxes, insurance
& overheads)
• Discounted Cash Flow (DCF) analysis
•
•
•
•
Depreciation period: 10 years
Project duration: 30 years
Discount rate 12%
Tax Rate: 40% (construction duration 2 years)
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Economic Assumptions
& Methodology (2)
• Capital investment
• ISBL (Inside Battery Limit): European location
• 10% contingencies
• Total Capital Investment = ISBL + Off-sites +
Engineering & Contractor fees + Interest on
construction loan + Start-up cost + Working capital
• NPV calculation based on European averaged
values (between 2001 and 2006) for:
• Investments, catalysts, utilities
• Feedstock, products (NWE prices)
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
25
Total Capital Investments: 2006
TCI includes:
• ISBL investments
• Off sites
• Engineering fees
Billion $
2.5
~17%
2
1.5
• Contractor fees
• Interest on
construction loan
• Start-up costs
• Working capital
1
~16%
2.38
2.31
1.98
1.99
2.23
1.73
0.5
0
N°1
N°2
N°3
ARDS + RHCK + RHCK +
RFCC Mild HCK + HP HCK
FCC
N°4
N°5
N°6
DC + RHCK + DC HP HCK +
HP HCK + HP HCK
VRDS +
RFCC
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
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Total OPEX Comparison: 2006
$/ bbl AR
14
12.3
11.5
12
10
10.2
3.2
8.9
3.9
2.9
6
5.5
4
5.7
Manpower +
Maintenance,
Taxes,
Insurance &
Overheads
Utilities (incl.
Natural Gas)
4.9
2
0
7.2
6.9
3.8
1.2
10.6
3.6
8.0
3.2
8
3.7
1.5
1.4
N°1
N°2
N°3
ARDS +
RHCK + RHCK +
RFCC Mild HCK+ HP HCK
FCC
0.2
1.4
1.3
N°4
N°5
N°6
DC + RHCK + DC HP HCK +
HP HCK + HP HCK VRDS +
RFCC
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
Catalyst &
Chemicals
27
Product Revenues: 2006 Europe
90
Other*
LPG
Propylene
80
70
60
Naphtha
50
Gasoline
40
Middle distillates
30
Base Oil
20
Fuel Oil
10
*Other = Fuel Gas + Sulfur
(+ Coke for n°4 & 5)
Products – Raw Materials
in ($/bbl AR)
Product Revenues ($/ bbl AR)
0
N°1
ARDS +
RFCC
28.9
N°2
N°3
RHCK + RHCK +
Mild HCK+ HP HCK
FCC
27.4
28.7
N°4
N°5
N°6
DC +
RHCK + DC HP HCK +
HP HCK + HP HCK
VRDS +
RFCC
21.6
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
31.4
31.9
28
Economic Results 2006 Europe
n°2
ARDS +
RFCC
RHCK +
Mild
HDK +
FCC
NPV@12%
(106 $)
1123
1006
956
657
973
1351
NPV/TCI
0.47
0.51
0.48
0.38
0.42
0.61
IRR (%)
18.5
18.9
18.5
17.2
17.8
20.1
POT (yr)(from
production start)
~ 7.3
~7
~ 7.3
~ 8.2
~ 7.9
~ 6.2
5.3
5.0
4.9
3.0
4.7
7.4
Options
Net Real.
($/bbl AR)
n°3
n°4
n°5
n°1
RHCK +
RHCK + DC + HP
HP HDK
HP HDK
HDK
+ DC
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
n°6
HP HCK
+ VRDS
+ RFCC
29
Economic Results Europe
2003-2006
25
IRR (%)
20
Opt 1: ARDS + RFCC
15
Opt 2: RHCK + Mild-HDK + FCC
Opt 3: RHCK + HP HDK
Opt 4: DC + HP HDK
10
Opt 5: RHCK + HP HDK + DC
Opt 6: HP HCK + VRDS + RFCC
5
0
2003
2004
2005
2006
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
30
General Economic Considerations
Europe
25
IRR (%)
2005
20
2004
2006
15
Opt 1: ARDS + RFCC
Opt 2: RHCK + Mild-HDK + FCC
2001
10
Opt 3: RHCK + HP HDK
2003
5
2002
Opt 4: DC + HP HDK
Opt 5: RHCK + HP HDK + DC
Opt 6: HP HCK + VRDS + RFCC
0
50
100
150
200
250
300
(Diesel – Atmospheric Residue) Price Differential ($/t)
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
31
2006 Main Changes…
•
AR-to-diesel price differential decrease has
deteriorated the profitability of schemes producing the
higher quantity of MD i.e. options 3, 4 and 5.
•
Schemes presenting a more well balanced production
(between Gasoline/MD) while minimizing HFO
production are in a better position (options 2 and 6).
•
Situation is worst for schemes (4 & 5) producing coke
due to AR-to-Coke price differential increase
• AR price increased from 254 $/t (2005) to 356 $/t (2006)
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
32
IRR Sensitivity Study to Petcoke Price
2006 Situation
IRR (%)
21
Opt 1: ARDS + RFCC
20
Opt 2: RHCK + Mild-HDK + FCC
Opt 3: RHCK + HP HDK
19
Opt 4: DC + HP HDK
Opt 5: RHCK + HP HDK + DC
18
Opt 6: HP HCK + VRDS + RFCC
Linéaire (Opt 3: RHCK + HP
HDK)
Linéaire (Opt 2: RHCK + MildHDK + FCC)
Linéaire (Opt 1: ARDS + RFCC)
17
16
0
10 20
30
40
50 60
70
Base Case
Petcoke Price = 20 $/t
Petcoke Price ($/t)
80 90 100
Linéaire (Opt 4: DC + HP HDK)
Linéaire (Opt 5: RHCK + HP HDK
+ DC)
Linéaire (Opt 6: HP HCK + VRDS
+ RFCC)
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
33
IRR Sensitivity Study to
Natural Gas Price
IRR (%)
23
Opt 1: ARDS + RFCC
21
Opt 2: RHCK + Mild-HDK + FCC
Opt 3: RHCK + HP HDK
Opt 4: DC + HP HDK
19
Opt 5: RHCK + HP HDK + DC
Opt 6: HP HCK + VRDS + RFCC
17
Linéaire (Opt 3: RHCK + HP
HDK)
Linéaire (Opt 2: RHCK + MildHDK + FCC)
Linéaire (Opt 1: ARDS + RFCC)
15
2
4
6
Gas Price ($/MMBtu)
8
Base Case
Zeebrugge = 7.3 $/MMBtu
10
~1% point IRR for:
Linéaire (Opt 4: DC + HP HDK)
~1.5
$/MMBtu: Opt. 3, 5
Linéaire (Opt 5: RHCK + HP HDK
+ DC)$/MMBtu: Opt. 2, 4, 6
~2.0
Linéaire (Opt 6: HP HCK + VRDS
~5.0
$/MMBtu: Opt. 1
+ RFCC)
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
34
Conclusion
•
In a diesel oriented market, conversion profitability is
mainly dependent on the diesel-to-AR price differential
• A diesel-AR differential around 160 $/t is required to exceed a
minimum IRR of 15%
•
Currently, with price differentials around 260 $/t (2006), all
studied options are profitable
• Due to AR-to-Coke price differential increase in 2006
profitability has deteriorated for schemes producing coke
• Natural Gas price has a significant impact on profitability
•
Optimum solution depends on refinery specific constraints
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
35
Upgrading Options
for Diesel Production
36
Atmospheric Residue Price Assessment
Source: Platts, Axens
NWE Prices ($/t)
400
300
398 $/t
AR (0.6%S)
AR (4%S)
LSFO (1%S)
HSFO (3.5%S)
356 $/t
314 $/t
283 $/t
200
100
0
2001
2002
2003
2004
2005
2006
•
From HSFO at 3.5%S (283 $/t in 2006) & LSFO at 1%S (314 $/t)
quotations  Calculation of “Sulfur content adjustment” in $/t per %S
(12.4 $/t/%S)
•
This “Sulfur content adjustment” is applied to AR at 0.6%S quotation
(398 $/t) to estimate AR at 4%S (356 $/t)
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
37
Main Prices
$/t
1000
800
Atmospheric Residue (Feed, 4%S)
Diesel (on spec, NWE)
Gasoline (on-spec NWE)
Gasoline (on-spec US)
Naphtha (NWE)
Propylene (Polymer grade, NWE)
600
400
200
0
2001
2002
2003
2004
2005
Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006
2006
38