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1 Upgrading Options for Diesel Production Nicolas Thevenot.

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Presentation on theme: "1 Upgrading Options for Diesel Production Nicolas Thevenot."— Presentation transcript:

1 1 Upgrading Options for Diesel Production Nicolas Thevenot

2 2 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Market characteristics Axens heavy ends technologies Overview of the different options Global analysis Economic evaluation European case Agenda

3 3 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Source: IFP EU-25 Market Characteristics

4 4 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Source: IFP Latin America Market Characteristics

5 5 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Source: IFP Argentina Market Characteristics

6 6 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 VGO & Resid Conversion Mapping Crude Oil Naphtha Jet Fuel Diesel Topping Unit Vacuum Distillation Unit Fuel-oil FCC HyC-10 HyK Solvahl H-Oil DC Hyvahl H-Oil RC HDHPLUS® R2R LPG

7 7 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Resid Conversion - Axens’ Offer - Net VR Conversion,% 1000 Ni + V Content in Feed, ppm H-Oil RC Hyvahl + R2R H-Oil RC HDHPLUS  1000

8 8 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 ARDS/VRDS TECHNOLOGY : HYVAHL Fixed bed process for VR hydrodesulfurization Can process feeds with high metals content using “PRS” technology Low to Medium diesel production: 20-25% 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 Resid Conversion Features

9 9 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 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 RS 2, Stripping with Structured Packing, Catalyst Coolers New technology features and catalysts permit cracking of heavy feeds & high propylene yields. Resid Conversion Features

10 10 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 RHCK PROCESS : H-Oil RC Ebullated bed process for VR Hydrocracking On-line Addition/Withdrawal of Catalyst Constant Conversion and Product Quality Very long cycle length VR Conversion range: % 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 Resid Conversion Features

11 11 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 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

12 12 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Overview of the Different Options: Case Study Base Arabian Medium Crude: API= 30.6, S= 2.4 wt.% Feedstock: 100,000 b/d (647.5 t/h) of Arabian Heavy/Arabian Light (50/50) atmospheric residue (S= 4 wt. %) Investment : European location 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

13 13 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Option 1: ARDS + RFCC ARDS RFCC AT FG MD LPG HDT Fuel Oil AR C3=C3= Naphtha Gasoline 647 t/h LPG and C 5 + throughput Total: 592 t/h

14 14 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Option 2: RHCK + Mild HCK + RFCC RHCK FCC HDT VT Mild HCK AT VR VGO AR 647 t/h LPG and C 5 + throughput Total: 616 t/h FG MD LPG Fuel Oil C3=C3= Naphtha Gasoline

15 15 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Option 3: RHCK + HP HCK RHCK HDT HP-HCK HCK resid VT AT FG MD LPG Naphtha Fuel Oil VR VGO AR 647 t/h LPG and C 5 + throughput Total: 626 t/h

16 16 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Option 4: Delayed Coker + HP HCK DC HDT HP HCK Coke AT VT HCK resid FG MD LPG VR VGO AR Naphtha 647 t/h LPG and C 5 + throughput Total: 626 t/h

17 17 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Option 5: RHCK + DC + HP HCK RHCK HDT HP HCK DC Coke VT AT FG MD VR VGO AR HCK resid Naphtha 647 t/h LPG and C 5 + throughput Total: 621 t/h LPG

18 18 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Option 6: HP HCK + VRDS + RFCC VRDS RFCC FG MD Fuel Oil VT AT HP HCK HCK resid VR VGO AR LPG C3=C3= Naphtha Gasoline 647 t/h LPG and C 5 + throughput Total: 611 t/h

19 19 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Products Propane and butanes sold as LPG C 3 = from FCC and RFC is extracted (FCC/RFCC yield: ~ 5 wt%) in a PPS and sold as C 3 = polymer grade, C 4 = alkylated with iC 4 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

20 20 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 AR Conversion AR Conversion, wt% with iC 4 import N°2 RHCK + Mild HCK + FCC N°3 RHCK + HP HCK N°5 RHCK+DC + HP HCK N°1 ARDS + RFCC N°4 DC + HP HCK N°6 HP HCK + VRDS + RFCC with iC 4 import

21 21 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 LPG and C 5 + liquid Yield LPG & C 5 + Yield, wt% with iC 4 import N°2 RHCK+ Mild HCK + FCC N°3 RHCK + HP HCK N°5 RHCK + DC + HP HCK N°1 ARDS + RFCC N°4 DC + HP HCK N°6 HP HCK + VRDS + RFCC with iC 4 import

22 22 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 LPG, C 5 + and Coke Throughput Production Capacity, t/h with iC 4 import N°2 RHCK + Mild HCK + FCC N°3 RHCK + HP HCK N°5 RHCK + DC + HP HCK N°1 ARDS + RFCC N°4 DC + HP HCK N°6 HP HCK + VRDS + RFCC with iC 4 import

23 23 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Options AR conversion LPG + C 5 + Liquid Yield Main productSelection N° 1ARDS + RFCC +++ G N° 2RHCK + Mild HCK + FCC +++ MD/G N° 3RHCK + HP HCK ++ MD N° 4DC + HP HCK MD N° 5RHCK + DC + HP HCK +++ MD N° 6VRDS + RFCC + HP HCK MD/G Objectives & Options

24 24 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 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)

25 25 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 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)

26 26 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Total Capital Investments: 2006 TCI includes: ISBL investments Off sites Engineering fees Contractor fees Interest on construction loan Start-up costs Working capital Billion $ N°2 RHCK + Mild HCK + FCC N°3 RHCK + HP HCK N°5 RHCK + DC + HP HCK N°1 ARDS + RFCC N°4 DC + HP HCK N°6 HP HCK + VRDS + RFCC ~17% ~16%

27 27 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Total OPEX Comparison: 2006 $/ bbl AR N°2 RHCK + Mild HCK+ FCC N°3 RHCK + HP HCK N°5 RHCK + DC + HP HCK N°1 ARDS + RFCC N°4 DC + HP HCK N°6 HP HCK + VRDS + RFCC

28 28 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Product Revenues: 2006 Europe Product Revenues ($/ bbl AR) Products – Raw Materials in ($/bbl AR) *Other = Fuel Gas + Sulfur (+ Coke for n°4 & 5) N°2 RHCK + Mild HCK+ FCC N°3 RHCK + HP HCK N°5 RHCK + DC + HP HCK N°1 ARDS + RFCC N°4 DC + HP HCK N°6 HP HCK + VRDS + RFCC

29 29 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Economic Results 2006 Europe ARDS + RFCC RHCK + Mild HDK + FCC RHCK + HP HDK DC + HP HDK RHCK + HP HDK + DC HP HCK + VRDS + RFCC (10 6 $) NPV/TCI IRR (%) POT (yr)(from production start) ~ 7.3~7~ 7.3~ 8.2~ 7.9~ 6.2 Net Real. ($/bbl AR) n°2 n°5 n°3 n°1 n°4 n°6 Options

30 30 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Economic Results Europe

31 31 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 General Economic Considerations Europe

32 32 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 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)

33 33 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 IRR Sensitivity Study to Petcoke Price 2006 Situation

34 34 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 IRR Sensitivity Study to Natural Gas Price

35 35 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 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

36 36 Upgrading Options for Diesel Production

37 37 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Atmospheric Residue Price Assessment 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 $/t) NWE Prices ($/t) Source: Platts, Axens AR (0.6%S) AR (4%S) LSFO (1%S) HSFO (3.5%S) 283 $/t 314 $/t 356 $/t 398 $/t

38 38 Upgrading Options for Diesel Production – Jornadas Latinoamericanas de refinacion – Mendoza 2006 Main Prices $/t


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