Global refining capacity is in a state of flux. In the principle, the refining capacity within the OECD nations is in a mature state, with refineries aging and struggling to achieve the mandatory returns for re-funding. This is particularly relevant for Europe and Japan where refining margins have been poor for decades.
The same applies to an extent within the US, though there has been more funding in upgrading within the US than Europe. It could be not hard to cause that high taxation of fuels might have been partly to blame. No matter your standpoint, the truth that refining margins are so poor – sometimes $ 2-5 pb – it is not any shock that much rationalisation is happening on the mature markets.
It’s value looking at the typical disposition of the products from a barrel of oil and Chris Skrebowski’s (of Peak Oil Consulting) slide Fig. 1 does it nicely.
Fig. 1 – Source: Skrebowski Power Institute Oil Depletion Convention 2008
By far, the vast majority of crude oil is consumed within the manufacturing of transport fuels. On a regional basis there are vital variations with Europe rising as a middle distillate market and the US remaining firmly within the gasoline mode. (See Fig. 2.)
Fig. 2 – Supply: Jim Williams 2007 American Petroleum Institute Diesel Gas, Use, Manufacturing and Supply
It is value noting the difference in product demand as a result of this considerably impacts the configuration of a refinery. As will be seen, the US demand is concentrated on gasoline and in Europe the desired products are jet kerosene and diesel. Within the US there is appreciable capacity to transform center distillate to gasoline. Converting gentle products to middle distillate is far harder and there are few processes obtainable. By way of fuels specifications it is apparent that the EU EN 228 and EN 590 fuel specs for gasoline and diesel respectively are rising because the dominant specs as they are being extensively adopted in the developing nations. Europe has been a pacesetter in small diesel engine functionality (Mercedes, BMW, Audi VW, Peugeot, Fiat), even ahead of the Japanese, and within Europe greater than 50 % of recent vehicles bought are actually diesel.
Even the premium luxurious manufacturers now have diesel choices. That is driven by the gas economic system as measured in volumetric terms and by taxation. Desk 1 under is constructed from the Feb 2011 IEA Oil Market Report and offers the percentage of demand for every product group (observe – 1 month’s data shouldn’t be taken in isolation). Notice how the US has managed to scale back gasoline oil production. The real level although is the sheer difference between gasoline and diesel consumption between Europe and the US.
The other products include ethane, LPG and naphtha which are extensively used in petrochemical manufacturing. This shall be mentioned later in more detail. Word that the entire demand might exceed the refinery capacity. This isn’t shocking as condensate and LPG will not be processed in refinery and with be counted as different demand. As well as there might be imports and exports of completed products (US gasoline and Europe middle distillate. Japan and China, naphtha and LPG.)
Desk 1: Supply: IEA OMR Feb 2011
Refining processes and complexity
The refining course of for crude oil may be described by 5 primary process steps as in Fig. 3 below. All fashionable refineries producing transport fuels will comprise these 5 course of steps, although not necessarily all the units described in every process.
Fig. Three – the 5 refining process steps in a modern refinery.
Europe has something of the order of 120 refineries however a few of these are very small specialist operations. In the principle there are about seventy nine respectable sized refineries with a crude throughput of thirteen.8 mm bpd. One measure of a refinery complexity is the Nelson Index, which assesses the refinery conversion capacity by relating every processing unit capability in opposition to the crude distillation capability and making use of weighting factor.
Desk 2 gives a simplified record of complexities for individual models and the base line capacities from which they had been derived.
Refinery Nelson Complexity = Sum of (Unit capability/ CDU capacity x Nelson Factor) for all units on refinery.
Table 2: Nelson Refinery Capability technique. From OGJ Dec 20 1999
In the above example, the unit Nelson Factors have been calculated from the baseline unit measurement. In the above example the refinery total is for illustrative purposes only. I have neglected all the potential items for simplicity i.e no hydrotreaters, oxygenates, isomerisation all of which carry a Nelson Factor.
For Europe, my pc mannequin gave the next distribution in Fig. Four (notice that is the consequence for particular person refineries). Many refiners report the Nelson complexity of their publications, significantly if they have a excessive rating.
Fig. Four – Supply: personal model analysis Aug 10
A Nelson complexity of four is an easy refinery whilst the refinery of complexity 14 would be thought to be amongst the best on the planet, however excessive care needs to be exercised before concluding that complicated refineries are naturally extra worthwhile. On the whole that’s true but very a lot relies on the product combine.
A posh refinery making forty % gasoline at the expense of middle distillate in Europe would be a giant mistake. The refinery model I developed is able to calculate a refining margin based on the refinery configuration and product combine, and makes a very good estimation of the vitality demand and CO2 emissions. This permits a greater estimation of refining margin for a selected refinery and allows some modelling with different crude sorts. (This isn’t a gross sales plug – it is not for sale or hire.)
For the US, the scenario is as follows (Fig. 5), noting that this is 2003 time-line (still reasonably correct) and this is the aggregate rating for all refineries operated by the owner. Basically the US refining base is extra advanced than the European base:
Fig. 5 – Supply: Valero – Refining Complexity 2003
A complex refinery would possibly seem like this (Fig. 6) (The actual Refinery is the Chevron El Segundo taken from the Chevron Diesel Fuels Technical Assessment.) – http://www.buschtaxi.org/downloadz/technik/diesel.pdf or right here for later version http://www.chevron.com/merchandise/prodserv/fuels/documents/Diesel_Gas_Tech_Review.pdf
Fig 6 – A fancy gas refinery (Chevron El Segundo)
On this refinery there may be excessive conversion of the the crude to transport fuels with the goal to produce minimum gas oil. Note that In the past is used to feed the hydrocracker and the FCC, which isn’t normal for Europe the place middle distillates are in short provide. Within the US gasoline is the desired product and subsequently the Ago fraction is usually cracked.
Another level to note on this refinery is the use of each a hydrocracker and a FCCU. That is unusual as usually either a hydrocracker or a FCCU is used alone. The sunshine cycle oil from the FCC is a diesel stream with very poor qualities, and is becoming increasingly tough to mix into highway diesel because of the excessive aromatic and sulphur content material. This refinery has a Nelson Index of 10 calculated from the latest OGJ survey. As will be seen there are 4 important fuel merchandise – gasoline, jet, diesel and fuel oil. As well as there will be coke, sulphur and lpg.
Fig. 7 – A fancy Integrated Refinery with Fuels and Petrochemicals – BPRP Gelsenkirchen
BPRP Geslenkirchen’s refinery in Fig. 7 is an unusual refinery configuration for Europe and is considered one of a form. I’ve chosen this refinery as it compares effectively with the Chevron El Segundo refinery in Fig. 6. Both have a Hydrocracker, FCCU and Coker. Gelsenckirchen goes further in that it additionally has a Visbreaker which is a mild thermal cracking process. You will also see that the coke is calcined which removes the remaining traces of hydrocarbons and produces almost pure coke.
This refinery makes use of the light distillates for petrochemicals and consequently there isn’t any alkylation unit. The sunshine naphtha and LPG is sent to a steam cracker for olefines manufacturing. Some gasoline is produced from the FCC and the reformer. The reformer additionally feeds the aromatics unit which is used for benzene and xylenes manufacturing.
One other feature of this refinery is the partial oxidation of the vis breaker tar stream which is used for the production of ammonia and methanol. The Nelson complexity of this refinery is only 8.6 which signifies that this index needs to be thought-about very rigorously when making comparisons. The production of high worth petrochemicals is just not reflected in the Nelson analysis. Olefines production is talked about in more detail later, however notice that the BPRP FCC produces propylene which is used for cumene production (propylene + benzene). Observe CHD is catalytic hydrodesulphurisation.
The Strangland diagram in Fig. Eight illustrates the hydrogen content material vs. molecular weight for varied gasoline types. As the molecular weight rises the retention of hydrogen within the molecules turns into extra important. Cracking reactions have a tendency to reduce the hydrogen to carbon ratio and to maintain the correct H:C ration in the finished product (either hydrogen must be added or carbon removed).
Motor gasoline is extra tolerant of lower hydrogen to carbon ratios. Aromatic molecules similar to toluene and xylene have H:C rations of simply over 1:1. These species have high autoignition temperatures, excessive octane numbers and good combustion properties in spark ignition engines. Jet gas and diesel require hydrogen to carbon ratios of close to 2:1.
Carbon rejection and hydrogen addition processes are mentioned later. Merchandise lying exterior of the envelopes will either need upgrading in some kind to meet gross sales specs. In some cases the price of the upgrading could also be greater than the value of the product. The only possibility for the peri-condensed aromatics is fuel oil or coking.
Fig. 8 – Strangland Diagram of hydrogen to carbon distribution. From the Encyclopedia of Hydrocarbons
Refinery Crack Unfold- refining margins
Certainly one of the important thing parameters for a refinery profitability is the crack spread. A collection of crack spreads for various refining centres can be discovered on the IEA web-site.
Fig. 9 – Crude crack unfold for Brent in North West Europe Feb 2011
The crack unfold is the margin over the crude price that refiners make. In this example for north-west Europe, the margin on jet kerosene is the best at $ 5-10 pb. Naphtha is from $ -5 to +5 pb and gas oil is a consistent loss at around $ -10 pb. For industrial causes the gasoline crack spread isn’t proven on this graph. The gasoline worth however might be obtained from this webpage as a graph of gasoline pricing. (This is due to Platts licence guidelines). To make a margin the worth of the profitable products has to exceed the net lack of value of the loss making products.
Crude oil characterisation, yields and residue upgrading
Crude oil (typical) may be characterised into 4 essential types as depicted in Fig 10. Naturally it is not fairly that easy as there are medium grades that lie in between after which there is the ultra heavy which is outdoors the scope of this essay.
Fig. 10 – Graphic representation of crude oil sorts
The yield pattern of the crude is important (see Fig. Eleven). Right here is an instance from BP (sorry, a bad name within the US).
Fig. Eleven – Source BP web site
Completely different crude varieties have completely different product yields. The difference between a sweet gentle crude – Brent and a sour heavy crude – Arab Heavy is dramatic. The main difference between these 2 varieties is in the yield of gentle products and the yield of vacuum residue. The Arab Heavy produces 3 x the mass of vacuum residue compared to Brent. For that reason Brent is seen as a premium crude and Arab Heavy will probably be bought at a discount to reflect the poorer yield and the upper value of upgrading.
The yield sample may also be found within the assay of the crude. The instance in Fig. 12 is the assay for Arab Heavy, which is a Saudi crude. A supply of assays may be discovered here.
Fig. 12 – Source Petroplan various available from here
There are several important properties price considering on this assay. The aromatic content of the streams is necessary for the quality of sure forms of gasoline. Within the center distillate fractions this is in direction of the higher end of what could be fascinating. Each jet kerosene and diesel properties are influenced by the aromatic content material. In the vacuum gasoline oil and residue, the metals content material is necessary along with the Calculated K (Watson K issue) and the C5 insolubles and Concarbon.
The latter is a coke precursor and really much influences how these fractions could be upgraded. You will be aware how the sulphur concentrates within the heavy fractions, normally in quite complicated ring buildings which makes elimination difficult. In all, that is moderately difficult crude to course of. It is the sulphur which is the principle concern. For these so inclined you may like to make comparisons with the opposite crude assays to see the distinction. The sharp eyed amongst you might notice a difference between the BP and Petroplan yields.
This is because of BP reporting Weight % and Petroplan Quantity %. The Petroplan assay lists 3 naphtha fractions. Not all refineries will cut up the naphtha fraction in to three. What I wish to attract to your consideration is the RON (Analysis Octane Quantity) of the naphtha fractions. These are exceedingly low and could be very difficult to mix into the gasoline pool without upgrading both in a reformer or isomeriser. The kerosene and light distillate and heavy distillate fractions (center distillates) have good cetane numbers (50 ish) which can be appropriate for direct blending into the diesel pool. The pitch or vacuum residue has a excessive SG of higher than 1 which implies it should sink relatively than float in water.
Upgrading the vacuum residue
As noted from the straightforward BP yield knowledge in Fig. 11 we will see a large difference between Brent and Arab Heavy. Processing Arab Heavy will produce 32 % of Vacuum Residue, which really only has a use as gasoline oil, until it is upgraded. Several choices can be found. Coking is the most certainly although the quality of the coke produced would not be too good and essentially gas high quality. Hydroprocessing can be pricey when it comes to hydrogen and catalyst. Beneath in Fig. Thirteen is a graphic representation from Foster Wheeler who produce Delayed Cokers. The carbon rejection vary refers to coking, though strictly speaking an FCC is a carbon rejection course of. Utilizing Arab Heavy for instance processing of residue in a FCC would not be a good idea, as it fails on both metals and carbon residue. Using a Hydrocracker, although not impossible, would entail a big consumption of hydrogen and a shortened catalyst like because of the metals. There are another prospects but these aren’t very common, comparable to deasphalting followed by hydrocracking of the de-asphalted oil.
Fig. 13 – Source Foster Wheeler: Zero Gasoline Oil
Refinery capacities and the affect of Ethylene production
It is now price taking a look at Regional refining capacity for 2010.
The current US refining capacity is about 17.8 mm bpd, and as earlier acknowledged Europe has a refinery capability of about 13.8 mm bpd. The Asian capacity has been break up into the related nations for clarity. I haven’t considered the exporting nations on this essay. The main exporting nations are the OPEC nations and these nations have different economic drivers to the consuming nations. Desk 3 offers a breakdown of the pertinent refinery capacities in the US, Europe and Asia.
World refining capability 2010
Desk three: Source. OGJ, P&G, C1 Energy and personal research March 2011.
Sorry to combine items. mm bpd is million barrel pd and mta is million tonnes per year. For a refinery a hundred kb/d = 5 million tonnes crude oil.
As will be seen in Desk three the regional capacities present some outstanding differences. The big FCC capability within the US is for the manufacturing of gasoline and should there be a change to diesel automobiles, as in Europe, the US would have some serious points with diesel capability. Catalytic reforming units are equally large and are for the production of gasoline.
The US additionally has a excessive put in capacity of coking units which are used for minimising fuel oil manufacturing. For the US VDU capability is 54 % of the CDU, which again points in the direction of the flexibility to process heavy oils (care have to be exercised with this comparison, especially in China). In Europe the same ratio is forty one % which illustrates that Europe processes extra medium and mild crude and isn’t targeting high conversion to gasoline – return to Table 1 to check the demand differences. Both India and South Korea have a low VDU:CDU ratio.
The truly scary fact is the scale of the demand development for oil in China. If those refining capacity estimates are correct for the following 5-10 years then one has to ask the place will all this oil come from, because it quantities to around 1 mm bpd each year for the next subsequent 10 years.
One in all the foremost petrochemicals produced kind refinery feedstocks is ethylene. If associated gases from oil production are available then these are steadily used as ethylene feedstocks and present up as demand but are not necessarily processed in refineries. In the US about forty % of the ethylene capacity is from refinery naphthas whereas in Europe the determine is nearer to 75 %. In Japan and South Korea the determine is close to 100 % as there are not any local sources of ethane or lpg.
For several many years North Asia has imported feedstocks for ethylene production as the put in refinery base has not been capable of fulfill native demand. China is massively expanding its ethylene capability along with its refining base, which I have illustrated in the underside half of Desk 4. The Asian refinery capacity just isn’t keeping up with the ethylene capacity development and in 2010 China grew to become a web importer of naphtha for ethylene manufacturing.
In Europe much of the light naphtha is used for ethylene production, together with lesser quantities of LPG and ethane from native manufacturing. Some refiners have applied heavy feedstocks reminiscent of hydrowax which is produced from hydrocrackers instead feedstock to gentle naphtha. On a volumetric foundation, Europe is sinking excess of 10 % of the crude oil into petrochemicals if the opposite supplies are additionally taken into consideration.
Asian crude oil demand is, if anything, even increased for petrochemicals and in China petrochemical growth is outpacing refinery capacity. What I am attempting for instance right here is that a very substantial part of the crude oil barrel is getting used for petrochemicals in Asia, which is getting used to produce the plastics for the manufacturing base.
On a global basis, plastics progress has been exceeding GDP development for decades. As China industrialises and more Chinese language turn into automotive homeowners, the demand for gasoline and naphtha in China is on a collision course. China will have to import increasing quantities of naphtha or the car drivers are going to should drive less.
Desk 4 illustrates the yield of ethylene from various feedstocks.
Desk 4: Ethylene Yield from varied hydrocarbon feedstocks – Supply Chemistry of Petrochemical Processes 2nd Version. Matar and Hatch
As might be seen, the yield of ethylene varies in response to the feedstock. The co-products of ethylene manufacturing are in lots of circumstances as vital as the ethylene itself. Each propylene and butadiene are vital chemical feedstocks which are in short provide. Butadiene is widely utilized in car tyre manufacturing and for the production of nylon polymers. Propylene is used both in polypropylene and for the manufacturing of different chemical products similar to methacrylates, phenol, and propylene oxide.
Other routes to propylene are gaining capacity and a brand new sort of FCC has been developed that’s configured for the production of petrochemicals slightly than fuels, that can produce forty-50 % C3 and C4 fractions. Growing quantities of petrochemicals are actually obtained from refineries.
For these interested, Fig. 14 reveals the method flow for a naphtha olefines cracker.
Fig. 14 – Schematic movement of an olefines cracker utilizing a liquid naphtha feedstock
Western refiners at the moment are represented in China, together with BP, Exxon, Shell, Saudi Aramco and Kuwait Petroleum. Expect more to observe. When it comes to ethylene capability then use an approximation of 1 mm tons of ethylene requiring 3.6 mm tons of naphtha or naphtha equivalent. 5 mm ton of refinery capacity is about 150,000 bpd of crude oil.
The state of affairs in South Korea, Japan, and Taiwan is such that ethylene capacity exceeds the naphtha manufacturing capacity of the country’s refineries and these nations have long been net importers of naphtha and lpg for ethylene production. They’re about to seek out that they will be fighting head to head with the Chinese for naphtha provides, and in the meantime Saudi NGL exports are declining rapidly as they are consumed at home.
From the Saudi Aramco 2009 annual report the manufacturing for sale of NGL’s amounted to
Propane: 376,000 bpd
Butanes: 218,000 bpd
Pure Gasoline: 203,000 bpd
Gas Condensate: 226,000 bpd
Fig. 15 – Saudi NGL consumption Supply: SRI Consulting Presentation 2009
In the meanwhile, other ME international locations exports NGL’s including Kuwait, Qatar and the UAE. But plans are afoot for petrochemical plants to domestically course of these products into worth added petrochemicals. The driver behind that is to provide jobs for a rapidly increasing inhabitants. Should these NGL’s disappear from Asia then the demand for this sort of product should be met from crude oil, which will imply a considerable increase in crude oil demand in the region, and essential increases in refining capability.
In the meantime if the fall in gasoline consumption in Europe continues as predicted, in some forecasts by as much as 30 % by 2020, then there is the chance that additional closures of European refineries are probably, and that Europe shall be looking East and West for jet and diesel to fill the shortfall in production. By 2020 Europe has legislation in place to cut back the typical CO2 emissions for new vehicles to 95 gms per km – a tough target that few cars are capable of to date.
One thing for sure, the next few years are going to be challenging for refining. Many refiners struggle to earn cash presently as refining margins slide again to $ 2-5 pb. My own refinery model clearly demonstrates this phenomena and completed product prices must rise substantially.
This is a really transient round up of refining capacities and for these extra skilled readers, I apologise for it missing all the mandatory element. I will try and reply specific questions within the feedback part however please be affected person. I travel rather a lot and time is typically a difficulty.