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Comment: Trends and options in deep conversion process technologies

by Guest on Aug 7, 2017

Valentin Kotlomin is director, strategic studies and downstream economics, Euro Petroleum Consultants.
Valentin Kotlomin is director, strategic studies and downstream economics, Euro Petroleum Consultants.

Let us have a look at the possible routes refiners may take to increase deep conversion and minimise fuel oil production, through a list of good examples.

Regretfully, for some refineries, the good old times of earning profits even when  producing significant amounts of fuel oil are now gone. Today, we see that competition in the petroleum refining industry keeps growing. Hence, the refiners are pushed to minimise fuel oil production by means of integrating deep conversion processes into their asset configuration.

A major driver for residue conversion projects is the new International Maritime Organization (IMO) specification for sulphur for bunker fuels, which will come in force in 2020. This will result in a much reduced market for the high sulphur materials.

The difficult challenge now for refiners is to adjust to these new market conditions and to select options for increasing conversion in their refineries. There is plenty of criteria available, to help choose between various process options. On top of technical features, it is important to factor in operational strategy of the plant as well as consider the business environment.

Delayed coking

Let us start our journey from Eastern Europe. At the back end of 2016, two regional companies announced their intentions to construct delayed coking units (DCUs) at their refineries. One such project is a DCU at the Rijeka refinery in Croatia, owned by INA. It was officially announced that INA and Tecnicas Reunidas signed a front-end engineering design (FEED) type contract for a residue upgrading plant, including a DCU licensed by Bechtel.

Another project is a DCU at the Pancevo refinery in Serbia, owned by NIS. This project is already on stream – an engineering, procurement and construction management (ЕРСМ) contract with CB&I has been signed. Actually, when it comes to converting oil residues, delayed coking is the most popular process in most regions. Yet, it has significant weaknesses: for example, the need to hydrotreat the products produced and to arrange sales of petcoke.

Hydroprocessing units

One alternate is to build a hydroprocessing unit instead of a delayed coker – these may be ebullated bed hydrocrackers or slurry hydrocrackers. Gazprom Neft, shareholder of NIS, when asked this question, confirmed that, after weighing up all the pros and cons, the company has opted for DCU since it remains the most reliable and time-tested option and best fitted their strategies.

While we are on the topic of delayed coking, let us have a look at Russia. Over the past few years, the Russian refiners have commissioned numerous deep conversion projects and indeed, DCUs were the most selected solution to minimise fuel oil production.

However, I would like to mention here a project at Nizhnekamsk refinery to illustrate that alternative deep conversion processes are also considered and selected. It is the heavy residue deep conversion complex based on slurry hydrocracker – the veba combi cracking (VCC) process licensed by Kellogg Brown & Root (KBR).

Commissioning is currently in progress and KBR’s representatives have promised to share the project results at the Moscow Downstream Conference Week to be held by Euro Petroleum Consultants (EPC) in Moscow in September 2017.

Back to Eastern Europe for another example of the different options available for residue upgrading: In late 2015, LUKOIL Neftochim Burgas of Bulgaria has successfully started up an ebullated bed hydrocracker – the H-Oil process licensed by Axens. LUKOIL Neftochim Burgas is in a fortunate position to be able to select different types of crudes to optimise performance of their new unit.

Our next stop is Northern Europe! In mid-2016, Sweden’s oil refiner Preem and US-based Beowulf Energy announced plans to examine the possibility for a new residue hydrocracking plant construction at Lysekil refinery in Sweden.

At this point, we know that the core unit of the plant will be a vacuum residue slurry hydrocracker – LC Slurry technology licensed by Chevron Lummus Global LLC (CLG). The aim of the project is to boost Euro 5 grade gasoline and diesel production, and to produce bunker fuel that meets the new IMO 2020 requirements.


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