Designing a revamp to meet your specific business drivers: seven scenarios

Scenario A: Increasing conversion to increase middle distillates yield

Maximising the middle distillates yield is a goal many refineries worldwide share. Many, though, cannot increase their hydrocracker feed rate, so they will likely look at improving the conversion instead. That was the situation for the Grupa LOTOS refinery in Gdańsk, Poland. In its first cycle, the refinery increased the conversion rate of its hydrocracker from 60 to 85% to produce more jet fuel and Euro 5 diesel. In this case, there was much more value in converting the bottoms to distillates than in selling it as feed to a fluidised catalytic cracking unit.

Scenario B: Reducing conversion to exploit high lubricant base oil margins 

Although middle distillates often provide a higher-value product stream, the economics in some regions are better for lubricant base oils. So, while Grupa LOTOS was revamping to increase conversion, Hyundai Oilbank was revamping the hydrocracker at its Daesan facility in South Korea to reduce it. The plant had originally been designed and started up at full 98% conversion.

It subsequently reduced the conversion to 70% and sold the bottoms product as base oil feed. However, the margins that it was recouping on its own lubricant base oils business prompted Hyundai Oilbank to reduce this further to 50% to accommodate the shift from middle distillate production to its own new base oil plant.

In China, CNOOC realigned routing of the hydrocarbon streams at its refinery in Guangzhou Province to take advantage of the premium on base oils. In this case, the operator was switching away from petrochemical products. Shell Global Solutions had originally installed an 80,000-bbl/d, dual-service hydrocracker at 85% conversion where the bottoms were running to the ethylene cracker at the Nanhai petrochemicals complex.

Now, the bottoms are routed to the base oils plant across the fence because there were better margins in base oils than in chemicals. A key enabler to this was the high quality of the hydrowax that comes from the Shell hydrocracker.

Scenario C: Providing additional petrochemical feedstocks

Like CNOOC’s Guangzhou refinery, many other refineries are also integrated with a neighbouring petrochemical facility. One Shell refinery had a 98%-conversion, two-stage diesel hydrocracker, but management commissioned a revamp to respond to the enhanced petrochemical margin. It is now running at twice the capacity and a lower percentage conversion to make ethylene cracker feedstock.

Scenario D: Maintaining conversion; adding middle distillates capacity

In the previous scenarios, the refiners were adjusting the conversion of their hydrocrackers but, of course, other parameters can be tuned instead. For example, Valero, North America’s largest refiner, originally built a 50,000-bbl/d, two-stage hydrocracker at each of its refineries in St Charles, Louisiana, and Port Arthur, Texas. Subsequently, it has revamped both of them to increase capacity towards 75,000 bbl/d to benefit further from the booming market for distillate products.

Marathon Oil Corporation has responded in a similar way. It revamped the hydrocracker at its Garyville refinery in Louisiana, to increase its capacity from 77,000 to 115,000 bbl/d. Marathon Oil maintained the same conversion level (80–85%) but increased the feed rate to generate more barrels of jet and diesel. Both of these expansion projects solved their hydraulic and heat balance constraints through cost-effective, low-cost revamps involving replacing the heat exchangers, small heaters and pumps.

Scenario E: Increasing middle distillates capacity by converting a mild hydrocracker

To increase capacity at minimum capital cost, reusing redundant equipment can often be a highly effective response. For instance, OJSC Naftan’s Novopolotsk refinery in Belarus added an available reactor to one of its hydrotreating units and, with the increased catalyst volume, raised the conversion, thus creating a mild hydrocracker. Shell’s state-of-the-art reactor internals were added to both reactors with new-generation pretreatment and cracking catalysts from Criterion. The revamped unit was able to achieve up to 60% conversion of the 370°C-plus heavy atmospheric gas oil and light vacuum gas oil fractions.

Scenario F: Cost-effectively responding to market demand for winter diesel

Many refiners are keen to produce winter diesel that has specific cold-flow properties, as it can attract a price premium. This can be achieved in several ways, but the economics can vary substantially. A revamping project that involves the installation of catalytic dewaxing capability can often provide a better economic return than additivation or kerosene blending, for example.

That was certainly the case at the Gazprom Neft refinery in Omsk, Russia. Reusing a redundant reactor as a second-stage dewaxing reactor enabled it to produce higher-quality winter and extreme-winter-grade diesel fuels at minimum capital cost and with minimum changes to the process configuration.

Scenario G: Adapting to process heavier feeds without compromising on cycle lengths

Many refiners are having to run heavier feeds such as heavy coker gas oil, heavy vacuum gas oil and deasphalted oil. This is due to the industry trend for increased fuel oil conversion and processing crudes with higher portions of 370°C-plus fractions. However this can lead to operational problems such as fouling that can curtail cycle lengths. Nevertheless, S-Oil was able to avoid such problems at its Onsan refinery in Ulsan, South Korea by adding Shell’s state-of-the-art reactor internals to both reactors, along with new-generation pretreatment and cracking catalysts from Criterion.

Revamping new units

Many of the projects described in this supplement are revamps of newly installed hydrocrackers. Why would a refiner invest additional capital in a new unit that is still in its first cycle?

As much as six years can elapse from completing the configuration study to the unit starting up and much can change in that time. Market conditions may have shifted or there may have been changes in emissions legislation or product-quality specifications. For example, if the market demand for middle distillates has outstripped the initial forecasts, the owner may be keen to increase capacity or, if some product streams are achieving an unanticipated margin, modify for a different product slate.

Shell Global Solutions has worked with several refiners, including, for example, Valero and Marathon, to revamp their newly started up hydrocrackers. These projects made relatively small adjustments but their impacts were substantial: they ensured that the new assets continue to be relevant to the prevailing market conditions and provide substantial bottom line benefits.

Technology focus 

Revamping an existing hydrocracker or hydrotreater is substantially more complex than building a new one and is a highly specialised area that calls for advanced process engineering skills and wide-ranging operating experience. A selection of the actions taken during a revamp is shown below.

New technologies may be installed, including:

  • state-of-the-art reactor internals that can enable a greater catalyst volume to be loaded into the reactor; 
  • latest-generation catalysts to help improve product yields and cycle lengths;
  • high-capacity distillation trays to help improve throughput cost-effectively;
  • additional rotating equipment, such as turbines, pumps and compressors, to support the increased capacity; and/or 
  • higher-capacity relief valves to help remove hydraulic constraints. 

A revamp may require operational changes, for example: 

  • realigning the process configuration to modify the conversion; 
  • optimising the feedstock selection and preparation; and/or
  • running the unit to the limit of its design constraints to achieve capacity creep.

Studies and reviews often are required, including:

  • dynamic simulations for reactor thermal stability checks during normal and upset conditions; and/or
  • material reviews of corrosion rates in, for example, wash-water loops and fired equipment.

Existing equipment is not replaced unless there is a strong economic case, so recycle gas compressors and recycle gas turbines, for example, are rarely replaced. Moreover, care is taken to avoid the additional duty triggering the need for more steam-raising capacity.

Key takeaway

These examples demonstrate that every revamp project is unique and should be carefully tailored towards a refiner’s specific situation. Should you process heavier feeds? Should you increase conversion or reduce it? Could you improve the yield of middle distillates, petrochemicals or lubricant base oils? The answer will depend on your business objectives, assets and the dynamics of the markets you serve. Moreover, your margin drivers are likely to change over time.

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