Empowering sulphur management

As “easy oil” increasingly fails to meet demand, more difficult feedstocks with higher sulphur are increasingly used and senior refinery managers are asking themselves how they can maintain efficiency, throughput and margins in this environment, while having to deal effectively with product sulphur specification and sulphur-based emission limitation.

The key to navigating this sulphur paradox and investing in the future lies in a multi-platform Shell Global Solutions Pentagon Model, which forms the foundation for the Sulphur Technology Platform, which is explored in greater depth in the next article. While long-term scenario planning can provide refiners with the capability to test strategies against potential developments in the future of energy, the Pentagon Model is an approach that refiners can use as a template when performing various projects that help optimise operations, restructure existing assets and improve margins.

This three-pronged model, developed using Shell Global Solutions’ expertise and experience as both a refiner and technology provider, encourages refiners to:

• Focus on operational improvements with no capital expenditures – or ‘sweating the assets’ – in the short term;
• Revamp to meet demand for clean fuels, increase margins while improving efficiencies and maximise production in the mid-term; and
• Schedule phased investment for the long term.

First pentagon: ‘Sweat the assets’

Refiners are finding it more difficult to obtain financing for new projects despite facing strict laws that force the production of low-sulphur products and dealing with aging assets. Beginning with the first pentagon, refiners can increase their profitability with their existing assets – or ‘sweat their assets’ – with no capital expenditure.

Every refinery has the capability to get $0.3 to $1 per barrel of improvements. Tupras, for example, embarked on its first pentagon programme three years ago. They made operational improvements with a focus on reliability, training of staff and energy management. As a result, they were able to save $240 million through application of the first pentagon.

In an industry where refiners must increase their margins and maximise production, implementing the first pentagon provides a strong foundation for increased operational excellence in the short term.

Second pentagon: Revamps

Shell Global Solutions Pentagon Model helps refiners invest in future

Refiners can begin to invest in upgrading units, including hydrocrackers, thermal crackers and other applications as part of the implementation of the second pentagon. This is an investment that ranges between $5 million to $25 million with a return on investment of between one to three years depending on the scope of the project. Successful refiners invest in revamp projects with the money generated from implementation of operational improvements in the first pentagon.

For example, one refiner who invested in hydrocrackers for many years wanted further improvements, including the installation of new reactor internals and new catalysts to boost performance. As a result they were able to process additional feedstock and increase middle distillate yields.

Another US refinery that was previously operating a fluid catalytic cracking (FCC) unit, but had a vacuum gas oil (VGO) hydrotreating FCC unit, is now converting the unit to a mild hydrocracker. In addition they revamped their vacuum unit to deep flash operation to yield more VGO feedstock for the mild hydrocracker. This type of revamp has been popular in the last two years.

sulphur recovery units, looking into ways to improve and determining the long-term needs driving the refinery to improved margins while meeting environmental restrictions. As new refineries are built and displace the ones that cannot keep up with the changes, it is becoming more important for refiners to make the right margins and have the right conversions.

Third pentagon: Phased investment

To succeed long term, refiners must continue investing in phases as part of the third pentagon. For example, if they want to maximise their diesel production with the right product combination, they will need to install using deep flash technology with the hydrocracker and/or build light cycle oil (LCO) hydrotreaters to enhance production of diesel.

There are environmental benefits to phased investment as well. Refiners with a typical crude distillation unit and high vacuum unit can invest in new technologies as part of the Sulphur Technology Platform and thereby decrease their energy use by approximately 25 per cent by integrating their technologies. This not only helps refiners reduce capital investment, it can also help them achieve energy efficiency and CO2 reduction as well.

A multi-platform approach to sulphur

Each of the three pentagons enables refiners to improve operations and adapt to changing emissions and product standards. During implementation of the first pentagon, refiners are able to make enough operational improvements to gain savings for further investment in revamps. They can then use their increased margins for the phased investment programme in the long-term, enabling them to implement effective strategies for dealing with sulphur and other by-products and emissions.

It is crucial refiners invest now and continue to do so in order to prepare for an inevitable surge in demand and more stringent emissions legislation and product specifications. Refiners can use the lessons learned from the recent economic crisis to avoid the ‘stop and go’ behaviour of past crises in which refiners ceased investing in new projects through a multi-platform approach.

Efficient and continuous project management is a necessity in a challenging, cyclical business environment. With the Pentagon Model, refiners will enhance their existing assets to meet the growing energy demand by implementing appropriate sulphur management technologies such as the Sulphur Technology Platform and, at the same time, increase their margins. By adopting the Pentagon Model now, refiners will be in a better position to survive and thrive in the short and long term.