Dispelling the myths: Four key Hydrocracking misconceptions

Myth One: Hydrocrackers are expensive

By Robert Karlin, Licensing Technology Manager, Shell Global Solutions (US) Inc.

Material costs for hydrocrackers can be high, particularly as high-pressure equipment is required. In addition, hydrocrackers utilise significant volumes of hydrogen. In the past, the economic justification for a hydrocracker may have been weak at best, but today, through the recent increase in the availability of natural gas, we have seen a corresponding decrease in the price of hydrogen. This combined with increasing crude prices has prompted refiners to push as much hydrogen into liquid products as possible.

The economic case for hydrocracking is the production of high-quality transportation fuels from difficult-to-process streams, and is further strengthened by the volume gain that hydrocracking provides, particularly towards jet fuel and diesel. This will usually outweigh the capital and operating expenses, as there is such a large volume expansion from a hydrocracker operation.

Combined with the volume gain advantage, hydrocrackers are designed to meet the most stringent product quality specifications from around the world. In this realm, hydrocracking is superior as a conversion process when compared with fluidised catalytic cracking (FCC) for producing diesel, as it generates ULSD-quality product that is sent directly to tankage without further processing. In comparison, although FCC does not require hydrogen, its diesel quality is poor, even as a blending component. The FCC produces a light cycle oil (LCO) that has to be further processed, which requires hydrogen.

In fact, although FCC used to be the conversion method of choice, especially in the Americas, hydrocracking has increased in popularity at the expense of FCC owing to the increase in demand for diesel and jet fuel. Some grassroots refineries designed in the last few years are based on hydrocracking as the primary conversion unit, with no FCC unit in the configuration.

Hydrocracking may have been dismissed in the past as an expensive process but, now that the cost of hydrogen is much lower than product values, it has developed into a very profitable operation. Despite the high capital cost, hydrocracking projects can return a very attractive net present value: payback periods of less than three years may be possible with well-executed hydrocracking projects.

Myth Two: Hydrocracking Catalysts are commodity items

By Lawrence Kraus, Hydroprocessing Product Manager, Criterion Catalysts & Technologies

Commoditising the catalyst you use in your hydrocracker will diminish the value that the unit can generate. These are complex units that utilise highly sophisticated catalytic materials. The top-performing refiners understand that catalyst selection is a critical part of unit optimisation and that the catalyst can provide some real performance differentiators.

For instance, if you desire to process heavy feeds such as deasphalted oil (DAO) in your hydrocracker, then your catalyst company can help you to design a catalyst system that will facilitate its efficient and reliable operation. Similarly, if your diesel’s cold flow properties are an issue, you can leverage catalysts to improve the cloud point or the pour point of the distillate.

Or, if you are feeding an ethylene cracker (EC), high hydrogen content bottoms is clearly an economic advantage, as it helps to restrict EC residue yield and boost ethylene production. Your catalyst supplier could, therefore, help you to tailor a catalyst system that adds hydrogen selectively into the bottoms' products.

It is very important to know the feedstock and process objectives, and then to match them with tailored catalyst systems. Experience in tailoring catalyst systems for hydrocrackers to match the processing objectives is key. Many refiners are benefitting from this tailored approach. They may pay a premium, but it is more than offset by the improved margin of the hydrocracker because they will be making a higher value product. Catalysts can unlock so much value and yet account for a small part of a hydrocracker’s total operating cost, so operators should not compromise in this area.

Myth Three: Hydrocrackers cannot process difficult feedstocks

By Aris Macris, Licensing Technical Manager, Shell Global Solutions (US) Inc.

Enormous advances have been made in processing difficult feedstocks in recent years. Now, refiners worldwide are using the latest Shell hydrocracking technology to produce high-quality diesel and jet fuel from even the most difficult feeds.

For instance, in the last five years Shell Global Solutions has designed and started up three hydrocrackers for processing DAO or heavy coker gasoil (HCGO), which, historically, could only be processed in an FCC unit. One of these DAO units is now in operation at Grupa LOTOS in Poland (see Grupa LOTOS article). The biggest design challenge with DAO is removing the metals; a reliable demetallisation catalyst is vital. DAO also has high Conradson carbon levels, but that is dealt with using pretreatment catalyst, and then it is all about conventional hydrocracking.

In North America, a Shell Global Solutions-licensed hydrocracker is co-processing HCGO, which has traditionally been routed to the FCC unit via hydrotreating. In China, HCGO is also the feed to the hydrocracker at CNOOC’s refinery, which is the first plant in the world specially designed to process 100% heavy, high-acid crude oil. Complications arise with HCGO because it contains high levels of nitrogen, sulphur, aromatics, olefins and silicon. But, once they are saturated across the pre-treatment catalyst, it is actually a very simple feedstock to handle.

Similarly, the two-stage hydrocracker at Shell’s Martinez refinery in California, USA, is co-processing HCGO and heavy cycle oils from the FCC unit.

At Shell Global Solutions, Criterion and Zeolyst, we have a lot of experience with processing straight-run vacuum gas oil (VGO) and non-straight-run feedstocks such as DAO, HCGO and even thermally cracked gasoils and cycle oils from FCC units. We have processed them all, and designed hydrocrackers for all of these streams.

Myth Four: Hydrocrackers are not flexible on product slate

Figure 1: The price differential between diesel and gasoline for the summer and winter driving seasons in the USA used to fluctuate predictably. In recent years, however, this differential has become increasingly volatile, which makes it difficult for refiners to exploit margin opportunities.

By Ward Koester, Hydrocracking Technical Services Manager, Criterion Catalysts & Technologies / Zeolyst International

Operators can be forgiven for thinking that if their hydrocracker was designed for diesel production then it cannot be optimised to produce anything else. In fact, with tailored cracking catalyst systems, today’s hydrocrackers are highly flexible and enable a refiner to swing between the gasoline and the distillate mode to take advantage of seasonal product demand shifts. This switch may only require the adjustment of process operating parameters such as conversion, liquid recycle rate and product cut points.

Such flexibility is especially valuable for US refiners, which have been beset by enormous fluctuations in the diesel-to-gasoline price differentials in recent years (Figure 1). Moreover, because the forecast move to sustained dieselisation has not yet fully materialised, this volatility is expected to continue in the short term.

Deploying a catalyst with the requisite product selectivity window during times of volatile product differentials can enhance the value that can be extracted from the hydrocracker. That is why Criterion and Zeolyst have expanded their hydrocracking catalyst portfolios to include a wider range of flexible naphtha/middle distillate selective catalysts to bridge the naphtha to diesel selectivity gap and expand the hydrocracker’s operating window.

For truly flexible operations, the two companies work closely with the refiner to select and design catalyst systems that drive conversion while supporting the swing between gasoline and distillate modes. The approach focuses on cycle objectives, technical requirements and economics in order to improve hydrocracker flexibility.