Hydrocracking: an overview of the misconceptions

Although fluidised catalytic cracking (FCC) has historically been refiners' conversion method of choice, hydrocracking has replaced it as the key process in recent years. Refiners worldwide are using hydrocracking to respond to the momentum in global dieselisation, especially as rising crude prices are forcing them to consider upgrading distressed crudes and difficult feedstocks. Such is its flexibility that several grassroots refineries built in the last few years have a hydrocracker but no FCC unit in their configuration.

Estimates suggest that global hydrocracking capacity will increase substantially in the next few years. But, despite this growth, Shell Global Solutions believes that the potential and capabilities of hydrocracking are not always widely understood. Impact explores some common hydrocracking misconceptions with four technical experts.

For instance, Robert Karlin, Licensing Technology Manager, Shell Global Solutions, asserts that it is a myth that hydrocrackers are expensive. "Yes, they use substantial volumes of hydrogen, but the cost of hydrogen has fallen in recent years, as the availability of natural gas has increased," he says. "And although capital costs may be relatively high, the economic justification for a hydrocracker can be extremely strong."

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

Hydrocracking compares extremely favourably with FCC as a conversion process for producing diesel, as it generates an ultra-low-sulphur diesel-quality product that is sent directly to tankage without further processing. Although FCC does not require hydrogen, its diesel quality is poor, even for use as a blending component; FCC produces a light cycle oil that has to be processed further, which requires hydrogen. However FCC remains an attractive process for upgrading vacuum gas oil and atmospheric residue to gasoline.

"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 become a very profitable operation," adds Karlin. "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."

Unit economics can be further enhanced through a well-reasoned approach to catalyst selection. Some refiners seek to commoditise their hydrocracking catalysts but that, says Lawrence Kraus, Hydroprocessing Product Manager, Criterion, diminishes the value that the unit can generate. "These are complex units that utilise highly sophisticated catalytic materials,” he says. “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 diesel cold-flow properties are an issue, there is likely to be a catalyst solution to improve the cloud point or the pour point of the distillate. Similarly, if the hydrocracker is feeding an ethylene cracker, bottoms with a high hydrogen content has an economic advantage, as it helps to restrict residue yield and boost ethylene production. A catalyst system could then be tailored that adds hydrogen selectively into the bottoms products.

"It is very important to know a refiner's feedstock and process objectives, and then to match them with tailored catalyst systems," says Kraus. "Experience in tailoring catalyst systems for hydrocrackers to match the processing objectives is key. Many refiners are benefiting from this tailored approach. They may pay a premium for a tailored catalyst system, but the additional cost 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 are only a small part of a hydrocracker’s total operating cost, so operators should not compromise in this area." 

Another area in which enormous advances have been made recently is the processing of difficult feedstocks. Refiners worldwide are now using the latest hydrocracking technology to produce high-quality diesel and jet fuel from even the most difficult feeds.

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

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 the nitrogen, sulphur and silicon are removed and the aromatics and olefins are saturated by the pretreatment catalyst system, HCGO is actually a very simple feedstock to handle.

Not only are hydrocrackers flexible about feedstock, they are also flexible about product slate: a fact that is not always recognised according to Ward Koester, Hydrocracking Technical Services Manager, Criterion/Zeolyst International. "Operators can be forgiven for thinking that if their hydrocracker was designed for diesel production, it cannot be optimised to produce anything else," he says.

With tailored cracking catalyst systems, today's hydrocrackers are highly flexible and enable a refiner to swing between the gasoline and the distillate modes 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," says Koester. "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."

For more information contact Süleyman Özmen.