Feature article

Using innovation to address challenges facing refineries today

16/07/2008

Oil and Gas News

Refiners are facing more challenges today than ever before as a result of growing demands from multiple stakeholders. Global demand for oil is rising and consumers continue to want performance and fuel economy while being increasingly concerned about their role in contributing to greenhouse gas emissions.

Governments are also concerned about emissions but, at the same time, are interested in energy security and supporting local agriculture, all of which are contributing to a drive for increasing market penetration of biofuels. Shareholders, although attracted to investing in the industry, are concerned about cost inflation and the sustainability of returns over the medium-to-long term.

The refining industry has enjoyed exceptionally favourable margins for the past few years, with robust demand growth (mainly driven by the developing nations) underpinning near-capacity operating rates at refineries, and high oil prices. However, the shift towards unconventional crudes and heavy feedstocks, coupled with vigorous market demand for cleaner products produced using reduced-emission manufacturing processes, is changing the refining landscape. The industry’s expectation is that margins will continue to be decent in 2008, but will fall down a bit in 2009 and 2010, indicating potentially leaner times for the industry going ahead.

To meet the challenges of a possible downturn, increased energy requirements and tough new environmental standards, refineries must focus on and find available expertise with continued investment in technology. This need for effective solutions to today’s challenges and thirst for new technologies has led to innovation being a key business driver and an important success factor. Underpinning this shift is the drive to create more efficient and reliable processes. Refiners have come to realise that in order to meet society’s needs, through successful projects that will increase the volume of oil products and meet more stringent specifications and requirements, they need to be innovative in all their activities – from master planning to project execution and maintenance.

Refinery plans based on innovative concepts and technologies generally provide better returns on investment and are, therefore, more likely to be implemented. The innovations of greatest value to refinery operators include:

• methods for economic processing of unconventional crude oils and feedstocks
• moving process constraints to boost clean products made and improve refinery margins
• high level of integration to reduce capital and operating cost
• novel catalyst performance improvements for production of high value products
• refinery configurations that can enhance upgrading to more valuable products

Additionally, it is essential that innovative solutions are tailored to the needs of individual refineries and are considered as long-term commitment, rather than a short-term project.

Using Innovative Solutions to Maximise the Life of Catalysts

Increasingly stringent fuel regulations, heavier crudes and feedstocks, and soaring energy demand have created complex – and sometimes conflicting – challenges for refiners operating hydroprocessing units. In response, many refiners are building new licensed units or revamping their existing facilities. An important part of the process is not only to implement the most optimised hydroprocessing solution, but also to select the best catalysts for an application.

Catalysts are critical to many industrial reactions. Refineries and chemical plants rely on them to help boost product yields and reduce the proportions of unwanted by-products and contaminants. Over time, however, the effectiveness of a catalyst declines. The loss of catalytic activity and/or selectivity is known as catalyst deactivation, and it can be caused by chemical, thermal or mechanical problems. For refinery operators, maximising the effective catalyst life, or cycle length, is vital for efficient and profitable operation.

An example of this is a project that Shell Global Solutions and Shell’s catalyst business – Criterion Catalysts & Technologies (Criterion) recently completed for a major refining company. In late 2006, the operators at the refinery encountered excessive deactivation of a hydrocracking pre-treatment catalyst after just six months of operation. This led to production losses and greatly reduced catalyst life. A similar problem had occurred during the previous cycle after around 400 days of operation; a typical “good industry practice” catalyst life would be closer to three years.

The refining company that owned the refinery decided to assemble a team of specialists drawn from within the organisation, Shell Global Solutions, and Criterion – to establish what was happening. This multi-disciplined team, using its extensive experience in hydrotreating, hydrocracking, distillation, operations, technology and consulting, carried out a five-day root-cause analysis (RCA) study at the refinery to investigate the problem. The RCA followed an innovative concept, called the Value Creation Activities (VCA), which entailed adding unusual service levels to a product offering by Criterion.

Based on the RCA, the team identified several basic causes that required closer investigation. These included the presence of sodium in the hydrocracker unit feed; the choice of catalyst; the recent vacuum distillation unit revamp; the operational practices of the vacuum distillation and hydrocracking units; the feed composition to the problematic hydrocracking unit; hydrocracking unit loading and start-up; the possibility of feedstock maldistribution in the hydrocracking unit reactors; and leaks and rogue streams.

The results of the RCA were promising. The Operations Superintendent of the refinery was convinced that the analysis will smooth future operations. He said that the RCA approach gave them a means to resolve the refinery’s issue of loss of processing capability in the hydrocracker unit, which will help to alleviate potential feed quality problems for the next hydrocracker unit run. He also commented that the RCA will help the refinery to realign its operating strategy.

Recommendations from the RCA that will be implemented include developing the hydrocracker unit feed specifications and formalising preventive or mitigating actions. However, the challenge of finding a balance whereby the refinery can produce asphalt-grade vacuum residue as well as on-specification hydrocracker feed remains. The refinery operators have also decided to review the loading pattern of the catalysts and have agreed that the customer and Shell’s catalyst business – Criterion will continue to work together for the success of the next cycle.