Declining fuel oil demand and highly complex assets coming on-stream demonstrate a clear need to invest in residue conversion projects. These can be highly capital intensive but Shell Catalysts & Technologies has insights for achieving higher rates of return through revamping existing process units.
Evaluating residue upgrading technologies
A wide range of technology options is available for refiners to reduce or eliminate their fuel oil exposure, so, at Shell Catalysts & Technologies, we have been working with sites around the globe to help identify the best response for their specific circumstances. Some of these options are shown in the accompanying chart.
A chart comparing the cost-effectiveness of a wide range of residue conversion technologies.
We have often found that the business case for some of the integrated solutions, which typically involve revamping existing process units, has tended to be far stronger than that for installing new high-residue-conversion technology such as ebullated-bed residue hydrocracking or slurry-phase residue hydrocracking. In large part, this is due to the capital expenditure involved.
For example, whereas the high-residue-conversion technologies are extremely capital intensive, a solvent deasphalting (SDA) unit can be added for comparatively moderate capital expenditure. Simultaneously revamping the hydrocracker can help to reduce high-sulphur fuel oil production by almost 50%, increase middle distillates yield and improve crude flexibility.
A business case for a residue upgrading unit revamp
At Pernis refinery in the Netherlands, a low capital expenditure revamp that converted a residue hydrodesulphurisation unit into a deasphalted oil (DAO) hydrocracker helped to achieve a return on investment above 15%, which is a factor of two higher than the industry-standard solution, a delayed coker.
In addition, the combination of SDA and DAO hydrocracking, or SDA and thermal conversion, which is another moderate-capital-expenditure response option, has another important advantage: it retains high levels of crude flexibility. This is becoming an increasingly important profitability driver for refiners. There are large opportunities for refiners to increase margins by including lower-priced, opportunity or niche crudes in their diet, so we always suggest that customers should evaluate the effect that their investments will have here.
Another crucial consideration is the refinery’s back end. When increasing the level of residue conversion, by either revamping process units or installing new ones, the treating and utility systems and logistics infrastructure can often be key constraints. Additional capacity is likely to be required for sour water strippers, wastewater treatment plants and, particularly, sulphur recovery units. Fortunately, with the development of Shell’s next-generation tail gas treating process, Shell Claus off-gas treating (SCOT1) ULTRA, a performance step change is now attainable with minimal capital investment.
It is important to first develop a robust investment plan tailored to your specific circumstances. You can only identify the optimal solution by taking into account your specific constraints, such as refinery configuration, local factors and available capital and by using tools such as scenario planning to help you take a view of the future market in which you will be operating.
Advanced ebullated-bed residue hydrocracking catalysts
Refiners around the world are already operating ebullated-bed residue hydrocracking units and benefiting from very high conversion levels. For many, sediment-induced fouling has been a key constraint limiting cycle lengths and feed processing flexibility, but Shell Catalysts & Technologies has commercialised a series of ebullated-bed residue hydrocracking catalysts that exhibit enhanced sediment control and higher conversion activity.
1SCOT is a trademark owned by the Shell group of companies.
Helping refiners and petrochemical companies to convert unwanted streams such as steam cracker residues into synthesis gas, a high-value product that can be used for producing chemicals, hydrogen and power.
Residue upgrading catalysts with proven track records in improving unit operability and maximising cycle lengths.
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