Hydrocracker Revamp Key To Hyundai Oilbank In South Korea Entering The Lubricant Base Oil Business 

Hydrocracker bottoms (hydrowax) can be a low-value product for refineries. However, transforming it into higher-value lubricant base oils can be a lucrative option, as proven by Hyundai Oilbank, whose decision to do just that is now set to bring in additional revenue of almost $1 billion per year at its Daesan refinery in South Korea.

Hyundai Oilbank was keen to enter the lubricant base oil market because of the growth in sales, particularly in Asia. Consequently, the company set about exploring the economic and technical feasibility of building a base oil plant connected to its refinery that could process the hydrowax previously sold to a third party.

Early-stage discussions with Shell Global Solutions about this plan provided the developer with a valuable lead. “We learned that Shell Lubricants was looking for a stable, high-quality producer to supply base oil in Asia,” explains Ji-Hoon Ha, Chief Operating Officer, Hyundai and Shell Base Oil Co., Ltd. “This led to the creation of a joint venture.”

With a new partner through which it could distribute the base oil, Hyundai Oilbank went on to contract Shell Global Solutions to provide the necessary technology, which needed to be capable of producing high-quality (Group II) base oils to satisfy Shell Lubricants’ requirements.

To ensure the new base oil plant would be as cost-effective as possible, Shell Global Solutions realised there would also need to be upgrades to the Daesan refinery. “If we could achieve the product qualities that the lubricant base oil plant required, it would really maximise the value of the project, but it became clear that to do so we would have to modify the catalyst system and operating mode of the existing hydrocracker,” explains John Baric, Licensing Technology Manager, Shell Global Solutions.

“Not only that, we also identified clear advantages by going back even further into the processing stream and revamping the high-vacuum unit to Shell’s deep-flash technology mode.”

A tailored catalyst system, developed jointly with Criterion Catalysts & Technologies, was introduced to the hydrocracker to change its operating mode and enable the delivery of the right quality of hydrowax, which is essential to maximise heavy base oil yields.

The high-vacuum unit revamp expanded the ability of the unit to produce more heavy vacuum gas oil. Replacing all of the internals, revamping the furnace and changing the transfer line between the furnace and the column improved its overall performance.

With all of the individual units in place, the new base oil plant started up and delivered the first on-specification products in July 2014. Immediately, the joint venture’s operations and technical support team began pushing the production rate to its initial design capacity (20,000 barrels a day of Group II grades 150N and 500N lubricant base oil) and optimising the yield within the product quality constraints.

Baric explains that the key to the success of the project is that each element has been optimised to work as a value chain. “The vacuum unit is delivering the vacuum gas oil feed to the hydrocracker at the right heaviness, the profile is exactly as per design and the yield is there. The hydrocracker is operating at target conversion to deliver the hydrowax quantity and quality that the base oil plant needs,” he says. “And all of this is helping the base oil plant to deliver the right product quality.”

For more details on Shell Global Solutions’ hydrocracking technology.

For more details on Shell Global Solutions’ distillation and separation technology.

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