India Plans to Raise Refining Capacity by 77% by 2030

India Plans to Raise Refining Capacity by 77% by 2030

Refiners in India, the world’s third-biggest oil consumer and importer, have drawn up plans to raise their capacity by 77% to about 8.8 MMbpd by 2030 to meet the country’s rising fuel demand. India is emerging as one of the key global drivers for refined fuels consumption as its economic expansion and rising industrial activity yields infrastructure improvements and increased energy access for commercial and retail consumers. If current patterns of use continue, India’s fuel demand could rise to as much as 335 million tonnes by 2030, and 472 million tonnes by 2040, from about 194 million tonnes last year, the oil ministry’s report says. The report also forecast a growth of 5 percent or more each year in India’s gasoline, diesel and jet fuel demand to 2030. The report recommended the refiners set up petrochemical projects and cut production of petcoke and fuel oil. Source: Hydrocarbon Processing, 2/9/2018.

TCGR Note:
While there is no doubt India’s growth in transport fuels demand could grow 5% pa through 2040 (which is an important consideration for our members), historically though, the refining infrastructure growth has been slower to date because of lower refining investment, particularly from international partners.

Topsoe Chosen as Technology Licensor of the World’s Largest Methanol Facility

IGP Methanol LLC (Houston; US) has awarded Haldor Topsoe A/S (Lyngby; Denmark) a contract for engineering of a methanol plant that will produce 1.8 million ton/yr, which is part of a planned complex with a total production capacity of 7.2 million ton/yr. Topsoe’s SynCOR Methanol technology will be at the core of the project. IGP plans to construct four identical SynCOR Methanol plants as part of their Gulf Coast Methanol facility in Plaquemines Parish, Louisiana (US). IGP’s Gulf Coast Methanol complex is planned to be the world’s largest methanol production facility and one of the most efficient and environmentally responsible. Source: Haldor Topsoe, 1/30/2018.

TCGR Note: Haldor Topsoe’s integrated SynCOR™ syngas solution is autothermal reforming process applying proprietary catalysts, equipment and engineering applicable to grassroots methanol, ammonia, GTL and H2 manufacture. At 5,000 mt/day it scale rivals the largest plants today. The closest competitors are Lurgi and JM for licensing.

Saudi Aramco, CB&I and Chevron Lummus Global Sign Joint Development Agreement to Demonstrate and Commercialize Thermal Crude to Chemicals (TC2C™) Technology

Saudi Aramco, through its wholly-owned subsidiary Saudi Aramco Technologies, has signed a three-party Joint Development Agreement (JDA) with CB&I, and Chevron Lummus Global (CLG), a joint venture between CB&I and Chevron U.S.A. The JDA will serve to scale up and commercialize Saudi Aramco’s Thermal Crude to Chemicals (TC2C™) technology. The TC2C™ technology has been pioneered at Saudi Aramco’s Research & Development Center over the past few years in order to enable higher chemicals yield than previously achievable. The technology also bypasses conventional refining steps by employing a proprietary direct conversion process. Source: Saudi Aramco, 1/18/18.

TCGR Note:
This is indeed an important future industry trend as refineries and integrated chemical complexes need to add more value-added chemicals production, because transportation fuels have become more threatened over the next decades due to the increasing adoption of EV’s/hybrids within the automobile industry. Need further information! See TCGR’s “Oil-to-Chemicals: Technological Approaches and Advanced Process Configurations” report completed in December, 2017!

 

The Future for Hydrocracking: Part 2

Refineries are gearing up to make more jet fuel/kerosene. For instance, PetroChina has said that it will build a new hydrocracking unit at its Golmud refinery in Qinghai province, China with the capacity to make 150,000 t/y (3200 b/d) of kerosene. The new unit was expected to start up in October 2017. Sinopec’s Fushun Research Institute of Petroleum and Petrochemicals (FRIPP) has developed a new generation of flexible hydrocracking catalyst. This features a smooth and open pore structure that significantly improves utilisation of the active centre, enhancing selective hydrocracking reaction capacity for flexible production of high quality chemical raw materials (high aromatic content heavy naphtha) and clean fuel products (CN-V standard clean diesel or its blending component and high quality jet fuel No. 3). HC-320 from UOP is said to possess superior activity and stability when compared to previous generation hydrocracking catalysts. In addition to diesel, HC-320 can yield ethylene cracker feed, jet A-1/kerosene, and high quality lube base stocks. HC-520 is the newest distillate selective hydrocracking catalyst offered by UOP in the Unity line. HC-520 utilises a new support technology and alternative metals compared to other Unity hydrocracking catalysts to boost the output of distillate. An unidentified grassroots refining/petrochemical complex in China has contracted Chevron Lummus Global (CLG) to license a number of its technologies. These include Isocracking, Isotreating and delayed coking technologies to produce a variety of products including diesel, jet fuel and heavy naphtha. The heavy naphtha will be fed to the petrochemical complex as feed for a BP paraxylene opex-advantaged crystallisation technology to produce paraxylene. A number of hydrocracking catalyst developers have also introduced new heavy naphtha maximisation catalysts in recent years. Heavy naphtha production from the hydrocracker has become more popular recently given expected long-term decline in demand for diesel and the ability of heavy naphtha from the hydrocracker to be fed to a catalytic reforming unit to yield high octane reformate for the gasoline pool or BTX: for instance, Albemarle’s KC 2715 hydrocracking catalyst, Axens’ Craken-Flex, Criterion Catalysts & Technologies’ Z-863, and Haldor Topsøe’s TK-971 zeolitic catalyst. Source: PTQ, Q1 2018, p. 25.

TCG Note: Worth a read! In related news, CLG has introduced a new scheme for a hydrocracker and base plant that’s been commercialized at Tatneft’s Taneco refinery in Russia, which will also be adopted by Pemex at Salamanca in Mexico.

Driving Octane in an Ultra‐Low Sulfur Gasoline Market

A recent survey, illustrates how North America refiners are meeting the Tier 3 regulations. The majority of refiners are meeting the regulations by increasing hydrotreating severity either with pre-treating FCC feed or post-treating FCC naphtha. This option increases the refinery H2 consumption and reduces the run length of these hydrotreaters. For some refiners, pre-treating FCC feed is still not sufficient and can sometimes present a heat balance challenge for the FCC unit. While post-treating is effective for reducing the sulfur content, it saturates aromatics and olefins resulting in octane loss in the FCC naphtha. This can be exacerbated at refineries that consume an increased diet of shale‐derived crudes, which are naturally light and produce low sulfur, but also low octane, gasoline This paper examines case studies to highlight a few different options around the FCC units for maximizing overall refinery octane: Case 1) Feed and operational changes to maximize LPG olefins to Alkylation Unit and improve octane; Case 2) Undercutting FCC naphtha to reduce post-treat requirement and improve octane; Case 3) Catalytic solution to maximize LPG olefins to Alkylation Unit and improve octane; Case 4) Additives to boost LPG olefins to Alkylation Unit and improve octane; Case 5) Gasoline Sulfur Reduction (GSR®) Technology to reduce post-treat requirement and preserve octane ; and Case 6) Combining multiple approaches. Source: Grace Catalagram, Fall 2017, p.8.

Image: Industry Survey on Meeting Tier 3 Regulations

TCGR Note: Interestingly, the demand for 93 octane has risen from 7.8% back to 11.3% market share since 2008 in the U.S. (EIA). To meet CAFÉ (mileage) standards, has been for automobile have to use smaller turbocharged gasoline engines. Each refiners solution will likely be site specific but the two (2) best options are using could be a butylene C4= specific FCC catalyst to boost alkylation production and additives such as Grace’s D-Prism to reduce sulfur.

World Energy Outlook 2017

Four large-scale shifts in the global energy system set the scene for the World Energy Outlook 2017: the rapid deployment and falling costs of clean energy technologies, the growing electrification of energy, the shift to a more services-oriented economy and a cleaner energy mix in China, and the resilience of shale gas and tight oil in the United States. These shifts come at a time when traditional distinctions between energy producers and consumers are being blurred and a new group of major developing countries, led by India, moves towards centre stage. How these developments play out and interact is the story of this year’s Outlook. With the US accounting for 80% of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, the world’s consumers are not yet ready to say goodbye to the era of oil. Up until the mid-2020s demand growth remains robust in the New Policies Scenario, but slows markedly thereafter as greater efficiency and fuel switching bring down oil use for passenger vehicles (even though the global car fleet doubles from today to reach 2 billion by 2040). Powerful impetus from other sectors is enough to keep oil demand on a rising trajectory to 105 mb/d by 2040: oil use to produce petrochemicals is the largest source of growth, closely followed by rising consumption for trucks (fuel-efficiency policies cover 80% of global car sales today, but only 50% of global truck sales), for aviation and for shipping. Once US tight oil plateaus in the late 2020s and non-OPEC production as a whole falls back, the market becomes increasingly reliant on the Middle East to balance the market. There is a continued large-scale need for investment to develop a total of 670 billion barrels of new resources to 2040, mostly to make up for declines at existing fields rather than to meet the increase in demand. Even greater upside for US tight oil and a more rapid switch to electric cars would keep oil prices lower for longer. We explore this possibility in a low oil price case, in which a doubling of the estimate for tight oil resources, to more than 200 billion barrels, boosts US supply and more widespread application of digital technologies helps to keep a lid on upstream costs around the globe. Source: International Energy Agency (IEA), 11/14/2017.

TCGR Note: In general, TCG/TCGR agrees with the trend factors surrounding IEA’s analyses. However, as well as with all forward looking analyses the devil is in the details of the assumptions used. For instance, the rate of EV/hybrid penetration into the transportation sector will have a large influence on the supply/demand picture. Will 900 million electric cars be sold by 2040? For more information on how these trends will shape the catalysis industry in the medium-term, look for the 17th Biennial Edition of “The Intelligence Report: Business Shifts in the Global Catalytic Process Industries, 2017-2023.”

More U.S. Distillate is Being Exported

U.S. distillate exports have continued to increase in 2017, both in volume and as a share of total distillate production. Domestic distillate demand has remained relatively stable, increasing slightly from January through July 2017. Distillate exports from the U.S. reached a record high in July 2017 of 1.7 million barrels per day (b/d). Based on data through August, distillate exports have accounted for 28% of the total distillate produced in the United States in 2017. U.S. distillate exports in 2017 have been destined primarily for countries in Central and South America, Europe, and North America. In addition to increased export demand, the difference between distillate prices and crude oil prices encouraged relatively high refinery runs. The largest single recipient of U.S. distillate exports from January through July 2017 was Mexico (228,000 b/d), followed by Brazil (183,000 b/d) and the Netherlands (102,000 b/d). Source: U.S. Energy Information Administration (EIA), 11/7/2017.

Saudi Aramco Sees Progress on Chemical Project Plan with SABIC by Year-End

Saudi Aramco expects to decide by the end of 2017 on plans for a joint oil-to-chemicals project with Saudi Basic Industries Corp (SABIC), according to Saudi Aramco Chief Executive Officer Amin Nasser. The project, known as COTC, is a key to plans for a chemicals complex costing $20 billion or more. It is the first major scheme involving the two state giants. “We finished the feasibility. We are at a stage where we need to work together and make some decision about proceeding with the project with SABIC,” said Nasser. He added that a decision was expected “before the year-end”. Source: Reuters, 10/24/2017.

TCGR Note: The topic of “oil-to-chemicals” is a hot subject area within industry today. The trends supporting the notion that chemical plants do not need to run a refinery naphtha feedstock are growing and include, but are not limited to, the fact that the world is awash with light crude oil and condensates that can more easily be converted into chemicals and crude oil is, and likely will continue to be, relatively cheap. Also, direct ethane cracking to ethylene is even more common, which changes the dynamic, and there are new or adapted catalytic process technologies that can now swing from 60 wt% olefins to 60 wt% aromatics that make crude to chemicals production more attractive. For more information, see TCGR’s multi-client study entitled “Oil-to-Chemicals: Technological Approaches and Advanced Process Configurations”.

 

Major Boost for On-Purpose Propylene

A new catalytic process from Dow Chemical will increase the efficiency of transforming shale gas-derived propane to propylene, satisfying a much-needed market. The Dow-developed fluidized catalytic dehydrogenation (FCDh) technology selectively produces propylene from shale gas feedstocks. The design uses robust reactor/catalyst regenerator technology that allows the process to scale as needed. The design prompts more than 20% capital savings versus alternative commercial processes, while reducing energy requirements per pound of propylene produced, resulting in lower CO2 emissions. Propane dehydrogenation (PDH) chemistry is endothermic and heat must be applied to drive the conversion. “We applied a concept of using the catalyst to carry heat to the reactor,” comments Matt Pretz, one of Dow’s principal FCDh technology developers. “This approach really improves the energy efficiency, but makes very little coke. To satisfy the required energy balance in FCDh, we use the catalyst to independently control the reactor temperature and add supplemental fuel to the regenerator.” Existing PDH technologies slowly move deactivating catalysts between reactors and a regenerator. The FCDh technology takes a very different approach, using more-active catalyst with shorter periods between regenerations. This leads to lower overall capital investment, fewer limitations on increasing scale, higher efficiency and better operability. Frequent catalyst regeneration creates higher effective catalyst activity while in service. FCDh technology is moving toward implementation in Dow hydrocarbon facilities as part of the company’s strategy to strengthen its feedstock flexibility. The company is not only using this technology, but is also commercializing it as part of its growing intellectual property (IP) portfolio – with favourable interest from the market. Dow is now examining opportunities for next generation catalyst and process improvements, with the goal of delivering additional operational benefits. Source: ICIS Chemical Business, 10/13-19/2017, p. 9.

TCGR Note: The new technology from Dow was recently awarded “Best Process Innovation” by ICIS. After validation from its commercial demonstration, the technology may become popular due to the increased feedstock flexibility.

Unwanted Diesel Production Vexes Europe’s Oil Refiners

Oil refiners had pinned their hopes on European diesel as the Continent’s fleet of personal diesel-powered vehicles grew to 45% by 2015, compared with 2% in the U.S., according to the International Energy Agency. Total had poured more than $2.4 billion into diesel-friendly upgrades at its two largest European refineries. Repsol and CEPSA invested $4.76 billion and $2.4 billion, respectively, on similar upgrades and modernization projects. Even independent refiners like Saras that aren’t tied to big oil-exploration companies shelled out hundreds of millions of dollars. However, a backlash against diesel sparked mostly by the Volkswagen AG emissions scandal has upended Europe’s big oil refiners. Sales of diesel vehicles are plummeting. “Diesel was the darling and has become the devil,” said Dario Scaffardi, executive vice president at Saras. To be sure, Europe still remains one of the world’s biggest consumers of diesel. European demand is estimated at 6.4 million barrels a day this year, over a fifth of global diesel consumption, according to the IEA. “Refineries that invested in complexity will have the ability to modify output toward heavier distillates [like marine and jet fuel]. They are well prepared,” said John Cooper, the head of refining industry group Fuel Europe. Switching to shipping fuel or jet fuel is easier for upgraded refineries because they are diesel-related distillates. By pumping out shipping fuel, the refiners can take advantage of new emissions curbs that cut the amount of sulfur allowed to be used in marine fuel starting in 2020. Source: The Wall Street Journal, 9/30/2017, p.B1.

TCGR Note: So where to from here! European refiners are already under intensifying competition from Asian and particularly Middle Eastern refiners. More Russian fuel exports are anticipated in the future. Between 2009 ─ 2016 about two dozen older refineries closed. Recent announcements like banning diesel vehicles from certain cities and increasing diesel taxes in France are now forcing big car makers like BMW, Daimler and even VW to scramble to increase their electric vehicle (EV) programs and Volvo/Geely has even announced all of their production vehicles will be either electric or hybrids by 2022. All of this brings serious revamp questions – more chemicals? For more information, see TCGR’s recently launched multi-client study “Oil-to-Chemicals: Technological Approaches and Advanced Process Configurations”.