bakken oil companies, the closing price of natural gas,etroleum Equipment, Inc. designs, installs, and services petroleum storage and handling systems for Convenience Stores,

The Oil Drum

By far, nearly all of crude oil is consumed within the manufacturing of transport fuels. On a regional basis there are vital differences with Europe rising as a center distillate market and the US remaining firmly within the gasoline mode. (See Fig. 2.)

external half coil heating reflects kettleFig. 2 – Supply: Jim Williams 2007 American Petroleum Institute Diesel Gasoline, Use, Manufacturing and Supply

It’s value noting the difference in product demand as a result of this significantly affects the configuration of a refinery. As can be seen, the US demand is targeted on gasoline and in Europe the desired products are jet kerosene and diesel. Within the US there’s appreciable capacity to convert center distillate to gasoline. Converting gentle merchandise to center distillate is much tougher and there are few processes out there. By way of fuels specifications it is apparent that the EU EN 228 and EN 590 gas specifications for gasoline and diesel respectively are emerging because the dominant specs as they’re being broadly adopted within the creating countries. Europe has been a frontrunner in small diesel engine capability (Mercedes, BMW, Audi VW, Peugeot, Fiat), even forward of the Japanese, and within Europe greater than 50% of latest cars sold are actually diesel. Even the premium luxurious brands now have diesel choices. That is pushed by the gas financial system as measured in volumetric terms and by taxation. Table 1 under is constructed from the Feb 2011 IEA Oil Market Report and gives the % of demand for every product group (word – 1 month’s data shouldn’t be taken in isolation). Discover how the US has managed to cut back gas oil production. The true level though is the sheer difference between gasoline and diesel consumption between Europe and the US. The other products embrace ethane, LPG and naphtha that are extensively utilized in petrochemical manufacturing. This might be mentioned later in additional detail. Word that the full demand might exceed the refinery capacity. This is not shocking as condensate and LPG will not be processed in refinery and with be counted as different demand. As well as there could be imports and exports of finished merchandise (US gasoline and Europe middle distillate. Japan and China, naphtha and LPG.)

Desk 1: Supply: IEA OMR Feb 2011
Refining Processes and Complexity

The refining process for crude oil can be described by 5 basic course of steps as in Fig. 3 below. All fashionable refineries producing transport fuels will contain these 5 course of steps, though not essentially all of the items described in every process.

Fig. 3 – the 5 refining course of steps in a modern refinery.
Europe has one thing of the order of 120 refineries but some of these are very small specialist operations. In the main there are about seventy nine respectable sized refineries with a crude throughput of thirteen.Eight million b/d. One measure of a refinery complexity is the Nelson Index, which assesses the refinery conversion capability by relating every processing unit capability towards the crude distillation capacity and making use of weighting issue. Desk 2 offers a simplified checklist of complexities for particular person units and the bottom line capacities from which they were derived.

Refinery Nelson Complexity = Sum of (Unit capability/ CDU capacity x Nelson Issue) for all units on refinery.

Desk 2: Nelson Refinery Capability methodology. From OGJ Dec 20 1999
Within the above example, the unit Nelson Factors have been calculated from the baseline unit dimension. Within the above instance the refinery whole is for illustrative functions solely. I’ve neglected all the attainable items for simplicity-i.e no hydrotreaters, oxygenates, isomerisation all of which carry a Nelson Issue.

For Europe, my laptop model gave the following distribution in Fig. Four (notice that is the outcome for particular person refineries). Many refiners report the Nelson complexity of their publications, notably if they’ve a excessive score.

Fig. 4 – Source: own mannequin analysis Aug 10
A Nelson complexity of 4 is a straightforward refinery whilst the refinery of complexity 14 would be thought to be amongst the best on this planet, however excessive care ought to be exercised before concluding that complicated refineries are naturally more profitable. Usually that is true but very much relies on the product combine. A fancy refinery making forty% gasoline at the expense of middle distillate in Europe can be a big mistake. The refinery model I developed is able to calculate a refining margin based mostly on the refinery configuration and product mix, and makes a good estimation of the power demand and CO2 emissions. This permits a better estimation of refining margin for a particular refinery and permits some modelling with totally different crude sorts. (This isn’t a gross sales plug – it isn’t for sale or hire.)

For the US, the situation is as follows (Fig. 5), noting that this is 2003 time-line (still moderately correct) and that is the aggregate rating for all refineries operated by the owner. Usually the US refining base is more advanced than the European base:

Fig. 5 – Supply: Valero – Refining Complexity 2003
A fancy refinery would possibly seem like this (Fig. 6) (The actual Refinery is the Chevron El Segundo taken from the Chevron Diesel Fuels Technical Evaluate.) – or here for later model…/Diesel_Fuel_Tech_Evaluate.pdf

Fig 6 – A posh gas refinery (Chevron El Segundo)
On this refinery there may be high conversion of the the crude to transport fuels with the purpose to provide minimum gas oil. Observe that Ago is used to feed the hydrocracker and the FCC, which isn’t regular for Europe the place center distillates are in brief supply. Within the US gasoline is the specified product and therefore the Ago fraction is often cracked. Another level to notice on this refinery is the use of both a hydrocracker and a FCCU. This is unusual as normally both a hydrocracker or a FCCU is used alone. The sunshine cycle oil from the FCC is a diesel stream with very poor qualities, and is turning into increasingly tough to mix into road diesel as a result of high aromatic and sulphur content material. This refinery has a Nelson Index of 10 calculated from the most recent OGJ survey. As will be seen there are 4 primary gasoline products – gasoline, jet, diesel and gasoline oil. In addition there might be coke, sulphur and lpg.

Fig. 7 – A fancy Built-in Refinery with Fuels and Petrochemicals – BPRP Gelsenkirchen
BPRP Geslenkirchen’s refinery in Fig. 7 is an unusual refinery configuration for Europe and is one in every of a kind. I’ve chosen this refinery as it compares well with the Chevron El Segundo refinery in Fig. 6. Both have a Hydrocracker, FCCU and Coker. Gelsenckirchen goes further in that it additionally has a Visbreaker which is a mild thermal cracking process. You will also see that the coke is calcined which removes the remaining traces of hydrocarbons and produces almost pure coke. This refinery uses the sunshine distillates for petrochemicals and as a result there isn’t any alkylation unit. The sunshine naphtha and lpg is sent to a steam cracker for olefines production. Some gasoline is produced from the FCC and the reformer. The reformer additionally feeds the aromatics unit which is used for benzene and xylenes production. One other function of this refinery is the partial oxidation of the vis breaker tar stream which is used for the manufacturing of ammonia and methanol. The Nelson complexity of this refinery is the closing price of natural gas barely eight.6 which signifies that this index needs to be considered very fastidiously when making comparisons. The manufacturing of excessive worth petrochemicals is just not mirrored in the Nelson analysis. Olefines manufacturing is mentioned in more detail later, however be aware that the BPRP FCC produces propylene which is used for cumene manufacturing (propylene + benzene). Word CHD is catalytic hydrodesulphurisation.

The Strangland diagram in Fig. Eight illustrates the hydrogen content vs. molecular weight for varied fuel varieties. As the molecular weight rises the retention of hydrogen in the molecules turns into more important. Cracking reactions have a tendency to reduce the hydrogen to carbon ratio and to keep up the proper H:C ration in the finished product (either hydrogen needs to be added or carbon removed). Motor gasoline is more tolerant of decrease hydrogen to carbon ratios. Aromatic molecules comparable to toluene and xylene have H:C rations of simply over 1:1. These species have high autoignition temperatures, excessive octane numbers and good combustion properties in spark ignition engines. Jet gasoline and diesel require hydrogen to carbon ratios of close to 2:1. Carbon rejection and hydrogen addition processes are mentioned later. Products mendacity outdoors of the envelopes will either need upgrading in some type to meet sales specs. In some cases the price of the upgrading could also be larger than the worth of the product. The only possibility for the peri-condensed aromatics is gasoline oil or coking.

Fig. Eight – Strangland Diagram of hydrogen to carbon distribution. From the Encyclopedia of Hydrocarbons

Refinery Crack Unfold- refining margins
Certainly one of the important thing parameters for a refinery profitability is the crack spread. A selection of crack spreads for different refining centres can be found on the IEA net-site.

Fig. 9 – Crude crack spread for Brent in North West Europe Feb 2011
The crack unfold is the margin over the crude worth that refiners make. In this instance for northwest Europe, the margin on jet kerosene is the highest at $5-10 per barrel. Naphtha is from $-5 to +5 per barrel and gas oil is a consistent loss at around $-10 per barrel. For industrial causes the gasoline crack unfold isn’t proven on this graph. The gasoline worth nonetheless might be obtained from this website as a graph of gasoline pricing. (This is due to Platts licence rules). To make a margin the value of the profitable merchandise has to exceed the web loss of value of the loss making merchandise.

Crude Oil Characterisation, Yields and Residue Upgrading
Crude oil (standard) could be characterised into four foremost varieties as depicted in Fig 10. Naturally it’s not fairly that straightforward as there are medium grades that lie in between after which there is the ultra heavy which is exterior the scope of this essay.

Fig. 10 – Graphic illustration of crude oil varieties
The yield sample of the crude is vital (see Fig. 11). Here is an instance from BP (sorry, a nasty title in the US).

Fig. Eleven – Source BP website
Completely different crude types have different product yields. The distinction between a candy gentle crude – Brent and a sour heavy crude – Arab Heavy is dramatic. The main difference between these two varieties is in the yield of mild products and the yield of vacuum residue. The Arab Heavy produces three x the mass of vacuum residue compared to Brent. For that reason Brent is seen as a premium crude and Arab Heavy will probably be offered at a discount to replicate the poorer yield and the higher value of upgrading.

The yield sample may also be discovered in the assay of the crude. The instance in Fig. 12 is the assay for Arab Heavy, which is a Saudi crude. A supply of assays might be found right here.

Fig. 12 – Supply Petroplan various obtainable from here
There are several vital properties price considering in this assay. The aromatic content material of the streams is important for the quality of sure types of gas. Within the middle distillate fractions that is towards the upper finish of what can be fascinating. Both jet kerosene and diesel properties are influenced by the aromatic content. In the vacuum gasoline oil and residue, the metals content is necessary together with the Calculated K (Watson Okay factor) and the C5 insolubles and Concarbon. The latter is a coke precursor and really a lot influences how these fractions will be upgraded. You’ll notice how the sulphur concentrates in the heavy fractions, usually in quite complex ring buildings which makes removing challenging. In all, this is moderately difficult crude to course of. It’s the sulphur which is the principle concern. For those so inclined you might wish to make comparisons with the opposite crude assays to see the distinction. The sharp eyed among you may notice a difference between the BP and Petroplan yields. This is because of BP reporting Weight % and Petroplan Volume %. The Petroplan assay lists three naphtha fractions. Not all refineries will split the naphtha fraction in to three. What I want to attract to your attention is the RON (Analysis Octane Number) of the naphtha fractions. These are exceedingly low and could be very difficult to mix into the gasoline pool without upgrading both in a reformer or isomeriser. The kerosene and mild distillate and heavy distillate fractions (middle distillates) have good cetane numbers (50 ish) which can be appropriate for direct blending into the diesel pool. The pitch or vacuum residue has a high SG of higher than 1 which implies it would sink somewhat than float in water.

Upgrading the vacuum residue
As noted from the simple BP yield knowledge in Fig. 11 we are able to see a large distinction between Brent and Arab Heavy. Processing Arab Heavy will produce 32% of Vacuum Residue, which really only has a use as gasoline oil, except it’s upgraded. Several options can be found. Coking is the almost definitely though the standard of the coke produced would not be too good and basically gas quality. Hydroprocessing can be pricey when it comes to hydrogen and catalyst. Beneath in Fig. 13 is a graphic illustration from Foster Wheeler who produce Delayed Cokers. The carbon rejection range refers to coking, though strictly speaking an FCC is a carbon rejection process. Utilizing Arab Heavy for instance processing of residue in a FCC would not be a good suggestion, as it fails on both metals and carbon residue. Utilizing a Hydrocracker, though not unimaginable, would entail a large consumption of hydrogen and a shortened catalyst like because of the metals. There are some other potentialities but these should not quite common, reminiscent of deasphalting followed by hydrocracking of the de-asphalted oil.

Fig. 13 – Source Foster Wheeler: Zero Gasoline Oil
Refinery Capacities and the influence of Ethylene Manufacturing

It’s now worth looking at Regional refining capability for 2010.
The current US refining capacity is about 17.Eight million b/d, and as earlier stated Europe has a refinery capability of about thirteen.8 million barrels per day. The Asian capability has been break up into the related nations for clarity. I have not thought of the exporting nations in this essay. The main exporting nations are the OPEC international locations and these international locations have totally different financial drivers to the consuming nations. Desk three offers a breakdown of the pertinent refinery capacities within the US, Europe and Asia.

World Refining Capability 2010
Table three: Source. OGJ, P&G, C1 Power and own analysis March 2011.

Sorry to mix units. Mb/d is million barrels per day and mta is million tonnes per year. For a refinery one hundred kb/d = 5 million tonnes crude oil.

As might be seen in Table 3 the regional capacities show some exceptional variations. The big FCC capability in the US is for the production of gasoline and will there be a change to diesel automobiles, as in Europe, the US would have some severe issues with diesel capability. Catalytic reforming units are similarly large and are for the production of gasoline. The US additionally has a high installed capacity of coking models that are used for minimising fuel oil manufacturing. For the US VDU capability is fifty four % of the CDU, which again points in the direction of the flexibility to process heavy oils (care should be exercised with this comparison, especially in China). In Europe the identical ratio is forty one% which illustrates that Europe processes more medium and mild crude and isn’t concentrating on excessive conversion to gasoline – go back to Desk 1 to match the demand differences. Both India and South Korea have a low VDU:CDU ratio.The really scary reality is the scale of the demand development for oil in China. If those refining capacity estimates are appropriate for the following 5-10 years then one has to ask where will all this oil come from, because it amounts to around 1 million b/d every year for the next next 10 years.

One among the most important petrochemicals produced type refinery feedstocks is ethylene. If associated gases from oil production are available then these are continuously used as ethylene feedstocks and present up as demand but aren’t necessarily processed in refineries. Within the US about 40% of the ethylene capability is from refinery naphthas whereas in Europe the figure is nearer to seventy five%. In Japan and South Korea the figure is near 100% as there are not any native sources of ethane or lpg. For several decades North Asia has imported feedstocks for ethylene production as the put in refinery base has not been capable of fulfill local demand. China is massively increasing its ethylene capability along with its refining base, which I’ve illustrated in the bottom half of Desk four. The Asian refinery capacity shouldn’t be maintaining with the ethylene capability development and in 2010 China became a net importer of naphtha for ethylene production. In Europe much of the sunshine naphtha is used for ethylene manufacturing, along with lesser quantities of LPG and ethane from native production. Some refiners have applied heavy feedstocks resembling hydrowax which is produced from hydrocrackers as a substitute feedstock to light naphtha. On a volumetric foundation, Europe is sinking excess of 10% of the crude oil into petrochemicals if the opposite supplies are additionally taken under consideration. Asian crude oil demand is, if anything, even larger for petrochemicals and in China petrochemical growth is outpacing refinery capability. What I’m trying for instance right here is that a very substantial a part of the crude oil barrel is getting used for petrochemicals in Asia, which is getting used to supply the plastics for the manufacturing base. On a world basis, plastics development has been exceeding GDP progress for many years. As China industrialises and more Chinese become car homeowners, the demand for gasoline and naphtha in China is on a collision course. China must import growing quantities of naphtha or the automobile drivers are going to have to drive much less.

Desk 4 illustrates the yield of ethylene from numerous feedstocks.
Table 4: Ethylene Yield from various hydrocarbon feedstocks – Supply Chemistry of Petrochemical Processes 2nd Version. Matar and Hatch

As might be seen, the yield of ethylene varies in accordance with the feedstock. The co-merchandise of the closing price of natural gas ethylene production are in many circumstances as necessary as the ethylene itself. Both propylene and butadiene are important chemical feedstocks which can be briefly provide. Butadiene is extensively utilized in car tyre manufacturing and for the production of nylon polymers. Propylene is used both in polypropylene and for the production of other chemical products equivalent to methacrylates, phenol, and propylene oxide. Other routes to propylene are gaining capability and a brand new type of FCC has been developed that is configured for the production of petrochemicals relatively than fuels, that can produce forty-50% C3 and C4 fractions. Rising quantities of petrochemicals at the moment are obtained from refineries.

For these interested, Fig. 14 shows the method stream for a naphtha olefines cracker.
Fig. 14 – Schematic circulation of an olefines cracker utilizing a liquid naphtha feedstock

Western refiners are actually represented in China, including BP, Exxon, Shell, Saudi Aramco and Kuwait Petroleum. Expect more to comply with. When it comes to ethylene capability then use an approximation of 1 million tonnes of ethylene requiring three.6 million tonnes of naphtha or naphtha equal. 5mt of refinery capability is about 150 kb/d of crude oil. The state of affairs in South Korea, Japan, and Taiwan is such that ethylene capability exceeds the naphtha manufacturing capacity of the nation’s refineries and these countries have long been net importers of naphtha and lpg for ethylene manufacturing. They are about to seek out that they are going to be combating head to head with the Chinese language for naphtha supplies, and in the meantime Saudi NGL exports are declining rapidly as they’re consumed at residence.

From the Saudi Aramco 2009 annual report the manufacturing for sale of NGL’s amounted to
Propane: 376 kbd

Butanes: 218 kbd
Natural Gasoline: 203 kbd

Gas Condensate: 226 kbd
Fig. 15 – Saudi NGL consumption Supply: SRI Consulting Presentation 2009

At the moment, other ME countries exports NGL’s together with Kuwait, Qatar and the UAE. But plans are afoot for petrochemical plants to regionally course of these products into value added petrochemicals. The driver behind that is to supply jobs for a rapidly expanding population. Should these NGL’s disappear from Asia then the demand for any such product should be met from crude oil, which can mean a substantial enhance in crude oil demand in the area, and necessary will increase in refining capacity. In the meantime if the fall in gasoline consumption in Europe continues as predicted, in some forecasts by as much as 30% by 2020, then there’s the likelihood that additional closures of European refineries are probably, and that Europe will be trying East and West for jet and diesel to fill the shortfall in production. By 2020 Europe has laws in place to cut back the common CO2 emissions for brand spanking new cars to ninety five gms per kilometre – a tricky target that few automobiles are capable of to date.

One factor for sure, the subsequent few years are going to be difficult for refining. Many refiners struggle to become profitable at present as refining margins slide back to $2-5 per barrel. My own refinery mannequin clearly demonstrates this phenomena and completed product costs will have to rise considerably.

This is a very brief spherical up of refining capacities and for those more experienced readers, I apologise for it missing all the required detail. I’ll try and answer specific questions in the feedback part however please be affected person. I travel too much and time is sometimes a problem.