Monday, September 12, 2011

Dieselization of Europe

The process of dieselization is having a significant impact on the refining industry by distorting the traditional demand structure for transport fuels. And alongside this, the declining gasoline demand in North America, the main outlet for Europe’s excess gasoline, adds a further challenge. How can European refiners improve their diesel yield while reducing that of gasoline? There are several potential options.

Most of Europe’s oil refineries are more geared towards producing gasoline as the major conversion process is FCC. In this type of refinery configuration, diesel is mainly formulated from the straight run diesel (SRD) that is obtained from the crude unit and the light cycle oil (LCO) produced by the FCC plant.Other streams can also be obtained, when available, from the hydro-cracker units, the coking units and the visbreaker units, as well as minor streams from the hydro-treating units. If refiners are required to increase diesel production, it is essential to enhance the diesel yields from these streams. This can be done by selecting crude oil with higher distillate yields, adjusting the cut points, modifying the yield of process units and adding conversion and agglomeration units.

Selecting the appropriate crude slate to maximize a refinery’s net income is obviously one of the most important short-term planning activities. When diesel production needs to be maximized, crude oils with high middle distillate yield are preferentially selected. The choice is usually constrained by the crude price differentials,the refinery configuration and the prevailing product prices. Widening the cut points of diesel blending streams through separation enhancement and the tuning of distillation towers can help increase diesel production. Operating the FCC unit in the distillate mode by lowering the reaction severity can increase a refinery’s diesel production by up to 5%, and at the same time reduce gasoline production.

Global product demand share growth

These options are considered the low hanging fruits and are already being leveraged by most refiners. FCC units are traditionally gasoline producing plants, and thus, for diesel production, it is important to look at the role of side-products. LCO is one such sideproduct being blended for diesel production after treatment, so maximizing the LCO yield while reducing that of gasoline is viewed as a key option for enhancing a refinery’s diesel production. Achieving this through conversion reduction is limited, however, as reducing the conversion results in a lower overall yield. In recent years, FCC licensors have specifically focused on how to enhance the LCO yield at high conversions and several enhancements are now available to refiners. These include: multiple feed injection points; the double riser reactor configuration; an improved catalyst formulation; the use of catalyst poisoning additives; and adding provisions for recycling heavy cycle oil. Employing these technologies can increase the diesel yield in an FCC based refinery. These options nevertheless require additional investment and can increase operating costs.

Refiners can also add more vacuum gas oil or residue conversion units. These units can be resid-hydro-crackers or coking plants, which minimize or eliminate fuel oil production. The addition of deep conversion units enables refiners to process heavier, less expensive crudes while maximizing light fuels production. These types of improvements, however, require major investments.
Global Demand Change 

To avoid the undesirable coke production and the reduced distillate yield associated with carbon rejection processes, such as delayed cokers, some technology providers are offering high conversion slurry hydro-cracking technology for residue and heavy oil conversion. The Uniflex from UOP, the Eni slurry technology (EST) of Eni and the Veba Combi-Cracker from KBR fall into this category. It is claimed that these processes can attain over 95% conversion with high yields of naphtha and gasoil, as well as other lighter products. In terms of costs, some of these processes are claimed to be more economical than traditional cokers, when the crude oil price exceeds $50/b. A commercial-scale plant based on EST technology is being built at Eni’s Sannazzaro refinery in Italy. Start-up of this facility is scheduled for 2012. The other two technologies are claimed to be commercially proven and ready for licensing. These can play a significant role in converting resids and heavy crude oils into desirable high quality distillate products.

At less cost, other diesel enhancement units can be added. These include dewaxers, deasphalters and LCO hydro-treaters. To increase the refinery diesel to gasoline ratio, units that convert LPG, naphtha and olefins to diesel range materials can be introduced. The thermal cracking process, the prime process for light olefins production is also being improved to allow the blending of gasoline inpetrochemicals feedstocks. All these processes can increase the gasoil available for further conversion and blending, while reducing the gasoline yield.

It is evident that the dieselization of transportation fuels poses a major challenge to oil refiners, especially in Europe. To meet this challenge, refiners are adjusting their processing units, tuning their blending schemes and selecting appropriate crude slates to maximize diesel production while minimizing that of gasoline. Processing and conversion process enhancements are becoming increasingly available. These enhancements can further help refiners to maximize diesel production, albeit at increased operating costs and with the need for additional investments.

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