TRANSFORM WASTE STREAMS INTO REVENUE STREAMS
19
TRANSFORM WASTE STREAMS INTO REVENUE STREAMS A smarter, greener, more cost-effective treatment for Merox effluent streams December 2019
Transcript of TRANSFORM WASTE STREAMS INTO REVENUE STREAMS
TRANSFORM WASTE STREAMS INTO REVENUE STREAMSA smarter, greener, more cost-effective
treatment for Merox effluent streams
December 2019
Finite Element Analysis
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and
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CONTENTS
THIS MONTH'S FRONT COVER
December 2019 Volume 24 Number 12 ISSN 1468-9340
03 Comment
05 World news
12 Working through the red tapeValentin Kotlomin, Euro Petroleum Consultants Ltd, Russia, predicts how new legislation will affect Russia’s refi ning industry.
17 Grappling with growthRichard Murphy, Allegro Development, USA, examines the challenges of the growing petrochemical market.
21 Upgrading propylene productionLothar Karrer, Carl Keeley, and Modesto Miranda, BASF, alongside Antonio Diaz, Miguel Arjona, and Eloisa Serrano, Cepsa, Spain, explore the methods used to maximise propylene production and improve its purity at Cepsa’s refi nery in La Rábida, Spain.
25 Paving a new path to high-value productsDan Gillis and Arun Arora, Chevron Lummus Global, USA, look at the benefi ts of upgrading residue hydrocracking products to transportation fuels and petrochemical feedstocks.
32 A holistic waste treatment approachJan De Ren and Christopher Ferguson, Callidus Technologies, a division of Honeywell UOP, present a comprehensive approach for effl uent treatment from hydrocarbon extraction and sweetening units.
39 Looking beyond the normWith refi neries broadening the scope of their crude oil processing capabilities to handle heavier, sourer feedstocks, advances in hydrogen sulfi de removal technology are set to play a key role in enabling operators to meet environmental and production targets. Lennard Spit, Frames, the Netherlands, reports on recent developments.
43 Monitoring methodsHaitem Hassan-Beck, ADNOC Refi ning, UAE, discusses the importance of monitoring and optimising hydrodesulfurisation unit operations.
47 Calculating chemical compositionS. Hielscher, S. Herrig, M. Thol and R. Span, Thermodynamics, Ruhr-Universität Bochum, and J. Barbe, Messer Group GmbH, explore how the modelling of composition changes in liquid hydrocarbon mixtures can be used for analyser calibration.
54 Smart combustion analysisDr Peter Geiser, Dr Viacheslav Avetisov, Dr Junyang Wang and Larry E. Sieker, NEO Monitors, Norway, overview the evolution of TDLAS technology.
59 Compressors in refi nery serviceKlaus Brun, Brian Pettinato, and Stephen Ross, Elliott Group, USA, examine typical refi nery processes that require compressors.
65 Dynamic simulationAttilio Brighenti, Davide Duranti, and Debora Quintabà, S.A.T.E. Systems and Advanced Technologies Engineering, Italy, evaluate the dynamic simulation of turbomachinery by hardware in the loop real-time systems.
69 Peak performanceJonathan Miller, Chart Industries, USA, advises how leveraging insights from distributed control systems can help keep heat exchangers at peak performance.
75 The right tools for successEdward Cass, Paratherm Heat Transfer Fluids, USA, evaluates top strategies for sustaining the performance of thermal fl uids.
Honeywell UOP, a global leader in process technology, develops innovative solutions for many of the world’s toughest challenges. UOP has recently introduced a greener treatment process for spent caustic. In addition to meeting the growing demand for low sulfur products, the technology helps refi neries improve operability, reduce capital investment, and maintain strict environmental compliance.
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APPLICABLE ONLY TO USA & CANADAHydrocarbon Engineering (ISSN No: 1468-9340, USPS No: 020-998) is published monthly by Palladian Publications Ltd GBR and distributed in the USA by Asendia USA, 17B S Middlesex Ave, Monroe NJ 08831. Periodicals postage paid New Brunswick, NJ and additional mailing offi ces. POSTMASTER: send address changes to HYDROCARBON ENGINEERING, 701C Ashland Ave, Folcroft PA 19032.
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COMMENTCALLUM O'REILLYSENIOR EDITOR
Sustainability was the central theme at the 2019 European Refi ning Technology Conference (ERTC), which recently took place in Warsaw, Poland. Indeed, the ERTC has already
committed to making sustainability the central theme for its conference in the years to come, as the
refi ning sector faces the challenge of the energy transition, upcoming regulations and competition from across the energy space.
The focus on sustainability is a sensible long-term policy. In its recently released ‘World Energy Outlook 2019’, the International Energy Agency (IEA) highlights the deep disparities that defi ne the global energy system. It focuses particularly on the gap between the promise of energy for all and the fact that almost 1 billion people do not have access to electricity; the gap between the need for rapid cuts in greenhouse gas emissions and the rise in energy-related emissions; the gap between expectations of a renewables-driven energy transition and the reality of fossil fuel reliance in today’s energy systems; and the gap between the calm in well-supplied oil markets and growing political tensions and uncertainties.1
As ever, the IEA presents three scenarios for the future. Its Current Policies Scenario presents a (rather bleak) outlook if the world continues along its current path without any additional changes in policy. Its Stated Policies Scenario incorporates today’s policy intentions and targets. And its Sustainable Development Scenario maps out a way to meet sustainable energy goals in full, but this requires rapid and widespread changes across all parts of the energy system.
In the Stated Policies Scenario, the IEA sees energy demand increasing by 1% per year to 2040, with low carbon sources supplying more than half of this growth, and natural gas accounting for a third. Under this scenario, oil demand is likely to fl atten out in the 2030s.
Energy security will remain paramount for governments worldwide, alongside attempts to put emissions on a sustainable trajectory. The IEA’s Executive Director, Dr Faith Birol, notes: “What comes through with crystal clarity in this year’s ‘World Energy Outlook’ is there is no single or simple solution to transforming the global energy systems […] Many technologies and fuels have a part to play across all sectors of the economy.”
The IEA notes that a “sharp pick-up in energy effi ciency improvements” is the single biggest factor to bring the world towards its Sustainable Development Scenario. Worryingly, the Outlook states that effi ciency improvements are slowing, with the 1.2% rate in 2018 approximately half the average seen since 2010.
The downstream sector has its part to play in continuing to improve energy effi ciency to ensure that it remains competitive in the future energy mix. As we stand on the brink of a new decade, Hydrocarbon Engineering will continue to provide a platform for the latest technology innovations, best practices and success stories to ensure the long-term success of our sector. If you have a case study or technical article that you would like to share, please drop me a line using the contact details to the left of this page.
And for all those interested in learning more about the renewable fuels that will stand alongside our industry as we attempt to shape a sustainable and secure energy future across the globe, please visit our sister website www.EnergyGlobal.com – the new home for the latest renewable energy news.
1. ‘World Energy Outlook 2019’, International Energy Agency (IEA), (November 2019).
WORLD NEWS
December 2019HYDROCARBONENGINEERING
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China | BASF Verbund project launched
BASF has launched its Verbund project in Zhanjiang, Guangdong
province, China, and commenced constructing its fi rst plants. It marks a milestone of the company’s US$10 billion investment project announced in July 2018. The fi rst plants will produce engineering plastics and thermoplastic polyurethane (TPU) to serve the increasing needs of various growth industries in the southern China market and throughout Asia.
By 2022, the new engineering plastics compounding plant will supply an additional capacity of 60 000 tpy in China, bringing BASF’s total capacity of these products in Asia Pacifi c to 290 000 tpy. The new capacity will enable BASF to meet the growing demand of its customers, particularly in the automotive, electronics and new energy vehicles (NEV) industries.
BASF plans to implement a comprehensive smart manufacturing concept at the Verbund site. The new site will utilise automated packaging, high-tech control systems, and automated guided vehicles.
The company is also forming strategic partnerships with several local technical institutions to develop young technical talents.
USA | Cheniere receives FERC approval for LNG project
Cheniere Energy Inc. has announced that it has received
approval from the US Federal Energy Regulatory Commission (FERC) to site, construct, and operate the Corpus Christi Stage 3 expansion project. Corpus Christi Stage 3 is being developed for up to seven midscale liquefaction trains with a total aggregate expected nominal
production capacity of approximately 10 million tpy of LNG.
The Corpus Christi Stage 3 site is adjacent to the three liquefaction trains operating or under construction at the Corpus Christi Liquefaction Project, and together the two projects are expected to have a total nominal production
capacity of approximately 25 million tpy.
Cheniere expects to make a positive fi nal investment decision on Corpus Christi Stage 3 in 2020 subject to, among other things, entering into an EPC contract, obtaining additional commercial support for the project, and securing the necessary fi nancing arrangements.
Russia | McDermott awarded contracts for two ethylene crackers
McDermott International has announced that it has been
awarded a technology contract by Baltic Chemical Co. (BCC) and an extended basic engineering contract by China National Chemical Engineering No. 7 Construction Co. Ltd (CC7). The ethane cracking project is owned by Baltic Chemical Complex LLC, a subsidiary of RusGazDobycha.
McDermott’s Lummus Technology will provide both the process design package engineering and the licence for its olefin production and recovery
technology. Lummus Technology’s proprietary ethylene steam cracking process is a widely-applied process for the production of polymer-grade ethylene, representing approximately 40% of the world’s capacity.
The project is the largest ethylene integration project in the world. Located near Russia’s shores of the Gulf of Finland, the natural gas processing chemical plant will be comprised of two ethylene cracking facilities, each with a capacity of 1.4 million tpy.
China | KBR awarded commercial licence for vinyl acetate monomer technology
KBR has been awarded a contract for vinyl acetate monomer
(VAM) technology by Shenghong Refining Petrochemical (Lian Yun Gang) Co. Ltd, China. This is the first commercial VAM technology licence secured under an alliance agreement between KBR and Showa Denko K.K. (SDK) to commercialise SDK’s VAM technology.
Under the terms of the contract, KBR will provide licence and basic engineering design for a
300 000 tpy VAM unit to be constructed in Lianyungang, China, as part of an integrated refinery and petrochemical complex.
The KBR-SDK VAM technology has been proven through the safe and stable operation of SDK’s ethylene based VAM unit at the Oita Petrochemical Complex in Japan.
KBR also provided its phenol/acetone technology to Shenghong in 2019.
WORLD NEWSIN BRIEF
December 2019 HYDROCARBONENGINEERING
6
USA | Enterprise PDH plant selects Honeywell technology
Honeywell announced that Enterprise Products Partners LP will
use Honeywell UOP’s C3 Olefl exTM technology in its second propane dehydrogenation plant (PDH 2). Located near Mont Belvieu, Texas, US, PDH 2 will produce 750 000 tpy of polymer-grade propylene as part of Enterprise’s expansion of its propylene manufacturing capacity.
Honeywell UOP will provide licensing for the Olefl ex technology, in
addition to engineering, catalysts, adsorbents, services, and equipment for the plant. Enterprise has operated a UOP C4 Olefl ex unit, which converts isobutane to isobutylene, since 1993 and is currently building a second C4 Olefl ex unit at Mont Belvieu.
The new propane dehydrogenation unit will have capacity to produce up to 1.65 billion lb/yr of polymer grade propylene. The unit is scheduled to begin service in the fi rst half of 2023.
USA | Burckhardt Compression purchases Arkos Group
Burckhardt Compression North America Services LLC, an indirect
subsidiary of Burckhardt Compression, has purchased the remaining 60% of Arkos Group LLC. With this step, Arkos Group, the parent company of Arkos Field Services LP, will be a 100% subsidiary of Burckhardt Compression.
Burckhardt Compression initially acquired a 40% interest in Arkos Group in December 2015. On 9 July 2019, Burckhardt Compression announced its decision to exercise a
call option to buy an additional 20% stake in Arkos. During subsequent negotiations, the parties agreed that Burckhardt Compression would purchase the remaining 60% of Arkos Group.
With the purchase of the remaining ownership of Arkos, Burckhardt Compression together with Arkos Field Services will be an independent one-stop provider for equipment and service in the upstream, midstream and downstream business.
ClearSign Combustion Corp. has announced that it has changed its name to ClearSign Technologies Corp. The company’s ticker ‘CLIR’ will remain the same.
Neste has strengthened its footprint in renewable feedstock sourcing by opening an office in Melbourne. This move aims to serve Neste’s waste and residue raw material sourcing operations in Australia and New Zealand.
Royal Vopak has been selected by Gulf Coast Growth Ventures (GCGV) – the petrochemical joint-venture between ExxonMobil and SABIC – to design, build, own and operate a new industrial terminal on the US Gulf Coast. The terminal will be dedicated to serving the planned 1.8 million tpy ethane cracker. All liquid products moved by marine vessels will be handled by the new Vopak terminal. The total capacity will be around 130 000 m3 tankage and will include pipelines connecting the terminal to the cracker complex.
The Gazprom Neft Omsk Refinery has taken delivery of 10 new pieces of high-tech equipment for the construction of a delayed coking unit. This equipment is designed to produce components for automotive gasoline. Gazprom Neft’s investment in this project – which forms part of a programme to develop a delayed coking complex at the Omsk Refinery, including construction of a new facility, as well as reconstruction of the existing one – now stands at more than RUB50 billion. Construction is due for completion by 2021.
UK | Fluor to proceed with ExxonMobil refinery project
Fluor Corp. has announced that construction planning is now set
to proceed for the Fawley Strategy (FAST) project. ExxonMobil’s UK affi liate, Esso Petroleum Co. Ltd, has received planning permission from the New Forest District Council for the new plant, which will be located at the Fawley refi nery and petrochemical site near Southampton, UK.
Following the successful completion of the front-end engineering design, Fluor is providing
engineering, procurement, fabrication and construction on a reimbursable basis for the project.
Fluor’s scope of work includes design and construction of a new diesel hydrotreater and steam methane reforming hydrogen plant accompanied by modifi cations to existing facilities at the Fawley site.
Engineering and procurement is under way, led by Fluor’s Farnborough offi ce in the UK, and construction is due to start later this year.
WORLD NEWS
December 2019 HYDROCARBONENGINEERING
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USA | Next Wave to build ethylene to alkylate facility in Texas
Next Wave Energy Partners LP has announced that it has made a
positive fi nal investment decision to construct a new alkylate production facility, known as Project Traveler, which will be located adjacent to the Houston Ship Channel at Next Wave’s 53-acre site in Pasadena, Texas, US.
Next Wave will convert ethylene supply to alkylate by utilising licensed and commercially proven process technologies at the facility,
which will have a nameplate capacity of 28 000 bpd of alkylate.
Initial production is expected by mid-2022.
The Next Wave facility will have the capability to consume in excess of 1.2 billion lb/yr of ethylene feedstock, which will be delivered to the site by multiple pipelines. The alkylate product, Optimate, will be delivered via direct-connection pipelines to major gasoline blending terminals in Pasadena.
India | KBR technology selected for Indian refinery upgrade project
KBR has announced that its ROSE® solvent deasphalting (SDA)
process will be integrated with LC-MAX technology, an advanced, patented, ebullated-bed residue upgrading process from Chevron Lummus Global (CLG) to assist Hindustan Petroleum Corp. Ltd (HPCL)’s modernisation at the Visakh refi nery residue upgrading project in India.
Under the terms of the contract, KBR will provide CLG with the technology licensing, basic engineering design and proprietary equipment for the ROSE SDA portion of the LC-MAX unit. ROSE is a cost-effective residue upgrading process that allows refi ners to upgrade a larger proportion of their low-value residue streams into high-value products.
Saudi Arabia | Baker Hughes begins construction of chemical facility
Baker Hughes has broken ground on its first chemicals
manufacturing facility in Saudi Arabia, designed to help customers improve production, reduce costs, and maximise the value of their assets across the chemicals value chain.
The company held a ground-breaking ceremony at the facility’s PlasChem Park location in Jubail to celebrate the milestone and formalise an agreement with Sadara Chemical Co. to supply the facility with feedstock chemicals.
The manufacturing facility will deliver the company’s full portfolio of chemical services and technology solutions for the hydrocarbon production, transmission, processing and petrochemical industries. Employees will also collaborate with researchers and subject matter experts at the Baker Hughes Dhahran Technology Center to address region-specific chemicals challenges and deliver value-added solutions to customers.
DIARY DATES11 - 12 December 201912th Annual National Aboveground Storage Tank Conference & Trade ShowThe Woodlands, Texas, USAwww.nistm.org
27 - 29 January 2020European Gas ConferenceVienna, Austriawww.energycouncil.com
12 - 13 February 2020Pumps & ValvesDortmund, Germanywww.pumpsvalves-dortmund.de
24 - 27 February 2020Laurance Reid Gas Conditioning ConferenceNorman, Oklahoma, USApacs.ou.edu/lrgcc
2 - 4 March 2020MERTCManama, Bahrainmertc.wraconferences.com
10 - 12 March 2020StocExpoRotterdam, the Netherlandswww.stocexpo.com
15 - 19 March 2020CORROSION 2020Houston, Texas, USAnacecorrosion.org
22 - 24 March 2020AFPM Annual MeetingAustin, Texas, USAwww.afpm.org/events
07 - 09 April 2020Asia Turbomachinery & Pump SymposiumKuala Lumpur, Malaysiaatps.tamu.edu
19 - 22 April 2020GPA Midstream ConventionNew Orleans, Louisiana, USAgpamidstreamconvention.org
09 - 11 June 2020Global Petroleum ShowCalgary, Alberta, Canadawww.globalpetroleumshow.com
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PAVE THE WAY TO PROFITABLE GROWTHA key challenge for the North American refining industry is profitable growth in the face of softening fuels demand and ever-changing global trade dynamics. To achieve growth and remain competitive, future-forward refiners will need to rethink their business models. Together with UOP, refiners can create real, bottom-line value by integrating petrochemicals, ensuring flexibility to meet rapidly changing market needs and optimizing daily performance through state-of-the-art connected technology.
ADVANCES IN CRUDE TO CHEMICALS
The refinery of the future delivers
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BEFUTUREFORWARD
THE REFINERY OF THE FUTURE IS FLEXIBLE, INTEGRATED AND CONNECTED
Today’s integrated refining and petrochemical mega-projects are targeting 50–70
percent petrochemicals products. This is also achievable for existing refineries through
strategic, step-wise investments in new process technology with advanced molecular
management. Honeywell UOP can help refiners develop an integration strategy that
profitably unlocks additional value by utilizing the latest bottom-of-the-barrel
technology, high-conversion hydrocracking and today’s energy-efficient aromatics
complexes. Integrating these technologies enables traditional refiners to diversify
into petrochemicals and create their own Refinery of the Future.
Targeting 50–70% petrochemical products
Honeywell UOP can develop a step-wise approach to increase value capture of every
barrel of oil, targeting the lowest value stream for conversion first. A configuration
study for a 500kBPD refinery with existing VGO Hydrocracking to diesel and Delayed
Coking unit demonstrated a potential pathway that would allow a refiner to profitably
maximize bottom-of-the-barrel conversion through Uniflex™ MC Technology and
integrate into petrochemicals with VGO and diesel Hydrocracking to naphtha.
(Table 1 below)
Unlock new value from every barrel
Table 1: Improve Economic Performance with Uniflex™ MC Technology and Hydrocracking to Naptha
CASE BASE 1 2
Delayed Coker
Diesel Naphtha
Naphtha
Included
None
None
Diesel
None
None
Base + 30 + 30
- 30
+ 21
+ 23
+ 32
+ 110
+ 16
+ 16
- 30Base
Base
Base
Base
Distillate Hydrocracker
VGO Hydrocracker
Vacuum Residue Upgrading
Aromatics Complex
LPG, Naphtha & Diesel Yield, %t
Coke Yield, %
Net Cash Margin, %
Incremental IRR, %t
Incremental NPV, %
UNIT YIELD IMPROVEMENTS VS. BASE CASE
REFINERY ECONOMIC PERFORMANCE IMPROVEMENTS VS. PREVIOUS CASE
Uniflex MCUnit
Uniflex MCUnit
© Honeywell UOP All rights reserved
12 HYDROCARBONENGINEERINGDecember 2019
December 201913HYDROCARBONENGINEERING
T he Russian oil refi ning industry is one of the largest in the world. From the Soviet era, up until the 2000s, Russia was second only to the US in terms of primary distillation capacity. Today, even though the
country has been displaced by China, Russia remains within the top three (Figure 1).
Taxation of the oil industry in Russia – a brief reviewGiven the importance of the oil industry as a whole, refi ning in Russia has always been under the scrutiny of the state, which traditionally used taxation as a means of control: these included export duties on crude oil and petroleum products, excise taxes on the sale of petroleum products on the domestic market, and a tax on crude oil production (severance tax).
At different periods, various strategic and tactical goals from taxation of the oil industry were declared, which was refl ected in ongoing reforms and changes.
The fi rst changes were made in 1995 – 1996, when against a backdrop of low oil prices on international markets, the decision was made to abandon export duties in order to increase the competitiveness of domestic oil production.
WORKING THROUGH
THE RED TAPE
Valentin Kotlomin, Euro Petroleum Consultants Ltd, Russia, predicts how new legislation will affect Russia’s refining industry.
December 2019 HYDROCARBONENGINEERING
14
In mid-1999, however, the export duties were restored, and such duties were also introduced for petroleum products. From 1999 – 2011, export duties on oil and petroleum products evolved in different directions – sometimes they levelled off and sometimes decisions were made to differentiate them. Therefore, for some petroleum products the export duty rates were either higher or lower than duty rates on crude oil.
The main objective of the export duty policies on petroleum products was to maximise the loading of refi ning capacities and create incentives for exporting petroleum products rather than crude oil itself. However, the system of export duties that existed in those years led to an increase in the profi tability of production of heavy petroleum products and not to an increase in the conversion rate.
In order to encourage refi neries to modernise their capacities and minimise the production of heavy petroleum products, a decision was made in 2011 to switch to an export duty rate system, which provided for a gradual increase in the duty rate on heavy petroleum products over several years to the value of the duty on crude oil.
Taking a closer look at the results achieved, there has been a clear progression: whilst in the previous decade, from 2005 to 2014, fuel oil yield from Russian refi neries almost stayed fl at, amounting to 28 – 30%, in 2018 it dropped to 16% (Figure 2).
Nevertheless, Russia is still one of the largest exporters of heavy petroleum products, and further modernisation of the industry is necessary.
2018 tax manoeuvre – change of conceptThe concept of ‘tax manoeuvre’ appeared in the Russian oil industry in 2012 and essentially represents a redistribution of the tax burden within the value chain: oil production, refi ning,
and the sale of petroleum products on the domestic and export markets.
Until recently, refi neries were the main benefi ciaries of such a system – the presence of a high export duty on crude oil created a situation in which Russian refi neries were able to buy oil from local producers at a large discount. However, starting from 2019, the approach has changed radically: over the next six years, there are plans to gradually reduce the export duty on crude oil until it is completely abolished and at the same time raise the ‘severance’ tax.
Such changes will lead to an increase in domestic oil prices to world levels, which will immediately negatively impact the profi tability of Russian refi ning. Therefore, in order to support domestic refi neries, measures are planned such as a gradual reduction of export duties on petroleum products (until they are completely cancelled), and various compensation measures for refi neries that are geographically remote from export markets and for independent refi neries that are not part of vertically integrated oil companies. There are also plans to continue modernisation projects.
Despite all of these measures from the Russian government to support domestic oil refi ning, many experts believe that the expected drop in business profi tability will be fatal for a number of refi neries in the country – only time will tell.
Is increasing the conversion rate the last hope?In this situation, the only way for Russian refi neries to save is to increase competitiveness, including increasing the conversion rate.
Traditionally, the main technology used by Russian refi neries to reduce the production of heavy oil residues is delayed coking.
One of the fl agships of Russian refi ning is the Omsk Refi nery with a capacity of more than 20 million tpy – currently constructing a new delayed coking unit (DCU) with a capacity of 2 million tpy. Start-up of the unit is scheduled for 2021. In parallel, the refi nery is reconstructing the existing DCU. Following the results of all the work, the owner of the refi nery, Gazprom Neft, expects to increase the conversion rate at the refi nery up to 97%, and to increase the light petroleum products yield to 80%. The supplier of delayed coking technology is Wood (previously known as Amec Foster Wheeler).
In addition to the Omsk Refi nery, Gazprom Neft continues to modernise its other refi ning asset, the Moscow Refi nery. The second stage of the refi nery modernisation is expected to be completed in 2020. The project primarily aims to improve the operational and environmental effi ciency of production, while also providing a slight increase in refi ning throughput and improvement in product quality.
The main focus is the replacement of existing units that were built back in the 1960s. The future plans of the company include a radical change in confi guration aimed at minimising fuel oil production, such as a vacuum gas oil (VGO) hydrocracking unit with a capacity of 1.5 million tpy and a DCU with a capacity of 2 million tpy.
Another example of a DCU in Russia is the unit at the Yaroslavl Refi nery, which is part of Slavneft, a 50/50
Figure 1. Top 10 global refining capacities in 2018, ‘000 bpd (source: BP).
Figure 2. Refining throughput and fuel oil production in Russia.
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joint venture between two state-owned majors, Rosneft and Gazprom Neft. Currently the project is at the basic engineering design (BED) stage. It is assumed that the capacity of the DCU will be more than 3 million tpy of heavy oil residues. Chevron Lummus Global LLC (CLG) is the contractor for BED package and the commissioning is scheduled for 2024.
LUKOIL, Russia’s largest independent vertically integrated oil company, is also actively implementing a project to increase the conversion rate at its Nizhny Novgorod Refi nery. In addition to a DCU, the project includes diesel hydrotreatment, gas fractionation, a hydrogen manufacturing unit, a sulfur recovery unit and infrastructure facilities. The design capacity of the DCU is 2.1 million tpy. Its start-up will signifi cantly reduce fuel oil production at the refi nery, increase the conversion rate up to 96%, and the yield of light oil products will rise to 76% from current levels of 64%. The licensor of the DCU is also CLG; commissioning is scheduled for 2021.
The state oil giant Rosneft, processing approximately 100 million t of crude oil at its Russian refi neries, continues to modernise its refi ning capacities. The company is completing VGO hydrocracking unit construction projects at four Russian refi neries. The refi neries in Tuapse, Novokuybyshevsk and Komsomolsk-on-Amur plan to complete commissioning and start production in the fi rst half of 2021, while the Achinsk refi nery plans to complete a hydrocracking by the end of 2021, and be put into operation at the beginning of 2022.
Rosneft’s future plans include the completion of the construction of a hydrocracking complex at the Ryazan Refi nery, as well as the implementation of the third stage of
the modernisation of the Tuapse Refi nery, including the construction of a Flexicoking unit, the only licensor of which is ExxonMobil.
Among independent refi neries, the most interesting is the modernisation of the Orsk Refi nery with a capacity of 6.6 million tpy. Over the past few years, the refi nery has been constantly improving its confi guration, and is currently implementing a DCU construction project using Wood technology. With the start-up of the DCU, the Orsk Refi nery plans to process crude oil as effi ciently as possible and stop the production of fuel oil. According to the results of this project, the conversion rate will exceed 98%, and the yield of light petroleum products will reach 85%. Completion of all work and start-up of the complex is planned for 2023.
ConclusionThe importance of the oil industry as a whole and of the refi ning sector in particular for the Russian economy forces the government to constantly regulate the industry by changing the tax environment. Whilst such regulations may create certain instability in the industry, they also make local refi ners better prepared for any changes and ensures that they have a backup plan if these changes have a negative impact on the operational and investment activities.
The course taken to increase the conversion rate and minimise the production of heavy petroleum products continues to be a key way for further development – with the primary goal to increase the competitiveness of the Russian refi ning industry.
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DECEMBER ISSUE
