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TRANSCRIPT
A Century of Innovation in the Oil and Gas Industry
© 2015 UOP LLC. All rights reserved. UOP 7081-1
Focus on Slurry Hydrocracking Uniflex Process Upgrade Bottom-of-the-Barrel to Improve Margins
Phil Hunt UOP LLC, A Honeywell Company
Russia & CIS BBTC 2015
April 22-24, 2015 Moscow
Market Opportunity, Russian Export Duties, Demand
UOP Residue Upgrading Technology Portfolio
UOP Uniflex Technology Update
Mendeleev Group Deep Processing Project
Summary
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Agenda
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Global Refined Product Demand has Followed a Consistent Trend....
...with Distillate demand increasing and Fuel Oil demand declining
Global Oil Product Demand (Fuel Oil and Distillates)
Global HFO demand equaled each of Light and Middle Distillates in 1970
Distillates have now passed 70% of total demand globally
Globally HFO has declined to 10% of total product demand
In Asia, the Light Distillate demand is driven by Petrochem Feedstock end-uses
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15000
20000
25000
30000
35000
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1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43
30 year trend
Middle Distillates
Light Distillates
Heavy Fuel Oil
Millio
n b
arr
els
Pe
r D
ay
40
20
0
Source: BP Statistical Review of World Energy 2013
1980 1990 2000 2010 1970
0
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80
Production
80
Demand
40
40 Bunkers
HFO
65
Exports
65
Imports
HFO
There are 3 Parts to the European Fuel Oil Market
1 2 3
3
Europe is very long in HFO (particularly HSFO)
European Fuel Oil demand is split between Marine Bunkers and HFO
Production currently aligns with demand
However, Europe also imports and then exports 65 million MTPA
Source: EIA Statistical Data
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(Units presented are MTPA)
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Why do we also need to understand developments in Russia – and their impact on European HFO?
Russia has ...
– Third highest installed refining capacity (after U.S. and China)
– The largest production of Vacuum Residue that is not upgraded, the majority of which is exported to Europe
Russia recently introduced ...
– New export duties on crude oil and products (so-named “60-66”)
– These provide significant incentive to upgrade HFO into Distillate products
Russian refiners plan to invest $50 billion to minimize HFO exports
Most of Russia’s Fuel oil exports go to Europe
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Marine Bunker Fuels: EU and IMO Developments
IMO (MARPOL) Regulations
• ECAs: Sulphur reduces from 1.0% to 0.1 % (January 2015)
• EU: Sulphur reduces from 3.5% to 0.5% (January 2020)
• Rest of the World: Sulphur reduces from 3.5% to 0.5% (January 2020/2025)
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Sulphur content allowable in bunker fuel (pc by weight)
IMO reduction timing subject
to study re availability to be
undertaken in 2018
Global
Emission Control Areas
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5.0
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Let’s Start with the Fundamentals...
What is residue and why convert it?
Characteristics: Heavy, dirty, low value, limited uses
Properties: High MW, stable and carbon rich, hydrogen deficient
Composition: Saturates, Aromatics, Resins, Asphaltenes
Impurities: Sulfur, nitrogen, heavy metals
Feedstock characterisation is a key parameter in residue processing –
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UOP Solutions for Residue Conversion (Low to Moderate Conversion Options)
UOP/FWUSA Visbreaking
UOP RCD Unionfining™Process
Limited conversion and feed flexibilty
LS fuel oil production
or RFCC feed prep
Emerging role again
Up to 30% conversion
Achieves reduction in cutter stock for fuel
Can be a partial fix, not a full solution
Fuel oil outlet needed
FWUSA SYDEC™
Delayed Coking Process
Higher conversion - up to 75%
Require further upgrading to meet final product specs
Need an outlet for the pet coke
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UOP / FWUSA Solvent Deasphalting......
De-Asphalted Oil (DAO) feed to:
Not a conversion process, but a solvent / gravity separation process
Separation also driven by the molecular type - paraffins vs aromatics
DAO yield (“lift”) is typically 40 - 60+%, limited by DAO quality and at high lifts by pitch quality
SDA Vacuum Residue
(VR)
Bitumen
Boiler / Power
SDA Pitch feed to:
FCC
HCU
DCU
Uniflex Unit
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The UOP Uniflex Technology Offering is......
UNIFLEX UNIT (Wt-%)
100
15
50-55
10-15
Vacuum
Residue Feed
Naphtha
Diesel
VGO
HDT
MHC & FCC
or HCU
90-95% Conversion
Maximum Diesel
Minimum VGO
Once through Catalyst
Products require further upgrading
Offered either as a “stand-alone-unit” or with integrated DHT
Catalyst H2
H2S, NH3
Gas, LPG
Pitch
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Uniflex Process Thermal Cracking of Asphaltenes
Archipelago Model of Asphaltenes, Carbon # = 313, MW = 4705
Source: M. Gray, Univ of Alberta
The process benefits from combination of:
1. Thermal cracking to shorter chain lengths
2. Inhibiting formation of coke through:
– Hydrogenation of free radicals from thermal cracking
– Catalyst physically hinders mesophase coalescence
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Uniflex Process Reactor Achieves High Conversion
• Optimal design for high conversion
– Upflow
– Near Isothermal
– Efficient utilization of reactor volume
• Effective Asphaltene management
– Inhibit formation of coke pre-cursors by hydrogen pressure, optimum temperature and catalyst
Feed, H2 and Catalyst
Products and Catalyst
Simple Commercially proven Reactor design for highly effective performance
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Catalyst (Additive) & Pitch
• UOP global supply
• Multiple manufacturing locations
• Simple logistics and storage
Catalyst (Additive) • Cement:
– Often the most attractive outlet option
• Boiler/Power: – Conventional power plants
– CFB or Rotary Kiln Furnace
• Gasification
• Solidification: – Proven technology (Pellets or Big Bags)
– Facilitates transportation and storage
Pitch
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1
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20 40 60 0
Average Carbon Number (Atoms per Molecule)
Hyd
rog
en
to
Ca
rbo
n A
tom
ic R
ati
o
DIESEL
THERMAL CRACKING
Converting VR into Diesel Needs
− Thermal Cracking
and
− Hydrogenation
Uniflex Complex Achieves this
− In a single slurry bed reactor
− With Post treatment to meet finished product specifications
H2 addition maximises margin
Uniflex Process Attributes Summary
HYDROGENATION
VAC RESID
CRUDE
OIL
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UOP Uniflex Process - Licensed Units Update
Name Location
Capacity,
MMTA Start-up
Petro-Canada, Montreal Canada 0.3 1985
NRL, Pakistan Pakistan 0.6 2017
Undisclosed China 0.9 2016
Mendeleev Group Russia 0.4 2017
Undisclosed China 0.8 2017
Undisclosed China 0.9 2017
Undisclosed China 0.8 2017
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OGT Background
• Oil Gas Trade (OGT) was established in 2002
• Key Business is fuels (jet, diesel, gasoline) and lubricants supply
• Acquired Yaroslavl Mendeleev Refinery in 2012
100+ year old existing refinery, open to new innovation, planning new “Deep Processing Complex”
New Mendeleev Group Project / Complex
• Construction of a new 3 MMTA “Deep Processing Complex” (DPC)
• Robust economics with Russian export duty regime
• Zero residue production (via Uniflex & Unicracking)
• Maximum diesel production
• Captive Power, Steam & H2 production
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It is Essential to assess a Major Project’s “Rate-of-Return” Relative to “Risk”
It is important to evaluate and mitigate any major project risks – technical, operational or other – otherwise forecast financial
returns can be undermined through under-performance
RISK
RoR
Window of Opportunity
Timeline
• Reliability
• Availability
• Throughput
• The early years of a Project’s performance are always the most visible
• Lifetime performance covers a 20+ year period
Consequences of Pushing the Risk Envelope too Far
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Global Fuel Oil is now Entering the Final Stages of Decline, Trending to Zero...
It is realistic to assume further reduction via further switching to natural gas and tighter IMO MARPOL regulations for Bunker Fuels
Global Fuel Oil Demand
<10% of Total Demand
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- 3 MBPD
-2 MBPD
-1.5 MBPD
VGO VR
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20
Millio
n b
arr
els
Pe
r D
ay
0 1980 1990 2000 2010
Source: BP Statistical Review of World Energy 2012
0
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$250/t
$350/t
$450/t
MARGINAL
GOOD
EXCELLENT
Price spreads and project economics are the main driver of any major residue upgrading project:
Russian pricing offers attractive economic returns
Europe
Pre 2012
The Diesel minus HSFO Price Spread is the Key Economic Driver
Europe
2013/15 Russia
2014/15
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Pro
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ct
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ee
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plift
, $/M
T
Ongoing Innovation in Vacuum Residue Conversion
Demand for transportation fuels vs. fuel oil has driven a “seven times” increase in the “gasoline + diesel” yield
enabling alignment of production with demand
Dubbs
Conv 25%
Visbreaking
Conv 15%
Delayed Coking
Conv 70%
Ebullated Bed
Conv 70%
Slurry Hydrocracking
Conv 95%
today’s pricing Year
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Q&A
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