Vacuum Distillation 101

More About PetroPlus

2012-01-28T22:33:00.011+01:00

It has been more than a month now since the banks pulled the plug on PetroPlus' credit line for crude oil purchases. During that time there has been a lot of hype about outside investors, mysterious bank connections providing more money, sales of refineries, permanent shutdowns of refineries, etc.

The apparent truth, to date, is that PetroPlus got some credit from one bank or another that allowed PetroPlus to keep the Coryton (UK) and Ingolstadt (Germany) refineries on line.

Recently there have been some articles in the Swiss newspapers that indicate that PetroPlus was never run by refinery people, but by investors and financial people with the idea of putting a "refining conglomerate" together and then flipping it to the highest (or maybe first) bidder. Sorry - "flipping" comes out of the Internet website business, it means selling a newly-made website quickly to earn some money - also quickly. In other words, to make a "quick buck."

Other articles are saying that the PetroPlus business model - trying to use the leverage of a refiner to be able to make use of arbitarage between crude oil and product prices - was a flop in the USA, and the continuing situation of excess and expensive refinery capacity in Europe was the final kiss of death for Petro Plus.

In any case, whatever the intentions were, the business model has proven itself to be a financial flop - for example, 11 losing quarters out of the last 12. Now, a consulting company is running the Coryton Refinery under the instructions of a British judge, and the Ingolstadt Refinery is running at about 50% of capacity using ??? for money. One has to wonder if this last stage in the process has not been a ruse to allow PetroPlus to close the unprofitable Antwerp (Belgium), Petite Couronne (France), and Cressier (Switzerland) refineries plus other lower level facilities (terminals) without having to pay up for the closure costs: personnel layoffs, ante up for the personnel pension funds, environmental cleanup costs, company closures, etc., not to mention avoiding much of the loan repayments due. It could be the icing on the cake for creating a "Petro Minus 3" with only two reasonably profitable refineries and minimum remaining debts.

What do you think? I would like to hear from you!

What Will Happen To PetroPlus?

2012-01-02T17:56:00.007+01:00

If you have been following the financial news in Europe, you may have seen some articles about PetroPlus recently. PetroPlus is the largest independent petroleum refining company in Europe, and their refining capacity is around 4.5% of the total European refining capacity. The refineries are located in the UK, Belgium, Germany, France, and Switzerland.

The reason that PetroPlus has been in the news is that their consortium of banks that was financing the purchase of crude oil for PetroPlus's 5 refineries froze the revolving credit line about ten days ago. In effect, that is like freezing your credit card when you are on a business trip and didn't take much cash with you. If that happened to you, your trip would stop, and that is about the same as what is going to happen to PetroPlus's refineries in the coming week.

Why did the banks do that to PetroPlus? The answers are not very clear, but the basic reason (my guess) is that the European banks are scared to death of what is coming with the financial crisis in Europe. It is so bad, that the banks don't even trust each other, and would rather park their excess money in the European equivalent of the Federal Reserve Bank than trust it with another bank!

A second reason is that the European refining industry is suffering from over-capacity as the result of the economic slowdown that has been taking place over the past two years. The refineries that are owned by a company that also owns its own crude oil supplies can afford to continue on at close to maximum throughput - which is the most effcient operating mode for virtually every refinery. The excess products are sold by the umbrella company on the market, and this puts price pressure on the other refineries - like PetroPlus.

PetroPlus's refineries apparently have been operating at roughly 75-80 percent of capacity - and that has put the refineries in a perilous financial position. Proof of the pudding: PetroPlus has made operating losses for the past 8 quarters.

The question now is, how will PetroPlus come out of their own private financial crisis? There is some pressure being applied by the refinery labour unions to the governments in various countries. The idea is to force the banks to loosen up with the money so that something around 3000 people plus at least as many dependent employees in the support areas do not lose their jobs.

What other options does PetroPlus have?

They could search for processing arrangements so that the crude oil and the products do not belong to PetroPlus, and thus the need for the revolving credit disappears. This will not happen immediately - most companies that want processing deals have them already, at least for 2012.
They could try to sell the refineries, but this is already a buyer's market, and PetroPlus's refineries are not the most attractive in Europe
They could just bite the bullet and shut down the entire operation, maybe retaining a few locations as terminals, and scale the company down to about 5-10% of what it is today. Scrapping the refineries will be an expensive procedure, since every refinery has its share of environmental problems that will have to be resolved - at a price.
They might try to sell the refineries one-by-one to non-European crude oil producers so that the producers could process their own crude oil in Europe. This is not very attractive, because refining in Europe is expensive, but someone might bite on the option.
The last option is to declare bankruptcy and let somebody else sort out the problems.

Not a very encouraging picture, is it? I suspect that the actual resolution will end up being a little bit of everything mentioned above. The refineries are in separate companies, so each one can be handled independently. The German refinery is the best candidate to continue operations, due to configuration (it has conversion capacity) and location (Bavaria). The least promising is probably the French refinery, which has a large number of employees and is the oldest and technically the least sophisticated of the group. The UK refinery is facing a major turnaround (technical overhaul) in 2012, and this will be a big negative for either continued operations or a sales effort.

What will happen? Your guess is as good as mine! In any case, I wish all the colleagues at PetroPlus all the best for 2012, whatever that turns out to be!

Refinery Process Design

2010-02-22T08:41:00.008+01:00

Recently, I received a question from a practicing chemical engineer. It was interesting, because it focused on one of the basic decisions involved in a new refinery: "What is the best oil refining process pattern if we want to produce a maximum amount of gasoline when refining a heavy crude oil." We all know that crude distillation is the first major process step that happens when crude is introduced into the refining process, but how do you decide what comes next?

The various licensing companies (UOP, IFP, Exxon Research, etc.) as well as most of the engineering and construction companies and many engineering consultants all have their own ideas, which (naturally) feature their own processing strengths and prejudices, and tend to ignore their weaknesses. All of them also have one or more computer programs that are supposed to determine the optimum refinery configuration for a given crude oil of combination or crude oils. They are even (supposedly) set to give the optimum return on investment using built-in investment costs that usually reflect the most recent projects attempted.

What you can do with the crude naturally depends upon what sort of crude you have. Responding to the question above, I assumed that it is not only heavy, but also contains a medium amount of sulphur (2-3%) and middle- to high-level of metals (particularly nickel and vanadium), and not an excessive level of organic nitrogen. In other words, nothing very exotic.

Gasoline Refinery

A more-or-less traditional flow scheme from the USA (which is where the gasoline refinery concept was born) for a medium to large gasoline refinery is shown below. This ignores the modifications necessary today to produce specialised gasoline.

Atmospheric distillation block

Atmospheric distillation

Full range naphtha HT => splitter => heavy naphtha to catalytic reforming and light naphtha directly or via C5/C6 isomerisation to gasoline

Light distillate (kerosene) HT à burning kerosene and/or jet fuel

Mid-distillate (gasoil) HT à Diesel fuel and light heating oil

Vacuum distillation block

Vacuum distillation

Delayed coker (a large one, so that essentially no vacuum residue remains)

Conversion block

FCCU – feeding medium VGO and heavy VGO with a feed hydrotreater to reduce the sulphur and nitrogen contents

The C3/C4 streams go to alkylation, catalytic polymerisation, and MTBE (except in places where MTBE is not allowed in gasoline)

An AGO/LVGO hydrocracker (depends on the needs of the gasoline pool and the cost of hydrogen production) as a combined FCCU feed HT and a gasoline component producer (the economics should decide whether this is necessary or not)

Hydrogen production

There will be a large volume of refinery gas and C3-C4's coming from the cracking units; these can be used for hydrogen production (steam-HC reforming), perhaps balancing gasoline component production against hydrogen requirements
Another option, if there is not enough light material after fuel and LPG product needs for steam-HC reforming, is a partial oxidation unit, using vacuum residue as the feedstock (this is effective but capital-intensive) instead of or in addition to the steam-HC reformer, and partially replacing the coker

Other process and utility units

Steam production for various usages, including utility, process, and power generation

Sulphur recovery – there will be large amounts of sulphur, produced as H2S, that will have to be converted to sulphur for safe handling

Coke handling – if the refinery coke is not burned in the power plant, it will need to be handled for export from the refinery – one option is to calcine the coke to make it a more valuable product

What you will note above is that virtually all products are hydrotreated at some stage of the process. This is to make the distillate fuels (gasoline, kerosene for jet or burning fuel, gasoil for heating oil and Diesel fuel) compatible with today's worldwide low sulphur environmental requirements. The product slate should be roughly 55-65% gasoline by weight, 25-15% light distillates by weight, with the remaining ±20% going to coke, sulphur, maybe propane/butane, and own consumption (including catalytic coke produced and consumed in the FCCU). The volume yield of gasoline can be almost 100% on crude, depending on specifications and the degree of cracking utilised.

If the refinery is to be a (relatively) small one, then the best solution may be to build the entire atmospheric distillation train, but only the vacuum distillation, the delayed coker, and the hydrocracker in the vacuum distillation train as a high-conversion unit (primarily gasoline components), and leave out the FCCU and its downstream units. The hydrogen production facilities will still be necessary unless H2 is available from outside the refinery. In the future, if the refinery is expanded, an FCCU plus its downstream units can be added, and the hydrocracker can be converted to an FCC feed pretreater with lower conversion (50-60 %) but with a much greater throughput (1,5 –2 times original).

Distillate fuel refinery
But what to do if you want mostly distillate fuels instead of gasoline? Well, this is the "European solution" as opposed to the "American solution" for gasoline above. Typically, the distillate solution (high cetane number Diesel fuel, light heating oil, kerosene for household fuel and aviation turbine fuel) uses different choices of conversion equipment, in order to provide more middle distillates and less gasoline.

The earlier solution (1960's) was to use low severity FCC units, which produced more than 50% light cycle oil instead of a large volume of gasoline. Today, the light cycle oil is a problem because of it's aromatic and sulphur contents, not to mention stability.
The more current solution is a hydrocracker using (typically) one conversion stage to produce large amounts of desulphurised, low aromatic distillates (kerosene and Diesel fuel). Depending on catalyst type and feedstocks, the volumetric yield of distillates can be over 100%. Conversion of the vacuum residue to hydrogen and energy (steam and/or electricity) may take on a more important aspect, since the large hydrocracking process requires a lot of hydrogen. However, the steam reforming straight run naphtha to hydrogen is another H2 source, if gasoline is really unimportant. The refinery is somewhat less complicated than a gasoline refinery of the same size. The blocks below give an idea of what might be used in a distillate fuels refinery. The common components that remain more or less unchanged are shown in bold print.

Atmospheric distillation block

Atmospheric distillation

Medium + light naphtha HT à medium range naphtha to catalytic reforming and light naphtha directly or via C5/C6 isomerisation to gasoline

Heavy naphtha / light distillate (kerosene) HT à burning kerosene and/or jet fuel

Mid-distillate (gasoil) HT à Diesel fuel and light heating oil

Vacuum distillation block

Vacuum distillation

Delayed coker (a large one, so that essentially no vacuum residue remains)

Conversion block

AGO/VGO hydrocracker optimised for distillate production

HC medium naphtha to catalytic reforming (hydrogen production and gasoline octane), HC light naphtha to gasoline blending, naphtha sales, or H2 feedstock

Hydrogen production

There will be a respectable volume of refinery gas and C3-C4's coming from the cracking units; these can be used for hydrogen production (steam-HC reforming), perhaps balancing LPG component production against hydrogen requirements
Another option, if there is not enough light material for steam-HC reforming, is a partial oxidation unit, using vacuum residue as the feedstock (this is effective but capital-intensive) instead of or in addition to the steam-HC reformer, and partially replacing the coker

Other process and utility units (sizes may be different, but functions are essentially identical)

Steam production for various usages, including utility, process, and power generation

Sulphur recovery – there will be large amounts of sulphur, produced as H2S, that will have to be converted to sulphur for safe handling

Coke handling – if the refinery coke is not burned in the power plant, it will need to be handled for transport – one option is to calcine the coke to make it a more valuable product

LPG Refinery
There is a third type variant, although it is relatively rare, and that is the LPG refinery. The objective of the LPG refinery is to optimise the production of propane and butanes in order to satisfy local market needs for LPG as fuel and as petrochemical feedstocks. Usually, these refineries are based on light crudes or condensates as a starting point, since there is a large potential for wasted energy when converting heavy oils to LPG.
The special process unit configurations that can be used here are

hydrocracking units that are optimised for LPG production,

catalytic reformers that run in what normally would be a stable but overchlorided catalyst condition (excessive hydrocracking), and

FCC units trimmed for maximum LPG production (with ZSM-5 cracking additive).

Naturally, in every case, there will be a number of options to consider before the refinery's final process design is set, and special solutions for unusual problems or local conditions are the rule, rather than the exception, in refinery basic process flow design.

The selection of the optimum process flow scheme generally takes place by making runs with a refinery economics model. The objective of the model is to product the optimum profit, taking into consideration the base feedstock (crude), additional feedstocks, the product requirements, and the prices for feedstocks, products, and utilities. The first runs are with most, if not all of the process units in the model "open", i.e. the economic model is allowed to optimise without considering which of the process units will be built. This will probably give a refinery with a large number of process units, some of which will be uneconomically small from an operating point of view. Later, the least attractive processes will be eliminated, and the capital cost will be factored into the calculation (this may have already been done in the first step). Finally, other considerations (site requirements and limitations, transport considerations for feedstocks and products, transport considerations for refinery equipment delivery to the refinery, market limitations, process complexity, licensing considerations, political considerations, etc.) will finalise the refinery process design.

This should give you an overview of the process that is termed "refinery process design". Flexibility and an open mind are necessary in order to come up with a refinery configuration that fits all needs.

Questions are welcome!

A Few More Notes

2009-01-15T19:48:00.003+01:00

Hello again,

Well, with all the things that are transpiring, it's easy to hear everyone holding their breath, waiting for the next pin to drop! As usual, all the commentators have an opinion on where this economic business is going to bottom out or at least slow down, but - most unfortunately - they are all opinions! There are no facts, because none of us (at least as far as I know) can see into the future.

There have been numerous governmental activities to try to stabilise the situation, but in my opinion, the governmental activities are what really got us here in the first place. More pressure from the government to do this and that results in more searching for ways to either beat City Hall (which is usually not possible) or find a way around or over or under or through the strangle-hold on whatever it is that's constraining business. That, in turn, usually results in more problems for business that are avoided by more contortions and manoeuvring that ultimately lead to more government interference, etc. A devil's circle!

Is there a way out? In pure theory, of course. In practice, I really doubt it, at least not in your and my lifetimes. The best we can hope for, in my opinion, is that the whole thing doesn't go down the proverbial tubes before there is some sort of recovery.

If you think about it, what I wrote there can apply to a multitude of industries and governments! Is it oil and the USA, or real estate and Spain, or automobiles and Germany? The answer is "yes!"

As individuals, all we can do is hold on and hope that the ride has a safe and reasonable ending.

Hang on tight!

Craig

Your comments are invited!

A Few Notes

2008-12-15T10:35:00.000+01:00

Hi there!

These are just a few notes about recent changes to the blog.

The neat video centerpiece we had was supposed to be a current events item, but after months of the same picture and the same news, I removed it! It's too bad; it was a great concept. Just to be sure it wasn't a fluke, I checked out some others from the same source, and I discovered I was looking at trading news from 26 December (2007)! Maybe I'll find something else in the future that'a current and kept current (like the OGJ headlines that are there).

I also updated the blog list and the RSS feeds a little.

I will move my "life story" to another location soon, but I don't know if that will be before I finish today or not.

That's about it!

As usual, we welcome your comments!

Craig

Winning the Oil End-Game

2008-08-28T16:34:00.008+02:00

This is the title of a presentation given by Emory Lovins at one of the TED sessions in Monterey, California, in 2005 (Technology, Entertainment, Design, at http://www.ted.com/). If you have the time, I would like to read your comments as oil business professionals. Please scroll down to the bottom of the page, and click on the picture you find there.

This should be interesting for you. Please enjoy and comment!

Ciao for now,

Craig

Mussels for Dinner?

2008-07-22T00:15:00.004+02:00

Hi there!

Based on the previous post, I had an interesting question (tongue-in-cheek I'm sure) from an old friend who wanted to remain anonymous. It went something like this...

"Do you have any recipes for the mussels that we get out of our sea water cooling system? They seem to like to grow in the tubes where [for them, I suppose] it's nice and warm in the summer. They are a strange shape (look like mini-cigars) but by the time we clean them out, they're already steamed!"

Well Buck, I have to say that if they're already steamed, the choices are rather limited. I suspect if you put them in the refrigerator for a while and then served them on fresh lettuce with horseradish and mayonaise, they could be delicious. At least as long as you didn't have any HC leaks into the cooling water!

Another choice, albeit not so traditional, would be to serve them up in an icecream glass with a little lettuce for decoration and the American shrimp cocktail sauce - ketchup, horseradish, Worcester sauce, and lemon juice.

Any other ideas? :-) Bon appetite!

Craig

Happy 1st of July

2008-07-01T14:40:00.006+02:00

Most Americans are not aware that the country just to the north of the US - Canada - has it's national day, Dominion Day, on the 1st of July. For all of those who are "north of the border", congratulations on your special day. It also happens to be the birthday of my step-daughter, Kristina, who lives and works near Hamburg. Happy Birthday Tina! No, I won't say how many years! :-) (but she is a good-looking natural blonde!)

There is not much technical stuff to report on at this point in time. As you can or will see, I have added a few more "bells and whistles" to the blog. I hope you enjoy them!

My wife and I are "enjoying" the weather in central Italy as we prepare to sell our B&B here. "Enjoy" is relative, it's been 32-35°C (lower-to-upper 90's Fahrenheit) every day for the last two weeks - great for relaxing at the pool, but not so great for clean-up, spruce-up type work! Yesterday afternoon, we had a thunderstorm that helped cool us off, at least for a few hours.

As always, I stand ready to answer, or at least comment on, any questions that you might have. One interesting area for this time of year is how to keep your vacuum stable when the temperatures (ambient air and cooling water) climb. A second centers around scaling and corrosion and animal/plant growth in cooling water systems for vacuum-producing equipment. Anybody want to start off?

Ciao for now,

Craig

New Viewers?

2008-06-05T00:17:00.004+02:00

Hi there!

Just looking in to see if there were any new viewers or some comments... Please note that everybody is welcome to comment, I just need to take a look at the comments before they're published. That will be to weed out the things that shouldn't be here, like spam, off-subject items (but other technical items will probably be accepted), derogatory comments, and other undesirable things. Write questions (technical or operational) and we'll see who can come up with some answers.

Ciao for now,

Craig

Why Vacuum Distillation ?

2008-05-29T13:28:00.008+02:00

The reasons for producing vacuum gasoil in the first place are well known, but not always the same:
• Minimise heavy residual fuel (heavy fuel oil)
• Provide components (maybe all) of the feed to a fluid catalytic cracking (FCC) unit or a hydrocracker
• Provide components for lubricating oil production
• Provide specialty cuts for the production of other specialty products (petrolatum, transformer oils, etc.)
Generally speaking, the final requirement is almost always the same – to improve the monetary returns on the heavy portion of the crude oil processed in a refinery – albeit not the method.
For fuels refineries, the products that generally bring the greatest monetary returns are transportation fuels – gasoline and diesel fuel, and perhaps LPG, depending upon market location. Conversion of atmospheric residue to transportation fuels is possible directly, but the capital cost for the units to do this is often prohibitive. Consequently, the classical solution is vacuum distillation, followed by either FCC or hydrocracking (or both) of the vacuum distillates and either further processing (destruction?) of the vacuum residue, or sales as heavy fuel oil.
The process unit chosen for separating hydrocarbon components boiling at between 340°C and up to 565°C or more is usually a vacuum distillation unit, operating at a flash zone absolute pressure of around 50 mm HG. The reason for distillation under a vacuum is to allow the distillation to take place at temperatures that are not (usually) high enough to produce thermal cracking of the vacuum gasoil components. The distillation tower internals historically were designed to be low pressure-drop systems (at least as conceived at the time of design) since the best maintainable absolute pressure at the top of the tower was generally about 10 mm HG. Because of the qualities of some of the components processed, it was necessary to utilise special metallurgy to assure the safety and continued long-term operation of the vacuum distillation unit. Carbon steel alone was not sufficient.

An example of what was originally possible (1950-1960 designs) is a vacuum tower operating at 30 mm HG at the top of the tower (two- or three-stage condensing steam ejector system). The flash zone could be less than 100 mm HG absolute pressure, with steam stripping in the tower to maintain the partial pressure of the hydrocarbons low enough that thermal cracking/coking in the bottom of the tower was minimised.
The typical products (in a fuels refinery) would be light vacuum gasoil (LVGO - boiling range about 315-400°C), heavy vacuum gasoil (HVGO - boiling range about 370-510°C), vacuum residue, and a slop cut drawn below the HVGO in order to minimize the amount of light products getting into the residue, and also to trap out the heavy material splashing up and entrained material from the bottoms (overflash). The slop cut was usually recycled back to the vacuum feed heater to extinction, although it was sometimes used as refinery fuel. There were two other small product streams, (1) the condensed liquid from the steam ejector vacuum-producing system, consisting of some lighter hydrocarbons, typically an atmospheric gasoil boiling range, partly from entrainment from the atmospheric distillation, and partly from thermal cracking in the vacuum tower system, and (2) water from the ejector system and condensed stripping steam. At 510°C endpoint, the HVGO was a relatively light feed for today’s FCC units with all riser cracking and “exotic” catalysts. It could even cause problems today with a lack of Concarbon to maintain temperature control in a modern unit designed for heavier feedstocks. It also left a relatively large amount of light material in the vacuum residue. Unless the FCC and/or hydrocracker was/were already full, and there was no other outlet, this was an extreme waste of money!
Coming next ...
What to Do?
In a modern fuels refinery, the objective of the vacuum distillation unit is as a feed preparation unit for conversion units. A “conversion unit” could be an FCC, a hydrocracker, or even a thermal cracker, visbreaker, or coker.

Welcome

2008-05-26T01:06:00.004+02:00

Hello,

We're just getting started with this blog, so please be patient with us for a while longer. If you need some information about our operations right away, please go to http://good2004.biz/oil.htm. We'll have more for you here soon.