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here is a growing focus in the refining industry on hydro- they may conclude that the most cost effective solution over

T gen capacity. Hydrogen is generally required for sulfur
removal and quality improvement of hydrocarbon prod-
ucts. As sulfur restrictions on gasoline and diesel become
the longer term is to build a new hydrogen plant.
In recent years, substantial advancements in hydrogen
plant technology have significantly improved overall life cycle
increasingly stringent, the refining demand for hydrogen con- costs. Based on experience with hydrogen plant benchmark-
tinues to grow. ing, it has become clear that the optimum economic solution in
By evaluating the hydrogen utilisation in their facilities, some cases may be to replace an existing hydrogen plant with
refiners are realising that they need additional hydrogen sup- a new modern hydrogen plant.
ply. There are a number of options available to address this
need. Refiners may be able to meet the increased demand by Hydrogen plant technology
improving the operations of their existing hydrogen plants.
They may choose to separate hydrogen from waste or offgas Old style
streams or even purchase hydrogen from third parties. As an Many refiners are still operating hydrogen plants that were
alternative, after careful technical and economic evaluation, designed and built 20 or more years ago. These older plants

Time for a new
hydrogen plant?
Clay A. Boyce, M.Andrew Crews and Robin Ritter, CB&I
Howe-Baker, USA, discuss the available options when making decisions
about hydrogen plant efficiency and debottlenecking.

Figure 1. Typical
modern hydrogen plant.

A pressure swing adsorption (PSA) unit A third option is to buy hydrogen from a third party. Building a HTSC. plot limitations.67-70 16/03/2004 11:58 am Page 68 increase in hydrogen demand. per unit than if self produced. There Figure 2. This overall production cost reflects a complete pic- options ture of the hydrogen plant economics over the life of the plant.  Adding combustion air preheat lowers the fuel requirement and potentially unloads the waste heat recovery unit and were generally designed with the best available technology of fluegas fan. Figure 3 shows a typical lay. ical overall production cost of hydrogen between a modern The PSA unit produces an offgas stream that can be used and an old style hydrogen plant is analysed and compared. depending on location. A second option is to separate hydrogen from a waste uct gas is normally 95 . Figure 2 shows a typ.99% hydrogen. the capital investment could PSA unit removes the impurities from the syngas. A modern hydrogen plant includes an SMR followed by an The last option is to build a new hydrogen plant. and maintaining the hydro- Additional hydrogen capacity gen plant. The first option for refiners who are operating old style hydrogen plants is to consider ways to increase the capacity of these plants. In addition. tion technology. For example. the higher purity The most significant economic factor in evaluating options to hydrogen makeup to a hydrotreater lowers the recycle flow increase hydrogen capacity is the overall cost of producing and reduces compression costs. Refiners could also debottleneck an existing hydrogen plant by revamping or upgrading portions of it. There are a number of options available to refiners to meet the The efficiency of producing hydrogen and byproducts is Reprinted from HYDROCARBON ENGINEERING FEBRUARY 2004 . these plants consist of a steam methane  Upgrading the CO2 removal unit can minimise hydrogen reformer (SMR) to convert the hydrocarbon feed to a syngas loss in the methanator. many significant improvements in technol. an LTSC is pay off if there is a significant gain in efficiency. they may be able to effectively increase the capacity by either operating with tighter control or selectively upgrading portions of the old plant. Figure 3. stream or an offgas stream that is currently being sent to fuel. Some of these potential upgrades may include:  Replacing reformer tubes with upgraded metallurgy and thinner walls will allow for more throughput and a higher heat flux. by the SMR as the primary fuel source. This hydrogen rich gas is purified by a CO2  Adding a PSA unit decreases hydrogen production. which increases capacity. A PSA unit purifies the syngas effluent from the HTSC. operating. resulting in a capacity increase.97% hydrogen. This typically requires adding separation equipment and pos- sibly some compression.  Adding a pre-reformer unloads the primary reformer so capacity can be increased. the cost and availability of utilities. and low temperature shift converter (LTSC) to shift most of the CO to hydrogen. Overall hydrogen production cost efits in downstream units. The option that provides the optimum economic and operational benefits will be differ- ent for each situation and will depend on such things as the existing steam balance. refiners should conduct a comprehensive technical and economic evaluation of their existing operations and evaluate the bene- fits of the options available to them. hydrogen is treated as a utility. This option requires a minimal capital investment by the ogy and design allow the modern plant to operate at much refiner but the delivered hydrogen is generally more expensive higher efficiency and with substantially lower operating costs. Modern plant. and the condition of existing hydrogen plants. resulting in a potential capacity mixture followed by a high temperature shift converter (HTSC) increase. In many refineries. separating hydrogen out Modern of the fuel system will usually result in additional makeup fuel. Debottlenecking options can also have a positive efficiency impact. by a stand-alone purity. modern hydrogen plant is typically the most capital intensive of The final product gas is typically 99. Before proceeding. remaining CO and CO2 to methane and water. The final prod. and possibly have an impact on other fuel burning equipment. the life of the hydrogen plant by using the different cost para- meters of constructing. Since the the options available. the increase in product purity from the PSA unit has potential ben. hydrogen. but removal unit where a hot potassium carbonate or MEA solu. would typically produce more cost effective and higher tion removes the CO2 and then a methanator converts the purity hydrogen. ical layout for an old style hydrogen plant. In addition. The main process difference between a modern hydrogen This could change the heating value of the refinery fuel system plant and an old style hydrogen plant is the hydrogen purifica. Various replaces the CO2 removal unit and methanator and allows the industrial gas suppliers are willing to sell hydrogen to refiners modern plant to produce hydrogen product with a much higher either by pipeline or. Old style plant. The overall production cost can be estimated over out for a modern hydrogen plant. the time. Below the typ- not required to further reduce the CO content. In addition.  Adding a secondary reformer increases methane conversion. However. which would increase capacity. simple operational changes could significantly increase production and efficiency. Typically. may not be much of a focus on the details of the actual pro- duction and the plants are sometimes operated ‘loose. Following an evaluation of the condition and efficiency of the existing plant. plant.’ In this case.

A new hydrogen plant requires a sig.  Labour: two operators per shift.275 0. tion model built to reflect typical plant performance. HP export steam @ US$ .475 0. million Btu LHV 0. Total feed + fuel @ US$ 4/million Btu LHV 1. the capital cost required for  Natural gas: US$ 4 per million Btu LHV. and both plants will export 600 psig super.409 hydrogen over the life of the plant is determined.67-70 16/03/2004 11:58 am Page 69 very important in minimising the production cost of hydrogen. design of a typical new plant. Total utility cost of hydrogen Utility costs are the major operating cost in hydrogen produc. Plant capacity. ern plant utilities are based on a simulation model for the  Working capital: 45 days. investment of about US$ 55 million would be expected for a cessing units described above and will produce hydrogen with new typical 90 MMSCFD hydrogen plant. ing the overall production cost of hydrogen. Table 1. lbs 20 90 Boiler feedwater. fuel. Average H2 production cost. once all fac. and deliv- duce hydrogen with a purity of 99.05/kWh 0. net cash flow. These other economic factors. For purposes of comparison.5/1000 lbs -0.65 0. will be compared. US$ .772 ters applicable to the plant being evaluated. For comparison A cash flow economic model can be generated using the util- purposes. startup cost. no SCRs or MCCs. ture the utility savings of the modern plant. US$ 1.001 meters include such things as capital cost. and generation of export steam Natural gas fuel. Utilities per 1000 ft3 of contained hydrogen Old style Modern tion.2 0.5%. This evaluation could be done based on a variety of other plant configurations. no cap- design will be based on producing maximum export steam. From this model.05 per kWh. and maintenance costs. this eval. The following evaluation contained hydrogen. The Cost (US$) per 1000 ft3 of contained hydrogen remainder of the utilities combined generally makes up less Old style Modern Natural gas feed @ US$ 4/million Btu LHV 1. US$ million per year 65.602 standard ft3 Overall production costs Average H2 production cost. but for demonstration purposes. million US$ . as well as a number of other economic fac-  HP steam: US$ 5 per 1000 lbs.317 water.268 than 10% of the total operating cost. to support many of the refinery unit operations.023 0. per 1000 standard ft3 of contained hydrogen. A total capital heated steam. no water treatment units. no buildings. the utility costs of a hydrogen plant  Maintenance: 2% of plant cost per year. and a generated income state. 55 ment can also be developed. For a plant producing 90 MMSCFD of illustrates this potential. A number of other economic and plant versus continuing to operate an old style plant.06 Power @ US$ 0. Other parameters for the old style plant will be installed cost is based on inside battery limits.1 -0. product and utilities. it is generally Table 1 clearly illustrates a lower total utility cost for pro- not viewed as a direct ‘money maker. especially when refin.  Cooling water: US$ 0. ducing hydrogen in the modern plant than in the old style plant. Of these. this difference results in an annual utility savings for a modern plant of US$ 16.6 Average annual production cost savings.’ However. MMSCFD (contained) 90 90 Capital cost. the Evaluation basis utility cost alone does not complete the picture of the overall To demonstrate the economics of building a modern hydrogen production cost of hydrogen. The modern plant ery to the US Gulf Coast. million Btu LHV 0.1 per 1000 gal. Cooling water. 0. industry engineering standards. This approximate a purity of 95%. tors. boiler feed Natural gas feed. Table 1 shows the utilities and nificant capital investment. kWh 0. Overall production cost of hydrogen internal rate of return (IRR). Utilities  Overhead: 50% of labour. are listed below:  Boiler feedwater: US$ 0. US$ per 1000 1. power. ‘standard’ Capital cost refers to conditions of 60 ˚F and 14.99%. 530 8 ery utility costs are favourable for steam production. The modern plant will con.8 0. gal.  Escalation rate 1. Utilities typically include usage of feed. As previously discussed.5% for all feed.409 operating costs (including catalyst replacement and tube replacement).  Reformer tube replacement: every 10 years. are used for both the old style and modern plants to calculate utility costs. feed and fuel make up the largest portion HP export steam. feed. net present value at various rates Old style Modern of return (NPV).053 0. The old style plant will consist of the major pro. sist of the major processing units described above and will pro.443 process).504 These utility costs.908 1. two rep- operating factors must also be evaluated.9 1. along with their associated values.5 per 1000 lbs. and although hydrogen is required utility cost of hydrogen for each plant.7 psig. Simulation models  Catalyst costs accrued in year of change out.033 0. Natural gas will also Capital must be invested to build the new plant in order to cap- be used for fuel. million Btu LHV 0.126 (steam is typically a by product of the hydrogen production Total feed + fuel. lbs 45 120 of the utility costs.4 million. natural gas based on typical observed values.6 52. the Table 2.45 rated into a cash flow model. each producing 90 MMSCFD of contained hydrogen from a natural gas feed.1/1000 gal. The old style plant utilities are based on a simula. the modern plant. cooling water. can be incorpo.026 of hydrogen can then be evaluated. resentative plants.908 per 1000 standard ft3 of with a new modern hydrogen plant. contained hydrogen. Reprinted from HYDROCARBON ENGINEERING FEBRUARY 2004 . ‘Life of the plant’ economics uation is limited to the plant types described. other Total utility cost. Natural gas fuel @ US$ 4/million Btu LHV 0. the cost of utilities will be based on the following: ity costs developed for each plant. no compression. Of course.9 comparisons million Building a new hydrogen plant is typically not the most appeal- ing alternative to refiners. tors are taken into account and a total production cost of The modern plant produces hydrogen at a rate of US$ 1. and the overall production costs Boiler feedwater @ US$ 0.996 1.1 1. together with other economic parame. the best eco.5/1000 lbs 0. the credit for export steam can Power.  New plant construction length: two years. The other economic para- Cooling water @ US$ 0. ital investment is considered for the old style plant. are among the most important economic factors in determin-  Miscellaneous: 1% of plant cost per year. The mod. In addition. while the old style nomic solution may be replacing an old style hydrogen plant plant produces at a rate of US$ 1. 12.  Onstream time: 98.  Power: US$ 0.52 have a significant impact on utility costs.

The efficiency of the technological improvements and offer a much lower over- existing plant can span a wide range and should be all life cycle cost. the modern plant becomes more favourable. the old style and modern plant utilities will be the most economically attractive and feasible approach held constant. For this evalu- The evaluation shows that taking all relevant eco. The optimum solution for each refinery will be different Sensitivity to economic variables and will depend on such things as the refinery steam bal- Economic parameters for each refinery are different. Export steam credit The export steam credit also has a significant effect on the overall production cost. B. the economics  Tax rate: 34%. and CREWS. the overall production cost of hydrogen is lower for the modern plant. more efficient hydrogen plant.996 per 1000 cost of utilities and particularly natural gas on the rise. credit. if the export steam credit were changed from US$ 5 construction). nomic factors into consideration. removal regeneration requirement.  Depreciation life (of capital cost): 10 years. the cost and availability of utilities. For the remaining tions are done. if the natural gas price were changed from US$ 4 to US$ 8 per million Btu (double the Figure 4. from US$ 12.6 million.1 for This resulting average overall production cost of the old style plant. This is due to the over- all feed and fuel efficiency advantage of the modern plant.45 per hydrogen production. February 2003.’ Hydrocarbon Engineering. the  Internal rate of return: 0% to obtain actual cost of overall production cost would drop by US$ 0. steam tracing is generally used more heavily and the Figure 5. to US$ 10 per 1000 lbs (double the base case credit). For exam-  Project life: 25 years (includes two years of ple.67-70 16/03/2004 11:58 am Page 70 nent of the overall production cost of hydrogen. The ance. major parameters that can significantly alter these results and the condition of any existing hydrogen plants. As the price of natural gas increases. for each specific application. The higher steam credit would hydrogen. pg 39. calculated for the life of the plant. Once technical and economic evalua- assessed for each plant independently. Reprinted from HYDROCARBON ENGINEERING FEBRUARY 2004 . A compre- plant of approximately US$ 12. feed and fuel price and export steam credit. The higher natural gas price would increase the average annual savings for the modern plant from US$ 12. steam may have a lower than average value. H2 production cost versus export steam value of steam could be higher than average. the export steam credit to natural gas price ratio was held constant. Figure 4 shows the effect of varying the natural gas price. it is economi- operations is required to determine the optimum solution cally feasible and potentially advantageous to build a new. The overall operating cost changes significantly as the natural gas price varies. the price of natural gas stays the same. With the style plant produces hydrogen at US$ 1. For example. Figure 5 shows the  Debt length: seven years. the overall production cost would price. Feed and fuel usually account for more than 80% of the total before the steam credit is taken. be analysed as a function of the other two major factors. increase by US$ 1. This lower overall pro- overall plant efficiency has become a key factor in defin- duction cost results in an annual savings for the modern ing the economics of what option to pursue.9 million to US$ 28.4 million. The mod- ern plant produces hydrogen at a rate of US$ 1. ‘Economics of export steam for The cost of feed and fuel is typically the largest compo. 1000 ft3 of hydrogen for the modern plant and US$ 0. plot limitations. is shown in increase the average annual savings for the modern plant Table 2.804 for the old style plant. the feed and fuel modern hydrogen plants take advantage of numerous price. during the winter.M.602 per Conclusion Refiners have a number of different options to consider in 1000 standard ft3 of contained hydrogen while the old addressing the demand for additional hydrogen. hydrogen plants. The overall production cost of hydrogen will may be to build a new hydrogen plant. Today’s are the efficiency of the existing plant. For this evaluation.326 per 1000 standard ft3 of hydro- gen for the modern plant and US$ 1.. M. hydrogen plants typically export much more steam due to the fact that they are more efficient and do not have a CO2  Cost of capital: 8%. Modern  Debt level: borrow 75% for new plant. it should not be a surprise to anyone that evaluations. ation. This evaluation hensive technical and economic evaluation of existing demonstrates that for the cases analysed. Conversely. As the export steam credit increases. when less steam tracing may be utilised. For example.A. References Feed and fuel price 1. TINDALL. for the modern plant become more favourable. and the export steam credit. H2 production cost versus natural gas base case credit).. The value a refinery places on steam depends on utility factors and the existing steam balance in the refinery. effect of varying the export steam credit.9 million. in the summer.9 million to US$ 24. standard ft3 of contained hydrogen.