Cat Cracker Seminar

August 23-24, 2016

Royal Sonesta Hotel
Houston, TX

CAT-16-13 FCC Benchmarking – Exploring Industry

Trends and Creating Paths Forward

Presented By:

Alexis Shackleford
Technical Marketing
Specialist
BASF Corporation
Houston, TX

American Fuel & Petrochemical Manufacturers 1667 K Street, NW 202.457.0480 voice

Suite 700 202.457.0486 fax
Washington, DC www.afpm.org
20006
This paper has been reproduced for the author or authors as a courtesy by the American Fuel &
Petrochemical Manufacturers. Publication of this paper does not signify that the contents
necessarily reflect the opinions of the AFPM, its officers, directors, members, or staff. Requests
for authorization to quote or use the contents should be addressed directly to the author(s)
  Market Trends

 Ecat and Operating Benchmarking Trends

 FCC Catalyst Proposal Request

 Paths Forward

Cat-16-13 Page 1 2016 Cat Cracker

 cagr

cagr 0.9%

(Million Barrels
+21% Continued slow growth
per Day (Mio
105
112 with investments slowing
B/D)) conversion units over long
93 27
26 term
Gasoline 24 9
8 7
Naphtha
7 1
7 1 Increase in Middle
Jet Fuel 6
Kerosene
1
37
Distillate fuel demand
34
Middle Distillate 28

Residual Fuel 8 7 Increased LPG Demand

8
LPG 10 13 14 of 40%
other 9 10 10
2015 2025 2035
Source: Stratas Advisors Jan 2016 Report
Note other: Lubricants, asphalt, refinery fuel
Cat-16-13 gas, coke, and miscellaneous product. Page 2 2016 Cat Cracker
 Transportation needs drive approx. two thirds of the oil demand.
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  Flat/slight decline in demand in
Regional Refined Product Demand Growth (2015 – 2035)
(million b/d; annual % growth) mature western economies
 Strong growth in Asia Pacific with
increasing populations and
developing economies
 Growth in Middle East driven by
diversifying economies and
population growth
 Other emerging regions also
experiencing growth
 Evolving import/export patterns
to accommodate these trends

Source: Stratas Advisors report Issued Jan 2016

Cat-16-13 Page 4 2016 Cat Cracker

 Audience
Polling

What is the annual growth rate for FCC

globally?
0.3% 0.5%

0.9% 3.1%
 7.0
• Global FCC
capacity 6.0 2015
today is 17.5 5.0 2035
MB/D
projected to 4.0
increase by 3.0
18.4 MB/D by
2035 2.0

• That is 1.0
roughly 0.3%
-
annual N. Asia Europe Latin CIS ME Africa
growth rate America Pacific America
0% 0% -2% 1% 38% 52% 105%
Source: Stratus Energy 2016
Cat-16-13 Page 6 2016 Cat Cracker
  Market Trends

 Ecat and Operating Benchmarking Trends

 FCC Catalyst Proposal Request

 Paths Forward

Cat-16-13 Page 7 2016 Cat Cracker

  BASF maintains a database of equilibrium catalyst
(Ecat), unit operation, and feed properties for FCC
units across the world.
 The database contains a diverse range of catalyst
suppliers, unit designs, operating conditions and
yields.
◦ Our Ecat database contains information for over 200 units
◦ Our unit operation database contains over 1,000 operating
snapshots of over 250 units in the past 20 years.
 From this, we can evaluate global and regional trends.

Cat-16-13 Page 8 2016 Cat Cracker

 80
Max
 Benchmarking for Gasoline

Gasoline Yield, vol%

70
~200 FCC units by Max
60
BASF Distillate

 Shows yield slates 50

vary greatly among 40 Max

the industry Olefins
30
50 60 70 80 90 100
Conversion, vol%

Yield Global Global Global

Average Min Max
Gasoline, vol% 58 36 78

Cat-16-13 Page 9 2016 Cat Cracker

 Max Propylene
40 25
Max LCO
20

Propylene, vol%
30
LCO, vol%

15
20
10

10 5

0
0 50 70 90
50 70 90
Conversion, vol%
Conversion, vol%

Yield Global Global Global

Average Min Max
LCO, vol% 17 1 39
Propylene, vol% 9 3 24
Cat-16-13 Page 10 2016 Cat Cracker
  Data used in Ecat trends analyses are from refineries all over
the world.
 Trends are compiled from 2002-2015 and represent global
averages.
 It is important to note that shifts in averages require large moves
globally and are indicative of market pressures and market
opportunities.
 Ecat trends are broken out by region to differentiate regional
market differences.
 First half of data looks at Ecat properties, while second half of
data looks ACE testing at constant conditions.

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100

80 38 41 40 38 38 37 39 38 43
48 45 51 52 48
60 Chart Legend
Resid
40 Gasoil
62 59 60 62 62 63 61 62 57
52 55 49 48 52
20

 Resid >3000 ppm Ni + V; Gasoil <3000 ppm Ni + V

 Globally, more units are processing resid with the average moving from ~40%
resid in the early 2000s, to today ~50%

Cat-16-13 Page 12 2016 Cat Cracker

 Chart Legend

 REO dropped starting in 2010 due to REO crisis. During this same time, many refiners also used
less catalyst or reformulated resulting in lower activity after 2011.
 An economic incentive for catalysts with less REO was present, which is why levels did not rebound
when REO prices stabilized. However, REO levels have not reached historical maximum values.
 North America is a gasoline driven market therefore higher REO; Asia is driven by propylene
therefore lower REO.
Cat-16-13 Page 13 2016 Cat Cracker
 Chart Legend

 Surface area of catalyst is increasing due to refiners wanting more catalytic

cracking- increased surface area results in increased activity.
 Significant jump in TSA in 2011 to make up for lower REO during REO crisis.

Cat-16-13 Page 14 2016 Cat Cracker

 Chart Legend

 Overall increase in activity. With decrease in REO, Ecat activity dropped slightly.
Recent rebound in activity resulting from increasing TSA and REO.
 Hydrotreated feeds will lead to an increase in activity.
 Low activity in Asia is due to resid feed processing, a result of higher contaminant
metal content.
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 An increase in Ni and V content globally indicates refineries Chart Legend
are now processing more resid.
 Asia processes very heavy feed resulting in highest Ni and V
content globally.
 NA has a steady trend due to hydrotreating of feed and
processing of tight oil.
Cat-16-13 Page 16 2016 Cat Cracker
 Chart Legend

 Since 2010, an increase in P content is visible indicating higher ZSM-5 usage

and/or higher P content in the catalyst, but flat in the past few years
 ZSM-5 usage is driven by economic incentives of C3 and C4 olefins and to a lesser
degree octane
 Biggest ZSM-5 users are in Asia, which has been decreasing in recent years
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 Increased hydrogen yield follows the increase in Ni, a dehydrogenation
catalyst. Chart Legend
 Asia has the highest hydrogen & metals levels
 Overall decrease in H2 selectivity despite increase in metals suggests
that refiners are using resid technology (e.g.. FlexTec) or catalyst
suppliers are just getting better!
Cat-16-13 Page 18 2016 Cat Cracker
 Chart Legend

 There is overall increase in LPG- could be a result of ZSM-5 and/or REO.

 Asia has highest LPG yield due to increased use of ZSM-5.

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 cv
cv

cc
vv

 Large increase globally is reflective of increasing olefin demand. Chart Legend

 Increase in selectivities is accomplished by catalyst changes
(lower REO/Z) and increase in ZSM-5 use.
 Also indicates higher gasoline octane potential from the catalyst.

Cat-16-13 Page 20 2016 Cat Cracker

 Large increases globally, reflective of increasing demand for
Chart Legend
C4 olefins due to higher olefin demand.
 Increase in selectivities is accomplished by changes to the
catalyst such as lower REO and increased ZSM-5 use.
 Also indicates higher gasoline octane potential from the
catalyst.
Cat-16-13 Page 21 2016 Cat Cracker
 Lower global average is indicative of desire to produce LPG Chart Legend
and/or LCO.
 NA has historically been more gasoline driven, therefore shows
higher than global average.

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 LCO trend in Asia is in line with lowest gasoline globally indicating
a desire for LCO over gasoline. Chart Legend

 High LCO demand before recession, since then slight rebound but
not supported by economics to maximize LCO for most units
 Recent LCO trend is opposite LCO/BOT trend, indicating an
activity effect.
Cat-16-13 Page 23 2016 Cat Cracker
  Data from refineries all over the world
 Data separated by Resid vs. Gasoil
 Data from RFP, modeling requests, and data reviews

Cat-16-13 Page 24 2016 Cat Cracker

 Chart Legend
Gasoil
Resid
Average

■ The slight increase in feed concarbon recently indicates heavier crudes being
processed globally.
■ Concarbon content can also differentiate between gasoil and resid.

Cat-16-13 Page 25 2016 Cat Cracker

 Chart Legend
Gasoil
Resid
Average

■ Increased hydrotreating of feed, mostly in North America, leads to decreased Ni and V in

gasoil units.
■ Larger gap between Gasoil & Resid Metals content
■ More emphasis on catalyst technology advances in the past decade to process resid
feeds with higher metals contamination.
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 (°F) Benchmarking ROT (°C) Benchmarking Conversion
995 536 80

78
Riser Outlet Temperature

990

Conversion (vol%)
532
76
985
528 74

980
72
524
975 70

970 520 68
2002 2004 2006 2008 2010 2012 2014 2002 2004 2006 2008 2010 2012 2014

■ The decrease in ROT suggests that refineries are pushing for

more LCO or relying more on catalyst activity or cat/oil – the Chart Legend
latter is supported by conversion data. Gasoil
Resid
■ Refiners who process lighter feed often need to reduce ROT to
Average
avoid downstream constraints such as wet gas compressor
limitations.
Cat-16-13 Page 27 2016 Cat Cracker
■ As in agreement with the ECat data, activity is increasing over the Chart Legend
years Gasoil

■ An increase in cat/oil after 2010 coincides with the decrease in Resid

Average
catalyst activity during the REO crisis.

Cat-16-13 Page 28 2016 Cat Cracker

■ An increase in total LPG and LPG olefins is a result of higher Chart Legend
catalyst activity and/or ZSM-5 usage. Gasoil

■ Selectivity shift towards LPG also lead to a increase in LPG yield. Resid
Average
■ Trend is in-line with strong butylene and propylene demand.
Cat-16-13 Page 29 2016 Cat Cracker
 Benchmarking Gasoline Endpoint

■ Refineries are trying to increase gasoline yields. This can be

accomplished by higher catalyst activity and/or by increasing gasoline
Chart Legend
cutpoints – higher gasoline cutpoint is demonstrated here.
Gasoil
■ Between 2003 and 2007, refineries undercut gasoline due to regulatory Resid
restrictions around sulfur. Since then hydrotreating has been used Average
more substantially increasing gasoline yield and decreasing the need to
undercut. Undercutting also was done to increase LCO.
Cat-16-13 Page 30 2016 Cat Cracker
 Benchmarking RON
94

93.5
Gasoline-RON-Total

Chart Legend
93
Gasoil
92.5 Resid
Average
92

91.5

91
2002 2004 2006 2008 2010 2012 2014

■ RON can be increased by undercutting gasoline, higher ROT, ZSM-5, and lower
REO/ZSA
■ RON has been decreasing, in-line with the lower ROT despite higher ZSM-5 usage

Cat-16-13 Page 31 2016 Cat Cracker

■ A steady state/slight decrease in LCO due to changes in
Chart Legend
cutpoints and operating objectives is demonstrated.
Gasoil
■ Lower bottoms yield overall is a result of improved bottoms Resid
cracking, and since LCO is steady/decreasing, this is an Average
activity effect.
Cat-16-13 Page 32 2016 Cat Cracker
  Market Trends

 Ecat and Operating Benchmarking Trends

 FCC Catalyst Proposal Request

 Paths Forward

Cat-16-13 Page 33 2016 Cat Cracker

 Increase LCO Increase delta coke
Decrease delta coke Increase profit
Increase C4 Olefins
Reduce catalyst cost Decrease dry gas
Max conversion Increase resid rate
Reduce LPG make
Improve fluidization Max propylene
Improve attrition Lower gasoline sulfur

Improve metals tolerance

Increase Octane
Reduce catalyst adds
Increase Gasoline
Cat-16-13 Page 34 2016 Cat Cracker
BASF received over 200
Audience
proposal requests over the Polling
past 4 years globally.

What do you think was the #1

most frequent objective requested?

1 Improved metals tolerance 2 Increase LCO yield/selectivity

3 Increase LPG olefins/olefinicity 4 Increase bottoms upgrading

  Global Results for Top Objectives

Decrease Increase
Bottoms LPG= Dry Gas Gasoline
Upgrading 56% 52% 45%
57%

Increase Decrease
Maximize Increase
Delta Coke
Conversion/ Gasoline LCO
45%
Volume Octane 36%
22% 28%

Cat-16-13 Page 36 2016 Cat Cracker

 #1 #2 #3 #4

North Bottoms Dry Gas LPG= LCO

America 68% 58% 47% 37%
Latin Gasoline LPG= Octane Bottoms
America 83% 67% 42% 42%
Europe/ LPG= Dry Gas Bottoms ∆Coke
Middle East/ 53% 48% 47% 42%
Africa
Asia Gasoline LPG= ∆Coke Bottoms
65% 64% 64% 58%

Cat-16-13 Page 37 2016 Cat Cracker

 Global LPG Needs
Both C3= C4s
North
24% 3% 22%
America
C4s Only
Latin
17% 33% 33% 8%
America
Europe,
C3= & C4s Middle East, 44% 8% 5%
50% Africa
Asia 19% 42% 6%
C3=
Only
33%

Cat-16-13 Page 38 2016 Cat Cracker

  Both increasing LPG olefin make and reducing
dry gas make continue to be important today
vs. 2013-2014

 More focus on bottoms upgrading

 Shifting from LCO to Gasoline

◦ 50% decrease in requests to increase LCO
◦ 20% increase in requests to increase Gasoline

 Increasing request for Iron tolerance

Cat-16-13 Page 39 2016 Cat Cracker
 Audience
Polling

What percentage of customers did not issue

a formal RFP in the past 4 years?

25% 50% 75%

 Annual
Biennial 1%
10%

No Bid
3-4 Yrs ~50%
40%

Cat-16-13 Page 41 2016 Cat Cracker

  Market Trends

 Ecat and Operating Benchmarking Trends

 FCC Bid Statistic Trends

 Paths Forward

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  FCC capacity to grow at 0.3% per year, but will see
rationalization in some areas including Europe
 Short term need for Gasoline and Octane
 Long term growth of Distillate outpaces that of
Gasoline
 Demand for LPG olefins
◦ C3=‘s for Petrochemical demand
◦ iC4s and C4= for Alky (octane)
 Increasing environmental regulations
 FCC will continue to need to be flexible to meet the
coming demands

Cat-16-13 Page 43 2016 Cat Cracker

 Next generation
Heavier crudes
high conversion
to refineries
(post DMS)
Technology Platforms
Product R&D

Incremental
Growing
demand for
petrochemicals
LCO over
demand
gasoline

Special market
drivers

Cat-16-13 Page 44 2016 Cat Cracker