Process development for Tier 3 low Hoekstra Trading LLC

421 Janes Ave. Unit 102

Sep 8, 2018

sulphur gasoline
Bolingbrook, IL 60440
+1 630 330-8159
George.hoekstra@hoekstratrading.com

Process development for Tier 3 low sulfur

gasoline
George Hoekstra Hoekstra Trading LLC

Gasoline sulfur is being reduced in the United States to meet the EPA’s Tier 3 standard which

G
asoline sulphur is being reduced
requires an annual inaverage
the ofOctane
10 ppm sulfur by 2020.
United States to meet the EPA’s Tier 3 When refiners desulphurise their gasoline to
standard which requiresInan2015, anticipating a need for better data to help refiners make decisions, Hoekstra Trading
annual average 10 ppm, octane will be destroyed for reasons
and C Solutions Ltd. sponsored a 3-year research program to improve the understanding of the
of 10 ppm sulphur by 2020. gasoline desulfurization process explained below. ofWe
and the economics Tier 3will see, This
gasoline. in overview
the nextof the183-
In 2015, anticipating a needyear
forproject
better data toin 3months,
is presented parts: a large reduction in the octane supply
help refiners make decisions, Hoekstra
• The business Trading
case capacity of North American refineries.
and C Solutions Ltd. sponsored • The a process
three-yeardevelopment project
The demand for octane in the US, and the
• Tier 3 strategy and economics.
research program to improve the understand- octane price, continue to rise. Figure 2 shows the
ing of the gasoline desulphurisation process and US premium – regular retail price differential,
the economics of Tier 3 gasoline. This
The business
Hoekstra
overview
Trading LLC case which is the average pump price of high-octane Sep 8, 2018
of the three-year project is 421
presented
Janes Ave. Unit 102in three gasoline minus the price of regular gasoline.
Bolingbrook, IL 60440
parts: +1 630 330-8159
Gasoline sulfur in North America
For decades, the premium-regular retail price
George.hoekstra@hoekstratrading.com
Gasoline sulfur reduction toward differential
10 ppm haswas
been10 cents
slow perAmerica.
in North gallon Figure
in the1 shows
United the
• The business case US average ppm sulfur in gasoline States butby things
which, have
regulation, changed.
has been 30 ppm maxThesince
premium
2012.
• The process development project differential has risen steadily, and this trend is
EPA gave the industry 6 years to achieve a 10 ppm sulfur average by 2020. The chart shows that
• Tier 3 strategy and economics.
sulfur has been creeping down by 2 ppm per year. But this still leaves a gap of 14 ppm more
sulfur removal to be accomplished by 2020.
The business case
Gasoline sulphur in North Refiners will be taking steps to close that gap to zero during the next year.
America
Gasoline sulphur reduction Octane
When refiners desulfurize their gasoline to 10 ppm, octane will be destroyed for reasons
toward 10 ppm has been
explained below. We will see, in the next 18 months, a large reduction in the octane supply
slow in North America. capacity of North American refineries.
Figure 1 shows the US
average ppm sulphur in The demand for octane in the US, and the octane price, continue to rise. Figure 2 shows the US
premium – regular retail price differential, which is the average pump price of high-octane
gasoline which, by regula-
gasoline minus the price of regular gasoline.
tion, has been 30 ppm max
since 2012. Figure 1 US annual average ppm sulfur in gasoline
EPA gave the industry USaverage
Figure 1 US annual premium - regular
ppm sulphur retail
in gasoline price
six years to achieve a 10
differential
1
ppm sulphur average by
$0.50
2020. The chart shows that
sulphur has been creep- $0.40
Dollars per gallon

ing down by 2 ppm per $0.30

year. But this still leaves
$0.20
a gap of 14 ppm more sul-
phur removal to be accom- $0.10
plished by 2020. $0.00
Refiners will be taking
1995
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1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
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steps to close that gap to

Figure 2 US premium - regular retail price differential
zero during the next year. Figure 2 US premium – regular retail price differential

www.digitalrefining.com/article/1001528
For decades, the premium-regular retail price differential was 10 cents per gallon in the United
States but things have changed. The premium differential has risen steadily, and this trend is
unlikely to be reversed in the foreseeable future. The differential where I live, near Chicago,2018 1
September
was $1/gallon in the summer of 2018.
Bolingbrook, IL 60440
+1 630 330-8159
George.hoekstra@hoekstratrading.com

This is why we believe an

octane/sulphur squeeze is
coming in North America.

The process development

project
Foreseeing this in 2015,
Hoekstra Trading, C
Solutions, and our multi-cli-
ent group initiated a process
development project to bet-
ter understand the gasoline
desulphurisation process,
and especially octane loss, in
deep desulphurisation.

Pilot plant and laboratory

studies of gasoline
desulphurisation
Ninety-eight percent of gas-
oline sulphur comes from
fluid catalytic cracker (FCC)
Figure
Figure 3 Hydroprocessing
3 Hydroprocessing pilot plants
pilot plants at C Solutions,
at C Solutions, Thessaloniki,
Thessaloniki, Greece Greece gasoline. This is the stream
that must be desulphur-
ised to reduce the sulphur of
The pilot plant studies showed our clients, for the first time, how much octane blendedwill
gasoline from 30 to
be destroyed
10 ppm. In most cases, this
when their gasoline is desulfurized to 10 ppm. Figure 4 is a chart of gasoline octane versus
is done by fixed-bed, selec-
gasoline sulfur for the gasoline desulfurization process. We call this the tive “performance curve”,
hydrotreating of FCC
because it shows the most important performance feature of the process which is to remove
gasoline.
sulfur with minimum octane loss. The higher the performance curve, the Figure better. 3 shows the pilot
plants in the laborato-
ries of C Solutions Ltd. in
Thessaloniki, Greece which
our client group used to
study the gasoline desul-
phurisation process. They
are essentially small-scale
versions of the units that
desulphurise FCC gasoline
in refineries.
Figure 4 The performance curve from pilot plant testing The pilot plant studies
showed our clients, for the
unlikely to be reversed in the foreseeable future. first time, how much octane will be destroyed
The differential where I live, near Chicago, was when their gasoline is desulphurised to 10 ppm.
$1/gallon in the summer of 2018. Figure 4 is a chart of gasoline octane versus gas-
North American refiners still have a long way oline sulphur for the gasoline desulphurisation
to go to meet the Tier 3 sulphur requirement. 4 process. We call this the “performance curve”,
Gasoline sulphur must still go down a lot, and because it shows the most important perfor-
that means octane supply will go down, and mance feature of the process which is to remove
octane cost will go up, while octane demand and sulphur with minimum octane loss. The higher
octane price are also going up. the performance curve, the better.

2 September 2018 www.digitalrefining.com/article/1001528

 from all our pilot plant tests, and from field tests on 10 commercial units.

In Figure 5 we see the wt% olefins distribution, charted vs. carbon number, for a feed (the blue
curve) and the product (the orange curve), for one of those units.
As we move to the left on
this chart, increasing reac- 10
9
tion severity, we are remov-
8
ing the slowest-reacting 7

wt% olefins
sulphur compounds to get 6
down below 10 ppm, and the 5
feed 4
octane loss accelerates. This
product 3
is because high-octane ole-
2
fins are being saturated to 1
low-octane paraffins, in par- 0
allel with sulphur removal. 3 4 5 6 7 8 9 10 11 12 13
Historically the process Carbon number
has operated in the “normal Hoekstra Trading LLC Sep 8, 2018
421 Janes
Figure Ave. Unitdistribution
5 Olefins 102 by carbon number for posttreater feed and product
operating window”, in the Figure 5 Olefins distribution by carbon number for post-treater feed and product
Bolingbrook, IL 60440
+1 630 330-8159
upper right part of the chart Olefin conversion is occurring across the full range of carbon
George.hoekstra@hoekstratrading.com numbers. The total conversion is
where octane loss is mod- 51 wt% and the octane loss is 7 RON which is more than this refiner can afford to lose. This
refiner is making a capital
10 investment to reduce octane loss.
erate. The acceleration of
9
octane loss at low gasoline Figure 5 shows the olefins
8 distributions for another unit, this one is experiencing 25% olefin
sulphur is much greater than conversion and 2 octane7loss.
Wt% olefins

was anticipated when the 6

Tier 3 standard was set. This 5
feed 4
means full implementation
product 3
of the Tier 3 standard will
2
reduce the US octane sup- 1
ply by more than has been 0
expected. 3 4 5 6 7 8 9 10 11 12 13
Carbon number
Commercial field tests
Figure 6 Olefins distribution by carbon number for posttreater feed and product
We then worked with several Figure 6 Olefins distribution by carbon number for post-treater feed and product
refiners doing commercial 6
field tests to determine whether Thethis also the
chart shows occurs
reason for lowerFigure 6 on
octane loss shows
this unit,the olefins
it is because distributions
the C5 olefins are not being for
converted. In this
in commercial gasoline desulphurisation unit, the C5-olefins
units. another are split out and
unit, bypass
this one theisdesulfurization
experiencing reactor,25%
saving olefin
octane.
A key part of the pilot plantTheandfield field tests is
tests confirmed conversion
the pilot and 2 that
plant studies, showing octane loss.
the octane loss for Tier 3 sulfur will be
a detailed chemical analysis thatmuch more than has been
quantifies theexpected. The chart shows the reason for lower octane
amount of every compound in gasoline. We have loss on this unit, it is because the C5 olefins are
Tier 3 gasoline strategy and economics
measured 759 different compounds in gasoline not being converted. In this unit, the C5-olefins
Our pilot plant studies, field tests, and detailed chemical analyses produced a powerful new database
streams. Doing the 759-compound for refinersanalysis
who want toon improvearetheirsplit out and
Tier 3 gasoline strategy.bypass
To providethe
gooddesulphurisation
tools for easy use of
feeds and products shows exactly what
the new chemistry
information, reactor,
we developed saving octane.
three spreadsheet models.
is happening in the desulphurisation reactor. We
Three spreadsheet models The field tests confirmed the pilot plant studies,
ran the test on feeds and products fromone
Figure 6 shows our showing
allspreadsheet that the
model that calculates octane
a refiner’s loss for
performance curveTier 3 sulphur
as a function of
pilot plant tests, and from fieldfeed quality,
tests onfeed10cutcom-
points, splitter
willefficiency
be much and more
catalyst selectivity,
than hasforbeen any gasoline posttreater,
expected.
given an analysis of the feed. This spreadsheet has become popular among our clients to provide more
mercial units.
accurate estimates for Tier 3 strategy studies.
In Figure 5 we see the wt% olefins distribution, Tier 3 gasoline strategy and economics
charted vs. carbon number, forTheaoctanefeedof(thea feed is calculated from the 759-compound distribution using the industry’s best-
blue Our pilot plant studies, field tests, and detailed
available octane model. For purposes of modeling octane loss in the process, the distribution is rolled
curve) and the product (the orange
up into ten curve),
lumps whichfor chemical
represent the ten keyanalyses
reaction pathsproduced
that dominate a powerful
octane loss. Thenewten data-
lumps
one of those units. are displayed in the INPUTS section base forupper
in the refiners who
left portion want
of the to improve their Tier 3
worksheet:
Olefin conversion is occurring across the full gasoline strategy. To provide good tools for easy
range of carbon numbers. The total conversion use of the new information, we developed three
is 51 wt% and the octane loss is 7 RON which is spreadsheet models.
7
more than this refiner can afford to lose. This
refiner is making a capital investment to reduce Three spreadsheet models
octane loss. Figure 7 shows one spreadsheet model that calcu-

www.digitalrefining.com/article/1001528 September 2018 3

George.hoekstra@hoekstratrading.com

Feed Hoekstra gasoline desulfurization process model

12 INPUTS CONTROLS OUTPUTS ppm sulfur section in the upper left por-
10 30 50 tion of the worksheet.
Feed component
lumps Feed 12 Controls in the lower left
apricots 1.81 0.0 0.00 0.00 0.00 corner allow the user to eas-
banannas 6.74 -1.0 -3.54 -3.30 -2.83 ily adjust splitter efficiency,
-2.0 new process with splitter
lemons 5.85 -0.44 -0.41 -0.35
-3.0 catalyst selectivity, and feed

Δ RON
goldenrods 2.08 -4.0 -0.73 -0.44 -0.36
new process no splitter
tangerines 1.55 -5.0 -0.84 -0.56 -0.35 end point. Olefin conversion,
roses 1.89 -6.0 -0.24 old -0.09 -0.02
process with splitter and octane of the product,
-7.0
potatoes 0.95 -0.07 -0.02 -0.01
-8.0 are calculated as a function
pumpkins 1.55 0 10 20 30 40 50 60 -0.31 old process
-0.12 no-0.03
splitter
geraniums 5.70 -0.11 -0.06 0.00 of product sulphur to pro-
product sulfur ppm
mangoes 7.80 -1.2 -0.2 0.0 duce the performance curves
splitter 100 old process no splitter -7.4 -5.2 -4.0 TRUE which are charted in the out-
selectivity 140 old process with splitter -3.9 -1.9 -1.2 TRUE
heavy tail 100 new process no splitter -4.5 -3.6 -2.8 TRUE
put section for four cases:
s plitter = % of C5's s plit out of HDS feed new process with splitter -2.0 -1.2 -0.8 TRUE the solid curves are for units
s electivity = % of old proces s olefin retention treating full range FCC gas-
heavy tail = % of meas ured heavies in the feed
oline feed, and the dashed
curves are for units with
Figure 7 spreadsheet model for calculating the performance curve
Figure 7 Spreadsheet model for calculating the performance curve splitters; and each of those
Controls in the lower left corner allow the user to easily adjust splitter efficiency, catalyst selectivity, and is calculated for a base cata-
feedlates
end point. Olefin conversion,
a refiner’s performance and octanecurve
of the product, are calculated as
as a function a function
lyst of product
selectivity (old process, black curves) and an
sulfur to produce the performance curves which are charted in the output section for four cases: the
of feed quality, feed cut points, splitter efficiency improved catalyst selectivity (new process, purple
solid curves are for units treating full range FCC gasoline feed, and the dashed curves are for units with
and catalyst selectivity, for any gasoline post- curves).
splitters; and each of those is calculated for a base catalyst selectivity (old process, black curves) and an
treater,
improved catalystgiven an analysis
selectivity of the
(new process, feed.
purple This spread-
curves). To help our clients understand their competitive
sheet has become popular among our clients to position, we gathered data on the configuration of
To help our clients understand their competitive position, we gathered data on the configuration of all
provide more accurate estimates for Tier 3 strat- all FCC refineries in the United States and sorted
FCC refineries in the United States and sorted them into three categories as shown in Figure 8, which is
partegy
of our studies.
second spreadsheet model. them into three categories as shown in Figure 8,
The octane of a feed is calculated from the which is part of our second spreadsheet model.
759-compound distribution using the industry’s In places where 10 ppm sulphur gasoline has
best-available octane model. For purposes of been produced reliably and consistently, most
Hoekstra
modellingTrading octane loss LLC in the process, the distribu- refineries are category 3 refineries. For Sep example,
8, 2018
421 Janes Ave. Unit 102
tion is rolled up into ten lumps which represent in the US west coast district, 86% of FCC gasoline
Bolingbrook, IL 60440
the
+1 630ten key reaction paths that dominate octane is produced in refineries that have high-pressure
330-8159
loss. The ten lumps are displayed in the INPUTS FCC feed pretreater or hydrocrackers.
George.hoekstra@hoekstratrading.com

8
THREE FCC REFINERY CONFIGURATIONS
Category 1 Cat Post-
refinery cracker treater

Category 2 Pre- Cat

refinery 20000
treater cracker
22 10
PPM S PPM S
PPM S
Octane destruction

Category 3 Pre- Cat Post-

refinery treater cracker 250 treater
PPM S $7.0

$billion/yr

Figure 8 Three categories of FCC refineries

Figure 8 Three categories of FCC refineries

In places where 10 ppm sulfur gasoline has been produced reliably and consistently, most refineries are
4 category 3 refineries. For example, in the US west coast district, 86% of FCC gasoline
September 2018 is produced in
www.digitalrefining.com/article/1001528
refineries that have high-pressure FCC feed pretreater or hydrocrackers.

EPA’s Regulatory Impact Analysis, and industry studies that estimated the economic impact of the Tier 3
 EPA’s Regulatory Impact Analysis, and indus-
try studies that estimated the economic impact of
the Tier 3 standard assumed that all FCC refiner-
ies in the US would make capital investments to
become Category 3 refineries. But few of these
investments have been made. Today, even count-
ing west coast refineries, fewer than half the FCC
refineries in the USA fall into category 3. This
is the first reason we’ve been predicting much
larger octane loss than the industry has been
anticipating. Category 1 and category 2 refineries
will face higher octane loss and cost.
The second reason is that US refineries like
to vary their crude slates and run opportunity
crudes. Category 3 refineries have flexibility for
handling variable feeds and optimising yields,
even when constrained by clean fuels specifica-
tions. By comparison, category 1 and category 2
refineries will have difficulty making 10 ppm sul-
phur gasoline consistently with varying crude
slates.
Our third spreadsheet is a desulphurisation
model that calculates unit severity requirements
for 10 ppm sulphur as a function of feed and pro-
cess variables using the 759-compound analysis
and a sulphur speciation analysis of the feed.
Tier 3 strategy options
Our clients are using these models today to
design new units and improve decision-mak-
ing for Tier 3 gasoline. Knowing the position of
your performance curve is an essential first step.
Strategic options include new-build units, unit
revamps, new catalysts, new process licensors,
and sulphur credit strategies.
For example, one of our clients decided to build
a new grassroots unit using Haldor Topsoe’s new
High Octane Technology (HOT™).
Another client decided on a unit revamp after
calculating an expected payout time of 18 months
to improve his performance curve.
Another client is making plans to produce sub-
10 ppm sulphur gasoline and generate credits for
future sale to others.
Most of our clients have done, or are doing step
tests on their units, and using our lab analyses
www.digitalrefining.com/article/1001528
to define and improve their performance curves.
Some are buying their own new lab instruments
to enable routine in-house use of these 21st cen-
tury analytical tools.
Market factors
We are part of a growing network of refiners,
suppliers, and other market players who together
bring expertise in all aspects of the fuels busi-
ness to our client group. We encourage open
sharing of information, to the maximum extent
possible. Clients benefit from open access to
up-to-date knowledge on trends in octane supply
and demand, sulphur credit trading, octane pric-
ing, sulphur credit pricing, and fuels regulations,
in addition to our ongoing program of pilot plant
experiments and laboratory studies.
Our Tier 3 gasoline strategy and economic
studies show that well- prepared refiners will
reap big benefits when the day of reckoning
comes for buying or selling Tier 3 sulphur credits.
Conclusions
1) An octane/sulphur squeeze is coming
2) Octane loss for Tier 3 gasoline will be more
than has been expected
3) Well-prepared refiners will reap big benefits
when the day of reckoning comes for buying or
selling Tier 3 sulphur credits.
Our clients include refiners, catalyst suppli-
ers, process licensors, and investment companies
who are interested in the refining business.
All our work is available to anyone in the form of multi-client
reports with attachments and spreadsheet models at a small
fraction of their cost.
LINKS
More articles from: Hoekstra Trading
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Catalysts & Additives
Sulphur Removal and Recovery
September 2018 5