Originally appeared in:

November 2012, pgs 61-70.

Used with permission.

Bonus Report Refining Developments

L. Wisdom, J. Duddy and F. Morel,
Axens, Princeton, New Jersey

Consider new technologies to increase

diesel yield from bottom-of-the-barrel products
As crude oil and product prices continue to climb, there are increase in residue hydrocracking worldwide, is DC still the
economic incentives for refineries to increase the total distillate best option for a US-based refinery?
yield with increased selectivity toward diesel fuel. The debate
continues over the pros and cons of simply adding a new de- Case history 1. The following case history investigates an ex-
layed coker vs. a residue hydrocracker upstream of an existing isting 100,000-bpsd refinery processing 100% Arabian Heavy
delayed coker to improve overall liquid yield. The following crude. Expansion studies were conducted using both Arabian
commercial examples will explore both sides on how to find Heavy crude and Athabasca bitumen, with properties as listed
more distillates from every barrel of oil processed. in Table 1.
Fig. 2 is the front-end section of a typical refinery configura-
BACKGROUND tion; it uses a delayed coker to process the entire VR. Straight-
The US has the greatest concentration of delayed cokers in run (SR) and delayed coker distillates are processed into naph-
the world. Of the 130 refineries processing 17.8 million bpd tha, diesel and fluid catalytic cracking (FCC) feed pretreat
(MMbpd) of crude oil, 60 of these refineries use delayed coking hydrotreaters. Steam-methane reforming (SMR) is used to
(DC) to destroy vacuum residue (VR) and to increase the yield generate hydrogen.
of distillates for further processing into transportation fuels.
The first delayed coker came online in 1929 at the Standard
Oil of Indiana refinery located in Whiting, Indiana. At that time,
crude oil was selling for $1.27/bbl in current dollars. Since then,
the refining industry has gone through various economic cycles.
The most recent cycle started in 2000 with a consistent rise in
the price of crude oil, which is about $100/bbl for WTI. In ad-
dition, two major shifts have occurred in the energy market;
natural gas prices started declining in 2008 due to new discov-
eries, and the gasoline-to-diesel margin reversed in 2005 with
diesel priced higher than gasoline. As a result of these changes,
a study was conducted to explore how these shifts would influ-
ence a refiner’s decision on adding more crude capacity via a
refinery expansion.

US MARKET FOR DELAYED COKING

In 2010, the US had 60 delayed cokers as compared to 11 in
Europe, 4 in the Middle East and 27 in Asia-Pacific. In the US
market, delayed coking was the preferred choice for destroying
the VR from medium and heavy crude oil. Of the 60 delayed
coking units in the US, 55% in terms of capacity are located in
PADD 3 (US Gulf Coast) and 13% are located in the PADD
2 market (US Midwest). The vast majority of these delayed
coking units (DCUs) were installed when crude oil was below
$20/bbl. In the last 10 years, Brent and WTI prices have risen
at an unprecedented rate.
Historically, refineries have added incremental DC capac-
ity as part of refinery expansions because it was considered
to be low-investment, well-known and economically attractive Fig. 1. Delayed coker at Husky Energy’s upgrader at Lloydmininster,
Saskatchewan, Canada.
option. But, with the new changes in market prices and the
HYDROCARBON PROCESSING November 2012
 Refining Developments

Two expansion configurations were investigated for this DCU is still capable of processing the entire unconverted VR.
case study. The first case (Case 1) adds an additional 100,000
bpsd of Arabian Heavy crude and duplicates the existing Case 3. The final case (Case 3) examines the effect of switch-
27,200-bpsd delayed coker. The expansion brings the total ing from Arabian Heavy Crude to Athabasca bitumen (DilBit).
crude throughput to 200,000 bpsd. The battery limits are This is a variation of Case 2 (see Fig. 3) with the addition of a
shown in Fig. 2; it includes the associated offsite and utilities. residue hydrocracker ahead of the existing DCU. Due to the
It does not include the FCC unit or the post-FCC hydrotreater. high VR content in the crude, the crude rate to the refinery is
only increased from 100,000 bpsd to 150,000 bpsd. In all cas-
Case 2. The second case (Case 2) adds a 54,400-bpsd residue es, the product streams—naphtha, diesel and vacuum gasoil
hydrocracker upstream of the existing delayed coker, which (VGO)—are treated to the same level of product quality.
remains unchanged, as shown in Fig. 3. In this configuration,
the residual hydrocracking unit is a single-train plant with a ECONOMIC BASIS
single reactor operating at 60% conversion of 975°F+ residue For this updated study, pricing data from the US Energy
to distillates. A second variation of Case 2 (Case 2A) was also Information Agency (EIA) for the US as a whole and also for
investigated with a variation in which the conversion level is the PADD 2 (Midwest) and PADD 3 (Gulf Coast) were exam-
increased to 70% and the crude throughput is increased to ined. The US prices for Brent, WTI and industrial natural gas
300,000 bpsd to fill the existing DCU. for the last 10 years are shown in Fig. 4. Brent and WTI have
To handle the increased feedrate and reactor severity for tracked fairly close to each other, except for the last couple of
Case 2A, two reactors, in series with inter-stage separation was years. The prices for DilBit (Athabasca bitumen) can be calcu-
required for this single-train plant. With the higher conver- lated from Western Canadian Select (WCS) synthetic crude,
sion level in the residue hydrocracker, the total Arabian Heavy which is traded in Chicago, Illinois. There is a weak correla-
crude capacity was increased to 300,000 bpsd, and the existing tion between Brent and WCS prices except when the natural
gas condensate (diluent) is removed from the WCS. To calcu-
Table 1. Options for refinery expansions late the actual price of the bitumen, the cost of natural gas con-
densate is removed from the DilBit resulting in an average net
Property Arabian Heavy Athabasca bitumen price for the Athabasca bitumen at $68/bbl when Brent crude
°API 27 8.4 is valued at $100/bbl. This bitumen price is the same price
Sulfur, wt% 2.85 4.92 as Hardisty heavy bitumen (12°API) at $68.35/bbl, quoted in
January 2012.
Nitrogen, wt ppm 1,680 3,900
Brent crude is used as benchmark crude for this study to
Ni + V, wt ppm 75 325 determine gasoline and diesel margins based on historical
CCR, wt% 7.9 13.5 trends. Natural gas prices increased from 2002 to 2005 due
C7 asphaltenes, wt% 2.5 9.5 to a large demand and supply shortage, as shown in Fig. 4.
However, in 2006, the production of additional natural gas en-
Distillation, wt%
tered the market with tight shale gas formations; this started a
IBP–350°F 15.0 – downward trend in natural gas prices. At present, the average
350–650°F 23.6 12.8
650–975°F 27.9 28.6 Light gases to gas plant
975°F+ 31.9 58.6
Naphtha Naphtha to gasoline plant
SR naphtha HTU
Light gases to gas plant H2
Crude Crude SR AGO Diesel Diesel product
SR naphtha Naphtha Naphtha to gasoline plant still HTU
HTU

H2
Crude Crude SR AGO Diesel Diesel product SR VGO VGO VGO to FCC
still HTU Vacuum
still HTU
Atmospheric
residue H2
SR VGO VGO VGO to FCC
Vacuum Vacuum Residue
still HTU residue H2
Atmospheric hydrocracking
residue H2 unit
Natural gas
H2 plant
Unconverted
Vacuum Natural gas vacuum Delayed
H2 plant
residue residue coking Coke product
Delayed unit
coking Coke product
unit
Fig. 3. Case 2 of the 100,000-bpsd refinery with residue hydrocracker
Fig. 2. Base case of 100,000-bpsd existing refinery. and expanded DCU.

HYDROCARBON PROCESSING November 2012

 Refining Developments

US industrial natural gas price is in the range of $4 to $5 per
thousand standard cubic feet (scf), or roughly $30/bbl of oil
equivalent (boe) basis.
The gasoline-to-Brent price spread (gasoline price minus
Brent crude price) is shown in Fig. 5. It reflects a general in-
crease in gasoline margins from 2000 to 2007 and then a
steady decrease thereafter. Importation of gasoline from Eu-
rope and the increase in ethanol blending into the US gasoline
pool are decreasing domestic demand for this fuel. For the last
three years, PADD 2 prices have been higher than the aver-
age US prices while PADD 3 prices have been lower than the
national average. The diesel-to-gasoline margin over the same
period is shown in Fig. 6. For this study, a price spread of $9/
bbl is assumed for gasoline to Brent crude, which equates to
$109/bbl for gasoline when Brent crude is valued at $100/
bbl for the average US market. Slightly higher prices could be
used for projects in PADD 2, based on these historical trends.
The price of diesel fuel overcame the price of gasoline in
Case 2: Add 100,000 bpsd of Arabian Heavy crude and in-
stall a residue hydrocracker, operating at 60% VR conversion
ahead of the existing delayed coker.
Case 2A: Same as Case 2, with the residue hydrocracker op-
erating at 70% VR conversion and crude throughput increasing
to 200,000 bpsd.
Case 3: Add 50,000 bpsd to the existing refinery and switch
from Arabian Heavy crude to Athabasca bitumen. In this case, a
residue hydrocracker was installed upstream of the existing DCU.
In all of the cases evaluated, the SR and cracked products
25
Whole US
PADD 2
PADD 3
20

Gasoline-Brent spread, $/bbl

2005, and it has remained higher than gasoline for the last six
years. Consequently, there is more interest from refiners to in-
crease diesel production. This would imply an increase in mild- 15
and full-conversion hydrocracking in the future. Based on the
mentioned trends, an economic basis, as shown in Table 2,
was determined.
10
STUDY CASES
A summary of the four expansion cases investigated is de-
scribed here:
Case 1: Add 100,000 bpsd of Arabian Heavy crude to the 5
existing refinery using DC as the residue conversion unit. 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Fig. 5. Gasoline-to-Brent price for US, PADDs 2 and 3: 1992 to 2012.

160
Natural gas
WTI 20
Brent Whole US
140 PADD 2
PADD 3
15
120

100 10
Diesel-gasoline spread, $/bbl
Cost, $/boe

80
5

60

40

-5
20

0 -10
Jun-00 Jun-02 Jun-04 Jun-06 Jun-08 Jun-10 Jun-12 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Fig. 4. Crude oil and natural gas prices: June 2000 to June 2012. Fig. 6. Diesel-to-gasoline prices: 1992 to 2012.

HYDROCARBON PROCESSING November 2012

 Refining Developments

were hydrotreated to meet the product specifications, as shown yield from the delayed coker is 66 vol%. This product is then
in Table 3. blended with the SR distillates and hydrotreated to meet the
product specifications, as listed in Table 3. The overall liquid
Expansion Case 1. The existing refinery crude capacity yield was 180,500 bpsd or 90.3 vol% on crude throughput,
was doubled to 200,000 bpsd with Arabian Heavy crude. The which includes liquefued petroleum gas (LPG), naphtha, die-
total VR feedrate to the delayed coker is 54,400 bpsd. The sel and VGO. The VGO is assumed to be routed to an FCC
new coker is a duplicate of the existing unit. The C5+ product unit, which has a post-hydrotreater and can meet Tier 3 gaso-
line specifications. Table 4 summarizes the breakdown of the
product yields.
Table 2. Economic basis
Item Expansion Case 2. As in Case 1, the overall refinery
Value
throughput is doubled to 200,000 bpsd and all of the VR
Operating, days per year 345
(54,400 bpsd) is routed to a single-train, single-reactor residue
Offsites and utilities cost, % of process units 50 hydrocracking unit operating at 60% VR conversion. The un-
Investment contingency, % 20 converted residue (21,922 bpsd) is sent to the existing DCU
Natural gas cost, $/thousand scf 5.00 with a nameplate capacity of 27,200 bpsd. The overall yields
from the residue hydrocracker, the downstream delayed coker
Sulfur product credit, $/metric ton 20
and hydrotreaters are listed in Table 4. All of the SR, residue
Coke product credit, $/metric ton 10 hydrocracker and coker distillates are hydrotreated to meet the
Arabian Heavy crude price, $/bbl 92.48 product quality specifications, as shown in Table 3. The overall
Net bitumen cost, $/bbl 67.85 liquid yield was 192,600 bpsd or 96.3 vol % on crude through-
put including LPG, naphtha, diesel and VGO, which is routed
Brent crude (Ref. Price), $/bbl 100
to an FCC unit.
LPG price, $/bbl 61 This case is very similar to the commercial residue hydro-
Gasoline price, $/bbl 109 cracker/DCU at Husky Energy’s Lloydminster Upgrader in
Diesel price, $/bbl 114 Saskatchewan, Canada (Fig. 7). The feed to this residue hydro-
cracker is about 34,000 bpsd of a blend Cold Lake/Lloydmin-
VGO (FCC feed) price, $/bbl 105
ster heavy residue, and it operates around 60% conversion. The
Note: Reflects prices represents typical values in the marketplace during the period entire unconverted residue from the residue hydrocracking
of 2009 to 2011 as reported by the US Energy Information Agency and by Natural
Resources Canada. unit is routed to a DCU to produce fuel-grade coke for export.

Expansion Case 2A. In this case, the residue hydrocrack-

Table 3. Product Specifications
ing unit conversion level is increased from 60% to 70%. The
Item Naphtha Diesel VGO number of reactors is increased to two in series with inter-stage
Sulfur, wt ppm 0.5 max. 10 max. 2,000 max. separation, but they still operate in a single train. The larger
reactor volume is required due to the greater feedrate and re-
Nitrogen, wt ppm 0.5 max. –
actor severity. With the higher conversion level, the refinery
Cetane number 40 min. throughput can be increased to 300,000 bpsd, which results in

Table 4. Product Yields

Case 1 Case 2 Case 2A Case 3
Feed type Arabian Heavy Athabasca bitumen
Configuration DC Resid HC Resid HC/DC Resid HC/DC
Resid HC conversion, % – 60 70 68
Yields, vol% on crude
LPG 1.81 1.79 1.2 1.49
Naphtha 24.73 25.32 25.2 14.06
Diesel 32.16 34.78 35.27 36.45
VGO 31.56 34.40 35.18 49.54
Total 90.26 96.29 96.86 101.53
Coke yield, metric tpy 3,114 1,431 1,706 1,647
H2, scf/bbl of crude* 490 800 875 1,840
Note: DC = Delayed coking
Resid HC= Residue hydrocracker
*Includes residue HC and/or DCU plus all three distillate hydrotreaters

HYDROCARBON PROCESSING November 2012

 Refining Developments

a feedrate of 81,655 bpsd to the residue hydrocracking unit;
the unconverted bottoms (24,503 bpsd) are routed to the ex-
isting DCU. The yields for this case are shown in Table 4 for
the residue hydrocracker and DCU. As before, all of the distil-
late SR and residue hydrocracked/delayed coker products are
hydrotreated. The overall liquid yield is 292,300 bpsd or 97.4
vol% on crude throughput.
Expansion Case 3. In this case, the crude type is switched
from Arabian Heavy to a Canadian DilBit based on Athabas-
ca bitumen. The feedrate to the refinery is expanded to only
150,000 bpsd of Athabasca bitumen (excluding the diluent,
which is recovered and returned to Canada). The total feed­
rate to the diluent recovery unit is 216,900 bpsd, and it con-
tains about 31 vol% of diluent. The relatively small increase in
throughput is due to the high content of VR in the feed (58.6
vol% vs. 31.9 vol% for Arabian Heavy). The feedrate to the
residue hydrocracking unit is 83,754 bpsd, and the feedrate
to the delayed coker is 27,221 bpsd. In this case, the residue
hydrocracking unit is a single train with two reactors in series
with interstage separation and operates at 68% conversion.
STUDY RESULTS
A summary of the cases processing Arabian Heavy crude
is shown in Table 4. The most severe design conditions were
associated with the cases processing the greatest percentage
of cracked stocks and the highly aromatic bitumen feedstock.
Catalyst cycle lengths were set at 30 months. The product
naphtha is routed to a catalytic reforming or isomerization
VGO to the FCC/post treater for meeting Tier 3 gasoline
specifications.
Liquid yield. In residue hydrocracking, many of the coke
precursors are hydrogenated, which results in higher liquid
yield and reduced coke production. In addition, hydrogen
consumption in the liquid product increases the API gravity,
which, in turn, leads to greater volume swell and increased
yield of transportation fuels.
As expected, the total liquid yield is a function of the resi-
due conversion level and the amount of hydrogen consumed
in the liquid product, as shown in Table 4. Case 2 shows a
6 vol% increase in liquid yield from Case 1, which is about
4.2 MM bbl/yr of additional product (LPG, naphtha, diesel
and VGO). By increasing the residue hydrocracker conver-
sion from 60 vol% to 70 vol%, the total yield increases by 6.6
vol% over Case 1, which adds an additional production of 4.6
million bbl/yr of liquid product. The additional production
translates into additional net revenue (product revenue less
feedstock cost and operating cost), as shown in Fig. 8. The
Case 1 expansion adds an additional $77 million/yr, while
Cases 2 and 2A add more than $500 million net revenue/yr.
In contrast with the higher liquid yield, the coke production
is reduced by more than 50%. Coke produced in Cases 1 and
100 600
90 Product yield of conv. unit, vol%
Incremental net revenue, $MM/yr
500
80

Incremental net revenue, $MM/yr

unit, diesel to the ultra-low-sulfur diesel (ULSD) pool and 70
400
Product yield, vol%

60
50 300
40
200
30
20
100
10
0 0
Existing Case 1 Case 2 Case 2A
refinery

Fig. 8. Product yield of conversion unit vs. incremental revenue.

2.5

2.0
Diesel/gasoline ratio

1.5

1.0

0.5

0.0
Case 1 Case 2 Case 2A
Fig. 7. Husky Energy’s residue hydrocracking unit in Lloydmininster,
Saskatchewan, Canada. Fig. 9. Diesel/gasoline selectivity for Cases 1, 2 and 2A.

HYDROCARBON PROCESSING November 2012

 Refining Developments

2 are 3,114 metric tpd and 1,431 metric tpd, respectively, in-
dicating that 54 wt% of the coke precursors were converted
in the residue hydrocracker. When the residue hydrocracker
conversion is raised to 70%, the conversion of coke precur-
sors is increased to 63 wt%, reducing the amount of coke even
further. Accordingly, Case 2A can process more feed without
major modifications to the existing DCU.
30,000
Crude dist.
Conversion unit
25,000 Hydrotreaters
Expansion investment cost, $/bbl
Selectivity to diesel fuel. Ebullated-bed residue hydrocrack-
ers are more selective to middle-distillate production than other
conversion technologies. With the margin between diesel and
gasoline expecting to increase, the selectivity becomes more
important to the refiner desiring to maximize the economic re-
turns on projects. One measure of this selectivity is the ratio of
diesel-to-gasoline production. As shown in Fig. 9, the selectivity
of the conversion unit increases from the DC scheme (Case 1)
of 1.5 bbl of diesel to 1 bbl of gasoline production to the residue
hydrocracker/DCU (Case 2—at 60% conversion) and reaches
Other the highest value 2.2 bbl of diesel to 1 bbl of gasoline for the res-
Offsites idue hydrocracker/DCU (Case 2A—at 70% conversion). For
Contingency
a 200,000-bpsd refinery, the diesel production would increase
from 64,400 bpsd (Case 1) to 70,500 bpsd (Case 2A). The in-
cremental increase of 6,000 bpsd translates into an annual rev-

20,000
enue increase of $234 million for the refinery.
15,000 Hydrogen consumption and volume swell. As shown in
Table 4, the total hydrogen consumption for the expansion in-

10,000
creases by 78% from Case 1 to Case 2A. This results in a total
volume swell increase of 6.6 vol% on crude, which equates to an
additional product of 13,200 bpsd for a 200,000-bpsd refinery.
5,000 As mentioned previously, the base price of industrial natural gas
used for this study is $5/thousand scf, which is about $30/bbl
(boe basis). With gasoline and diesel selling for $109/bbl and
0
Case 1 Case 2 Case 2A Case 3 $114/bbl, hydrogen consumption provides the refinery with an
Fig. 10. Investment costs for various expansion plans: Cases 1, 2, 7
2A and 3.

35
Case 1 6
Case 2 Case 3
Case 2A
30
5

25

4
Average US value Case 2A
IRR, %

20
IRR, %

3
15
Case 1
2
10

Case 2

1
5

0 0
0 25 50 75 100 125 150 -10 -5 0 5 10 15 20 25
Brent price, $/bbl Diesel/gasoline spread, $/bbl

Fig. 11. IRR vs. Brent price. Fig. 12. IRR vs. diesel-to-gasoline spread.

HYDROCARBON PROCESSING November 2012


100
95
Unit availability, %
90
85
80
75
A B C D E F
Commercial plants
Fig. 13. Onstream times for commercial advanced ebullated-bed
hydrocrackers in operation.1
impressive uplift of $79/bbl to gasoline (i.e., $30/bbl H2 boe to
$109/bbl for gasoline) and $84/bbl uplift for diesel production.
Alternate case when processing Athabasca bitumen.
The major results of this case are shown in Table 4. Pro-
cessing Athabasca bitumen or other heavy Canadian crudes
will provide economic advantages that include upgrading
a cheaper feedstock with low-cost hydrogen to high °API
transportation fuels.
Relative to Case 2A, Case 3 provides the highest total liq-
uid yield on crude of 101.5% of total liquid product vs. 96.9%
for Case 2A. This is due to the lower API gravity of the crude
and upgrading to about the same API gravity of the products.
This case also represents the highest production of diesel and
VGO per barrel of crude for any of the cases examined.
For all of the cases, diesel production could increase further
by adding a VGO hydrocracker during the expansion as com-
pared to adding additional cat feed hydrotreating (CFHT) ca-
pacity upstream of the FCC unit. This would also improve the
overall refinery diesel/gasoline ratio.
ECONOMIC ANALYSIS
For the economic analysis, the same basis from Table 2 will
be used. The investment cost for the expansion cases was only
for new units and associated offsites and utilities whereas, the
revenues and operating expenses were for the entire refinery.
Investment cost. Offsites and utilities were taken as a per-
centage of the total installed cost for the process units. Fig.
10 shows the investment cost breakdown for each of the in-
vestigated cases. The investment cost per barrel of crude for
the new units varied from $14,800/bpsd to $22,400/bpsd
with the delayed coker expansion at the lowest overall invest-
ment. For the expansion cases, the investment cost included
new crude and vacuum units; conversion unit (delayed coker
or residue hydrocracking unit); naphtha, diesel and VGO hy-
drotreaters, SMR hydrogen plant, sulfur plant, gas recovery
section, amine regeneration; sour-water stripping; and corre-
sponding offsites plus utilities.
HYDROCARBON PROCESSING November 2012
Refining Developments
Operating cost for ISBL. The total operating cost, includ-
ing fixed and variable operating costs, varied from $3.15/bbl
of crude in Case 1 to $4.42/bbl for Case 2. Case 3, process-
ing Athabasca bitumen, was the highest with a cost of $7.98/
bbl. The top two operating costs for the residue hydrocrack-
ing unit/DCU cases (Cases 2, 2A and 3) were natural gas plus
catalyst and chemicals vs. natural gas and electricity for the
delayed coker case (Case 1).
Rate of return. The total net annual revenues (product reve-
nue less crude cost and total operating cost) varied from $169
million for the delayed coker expansion (Case 1) to $932 mil-
lion for the residue hydrocracking/DCU expansion (Case
2A) based on an Arabian Heavy crude price of $92.48/bbl.
The product prices were $109/bbl for gasoline and $114/bbl
for diesel.
As shown in Fig. 11, the addition of a residue hydrocracker
upstream of a delayed coker is more profitable when Brent
crude price exceeds $55/bbl. As light oil prices continue to
climb, the IRR for the delayed coker expansion case falls to
zero when Brent crude reaches $115/bbl. This is due to the
low conversion (i.e., low product liquid yield) and high crude
costs. This analysis assumes a constant $/bbl discount to
Arabian Heavy crude and a constant $/bbl differential be-
tween the price of gasoline and diesel to the price of Brent
crude. History tells us that variations will occur in both light-
and heavy-crude price differentials as well as price fluctua-
tions in the finished product prices of gasoline and diesel. For
this reason, several sensitivity studies were conducted.
Sensitivity studies. During a sensitivity study, a number of
questions were asked including, “What happens if the diesel-
to-gasoline spread continues to widen?” In all cases, the IRR
climbs sharply by 6 to 7 percentage points for every $5/bbl
the margin of diesel/gasoline increases. In the US Energy In-
formation website forecast, the margins are expected to keep
climbing for the short term.
What’s the impact in processing Athabasca bitumen from
Canada relative to Arabian Heavy? The IRR doubles from 24%
in Case 2 to over 50% in Case 3. This is mainly due to the at-
tractive price of Canadian bitumen ($68.85/bbl) vs. the price
for Arabian Heavy ($92.48/bbl). The differential of $23.63/
bbl for feedstock cost provides a significant incentive for all
cases processing Athabasca bitumen.
During a review of product prices in the US market, it was
noted that higher margins for diesel fuel in PADD 2 (Midwest
market) were $2/bbl to $3/bbl. The price variations in the die-
sel/gasoline spread varied between $5/bbl to +$17/bbl with a
general increase occurring over the past five years. As shown in
Fig. 12, an increase in the price of ULSD fuel vs. gasoline pro-
vides a tremendous uplift in the IRR for the project.
A project located in the Midwest would see the IRR in-
creased by 4 to 6 percentage points, depending upon which
expansion case is selected. The same general trend is evident
when the gasoline-to-Brent crude price is increased.
Residue hydrocracking reliability. Residue hydrocracking
based on ebullated-bed technology is a mature technology, with
 Refining Developments
17 operating plants processing more than 650,000 bpsd of VR
in North America, Europe, Middle East and Asia-Pacific. The
reliability of the advanced ebullated-bed technology has im-
proved over the last 44 years since the startup of the first plant
for KNPC’s Shuaiba Refinery in Kuwait.1 Over the past 10
years of operation, the average availability of six commercial ad-
vanced ebullated-bed units was 96% (Fig. 13).1 This high level of
reliability is the direct result of nearly 200-unit years of operat-
ing experience, automation of operations, pro-active reliability
teams, improvements in the understanding of the chemistry of
asphaltene conversion and stability through R&D, and ongoing
improvements in critical equipment, components and process
instrumentation. The plot shown in Fig. 13 reflects unit avail-
ability for six operating commercial advanced ebullated-bed
units.1 Availability is defined as the actual onstream time less
planned turnarounds (typically occur once every three to six
years) and outages due to external factors (i.e., hurricanes on
the Gulf Coast).
Acknowledgment
Jim Colyar, a senior technology consultant, performed the revised internal study
for which this article is based. The authors wish to acknowledge his work and contri-
bution to heavy-oil upgrading.
Editor’s Note
1
The process is Axens’ ebullated-bed technology.
BIBLIOGRAPHY
Duddy, J., L. Wisdom, S. Kressmann, and T. Gauthier, “Understanding and
Optimization of Residue Conversion in H-Oil”, Oct. 20, 2004.
Ellis, P. J. and C. A. Paul, “Delayed coking,” AIChE 1998 Spring National Meeting,
New Orleans, March 8–12, 1998.
Largeteau, D., J. Ross, M. Laborde and L. Wisdom, “The Challenges & Opportunities of
Your objectives
Article copyright ©2012 by Gulf Publishing Company. All rights reserved. Printed in U.S.A.
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- High performance catalysts & adsorbents
- Revamps
ce technology and service provider
O 9001 – ISO 14001 – OHSAS 18001
www.axens.net
10 wppm Sulfur Gasoline,” 2011 NPRA Annual Meeting, San Antonio, March 2011.
McQuitty, B., “Status of the Bi-Provincial Upgrader: H-Oil Operation and
Performance,” IFP Seminar in Lyon, France September 1997.
US Energy Information Agency, 2012 Annual U.S. Crude Oil First Purchase Price.
Wisdom, L., E. Peer. and P. Bonnifay, “Cleaner fuels shift refineries to increased resid
hydroprocessing”, Parts 1 and 2, Oil and Gas Journal, Feb. 9, 1998.
Larry Wisdom is a senior executive at Axens in charge of
marketing the heavy-ends technologies in North America. The
current portfolio of technologies includes the hydrotreating and
hydrocracking of gasoil and residues, slurry-phase
hydrocracking, solvent deasphalting and visbreaking. During his
30 year career, he has co-authored more than 30 papers on
heavy-oil upgrading and holds two patents. Prior to joining
Axens, he worked for Hydrocarbon Research Inc. (HRI) and FMC Corp. Mr. Wisdom
graduated from the University of Kansas with a BS degree in chemical engineering
and a MBA in marketing and finance.
John Duddy is the director of heavy oil and coal technology for
Axens North America Inc. in Princeton, New Jersey. He is
responsible for Axens’ ebullated-bed technologies for upgrading
of heavy oil and coal. These technologies include H-Oil, H-Coal
and Coal/oil co-processing. Mr. Duddy has been with Axens for
32 years and holds a BS degree in chemical engineering from
Drexel University.
Frédéric Morel is an expert director adviser for Axens’
marketing, technology and tech services department. He was
formerly the manager of Axens’ hydroprocessing and conversion
technical services group and the product line manager of VGO,
resid and coal conversion. Mr. Morel has over 30 years of
experience in oil refining, having worked previously with IFP’s
Lyon Development Center as a research engineer, a project
leader of distillates and residues hydroprocessing, and the manager of the
development department. Mr. Morel holds a degree in chemical engineering from
Ecole Supérieure de Chimie Industrielle de Lyon and a graduate degree from
Institut d’Administration des Entreprises.