Capital Cost Savings through Better Hydrogen

Management
Chris Bealing, Gert-Jan Fien, Doug Hutton, Bodo Linnhoff
Linnhoff March Ltd., Northwich, UK
Recent developments in environmental legislation and market forces are placing
pressure on the refining industry to change. Legislation to reduce sulphur in
products, markets shifting further towards lighter fuels, and the increasing drive to
heavier, sourer crudes all mean that refinery operations will have to adapt to
remain profitable.
Adapting to new challenges often presents unwelcome choices:
• Investing in new processing capacity
• Importing more expensive crudes
• Losing yield on valuable products
The questions then arise for many refiners:
1. Just what can be achieved with existing equipment?
2. What would be the pattern of investment necessary to maintain profitability?
3. How can I take advantage of new market possibilities resulting from the
changes in legislation?
Aside from considering changes in processing capacity, the hydrogen balance is
also shifting. Demands for hydrogen are increasing to supply the additional
hydrotreating capacity required to produce lower sulphur products from heavier,
sourer crudes as well as to process lighter fuel products from cracking processes.
Simultaneously, some refineries are reducing naphtha reforming to meet aromatics
limits, a consequence of which is less hydrogen generation. To re-balance supply
with demand, investments are widely planned for new hydrogen plants and
hydrogen recovery units.
A lower (capital) cost alternative is hydrogen management. A fresh approach
building on Linnhoff March HydrogenPinch™ technology incorporating the
economics of hydrogen supply, process yield and capital investment, leads to
practical and economically viable solutions that meet the new specifications
required of today’s refineries. This paper demonstrates the value of the technology
through application to real refinery problems.

Solving the Combinatorial Problem

A long list of possible process modifications can be considered in the attempt to
meet new product specifications. These range from new catalysts to new reactors
and even entirely new desulphurisation technologies to achieve the hydrotreating
capacity required. On the hydrogen side, alternatives range from additional
hydrogen generation to better purification of waste gases or outsourcing supply.
It is clear that no single technology will meet all requirements. The question then
becomes, which combination of options represents the best solution for a given
refinery? Evaluating all improvement options would require substantial engineering
time and effort without necessarily identifying the optimum combination of
improvements or addressing all bottlenecks and inefficiencies in the existing
hydrogen network.
HydrogenPinch technology forms the basis of a systematic approach to addressing
the complex, highly combinatorial problem of hydrogen system management. By
constructing a model of the refinery in terms of the hydrogen balance, key
economic parameters can be simultaneously addressed:
• Process unit economics (product value, throughput, yield, run length, etc.)
• Hydrogen supply costs (generation, purification, outsourced supply, etc.)
• Utility costs (power and fuel)
• Product constraints
• Feedstock constraints
It is therefore clear that optimising hydrogen management involves more than just
minimising the cost of hydrogen supply. The approach maximises profits by
minimising utility cost, reducing (or avoiding) investment and maximising product
yield within the given constraints. It is also an invaluable planning tool for exploring
alternative investment strategies to meet future fuels specifications.

The HydrogenPinch Approach

The HydrogenPinch approach is a rigorous, structured method for evaluating and
optimising modifications to the hydrogen system to maximise refinery profits. The
approach is centred on three targeting tools (see Figure 1).

HydrogenPinch
TTAARRGE ETSS
GETTS ARGGET
S TTAR
Structured
Approach
TARGETS
TARGETS

Composite Curves
Sensitivity Analysis

LP
NLP
MILP
Optimisation Tools

Figure 1: HydrogenPinch Targeting Tools

The Composite Curves provide a graphical representation of hydrogen sources

and sinks in the network in terms of their flow and purity. The overlap of the source
and sink curves in effect defines the optimum network of suppliers and consumers,
and therefore the minimum or “target” fresh hydrogen requirement. The curves
also help to identify the potential for such modifications as stream mixing and the
appropriate placement of purification units.
The Sensitivity Analysis has two parts, the first of which calculates the cost of
increasing the feed purity to a consumer. This is critical for determining the units
where the economic benefit of improved feed gas quality outweighs the cost in
terms of supply. A by-product is the ability to identify the units where a reduction in
feed purity may debottleneck hydrogen supply.
The second part of the Sensitivity Analysis reviews the unit outlet purities to locate
units where an improvement in gas separation may offer benefits to the hydrogen
system as a whole.
The Optimisation Tools combine defined process constraints and economic data
to determine the network offering the minimum operating cost. This includes utility
costs, process unit economics and capital investment parameters.
The structured approach outlined in Figure 2 is designed to identify project ideas
according to a staged investment plan. Each progressive Target corresponds to a
new level of expected investment, e.g. the aim of Target 0 is to identify no/low-cost
savings, while Target 3 is expected to involve significant modification.

TARGET 0 Measurements
Base Case Optimisation
- no new piping or equipment Pinch tools

TARGET 1 Site expertise

Minimum Investment
- new piping considered Pinch expertise
- no new major equipment
Simulation
TARGET 2
New Equipment
Maximise e.g. major piping, compressors,
savings new regen/generation capacity
TARGET 3
Process Modifications
Minimise - sensitivity analysis
investment - relax process constraints

Figure 2: Structured Targeting Approach

Following this structured procedure ensures that all relevant and attractive options
are evaluated, with the result that they can be laid out according to cost, savings
and compatibility in a hydrogen system RoadMap™.
The RoadMap is a key decision support tool, allowing strategic planning of project
implementation to meet specific investment criteria.
HydrogenPinch in Practice
The approach has been applied to a number of refineries in North America, Europe
and Japan. The aim in each case has not always been the same. In some cases,
the remit has been simply to identify savings in current operation; in others, the aim
has been to determine the most cost-effective means of supplying hydrogen to
meet future hydrotreating needs. The technique has also been applied in the
design phase of refinery expansion planning to determine the best combination of
process and utility system design.
The following examples are taken from recent studies, illustrating different aspects
of the methodology and their influence on the refinery in question.
Example 1
A study was carried out for a European refiner to optimise hydrogen use in their
existing system. Figure 3a shows part of the existing system.
Process sources As part of an earlier expansion, a
74% 75% 70% hydrocracker was installed with a
resulting demand for high purity
hydrogen. Gas for the unit was
Mix 71% Hydrocracker sourced from other units that, at
Drum
LP Main Complex
the time, were sending their off-
gas to the refinery fuel gas main.
65%
XS 71% Fuel
The gas is now purified in a
Process source Gas membrane unit before being fed
to the hydrocracker.
Figure 3a: Example 1 Existing Operation

The proposed modification, Process sources

74% 75% 70%
shown in Figure 3b, appears
obvious: a relatively impure
stream can be sent straight to
the fuel gas main to prevent Mix 73% Hydrocracker
LP Main Drum Complex
dilution of the hydrocracker
feed. The increase in feed X XS Fuel
65% Gas
purity to the hydrocracker 65%
complex means that more pure Process source
gas can be supplied to the Figure 3b: Example 1 Proposed Configuration
reactors, thus enabling an
increase in throughput (up to a certain limit). In this case, the increase in
throughput is worth approximately $4m per year.
The modification was, however, not immediately obvious. The complexity of the
existing network and control system means that there are limits to what can
currently be achieved. Now that the benefit has been determined, a capital project
to improve control can be evaluated.
Example 2
A US refiner was evaluating an expansion to
meet new fuels specifications. The expected at maximum H2
69 MMSCFD Plant 97%
increase in demand for hydrogen left them
facing a step-change in imported hydrogen
costs and the prospect of investment in a new
pipeline for its delivery. Refinery
Area 1
Figure 4a shows the existing refinery
configuration. Currently, gas is imported into
refinery area 2, while an on-site hydrogen 85%
plant supplies area 1. Excess gas from area 100% Refinery
1 is also fed to area 2. Current plans are that Import
Area 2
a new high-pressure pipe is built between the 12.5 MMSCFD
refinery areas to feed high purity imported gas Figure 4a: Example 2 Base Case
to area 1 to increase gas quality to a key unit.
Using sensitivity analysis a unit in area 2 was found to be using pure H2 when it
could satisfactorily operate with a significantly lower purity. At the same time, the
H2 plant in area 1 was found to be operating
80 MMSCFD H2
Plant 97%
below its nameplate capacity. Considering
11 MMSCFD these two facts independently has no value.
However, considered together, the potential for
savings was significant.
Refinery
Area 1 Optimising the network with respect only to
hydrogen system operating cost, results in the
85%
scheme shown in Figure 4b. Here, a new
compressor and piping is required to feed the
100% Refinery
Import extra gas generated in the hydrogen plant to
Area 2
2 MMSCFD the key unit in area 2. This modification is
worth $3.4m per year.
Figure 4b: Example 2 Solution 1
If the network is optimised including process
H2 80 MMSCFD
Plant 97% unit economics, the solution is quite different.
Figure 4c shows that with minimal investment in
250#
95%
new piping, the extra gas generated in the area
Users
1 H2 plant can be fed through existing piping to
HD1
200#
area 2. The gas import saving is reduced to
88% $2.8m per year, but hydrogen purity in the area
Others
Users 1 headers has increased. The HDS unit, which
1760#
91% is key to meeting future fuels specifications, can
HDS now be fed with gas 1.5% purer. It is estimated
87% that this is worth a further $3m per year.
100% Refinery
Import In all, a RoadMap of 14 projects was developed
Area 2
3 MMSCFD combining yield and operating cost savings of
Figure 4c: Example 2 Solution 2 $6.9m per year.
Example 3
Here, the refinery was exploring options for meeting future fuels specifications
including the design of new
processing units. One HD1
alternative under 25 MMSCFD
73%
investigation was a revamp HD2 RFG
to increase throughput in an 73%
25 MMSCFD
existing hydrotreater. HD3
Figure 5a shows that to H2 Plant
meet the 20% higher or
PSA 95%
demand for H2 in unit HD2,
a new purification unit was Figure 5a: Example 3 Base Case
planned.
A targeting analysis showed that an alternative source of hydrogen is already
available. A hydrotreater with an 80% pure purge had not previously been
recognised as an alternative due to its (relatively) low purity.
100% 80% Figure 5b shows the result of a
HD4
X RFG
network optimisation based
8 MMSCFD purely on hydrogen system
HD1
25 MMSCFD operating cost. In this solution,
73%
HD2 RFG the purge from HD4 is fed
73% directly to HD2 reducing the
20.5 MMSCFD
HD3 demand from the compressor,
4.5 MMSCFD
RFG which is debottlenecked by
Figure 5b: Example 3 Solution 1 18%.
A full optimisation including the economics of additional production in HD1 and
HD2 showed that feed purity was more valuable in HD1, Figure 5c shows the
optimum network where the feeds of HDs 1, 2 and 3 are rearranged such that the
HD4 purge is fed to HD1 and HD2. HD3 receives the same feed purity as before.
In this case, the optimal
100% 80%
solution provides savings in
capital avoidance, operating
HD4
X RFG

8 MMSCFD
cost and yield. The operating HD1
25 MMSCFD
cost savings result from 76% 73%
HD2 RFG
debottlenecking the 73%
compressor by 7%. In 23 MMSCFD 73%
HD3
practice, this is unlikely to be 2 MMSCFD 2.5 MMSCFD
RFG
realised as a power saving. A
more likely scenario is that the Figure 5c: Example 3 Optimal Solution
compressor discharge pressure would be increased to provide an even higher
hydrogen partial pressure in the process units. The saving would therefore be
realised in yield benefits.
Summary
Changing legislation and market forces are making dedicated hydrogen
management vital for refinery profitability. Refiners as well as industrial gas
suppliers can gain a competitive edge using HydrogenPinch technology.
The systematic approach built on HydrogenPinch technology has been
demonstrated to maximise profits by:
• Reducing or avoiding capital investment in new hydrogen capacity
• Increasing yields and run lengths
• Minimising operating costs.
Typically, the operating and capital cost savings amount to 50 to 200 times the
engineering costs of applying this technique.
The targeting and optimisation tools at the core of the technology ensure that all
constraints are satisfied while simultaneously evaluating and comparing all
economic solutions.
The structured nature of the method leads to development of an investment
strategy RoadMap enabling refinery management to achieve their goals within their
specific investment criteria.
The examples given in this paper illustrate the sort of non-intuitive solutions that
are generated by such an analysis.