Terry Fearn Fuel Oil Upgrading Schemes

Economics and Project Development

5th December 2017  2017 Bottom of the Barrel Iranian Conference Tehran, Iran
© 2017 UOP Limited UOP 7200-0
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Agenda
1

1. Overview of Case
Studies

2. Summary of
Refinery Upgrade
Economics

3. Project
Development

Fuel Oil Upgrading Economics

Key Economic Drivers
BOB Upgrading
• Product Price Differentials
• Transport fuels v Fuel Oil
• Euro V v Local Prices
• Diesel v Gasoline
• Gasoline v Propylene
• BTX v Gasoline
• Capital Cost
• Local Factors
• Plot Congestion
• Cost of Finance
• Specifications
• Euro V for Gasoline, Diesel
• Fuel Oil / Pitch
New Refinery
• Crude oil price / availability
• Crude quality
• Crude v product differential
• Demands, Specifications
• Euro V for Gasoline, Diesel
• Fuel Oil / Pitch
• Capital Cost
• Local Factors
• OSBL v ISBL
• Cost of Finance
 Current Refinery Configuration 3

Kerosene
9,300

Condensate
SR Gasoil Kero
5,000
CDU 8,100
Local
Crude 60,000 Diesel
BPSD Diesel
55,000
4,493

HCU Kerosene
Condensate
AR 3,000 9,720
25,777 BPSD

LVGO
18.9 %v
HVGO
2,264 6,720
UCO
1,100

HVGO
680
Fuel Oil
VDU
HVGO
18,400 7,400 VR
BPSD 900
AR
7,377
VR VR
6,336 2,936
Asphalt

Slop Wax
2,400 VR
Only Bottom of VBU 2,500 Bitumen

the Barrel 8,900

BPSD
(BoB) is shown
AR
877 Tar/Fuel Oil
9,687
 Step 1: Moving to Euro-V Diesel 4

Naphtha
1,800
Kerosene
9,300
DHT
Condensate
SR Gasoil 25,957
Kero
5,000
CDU 8,100 BPSD
EuroV
Crude 60,000 Diesel
55,000 BPSD
Diesel
4,493

HCU Kerosene
Condensate
AR 3,000 9,720
25,777 BPSD

LVGO
18.9 %v
HVGO
2,264 6,720
UCO
1,100

HVGO
680
Fuel Oil
VDU
HVGO
18,400 7,400 VR
BPSD 900
AR
7,377
VR VR
6,336 2,936
Asphalt

Slop Wax
2,400 VR
VBU 2,500 Bitumen
8,900
BPSD

AR
877 Tar/Fuel Oil
9,687
 Step 2: Add VDU (HCU in once through mode) 5

Naphtha
1,800
Kerosene
9,300
DHT
Condensate
SR Gasoil 27,916
Kero
5,000
CDU 8,100 BPSD
EuroV
Crude 60,000 Diesel
55,000 BPSD
LVGO Diesel
4,161 2,291

Kerosene
A 3,326
HCU
Condensate
AR 3,000 11,999
25,777 BPSD
Revamp will include
LVGO HVGO converting to once
2,264 7,400 through operation

HVGO UCO
680 3,759 13.3 %v
VDU
HVGO
18,400 4,599
BPSD
AR
7,377 VR Options
VR
6,336 1 To Fuel Oil

Slop wax 2 External Processing

Slop Wax
contains ~50% 2,400 3 To Bitumen
VDU A
VGO range
material
12,777
Condensate BPSD
3,000
Condensate
processed in
VR
new VDU
4,017
 Step 3: Add HCU 1st Stage for High Conversion 6

Naphtha
1,800
Kerosene
9,300
DHT
Condensate
SR Gasoil 25,625
Kero
5,000
CDU 8,100 BPSD
EuroV
Crude 60,000 Diesel
55,000 BPSD
LVGO Diesel
4,161 7,070

A
HCU Kerosene
Condensate
AR 3,000 11,999
25,777 BPSD
Revamp will include
LVGO HVGO producing EuroV
2,264 7,400 diesel from HCU

HVGO UCO
680 51 7.6 %v
VDU
HVGO
18,400 4,599
BPSD
AR
7,377 VR Options
VR
6,336 1 To Fuel Oil

Slop wax 2 External Processing

Slop Wax
contains ~50% 2,400 3 To Bitumen
VDU A
VGO range
material
12,777
Condensate BPSD
3,000
Condensate
processed in
VR
new VDU
4,017
 Step 4: Add SDA 7

Naphtha
1,800
Kerosene
9,300
DHT
Condensate
SR Gasoil 25,625
Kero
5,000
CDU 8,100 BPSD
EuroV
Crude 60,000 Diesel
55,000 BPSD
LVGO Diesel
4,161 8,109
B

A
HCU Kerosene
Condensate
AR 3,000 14,916
25,777 BPSD

LVGO HVGO
2,264 7,400
UCO
254
HVGO
680 SDA DAO
VDU B
2,917
HVGO
18,400 4,599

AR
BPSD
SDA
3.4 %v
7,377
VR 10,607
6,336 BPSD
SDA Pitch Options
Slop Wax
2,400 A 1 To Fuel Oil
VDU
SDA Pitch
2 External
7,690
12,777
Condensate BPSD 3 To Bitumen
3,000

VR
VCMStudy.ir 4,017
 Step 5: Slurry HCK 8

Naphtha
1,800
Kerosene
9,300
DHT
Condensate
SR Gasoil 25,625
Kero
5,000
CDU 8,100 BPSD
EuroV
Crude 60,000 Diesel
55,000 BPSD
LVGO Diesel
4,161 8,467
B C

A
HCU Kerosene
Condensate
AR 3,000 15,574
25,777 BPSD

LVGO HVGO
Diesel
2,264 7,400
5,169
ISO Off Test
501
HVGO
680 SDA DAO
VDU B
2,920
HVGO
18,400 4,599
BPSD
AR SDA
7,377
VR 10,618
6,336 BPSD
LVGO
Slop Wax 655
2,400 A
Slurry
VDU HCK
SDA Pitch
7,698
C
12,777 7,698
Condensate BPSD BPSD
3,000
No Fuel
VCMStudy.ir
VR
4,017
Oil Slurry Pitch
88 MT/D
 9
Summary of Fuel Oil Upgrading Concept Study
Case 1 2 3 4 5
Add DHT Add DHT & VDU Add DHT & VDU Add DHT, VDU, SDA Add DHT, VDU, SDA,
& revamp Isomax & revamp Isomax & revamp Isomax Slurry HCU &
Scope (to single stage OT) (add new 1st stage) (add new 1st stage) revamp Isomax
(add new 1st stage)

Complexity Lowest Highest

Δ Gross Product
Value vs Base,
MM USD/year 42 102 150 186 238

Estimated
3.5 3.2 4.4 4.4 4.8
Payback, years
Estimated CAPEX,
+ 150 350 664 822 1146
MM USD
1) CAPEX estimates are Total Installed Cost (TIC), including 50 % allowance for OSBL costs. US Gulf Coast.
2) Gross Product Value is based on typical Persian Gulf product prices

Payback < 5 year for all options

Diesel production is 100 % EURO 5, no HS gasoil production
Hydrocracker Revamp in Step 2 consistent with future Steps 4, 5
Each phase is consistent with the next – “no regret” investment
Phased investment for optimal return on capital invested
 10
Summary of Fuel Oil Upgrading Concept Study
- Phased Investment
Phase 1 2 3 4 5
Add DHT & VDU Add DHT, VDU,
Add DHT & VDU Add DHT, VDU,
& revamp Isomax SDA & revamp
Scope Add DHT & revamp Isomax
(add new 1st Isomax (add new
SDA, Slurry HCU &
(to single stage OT) revamp Isomax
stage) 1st stage)
Δ Gasoline No Change +13.0% -5.2% +3.3% +1.7%
vs. prior phase, %

Δ EURO 5 Diesel Base + 1,117 +8.7% +17.3% +4.4% +16.8%

vs. prior phase, kMTA / %

Δ Fuel Oil Yield No Change -22.8% -42.7% -54.6% No Product

vs. prior phase, %
Δ Gross Product Value,
MM USD/year 42 60 48 36 53
vs. prior phase, kMTA
Estimated Payback
3.5 3.4 6.5 4.4 6.1
PER PHASE, years
Δ CAPEX vs. prior phase
147 203 314 158 324
MM USD

Opportunity to phase investment to suit capital budget

- reduces fuel oil, increase EURO 5, step by step
Fuel Oil is already below 10% by Phase 3
 11

Project Development:
Front End Analysis Determines Project Value

Owner’s influence on
Project NPV
Influence on NPV

Expenditures
Design Operations

Front end definition, key to maximizing project economics

 12

Major Capital Project Work Flow

Basic Detailed
Configuration Process
Design & Design & Start Up
Study Optimisation
FEED Construction

UOP Engineering and Technical Services

Configuration Studies Design Review

Managing Licensor Training and Start-up

FEED Services On-going Technical Services

Front End Work Maximize Project Economics

• Optimize Process Units • Ensure Business objectives are met
Integration and Basic Design
• Minimize project schedule

Optimized front-end work minimizes project schedule

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Example Mega-Project Cost Build Up

M$
4000

3000

2000

1000

0
Conf ig Feed Sch A Licence ISBL OSBL C & WC

• Front End Engineering Services (Including Configuration Study Work) ~$ million

• Basic Design Packages ~$$ million
• License fees for provided technology ~$$ million
• Engineering, procurement and construction ~$$$$$$$$$$... million
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Example Project Cost Build Up

M$
4000

3000

2000

1000
< 5%
0 of total
Conf ig Feed Sch A Licence ISBL OSBL C & WC

• Front End Engineering Services (Including Configuration Study Work) ~$ million

• Basic Design Packages ~$$ million
15% more than covers
• License fees for provided technology ~$$ million Configuration,
• Engineering, procurement and construction ~$$$$$$$$$$$Optimization,
million License
and BED
ECA Funding requires 15% Equity Minimum

Configuration and Process Integration has profound impact on project economics for
small financial outlay
 15

Conclusions

Opportunities exist A phased Maximizing Each Refinery has

for successful and investment Project Economics different
profitable BOB strategy generates requires a challenges and
projects in Iran early income to complex analysis opportunities
fund subsequent of multiple which should be
high conversion variables and carefully
investments process/design evaluated
OP 7879C-15 interactions

UOP has the Technologies and Design Experience to Deliver

Optimized Solutions to Maximize Return on Investment
 16

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