Engineeringpractice September2023
Engineeringpractice September2023
Engineeringpractice September2023
WWW.IACPE.COM
2
In This Issue
Volume 9 | Number 40
EDITOR
SPECIAL FEATURES Karl Kolmetz
09
PROCESS ENGINEERING
Enhanced LP-CRS™ CONTRIBUTING AUTHOR
Jayanthi Vijay Sarathy
CONTRIBUTING AUTHOR
Some Common Questions on Ronald J. Cormier
19 Centrifugal Compressors
Jayanthi Vijay Sarathy
Petrochemicals x Transportation
25 Fuels: Which will Drive the Strategic
Planning of the Downstream Players
for Next Years?
Dr. Marcio Wagner da Silva
INTRODUCTION
After the removal of the restrictions imposed
to stop the advance of the COVID-19 pan-
demic, the energy market has registered a
faster-than-expected recovery, the demands
for liquid fuels continue to increase in most
countries, so it is imperative to increase in-
ventories of distillates to supply the local and
global demand for hydrocarbons at values
close to those registered before the start of
the pandemic. However, the projection for the
consumption of liquid fuel is not as favorable
as expected, according to the report “Short-
Term Energy Outlook. July 2023” published
by the U.S. Energy Information Administration
EIA, consumption of liquid distillates will in-
crease by only 1.8 million barrels per day (b/ Given this not-very-encouraging situation for
d) in 2023 and by 1.6 million b/d in 2024 Vs. the liquid hydrocarbons sector, the use of
2.3 million b/d in 2022. software and mathematic tools for controlling
and optimizing chemical processes should be
a priority to maximize production and mini-
mize energy consumption. Complex product
disposition scenarios require an exhaustive
analysis of the entire supply chain and the
operation of the different process units to op-
timize the entire production line without com-
promising the quality of the products.
However, there are exceptions to the down-
ward trend in distillate consumption, accord-
ing to the report “Annual Energy Outlook
2022 Reference Case” published by the U.S.
Energy Information Administration EIA, The
US total consumption of petroleum and other
liquids will increase in most years through
2050. But regardless of some local scenarios,
downstream companies at a global level con-
According to the report "Oil 2023 Analysis
tinue to promote automation/optimization pro-
and Forecast to 2028" published by the Inter-
jects, with advanced process control (APC),
national Energy Agency IEA, this trend of low
LP models, and real-time optimization (RTO)
consumption of liquid distillates will continue
that allow increasing refining margins.
until at least 2028, due to increased produc-
tion of biofuels and increased demand for REFINING MARGINS
electric cars that will possibly bring oil de-
The objective of oil refining is to satisfy the
mand to a record low of 0.4 mb/d in the year
demand for fuels, lube oil, and some other
2028.
distillates, to generate a profit that allows cov-
ering costs. Therefore, the most important
economic parameter of oil refining is the:
5
APC controller (for example, hydraulic limita- map the largest number of controlled varia-
tions). Otherwise, the increase in the refining bles by manipulating the necessary variables,
margin will be conditional on human interven- with empirical models, identified under robust
tion, not only on the advanced process control mathematical techniques. When trying to inte-
engineers who carry out the appropriate grate APC with a real-time optimizer, the ma-
maintenance and tuning of models but also on trix of the different APC controllers must be
operators and supervisors who allow APC con- replicated to the optimizer model, to contem-
trollers to operate with the necessary degrees plate for the real-time optimization, all the dy-
of freedom and under the limits of controlled namic and hydraulic effects considered in the
and manipulated variables appropriate to the empirical models.
design and planning.
MISMATCHES BETWEEN APC AND LP:
Many industries in the downstream sector have
If the objectives built into multivariable con-
opted for cross or hybrid planning schemes
trollers are different from the objectives built
where logistics, operational and process objec-
into the LP, the plant will run at a different op-
tives are combined to find the sweet spot of
erating point from the one suggested by the
maximum performance and minimum expense.
LP or the schedule. If the constraints set in
For this, the different units are linked through
the APC controller differ from the constraints
individual APC controllers coordinated by a re-
set in the LP model, the optimization in the
al-time optimizer that estimates economic ben-
control system will be incorrect.
efits and generates critical targets for cut-off
temperatures in main separation towers, reac- REFINING MARGIN USING APC AND LP
tion temperatures, reflux flowrates, and pump- MODELS
around flowrates.
A typical increase in refining margin capture
The optimization of any refinery should consid- by APC implementation is approximately
er three relevant aspects: $0.3/b. An accurate LP model can improve
the refining margin by $0.5/b. The optimal
GENERAL REQUIREMENTS FOR AD-
operation of both technologies in a refinery
VANCED APPLICATIONS:
with a small capacity of 100 -thousand-b/d
Not all process units in a refinery require the would mean a capture of $29 million per year.
implementation of APC, some effluent treat-
OIL MARKET AND REFINING MARGIN
ment plants or plants where several physical
separation processes intervene without an ad- According to the report “Oil 2023 Analysis
equate level of automation will be candidates and Forecast to 2028” published by the Inter-
for the implementation of highly complex con- national Energy Agency, gasoline consump-
trol applications at the basic/supervisory con- tion in the world will decrease by 0.3 mb/d in
trol layer of the Distributed Control System the coming years. The downstream compa-
(DCS). In the case of highly complex plants, nies should adapt their facilities, change unit
with a large number of controlled and manipu- operating conditions, and implement precise
lated variables that end up forming a matrix of and updated control and optimization sys-
great magnitude and interconnection, with sev- tems that allow maximizing the production of
eral disturbance variables and a high level of high-demand distillates vs. the production of
operational flexibility, it will be recommended gasoline.
the implementation of APC, which will allow the
future implementation of an optimizer that syn-
chronizes plans of the refinery with the plant,
but it should be noted that in cases of control
applications of high complexity in the DCS, the
ability to align with the refinery planning will not
necessarily be lost, it will only be required to
make it clear which variables should be con-
trolled and manipulated by the console opera-
tors.
CONTROLLER SIZE AND REAL-TIME OPTI-
MIZER:
For many refineries it is crucial to implement
APC controllers with effective gain matrices
that are easy to identify and maintain, one ideal
premise for APC implementation should be to
7
Enhanced LP-CRS™
OVERVIEW
TECHNOLOGICAL ADVANCEMENTS
time of more than 2 years. By offering a range generation, LNG, CNG, GTL, etc. for mone-
of applications, the Enhanced LP-CRS™ sys- tizing the gas generally economically not via-
tem empowers oil and gas facilities to optimize ble. Table 2 presents some of the prominent
their operations, reduce emissions, and gener- solutions providers in the market.
ate additional revenue streams.
As indicated in the tabulation, all the solutions
mentioned above require relatively high
CAPEX and require additional facilities for
pressure boost, gas pre-treatment, power
supply, among others. Particularly for off-
shore facilities, these solutions become pro-
hibitive.
COMPETITION LANDSCAPE
BUSINESS CASE
The scale of the market opportunity becomes of 493 barrels of oil condensate per day
evident when considering the number of pro- (bopd) from each production site unlocks in-
duction sites worldwide that flare significant cremental revenue of USD 12.1 million, as-
amounts of associated gas. Based on data ex- suming an oil price of USD 70 per barrel. Ad-
tracted from the World Bank's GGFR, there ditionally, the system enables an average re-
are approximately 7,000 production sites glob- duction of 71,400 tons per year in CO2 emis-
ally that flare AG, with around 850 production sions, resulting in potential carbon tax sav-
sites flaring more than 3 MMscfd, totaling 8.4 ings.
bscfd and with a mean AG flaring rate of 9.87
MMscfd. The cumulative financial benefits realized
with the installation of the Enhanced LP-
CRS™ system are remarkable. The estimat-
ed payback period for the technology is ap-
proximately 11 months, highlighting its rapid
return on investment. The total market poten-
tial for the Enhanced LP-CRS™ system is
estimated at a staggering USD 2.98 billion,
underscoring the vast commercial prospects
waiting to be harnessed.
CONCLUSION
The following article covers attending to some multifold in the next few years primarily focus-
questions related to centrifugal compressors. ing on increasing power savings, extended
turbomachinery life, operational efficiency,
LIFE CYCLE COSTS reducing compressor stall and surge avoid-
Most compressor purchasers look at price first, ance. However, to support AI/ML based solu-
but the lowest capex cost is often the highest tions, data gathering using improved sensor
cost when you include energy and mainte- quality & embedded systems would be a pre-
nance cost. How can clients be best helped to requisite.
understand the life cycle cost and the cost of Compressor performance & monitoring de-
quality? pends on a mix of both hardware and soft-
The total lifecycle cost of a compressor pack- ware capabilities and more importantly, how
age comprises of both CAPEX and OPEX accurate and reliable the signal measure-
costs. As part of CAPEX, the expenses cover ments are to perform diagnostics. For reliable
manufacturing, transportation, installation & readings, much starts with the design stage
commissioning costs, which is a one-time af- where, the location of the instrumentation on
fair. However, OPEX costs are a variable the piping and equipment matters as well as
which involves spare parts and consumables how good the support structures and civil
(such as lube oil & nitrogen for sealing), costs foundation is laid. Process instrumentation
due to shipping delays, annual maintenance, often suffer from vibrational disturbances &
associated labour costs, power consumed for any radio/electromagnetic interference
operations & costs associated with production (depending on whether digital or analog)
loss and equipment failure. OPEX costs can thereby generating noise in the signals.
also vary when there are production/ process Therefore, sampling frequency & signal integ-
changes or brownfield expansion/ develop- rity needs to be maintained to generate high
ments, which puts the operational flexibility quality data for any further post processing
and reliability of the turbomachinery under using software methods. In the author’s opin-
question, and if they can deliver the same per- ion, AI/ML cannot be used to compensate for
formance as before. poor design and hardware performance.
API 686 is a design standard that provides must be provided. Temperature sensors &
guidelines on foundation design. A part of the liquid level gauges must be placed for con-
solution comes from increasing the weight of stant monitoring and prevent overheating dur-
the concrete foundation by at least up to 3 to 5 ing peak operating cycles. The entire con-
times the weight of the total equipment laid on tents in the reservoir are circulated typically
the foundation. The concrete mix should be between 8 to 12 times/hr.
poured into a neat and clean excavation with
zero formed side faces. Typically, increasing To attend to cold/winter/ startup conditions,
the width and length of the foundation is better where the lube oil viscosity needs to be regu-
choice instead of an increase in depth, so as lated, a heating coil can be installed in the
to uniformly distribute the weight of the total reservoir with temperature control. Relief
equipment. For a design less than 50% of the valves and check valves need to be installed
allowable static load, soil bearing methods can appropriately to prevent any backflow and
help avoid shear failure. prevent any over pressurization. A key pa-
rameter is, to maintain the oil pressure which
The foundation needs to be a unified system is fed to the bearings. To do so, a bypass line
which has a concrete footing laid on the soil with a pressure control valve from the oil res-
base. Upon which lies a concrete pad and ervoir to the compressor bearings is installed.
grouting. Jack bolts and anchors are placed This ensures any excess flow of lube oil is
through the grouting and concrete pad upon routed back to the lube oil reservoir. Addition-
which the compressor I-beam base plate is ally, a pressure switch is installed at the lube
installed with vibration dampeners. Therefore, oil pump discharge which upon activation due
to avoid any cracking of the grouting & con- to low discharge pressure, causes the auxilia-
crete, which can result in the anchoring getting ry pump to start. However, in the event where
dislodged, the material quality should be high despite the auxiliary pump running, if the oil
& cured sufficiently. Cracking of the foundation pressure is insufficient, the compressor train
can also occur when there are no expansion needs to shut down.
joints since concrete can expand and contract
due to temperature changes. Additionally, the A typical range of ISO viscosity grades of
shoulder spacing of the grouting must not be lube oils used is between 32 to 46. They must
excessive to prevent any edge lifting which have resistance to oxidation as per ASTM
can cause the grouting to crack. D943, a flash point of more than 2000C as
per ASTM D92 and should provide more than
Grouting is also susceptible to degradation 5000 hours of operation. Lube oils must also
due to oil leakages. Hence provisions such as provide resistance to foaming, volatility at
a drip pan must be provided to avoid any lube high temperatures that can cause reservoir
oil or seal oil leaking into the crevices of the depletion, any corrosion & repel water if it en-
grouting. The primary purpose of anchor bolts ters the lube oil system.
is to prevent any upward movement of the
concrete by providing tensile strength. Earlier SMALL BORE PIPING
designs of anchor bolts were a “J” or an “L” Small bore piping on compressor discharges
shape. But in recent years, the anchor bolting have seen many failures. What are some
is sunk deeper into the foundation with round- best practices for small bore piping on com-
ed plates. pressor discharge?
COMPRESSOR LUBRICATION A chief cause for small bore piping to fail is
What are some best practices of lubrication in due to mainline piping vibrations. Locations in
centrifugal compressors? the mainline which are near piping elements
like flow meters, bends, and Tee-bends expe-
A lube oil system is a closed loop system con- rience turbulent flow. This causes noise and
sisting of a lube oil reservoir, two oil pumps vibrations which is transmitted to the small-
(running + auxiliary) with their respective lube bore piping. Depending on the phase at
oil coolers, followed by oil filters, before the which these issues are addressed, certain
lube oil is fed to the compressor bearings and measures can be taken.
returned to the lube oil reservoir. A common
issue is the accumulation of debris, to form a During the design phase a Finite Element
sludge that settles down at the bottom of the Analysis (FEA) study can be conducted to
lube oil reservoir. Therefore, the base of the check for stress concentration points. The
reservoir must be sloped to ensure easy drain- small-bore piping can then be shifted accord-
age. Any dissolved gases in the reservoir lube ingly to locations which have low stress con-
oil can get degassed for which a vent valve centration. Alternatively, small bore piping
can be welded instead of using threaded
21
such as H2S and CO2 or ingress of air. To size the anti-surge valve (ASV), the phi-
Any contamination of the sealing gas with losophy employed should consider, operating
process gas can cause the mixture to act the compressor on the right-hand side of the
as a poison to the catalyst bed down- SCL while also ensuring the operating point
stream (if any). does not cross the choke flow line. Towards
this, the recycle flow rates across the ASV
5. In case any moisture or condensable va- can be taken to be 1.8 to 2.2 times the surge
pours are present, then either we could flow rate.
potentially see liquid condensation or hy-
drate formation, during a compressor de- Traditionally ASVs have linear opening char-
pressurization. acteristics, though sometimes equal percent-
age characteristics can be incorporated into
6. O-rings are elastomers & any rapid depres- the linear trend. Quick opening characteristics
surization can cause the process gas along are not preferred due to poor throttling char-
with hydrates/condensables / H2S / CO2 to acteristics while Equal percentage valves suf-
diffuse/ permeate into the O-rings, causing fer from slow opening during the early travel
degradation & deformation. period. The stroking time of the valve should
7. Traditionally oil type seals were in vogue, be ideally less than 2 sec with less than 0.4
but with time, newer compressor designs sec time delay and no overshoot. The actua-
incorporated dry gas seals since the tor response time must be less than 100
1990s. But there are legacy compressors msec and the noise limit is ~85 dBA. The
which even to this day, still run on seal oil maximum noise level allowed is 110 dBA.
systems. Anti-surge valves are Fail-open [FO] type and
Therefore, the engineer needs to go on a case should provide stable throttling. Fluid veloci-
-to-case basis, to see what kind of process ties should be less than 0.3 Mach to avoid
gas, process conditions & the kind of plant op- piping damage and valve rattling. The anti-
erations, the turbomachinery has to deal with. surge valve can be operated pneumatically or
Also, not all legacy centrifugal compressors by solenoid action. For valve sizes greater
can be retrofitted with dry gas seals. than 16”, a motor operated valve can be used
to effectuate the fast-opening requirements.
ANTI-SURGE VALVE Although the current module provides a meth-
odology to size an ASV which is suitable dur-
What are some the key elements in sizing an
ing Concept/Basic Engineering stage, a com-
Antisurge Valve for a Centrifugal Compressor?
pressor dynamic simulation shall be per-
The surge curve is defined as the Surge Limit formed with the actual plant layout based on
Line [SLL] and an operating margin is provided detailed design to verify if the ASV can cater
[e.g., 10% on flow rate] which is called the to preventing a surge during start-up & shut-
surge control line [SCL]. To ensure process down scenarios.
safety & avoid mechanical damage, the anti-
The final ASV size must be verified in concur-
surge valve (ASV) must be large enough to
rence with the turbomachinery vendor, valve
recycle flow sufficiently. An undersized valve
manufacturer, if the ASV can cater to the
would fail to provide enough recycle flow to
surge control philosophy employed, slope of
keep the compressor operating point away
the performance curves & polytropic efficien-
from SCL and SLL. Whereas over sizing the
cy maps at the choke points.
ASV leads to excess gas recycling that can
drive the compressor into the choke flow re- UNCERTAINTIES IN MEASUREMENTS
gion. Oversized valves also create difficulties
in tuning the controllers due to large controller How much do uncertainties in measurements
gain values and limited stroke. affect the surge control system?
23
REFERENCES
Pressure, temperature, and flowrate are the
three parameters that go into the anti-surge Application Guidelines for Centrifugal Com-
algorithm. Any uncertainties in these measure- pressor Surge Control Systems, GMRC
ments can either overestimate or underesti- Guidelines, Ver 4.3, Southwest Research In-
stitute, April 2008
mate the surge protection margins. Underesti-
mating the uncertainties is more detrimental, Compressor foundation assessment and re-
as it could prevent the anti-surge controller pairs key to reducing vibrations, Michael Gol-
la, Compressor Tech, Dec 2019, Page 46
from having sufficient time to respond. Say the
flow measuring orifice is near a piping bend, it (https://www.structuraltechnologies.com/wp-
can create turbulence which causes improper content/uploads/2019/12/CT2-Foundations-
Tech-Corner-December-2019.pdf)\
recording of the process parameters.
AUTHOR
As per GMRC Guidelines, Ver. 4.3, the In-
Practice achievable uncertainties for measured
test parameters, suggests the following typical
values, 0.3% to 2.0% (full scale) for pressure,
0.30C to 4.00C for temperature, 1% to 3% for
flow (clean gas) and 0.2% to 3.0% for density,
enthalpy, and isentropic coefficient. Flow Vijay Sarathy holds a Master’s Degree in
measurement uncertainty is affected by instal- Chemical Engineering from Birla Institute of
lation errors such as insufficient straight run Technology & Science (BITS), Pilani, India
length for fully developed flow, DP meters and is a Chartered Engineer from the Institu-
causing bias errors in flow measurement and tion of Chemical Engineers, UK. His expertise
over 16 years of professional experience co-
pulsating flow in the piping. For accurate pres- vers Front End Engineering, Process Dynam-
sure measurements, the location of the pres- ic Simulation and Subsea/Onshore pipeline
sure transmitters must follow ASME PTC 10 flow assurance in the Oil and Gas industry.
standards. For temperature transmitters, apart Vijay has worked as an Upstream Process
from incorrect positioning and calibration er- Engineer with major conglomerates of Gen-
eral Electric, ENI Saipem and Shell.
rors, insufficient insulation causes heat trans-
fer from the piping wall to the temperature
probes and hence also needs to meet ASME
PTC 10 standards, to reduce uncertainties in
temperature measurements.
· The costumer power – How is the flexibility The current scenario presents great challeng-
and alternatives of the customer in relation es to the crude oil refining industry, prices
to your services and products? volatility of raw material, pressure from
26
society to reduce environmental impacts and with energy efficiency of the refining hard-
refining margins increasingly lower. The dras- ware, once more than 60 % of the operat-
tic reduction of sulfur content in the final prod- ing costs are related to energy consump-
uct, lead refiners to look for alternatives to re- tion.
duce the sulfur content in the intermediate
streams, in this business environment it’s pos- · Bargain power of buyers – The costumers
sible to imagine how the Porter’s competitive have low bargain power in the down-
forces to the downstream industry. stream industry once is still difficult to
found energy sources in quantity and
THE PORTER’S COMPETITIVE FORCES IN quality capable to substitute the crude oil
THE DOWNSTREAM INDUSTRY derivatives, of course, in markets with
high quantity of players, the competitive-
Considering the shown in Figure 1, it’s possi- ness can offer alternatives to the costum-
ble to analyze the five competitive forces listed ers, but it’s difficult to achieve great gap of
by Michael Porter to the downstream industry. prices in a commodity market. Despite
· Bargain power of Suppliers – The main this, the public opinion over the down-
supplier of the downstream industry is the stream industry is increasingly important
crude oil producers, normally the refiners and have potential to change the energy
have low bargain power because the crude market, an example is the growing trend
oil price is defined by a several factors, but of energy transition efforts demanded by
refiners relying on flexible refining hard- the society, requiring a transition to low
ware can face advantages once are capa- carbon energy sources.
ble to processing heavier and discounted · Threat of new entrants – Due to the high
crudes that present lower costs. In other
capital requirements, it’s hard to face the
words, adequate bottom barrel conversion
new entrant threat in the downstream in-
capacity can offer a significant competitive
dustry, but this threat can always be con-
advantage to the refiners. Over the years sidered mainly due to government inter-
some companies have developed integrat- ventions and the attractiveness of the lo-
ed operations to minimize the exposition of
cal markets.
the variation of crude oil prices. Regarding
the other suppliers, normally the refiners · Rivalry among existing competitors – This
are considered great costumers and these is a great concern in the downstream in-
suppliers tends to present low bargain dustry, the great number of players and
power, in normal conditions, they do not the standardization of the products create
represent a great threat, in this case, the great pressure over the refining margins,
most integrated players can get competi- to overcome this the refiners have look for
tive advantage. The operational efficiency improve their operational efficiency, but
is another fundamental characteristic, refin- it’s normally quickly followed by the other
ers capable to reduce the operating costs players, reducing the profitability in the
can acquire more resilience face to the var- market.
iations of crude oil prices, the operating
costs reduction is especially related
27
· Threat of substitute products and services The improvement in fuel efficiency, growing
– Nowadays, this is the great threat to the market of electric vehicles tends to decline
players of the downstream industry. The the participation of transportation fuels in the
reduction of the consumer market in the global crude oil demand. Figure 4 presents
last years became common, news about the growth of electric vehicles in the last
countries that intend to reduce or ban the years in the global market.
production of vehicles powered by fossil
Further the electrification of the automobiles,
fuels in the middle term, mainly in the Eu-
ropean market. Despite the recent fore- new technologies like additive manufacturing
casts, the transportation fuels demand is (3D printing) has the potential to produce
great impact to the transportation demands,
still the main revenues driver to the down-
leading to even more impact over the trans-
stream industry, as presented in Figure 2,
portation fuels demand the growing trend of
based on data from International Energy
vehicles sharing services like Uber has great
Agency (IEA).
potential to destroy demand in the down-
According to Figure 2, the transportation fuels stream industry. Another threat is the growing
demand represents close to five times the de- participation of renewable raw material in the
mand by petrochemicals as well as a focus on crude oil refineries, in a response of the soci-
transportation fuels of the current refining ety requirement to energy transition efforts. In
hardware. Despite these data, is observed a the last months some important players have
strong trend of reduction in transportation fuels announced the conversion of some crude oil
demand followed by a growing market of pet- refineries into renewable processing plants
rochemicals. Still according to IEA data, pre- while other players and technology develop-
sented in Figure 3, is expected a relevant ers announce the production of diesel and jet
growth in the petrochemical’s participation in fuel applying co-processing of crude oil and
the global oil demand. renewable raw material like HVGO in some
refineries around the world.
28
Another deep change in the downstream sec- players tend to compete in the existing mar-
tor that reinforces the necessity of high conver- ket focusing on defeat competitors through
sion refining hardware is the IMO 2020. Re- the exploration of existing demand, leading to
strictive regulations like IMO 2020 raised, even low differentiation and low profitability. The
more, the pressure over refiners with low bot- blue ocean is characterized by look for space
tom barrel conversion capacity once requires in non-explored (or few explored markets),
higher capacity to add value to residual creating and developing new demands and
streams, especially related to sulfur content reaching differentiation, this model can be
that was reduced from 3,5 % (in mass) to 0,5 applied (with some specificities once is a
%. Refiners with easy access to low sulfur commodity market) to the downstream indus-
crude oils present relative competitive ad- try, considering the traditional transportation
vantage in this scenario, these players can rely fuels refineries and the petrochemical sector.
on relatively low-cost residue upgrading tech-
Due his characteristics, the transportation
nologies to produce the new marine fuel oil
fuels market can be imagined like the red
(Bunker) as carbon rejection technologies
ocean, where the margins tend to be low and
(Solvent Deasphalting, Delayed Coking, etc.),
under high competition between the players
but they are the minority in the market. The
with low differentiation capacity. On the other
most part of the players need to look for
side the petrochemicals sector can be faced
sources of low sulfur crudes, which present
like the blue ocean where few players are
higher cost putting under pressure his refining
able to meet
margins or look for deep bottom barrel conver-
sion technologies to ensure more value addi- the market in competitive conditions, higher
tion to processed crude oils and avoid to loss refining margins, and significant differentia-
competitiveness in the downstream market. tion in relation to refiners dedicated to trans-
For these refiners, deepest residue upgrading portation fuels market. Figure 5 presents the
like hydrocracking technologies can offer great basic concept of blue ocean strategy in com-
operational flexibility, despite the high capital parison with the traditional red ocean where
spending. In this scenario, with necessity to the players fight to market share with low
higher value addition to bottom barrel stream margins.
and growing market of petrochemicals, refiners
As presented above, the market forecasts
with adequate bottom barrel conversion capac-
indicates that the refiners able to maximize
ity can achieve great competitive advantage in
petrochemicals against transportation fuels
the downstream industry.
can achieve highlighted economic perfor-
Based on the description above it’s possible to mance in short term, in this sense, the crude
apply the article published by W. Chan Kim oil to chemicals technologies can offer even
and Renée Mauborge called “Blue Ocean more competitive advantage to the refiners
Strategy” in Harvard Business Review, to clas- with capacity of capital investment.
sify the competitive markets in the downstream
Can be difficult to some people to understand
industry. In this article the authors define the
the term “differentiation” in the downstream
conventional market as a red ocean where the
29
industry once this is a market that deal with 2 – Offer a new Value Addition – Face the
commodities, but the differentiation here is re- reduction in transportation fuels, an attractive
lated to the capacity to reach more added val- strategy to the downstream sector is to offer a
ue to the processed crude oil and as present- new proposed value to the market through
ed above, nowadays this is translated in the higher value addition to the processed crude
capacity to maximize the petrochemicals yield, oils as well as needed materials to the society
creating differentiation between integrated and with lower environmental footprint than fossil
non-integrated players. fuels. The petrochemical intermediates have
higher added value to refiners and growing
CHANGING THE FOCUS – MORE PETRO- demand as data, the substitution of steel is
CHEMICALS AND LESS FUELS some engineering materials is an interesting
In this business environment it’s possible to way to ensure market to petrochemicals in
adapt the Anssoff Matrix to considering the short term, in this sense, the refiners can
contraction profile of transportation fuels mar- change the production focus from transporta-
ket to analyze the available alternatives to the tion fuels to petrochemicals, especially in
downstream players, the Anssof Matrix is pre- markets like Asia and Europe where the fall-
sented in Figure 6. ing in transportation fuels demand is most
significant. Beyond the petrochemicals, the
In Figure 6 the current position of downstream capacity to add value to bottom barrels
players is focused on transportation fuels de- streams appears like a competitive ad-
mand that presents a contraction profile as vantage.
aforementioned. In this scenario there are
three alternatives to the players: 3 – New Clients and New Value Addition –
Strategically, this alternative seems the right
1 – Look for new clients – This alternative way to follow, mainly to refiners with the most
seems attractive at first look, but the stricter complex refining hardware. Through the pro-
regulations and trend of reduction in the con- motion of closer integration with petrochemi-
sumption create great pressure over the con- cal sector, the refiners not only offer a higher
sumption of fossil fuels. The major consumers proposed value to the clients and society but
of transportation fuels are still the in develop- can reach a new range of costumers capable
ment economies like Brazil, Mexico, and India to ensure higher added value to the pro-
but the most efficient engines and substitute cessed crude oils and lower operational costs
technologies like hybrid and electric vehicles through available synergies between refining
tends to reduce the market growth even in and petrochemical assets.
these countries;
30
Another strategic planning model which can be assets. The challenge here is related to
applied to the current scenario of the down- the production of green hydrogen in large
stream industry is the PESTEL model. This scale to minimize the carbon intensity of
theory applies six fundamental factors which the downstream sector.
influence the strategy of any business, these
factors are: · Environmental – Again, the environmental
factor favors the petrochemical sector due
· Political – The growing pressure to mini- the higher potential of circularity than the
mize the environmental footprint of the en- transportation fuels.
ergetic matrix is leading the governments
raise the pressure over the downstream · Legal – We are seeing a growing pres-
players to reduce their carbon intensity, sure over the downstream players to re-
this is translated into an increasingly hos- duce the carbon intensity of their opera-
tile scenario to the fossil fuels. tions which is translated to stricter regula-
tions, this factor overlaps with the political
· Economic – The higher added value of pet- factor which favors the adoption of petro-
rochemicals in comparison with transporta- chemicals against fuels as production fo-
tion fuels as well as their higher potential of cus.
circularity are important drivers to consider
in the strategic planning of the downstream A simplified analysis based on the PESTEL
players. The question here is the capital model can indicate the favorability of chang-
intensity required to make the change of a ing the production focus from fossil fuels to
refining asset from transportation fuels to petrochemicals, this is summarized in Figure
petrochemicals. 7.
· Social – The impact of the energy industry At this point it’s important to explain that the
in the communities is high, considering the energy transition is an incremental and not
higher circularity of the petrochemicals disruptive process. The change in the produc-
against the fuels and the higher economic tion focus from fuels to petrochemicals is not
returns it’s possible to imagine a better so- a easy task and the capital requirement is a
cial benefits for the society considering the barrier among the downstream players, our
change of the production focus in the point of view is that the players with capital
power and inserted in more economic devel-
downstream sector from fuels to petro-
chemicals or non-energetic derivatives like oped markets will change quickly from fuels
lubricants depending on the local policies to petrochemicals while the players with less
of the consumer market. access to capital and based in in developing
economies will keep their focus in transporta-
· Technological – The refining and petro- tion fuels.
chemical industries are well technologically
developed, and the commercial technolo-
gies are totally able to allow closer integra-
tion between refining and petrochemical
31
PETROCHEMICAL AND REFINING INTE- Figure 8 presents a block diagram that shows
GRATION AS DIFFERENTIATION STRATE- some integration possibilities between refin-
GY ing processes and the petrochemical indus-
try.
The focus of the closer integration between
refining and petrochemical industries is to pro- Process streams considered with low added
mote and seize the synergies existing opportu- value to refiners like fuel gas (C2) are attrac-
nities between both downstream sectors to tive raw materials to the petrochemical indus-
generate value to the whole crude oil produc- try, as well as streams considered residual to
tion chain. Table 1 presents the main charac- petrochemical industries (butanes, pyrolysis
teristics of the refining and petrochemical in- gasoline, and heavy aromatics) can be ap-
dustry and the synergies potential. plied to refiners to produce high quality trans-
portation fuels, this can help the refining in-
As aforementioned, the petrochemical industry dustry meet the environmental and quality
has been growing at considerably higher rates regulations to derivatives.
when compared with the transportation fuels
market in the last years, additionally, represent The integration potential and the synergy
a noblest destiny and less environmental ag- among the processes rely on the refining
gressive to crude oil derivatives. The techno- scheme adopted by the refinery and the con-
logical bases of the refining and petrochemical sumer market, process units as Fluid Catalyt-
industries are similar which leads to possibili- ic Cracking (FCC) and Catalytic Reforming
ties of synergies capable of reducing opera- can be optimized to produce petrochemical
tional costs and add value to derivatives pro- intermediates to the detriment of streams that
duced in the refineries.
32
will be incorporated to fuels pool. In the case with low residual carbon that is a common
of FCC, installation of units dedicated to pro- characteristic in Middle East crude oils. The
duce petrochemical intermediates, called pet- processing scheme involves deep catalytic
rochemical FCC, aims to reduce to the mini- conversion process aiming to reach maxi-
mum the generation of streams to produce mum conversion to light olefins. In this refin-
transportation fuels, however, the capital in- ing configuration, the petrochemical FCC
vestment is high once the severity of the pro- units have a key role to ensure high added
cess requires the use of material with noblest value to the processed crude oil. An example
metallurgical characteristics. of FCC technology developed to maximize
the production of petrochemical intermediates
The IHS Markit Company proposed a classifi- is the PetroFCC™ process by UOP Compa-
cation of the petrochemical integration grades, ny, this process combines a petrochemical
as presented in Figure 9. FCC and separation processes optimized to
According to the classification proposed, the produce raw materials to the petrochemical
crude to chemicals refineries is considered the process plants, as presented in Figure 11.
maximum level of petrochemical integration, Other available technologies are the HS-
where the processed crude oil is totally con- FCC™ process commercialized by Axens
verted into petrochemical intermediates like Company, and INDMAX™ process licensed
ethylene, propylene, and BTX. by Lummus Company.
market share in the petrochemical sector, al- compared with the original catalyst. This al-
lowing then a favorable competitive positioning ternative raises the operational costs, howev-
to the refiner, through the maximization of pet- er, as aforementioned can be economically
rochemical intermediates. Figure 12 presents attractive considering the petrochemical mar-
a block diagram showing a case study demon- ket forecasts.
strating how the petrochemical FCC unit, in
this case the INDMAX™ technology by Lum- Installation of catalyst cooler system raises
mus Company, can maximize the yield of pet- the process unit profitability through the total
rochemicals in the refining hardware. conversion enhancement and selectivity to
noblest products as propylene and naphtha
In refining hardware with conventional FCC against gases and coke production. The cata-
units, further than the higher temperature and lyst cooler is necessary when the unit is de-
catalyst circulation rates, it’s possible to apply signed to operate under total combustion
the addition of catalysts additives like the zeo- mode due to the higher heat release rate as
litic material ZSM-5 that can raise the olefins presented below.
yield close to 9,0% in some cases when
34
The naphtha to steam cracking is composed applies a reduce residence time to minimize
basically of straight run naphtha from crude oil the coking process and ensure higher opera-
distillation units, normally to meet the require- tional lifecycle. Another commercial technolo-
ments as petrochemical naphtha the stream gy dedicated to optimizing the yield of eth-
needs to present high paraffin content (higher ylene is the SCORE™ technology developed
than 66 %). by KBR and ExxonMobil Companies which
combines a selective steam cracking furnace
Due to his relevance, great technology devel- with high performance olefins recovery sec-
opers have dedicated their efforts to improve tion.
the steam cracking technologies over the
years, especially related to the steam cracking The cracking reactions occur in the furnace
furnaces. Companies like Stone & Webster, tubes, the main concern and limitation to op-
Lummus, KBR, Linde, and Technip develop erating lifecycle of steam cracking units is the
technologies to steam cracking process. One coke formation in the furnace tubes. The re-
of the most known steam cracking technolo- actions carry out under high temperatures,
gies is the SRT™ process (Short Residence between 500 oC to 700 oC according to the
Time), developed by Lummus Company, that characteristics of the feed. For heavier feeds
alternative as feedstock to steam crackers. like gas oil, is applied lower temperature
36
aiming to minimize the coke formation, the like UOP, Shell Global Solutions, ExxonMobil,
combination of high temperatures and low resi- Axens, and others are developing crude to
dence time are the main characteristic of the chemicals technologies, reinforcing that this
steam cracking process. Despite be possible is a trend in the downstream market. Figure
to operate with naphtha, nowadays the steam 17 presents a highly integrated refining con-
cracking operators have chosen to operate figuration capable of converting crude oil to
with ethane or LPG against naphtha due to the petrochemicals developed by UOP Company.
competitive prices related to the new sources
of NGL (Natural Gas Liquid), despite this trend As presented in Figure 17, the production fo-
over the last years, in markets where is ob- cus changes to the maximum adding value to
served a gasoline surplus, naphtha can still an the crude oil through the production of high
attractive alternative as feedstock to steam added value petrochemical intermediates or
crackers. chemicals to general purpose leading to a
minimum production of fuels. As aforemen-
According to some forecasts, the demand for tioned, big players as Saudi Aramco Compa-
propylene will rise from 130 million metric tons ny have been made great investments in
in 2020 to around 190 million metric tons in COC technologies aiming to achieve even
2030. Facing the increasingly light feed to re- more integrated refineries and petrochemical
fineries and steam cracking units which tends plants, raising considerably his competitive-
to favor the ethylene production in detriment of ness in the downstream market. The major
propylene, the propylene demand tends to be technology licensors as Axens, UOP, Lum-
supplied by on-purpose propylene production mus, Shell, ExxonMobil, etc. has been ap-
routes like propane dehydrogenation, metha- plied resources to develop technologies ca-
nol to olefins (MTO), and olefins metathesis. pable to allow a closer integration in the
downstream sector aiming to allow refiners
As quoted above, some technology developers extract the maximum added value from the
are dedicating their efforts to develop commer- processed crude oil, an increasing necessity
cial crude to chemicals refineries. Figure 15 in a scenario where the refining margins are
presents the concept of crude to chemicals under pressure.
refining scheme by Chevron Lummus Compa-
ny. Figure 18 presents a comparison between
the petrochemicals yields of traditional refin-
Another crude to chemicals refining arrange- eries, a benchmark integrated refinery and
ments is proposed by Chevon Lummus Com- Hengli crude to chemicals complex, accord-
pany, applying the synergy of residue upgrad- ing to data from IHS market.
ing strategies to maximize the petrochemical
intermediates production, Figure 16 presents a Analyzing Figure 18 it’s possible to note the
crude to chemicals arrangement relying on de- higher added value reached in crude to
layed coking unit. chemicals refineries when compared even
with highly integrated refineries. Based on
Another great refining technology developers
37
38
in crude to chemicals refineries is 300 billion the current competitive scenario as well as
US dollars and 64 % of this investment was the operational flexibility related to the pro-
made by Asian players, to reinforce this trend cessed crude oil slate.
Figure 19 present a comparison between the
relation of crude oil distillation capacity and the INTEGRATED REFINING HARDWARE –
integrated refinery capacity for each continent. SYNERGY OF PETROCHEMICALS MAXI-
MIZATION AND RESIDUE UPGRADING
Figure 19 shows that the Asian players have a
superior integration capacity of their refining As aforementioned the residue upgrading
assets in comparison with another continents, units are capable to improve the quality of
as mentioned above, this can be translated in bottom barrel streams, the main advantage of
a significant competitive advantage to the the integration between residue upgrading
Asian players and a great potential o competi- and petrochemical units like steam cracking
tive imbalance of the downstream market con- is the higher availability of feeds with better
sidering the recent forecasts which indicates crackability characteristics.
growing demand for petrochemicals. Further- Bottom barrel streams tend to concentrate
more, it’s possible to see the power of the Chi- aromatics and polyaromatics compounds that
na in the Asian and global downstream mar- present uneconomically performance in
ket. Another interesting point of Figure 19 is steam cracking units due the high yield of fuel
the positioning of the Middle East market oil that presents low added value, further-
which presents great potential of competitive- more, the aromatics tends to suffer conden-
ness of the petrochemical integration due to sation reaction in the steam cracking furnac-
the high capital availability and access to light es, leading to high rates of coke deposition
and high added crude oil. Recently, the that reduces the operation lifecycle and rais-
SATORP Company (A Joint Venture between es the operating costs. In this case deep con-
Saudi Aramco and Total Energies Compa- version units like hydrocracking can offer
nies), announces an investment of USD 11 higher operational flexibility.
billion in the Amiral crude to chemicals com-
plex in Saudi Arabia. Once cracking potential is better to paraffinic
molecules, and the hydrocracking technolo-
As aforementioned, facing the current trend of gies can improve the H/C in the molecules
reduction in transportation fuels demand at the converting low added value bottom streams
global level, the capacity of maximum adding like vacuum gasoil to high quality naphtha,
value to crude oil can be a competitive differ- kerosene, and diesel the synergy between
ential to refiners. Due to the high capital in- hydrocracking and steam cracking units, for
vestment needed for the implementation that example, can improve the yield of petrochem-
allows the conventional refinery to achieve the ical intermediates in the refining hardware, an
maximization of chemicals, capital efficiency example of highly integrated refining configu-
becomes also an extremely important factor in ration relying on hydrocracking is presented
in Figure 20.
39
Considering the recent trend of reduction in residue in FCC unit aiming to improve the
transportation fuels demand followed by the yield of high added value derivatives in the
growth of petrochemicals market makes the refining hardware, mainly middle distillates
presence of hydrocracking units in the refining like diesel and kerosene.
hardware raise the availability of high-quality
intermediate streams capable to be converted CONCLUSION
into petrochemicals, an attractive way to max- Nowadays, is still difficult to imagine the glob-
imize the value addition to processed crude oil al energetic matrix free of fossil transportation
in the refining hardware. As presented in Fig- fuels, especially in developing economies.
ure 20, the synergy between carbon rejection Despite this fact, recent forecasts, growing
and hydrogen addition technologies like FCC demand by petrochemicals, and the pressure
and hydrocracking units can offer an attractive to minimize the environmental impact pro-
alternative, sometimes the hydrocracking and duced by fossil fuels creates a positive sce-
FCC technologies are faced by competitors nario and acts as main driving force to closer
technologies in the refining hardware due to integration between refining and petrochemi-
the similarities of feed streams that are pro- cal assets, in the extreme scenario the zero
cessed in these units. In some refining fuels refineries tend to grow in the middle
schemes, the mild hydrocracking units can be term, especially in developed economies.
applied as pretreatment step to FCC units, es-
pecially to bottom barrel streams with high The synergy between refining and petro-
metals content that are severe poison to FCC chemical processes raises the availability of
catalysts, furthermore the mild hydrocracking raw material to petrochemical plants and
process can reduce the residual carbon to makes the supply of energy to these process-
FCC feed, raising the performance of FCC unit es more reliable at the same time ensures
and improving the yield of light products like better refining margin to refiners due to the
naphtha, LPG, and olefins. high added value of petrochemical intermedi-
ates when compared with transportation
Considering the great flexibility of deep hy- fuels. The development of crude to chemicals
drocracking technologies that are capable to technologies reinforces the necessity of clos-
convert feed stream varying from gas oils to er integration of refining and petrochemical
residue, an attractive alternative to improve the assets by the brownfield refineries aiming to
bottom barrel conversion capacity is to pro- face the new market that tends to be focused
cess in the hydrocracking units the uncracked on petrochemicals against transportation
40
fuels, it’s important to note the competitive ad- International Energy Agency (IEA) - Oil Out-
vantage of the refiners from Middle East that look, 2023.
have easy access to light crude oils which can
be easily applied in crude to chemicals refiner- MUKHERJEE, U.; GILLIS, D. – Advances in
ies. As presented above, crude oil to chemi- Residue Hydrocracking. PTQ Magazine,
cals refineries is based on deep conversion 2018.
processes that requires high capital spending, PORTER, M.E. The Five Competitive Forces
this fact can put under pressure the refiners that Shape Strategy. Harvard Business Re-
with restrict access of capital, again reinforcing view, 1979.
the necessity to look for close integration with
petrochemical sector aiming to achieve com- ROGERS, D.L. The Digital Transformation
petitiveness. Playbook: Rethink your Business for the Digi-
tal Age. 1st ed. Columbia University Press,
In the extreme side of the petrochemical inte- 2016.
gration trend, there are the zero fuels refiner-
ies, as quoted above, it’s still difficult to imag- SARIN, A.K. – Integrating Refinery with Pet-
ine the downstream market without transporta- rochemicals: Advanced Technological Solu-
tion fuels, but it seems a serious trend and the tions for Synergy and Improved Profitability –
players of the downstream sector need to con- Presented at Global Refining & Petrochemi-
sider the focus change in his strategic plans cals Congress (Mumbai, India), 2017.
like opportunity and threat.
SILVA, M. W. – More Petrochemicals with
Despite the benefits of petrochemical integra- Less Capital Spending. PTQ Magazine, 2020.
tion, it’s fundamental to take in mind the ne-
cessity to reach a circular economy in the VU, T.; RITCHIE, J. Naphtha Complex Opti-
downstream industry, to achieve this goal, the mization for Petrochemical Production, UOP
chemical recycling of plastics is essential. As Company, 2019.
presented above, there are promising technol- AUTHOR
ogies which can ensure the closing of the sus-
tainability cycle of the petrochemical industry.
REFERENCES
Advances in Catalysis for Plastic Conversion
to Hydrocarbons – The Catalyst Group
(TCGR), 2021.
CHANG, R.J. – Crude Oil to Chemicals – In- Dr. Marcio Wagner da Silva is Process Engi-
dustry Developments and Strategic Implica- neer and Stockpiling Manager on Crude Oil
tions – Presented at Global Refining & Petro- Refining Industry based in São José dos
chemicals Congress (Houston, USA), 2018. Campos, Brazil. Bachelor’s in chemical engi-
neering from University of Maringa (UEM),
CUI, K. – Why Crude to Chemicals is the Obvi- Brazil and PhD. in Chemical Engineering
ous Way Forward. Wood Mackenzie, 2019. from University of Campinas (UNICAMP),
Brazil. Has extensive experience in research,
FRECON, J.; LE BARS, D.; RAULT, J. – Flexi- design and construction to oil and gas indus-
ble Upgrading of Heavy Feedstocks. PTQ try including developing and coordinating pro-
Magazine, 2019. jects to operational improvements and debot-
GARY, J. H.; HANDWERK, G. E. Petroleum tlenecking to bottom barrel units, moreover
Refining – Technology and Economics.4th ed. Dr. Marcio Wagner have MBA in Project Man-
Marcel Dekker., 2001. agement from Federal University of Rio de
Janeiro (UFRJ), in Digital Transformation at
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GUPTA, K.; AGGARWAL, I.; ETHAKOTA, M.
SMR for Fuel Cell Grade Hydrogen. PTQ Mag-
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KIM, W.C.; MAUBORGE, R. - Blue Ocean
Strategy. Harvard Business Review, 2004.
41
For a single column the top section is called way to determine your current capacity and
the scrubbing section. The scrubbing section limitations is a high load test. You develop a
can be one to three beds. The scrubbing sec- test and measure all the relevant data. De-
tion is typically structured packing of KLM termine what is the current capacity and limi-
250X EC style. The EC (Enhanced Capacity) tations. Limitations might include packing,
is 2nd Generation Structured Packing. heat exchangers, or pumps.
If the column has two stripping section beds, 2. Develop a simulation matching current da-
the top bed height of 1.3 meters with 1.3 mbar ta
pressure drop. The higher-pressure drop is
due to the pump around the bed which has From the high load test data, a simulation is
higher flow parameters. The middle bed height developed for the complete system including
is approximately 1.6 meters with 0.6 mbar heat exchangers and pumps. The simulation
pressure drop. Total tower pressure drop should match the field data. KLM is happy to
may be in the range of 4 to 6 mbar. A typical assist in your simulation.
column diameter is one to two meters. 3. Review the equipment.
The stripping section is structured packing of Heat Exchangers
KLM 250Y EC style with a bed height of four
to 6 meters. The 6-meter bed might have ap- Heat exchangers are rarely optimized or de-
proximately 3.92 mbar pressure drop. signed well because they are awarded to the
low bidder. Then the operating unit pays for
Typical metallurgy is SS 304, SS 316 and SS the low unit performance in heat exchanged
316L. Typical stripping steam ratio is 0.20 kg/
hr for each MTPD. Free Fatty Acid (FFA) in and run length. Equipment should be bid on
the feed is about 5% wt and FFA out is about a cost and performance matrix.
0.05% wt. Typically, about one stage per me-
ter and packing pressure drop about 1 mbar When a performance matrix is utilized, the
per meter except for the pump around sec- lowest bidder rarely wins the heat exchanger
tions. Typically, design with about 20% safety bidding. For many units heat exchangers set
factors. the run time between maintenance outages.
With today’s high energy cost heat exchanger
Some Palm Oil Strippers may be more com- is a larger focus. KLM can assist with a bet-
plex with an extra draw from the column. ter design and supply of heat exchangers.
Steps of a Column Revamp Pumps
1. Determine Current Capacity and Limitations Pumps again are awarded to the lowest bid-
der. Typical low-cost pump efficiency might
The first step of a revamp is to understand be 80% where newer pumps are above 90% -
your current capacity and limitations. One this is a large energy saving. If you need to
45
replace a pump do not replace it with a low If you had KLM 250Y before we could consid-
efficiency pump. KLM can assist with a high er KLM 250Y EC for increased capacity. The
efficiency pump. KLM 250Y and KLM 250Y EC has roughly
the same efficiency but the KLM 250Y EC
Packing has about 25% to 40% more capacity.
Structured Packing has performed well in Here are some average Number of Theoreti-
Palm Oil Strippers. Distillation of Oleochemi- cal Stage Per Meter (NTSM) and Height of
cals requires attention to the following key fea- Equivalent Theoretical Plate (HETP). These
tures: numbers are based on low pressure of about
· High Vacuum 1 bar, low relative volatility, and good vapor /
liquid distribution – see next section on dis-
· Low pressure drop tributors.
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