Catalyst and change have been synonymous from a long time. Starting from the 18th century when Humphry Davy mentioned about catalytic activity to present day, the catalyst industry, and hence, the overall chemical industry, has witnessed a sea of change.
By definition, catalysts are chemicals that are added in small amounts to aid conversion of raw materials to products and in the process do not undergo any chemical change themselves. They reduce the amount of energy / time required to complete a reaction.
More than 80% of all chemical products have been manufactured using catalysts at some point in their lifecycle.
Early understanding of catalysts was extremely limited. However, with the advent of molecular chemistry, the mechanism of catalysis has been explored resulting in increased control over it, helping tweak its properties to make processes quicker and less energy-intensive. This is one area of chemistry where the industry still expends R&D efforts on a regular basis.
Catalysts can be classified as heterogeneous and homogenous based on their phase and the phase of the reactants. Catalysts can be also categorised based on the processes they are used for.
They find application across all industry segments such as refinery, petrochemicals, chemicals, foods, etc. With increased energy demand and stress on green technologies, catalysts play a very significant role in petroleum refinery operations.
Key refinery processes such as cracking, hydroprocessing, reforming, etc., require the presence of catalysts.
From being an oil-exporting region to a refining hub and a hotspot for downstream investments, the Gulf Co-operation Council (GCC) is becoming a major force in shaping the global chemical industry.
With about 10% of global refining capabilities, the importance of petroleum refining catalysts in the region cannot be understated. This can be clearly observed by the recent activities of catalyst manufacturers in these countries.
Article continues on next page …
Fluidised Catalyst Cracking (FCC) is the process of cracking and converting gas oils and residues into light olefins, high-octane gasoline, naphtha, etc. The catalysts used in the process are zeolite-based with some rare earth metal content in them.
Due to constant movement between the cracker and the regenerator, there is a constant loss of catalysts during the process. Hydroprocessing includes hydrotreating and hydrocracking. Hydrotreating catalysts are predominantly Nickel / Cobalt / Molybdenum-based.
The hydrocracking catalysts are composed of an active metal component and a base material such as alumina-silica or zeolite. Reforming catalysts are quite expensive due to the presence of precious metals such as platinum.
This is used to increase the octane number of gasoline. Claus catalysts help in the removal of sulphur from various petroleum streams to comply with environmental standards. The catalyst contains titanium or is activated alumina. Alkylation catalysts aid in the combination of smaller molecules to increase the octane rating of gasoline and are, typically, an acid. Isomerisation catalyst also employs a noble metal.
Frost & Sullivan estimates the global market for petroleum refining catalysts to be worth about $5.10 billion in 2013. Catalysts used for FCC is the largest segment due to the frequent refills needed by the system.
Asia Pacific (APAC) is the largest market for catalysts with more than 30% of total refining capacity and a growing demand for fuel, polymers, and other chemicals being the prime reason. However, the demand for hydroprocessing catalysts is higher in Europe (EU). This is as a result of stringent environmental regulations enforced by the EU.
Only leading global companies such as UOP LLC, W.R. Grace & Co., Axens, BASF, etc. offer catalysts for majority of the chemical processes. Certain companies specialise in the manufacture of certain catalysts, whereas others such as BASF and Axens supply catalysts for multiple technologies. These companies also possess refinery process technologies for which their catalysts are used. Sinopec from China is also emerging as a leading participant.
Smaller companies, especially in the developed regions, tend to concentrate in the development of a single, speciality catalyst that is subsequently acquired by one of the larger companies.
Currently, manufacturing of catalysts is concentrated only in developed regions such as the US and EU. However, manufacturing in China has also begun recently. As far as timelines go, usually, the order for manufacturing catalysts is placed three to six months before requirement; typically, the beginning of each year and the delivery of catalysts, including manufacture time, can vary between four to 12 weeks depending on the catalyst and the location.
The cost of catalysts can vary between $3,500-$24,000 per Metric Tonne (MT), depending on contracts and the nature of the catalyst. The Middle East accounts for about 3.6% of the total global market for petroleum refining catalysts and is one of the fastest growing regions.
Article continues on next page …
With outdated refineries in other regions being forced to shut, the Middle East, particularly the GCC countries, is seeing a lot of activity in petroleum refining. Frost & Sullivan estimates the petroleum refining catalyst market in the Kingdom of Saudi Arabia (KSA) at over $55 million in 2013 with more than 75% demand for FCC catalysts.
All the major global participants such as UOP, BASF, Axens, etc. have their presence in the region. However, currently there is no significant manufacturing presence for catalysts locally and domestic companies have not shown interest in this domain.
Kuwait Catalyst Company is the lone manufacturer of catalysts for desulphurisation and hydrotreatment of certain streams. The company was acquired by Advanced Refining Technologies with plans to use it for manufacturing hydroprocessing catalysts.
Companies have been engaged in R&D to develop innovative catalysts and control catalyst properties over the last few decades. However, most of this activity happens only in developed regions and not in the Middle East.
With the growing pressure on industries to reduce their carbon footprint and increasing competition, companies have focussed their research on reducing costs and making cleaner fuels.
Hydroprocessing, desulphurisation, and Claus process catalysts are some of the key catalysts that help in removal of sulphur and other polluting components from refinery streams. Albemarle developed the Ketjenfine catalyst which enhances the pre-treatment before hydrotreatment of Vacuum Gas Oil.
In hydrotreatment, research towards increased rate of performance, extended life, and cost optimisation is the trend.
Particular focus on development of innovative metallic catalysts for deep hydrogenation and customised catalysts for multi-bed reactors is seen. Another area in which companies are focussed on is cost optimisation.
Catalysts with high levels of selectivity and activity are critical to control processes and produce large volumes of desirable products and reduce side reactions. In FCC, focus on increasing the catalyst life span, reduction of sulphur, and optimisation of process yields are some of the key research trends.
For example, BASF’s HDXtra catalysts increase overall yield of light oils and also increases diesel production while controlling excess gasoline production. Novel catalysts also provide options to combine multiple processes, thereby, reducing capital investment.
Article continues on next page …
Additionally, companies are developing alternate technologies and catalysts for them that will help reduce emission of harmful products into the environment. Methyl Tertiary Butyl Ether (MTBE), Ethyl Tertiary Butyl Ether (ETBE), and Tertiary Amyl Butyl Ether (TAME) are alternates to benzene and other harmful streams that are added to fuels to increase octane content.
Another area of focus is also in the use of alternate raw materials such as coal and biomass to produce fuels and other petrochemicals. Such technologies will help reduce overall carbon footprint and dependence on crude oil.
The advent of nanoscience has presented tools to tweak catalyst structure and properties to tailor-make catalysts that suit specific requirements in the future. Many big catalyst companies have acquired smaller companies to consolidate their position in the market, expand their product baskets, and offer niche products.
Johnson Matthey’s acquisition of Intercat and BASF’s acquisition of Engelhard are some examples. Further, catalyst companies forge strategic alliances with technology companies and other catalyst companies to offer process solutions.
Advanced Refining Technologies (ART) has formed an alliance with Kuwait Catalyst Company (KCC) through which ART gains access to its manufacturing facility while KCC gets access to ART’s catalyst technologies and commercial resources. More such tie-ups can be witnessed with global companies trying to enter emerging markets such as China, other Asian countries, and the Middle East.
With increasing stress on cleaner fuels and emission reduction, refiners have been forced to invest on hydroprocessing technologies and this is working out to be a major driver for catalyst demand. This trend is quite evident in the Middle East where diesel export to the EU has been planned mandating compliance to EU norms for fuels.
Further, with the need to process more heavy and sour crudes in the future, the demand for cracking and hydroprocessing catalysts will increase. With increasing focus on the manufacture of light ends, catalysts for upgrades of heavier ends will also witness growing demand.
However, with so much effort being expended on the industry, there are a few challenges that the overall catalyst industry is facing. One of the key challenges is the price of key input components. Over the past three to four years, the price of metals such as nickel, one of the key raw materials, has witnessed a large increase.
The price of platinum has increased by almost one and a half times over the last five years. This further pushes up the price of the already expensive catalyst. Catalyst companies now prefer refineries to supply the precious metals and charge only for the rest of the catalyst. Finally, refiners can recover precious metals from the deactivated catalyst.
Another key challenge is in the availability of rare earth metals, one of the key components in FCC catalysts. Currently, China is the largest producer of rare earth metals commanding about 60% of global market.
Article continues on next page …
Due to regulatory policies, the export of rare earth metals is restricted, thereby, shooting up prices. The supply of rare earth metals is still not very stable and is a major challenge for the industry.
With the increasing demand for fuels and other chemical products, especially from emerging markets, Frost & Sullivan estimates that the catalyst industry will witness a growth of 3-4% globally over the next five years. The growth is not expected to be uniform, with emerging geographies such as APAC and the GCC leading growth. With developed economies closing down obsolete refineries, these regions are expected to take over production.
China, especially, is slated to become one of the largest consumers of petroleum refining catalysts, buoyed by increasing domestic demand for Kerosene and Diesel, and demand in the export market for gasoline and lighter fractions. A high-growth period is expected over the next four to five years, post which a situation of oversupply and a slowdown in growth is expected.
With the Middle East transforming from an exporter of crude oil to an exporter of value-added fuels and chemicals, the demand for catalysts has been increasing over the last four to five years. Considering the number of refinery projects in the pipeline, this period of high growth is expected to continue over the next six to seven years.
An overall growth of 6% has been estimated with high demand for FCC and hydroprocessing catalysts. The KSA, with about 50% of the region’s refining capabilities, is expected to witness phenomenal growth estimated at over 10% over the next few years.
Various refinery projects such as Jazan refinery (Saudi Aramco), Jubail refinery (JV of Total and Saudi Aramco), Yanbu refinery (JV Sinopec and Saudi Aramco), etc will support this growth. FCC is the largest segment with more than 10 units to be built in the next five years.
Demand for hydroprocessing catalysts is also expected to witness strong growth. The situation is similar in the rest of the GCC countries, as well, with an estimated growth rate of 9% over the next few years.
Projects across the United Arab Emirates (UAE), Kuwait, Qatar, Oman, and Bahrain further support growth. With great potential in the GCC, catalyst manufacturers have shown interest in consolidating their position in the market. Their investments are aimed at capturing growing demand as well as to optimise production across regions.
With new refineries coming up and catalyst manufacturers showing keen interest on local presence, the GCC is poised to grow into a leading global supplier of cost-competitive and clean products in the near future.
In numbers:
– 80% More than this many chemical products use catalysts for manufacturing
– 3.6% The Middle East accounts for this much of the global market for refining catalysts
– $55 mln The petroleum refining catalyst market in the KSA is estimated to be valued at over this much in 2013.
– 3-4% The global catalyst industry is expected to grow this much over the next five years, led by APAC and the GCC.
– 50% The KSA holds this much of the region’s refining capacity and is expected to see another 10% capacity growth soon.
– 30% The Asia Pacific region is the largest market for catalysts with over this much total refining capacity.
