Scraping the Bottom of the Barrel?

Although a very simple concept, it was hugely successful for ExxonMobil. The company consistently outperformed its peers in terms of profitability for many years and although there were other contributing factors, the relentless focus on Molecule Management certainly played its part. Over time, other companies have moved in this direction.

In refining and in particular for those refineries processing heavier crudes, there is a simple challenge – how to increase the overall conversion of the residues of all crudes into the most valuable distillates.

We know that refinery complexity is generally increasing. Although this has capital cost implications, the benefits in terms of flexibility and financial performance are considerable. Of course the extra capital expenditure can be challenging, particularly when funds are limited or there are other, competing options but it is important to look at margins and operating costs, not just CAPEX.

There are many different residue upgrading technologies available and, of course, every technology provider will point out the strong points of his particular technology but technology selection is more complex than that.

It is based on factors specific to each refiner and project, including return on investment, the specific product slate desired, refinery location, refinery configuration, target markets, feed and product pricing and type of crudes available.

The end result for an optimised refinery will almost certainly consist of technologies from different providers and this is absolutely fine, provided that the interfaces are well managed during the design stages.

Traditional technologies such as Delayed Coking, Residue Hydrotreating and Ebulating Bed Hydrocracking are now well developed and licensed by many of the big names in the business and need no mention here.

There is also a big push by some licensors for slurry hydrocracking, which claims much higher level of conversion. However there is a lack of experience of large operating units, so some caution is required. Economics are potentially attractive but there are some risks with commercial operation, until all the bugs are ironed out.

Other options include power generation via processes such as Gasificaton, Flexicoking and Circulating Fluid Bed Boilers, to convert coke to power. Here, local economics must be considered.

Ultimately, what refiners need are residue conversion solutions that use proven technologies to maximise conversion to distillates, eliminate any project risks and with sound economics over the lifecycle of a facility while facilitating project financing.

The key for owners and producers is to possess enough knowledge to know the questions. You can then effectively use the specialised technology providers to provide the answers. One option is to develop some well-informed and knowledgeable in-house capability to be able to manage the various parties involved.

An alternative is to engage a specialist consultant to act as your client project engineer (CPE) and act as an integral part of your project team to support you in technology selection and in managing the interfaces with technology providers and EPCs throughout the life of the project. There are several companies with well experienced and capable personnel that can serve as highly effective CPEs.

So that’s a quick overview of residue upgrading. Putting it in simple terms, if you manage molecules you make more money!