PTQ Q2 2024 Issue

Vol 29 No 3 Q2 (Apr, May, Jun) 2024 ptq PETROLEUM TECHNOLOGY QUARTERLY

Keeping refineries profitable

T hroughout every quarterly issue of PTQ , we have seen the need to find new ways to improve and apply existing technology for changing market forces and regulatory requirements. So, with adaptation of carbon taxation, refiners must produce higher yields of fuels per unit of CO 2 from conversion units such as the fluid catalytic cracking (FCC) unit. One interesting route is to operate FCCs more sus - tainably by supporting the co-processing of alternative feeds. But how many FCC units are co-processing alternative feedstocks? The consensus is that co-processing is feasible if less than 5% of the feedstock is from alternative sources. Above 5%, processing unknowns weigh in on the need for additional expertise, such as the use of more active and poison-resistant cata- lysts and absorbents for efficient conversion of renewable feedstocks to fuels and chemicals, bringing new capabilities to existing facilities seen in Europe and North America. Elsewhere, project start-ups reflect strategies to increase fuel production and feed - stock volumes for monetisation to petrochemicals, as seen in the Middle East and other countries. For example, Saudi Arabia is building nine liquid-based ethylene steam crackers to produce a wide range of products, such as a high-margin polymers. Through joint ventures, steam cracker projects will process byproducts from crude processing, including naphtha and off-gas, to produce ethylene, such as with a multi-billion-dollar project between Saudi Aramco and South Korea to pro- duce propylene, butadiene, and other basic chemicals by 2026. Petrochemicals are set to account for nearly half of growth in oil demand to 2050, according to the International Energy Agency. Petrochemicals are also poised to consume an addi- tional 56 billion cubic metres of natural gas by 2030, the agency recently noted. The global petrochemical market is projected to be worth roughly $800 billion by 2030, according to Precedence Research. At this juncture, there is a lot of pressure to close refineries in Europe if old assets cannot be modified, such as with the ability to co-process alternative fuels. What is happening with refinery growth in Africa now could significantly impact European refineries, such as with a refinery in Nigeria that includes a new 600,000 bpd single column crude unit. According to Honeywell UOP’s Keith Couch, speaking at the January NARTC in Houston, “when that unit starts up (i.e., at the Dangote refinery), the price pressure on European refineries will approach $4 per barrel”. The Dangote refinery has ramped up its stock of imported crude oil, including shipments of US light sweet crude oil, according to trader and ship tracking data. So, the facility is well on its way to running at full capacity. Will European refiners be able to stave off imports? Perhaps with government subsidies and ESG-focused projects. Elsewhere, the rapid start-up of major capital projects in China and India is taking 36 months, while projects in the Middle East need perhaps 96 months to complete due to supply chain and labour restrictions. This makes refineries such as Reliance in India more competitive, even as they are leveraged by a lack of crude oil reserves. In almost every instance, the road to success for refiners involves a shift to petrochemicals, such as with olefins and aromatics. For ‘older’ refinery facilities, such as in the US, that petrochemical opportunity could begin with benzene, as its octane-enhancing importance in the gasoline mar- ket is diminishing due to regulatory restrictions. Propylene is another bankable pet- rochemical that can be considered with the right process and catalyst upgrades, as discussed in this issue of PTQ . Further into the year, this narrative will discuss track- ing a facility’s carbon footprint from new profitable and energy-efficient projects.

Editor Rene Gonzalez editor@petroleumtechnology.com tel: +1 713 449 5817

Managing Editor Rachel Storry rachel.storry@emap.com Editorial Assistant Lisa Harrison lisa.harrison@emap.com

Graphics Peter Harper

Business Development Director Paul Mason sales@petroleumtechnology.com tel: +44 7841 699431

Managing Director Richard Watts richard.watts@emap.com

Circulation Fran Havard circulation@petroleumtechnology. com

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PTQ (Petroleum Technology Quarterly) (ISSN No: 1632-363X, USPS No: 014-781) is published quarterly plus annual Catalysis edition by EMAP and is distributed in the US by SP/Asendia, 17B South Middlesex Avenue, Monroe NJ 08831. Periodicals postage paid at New Brunswick, NJ. Postmaster: send address changes to PTQ (Petroleum Technology Quarterly), 17B South Middlesex Avenue, Monroe NJ 08831. Back numbers available from the Publisherat $30 per copy inc postage.

Rene Gonzalez

PTQ Q2 2024