PTQ Q4 2023 Issue

0.0

$4,000

Credit price

-2.0

$3,000

-4.0

-0.6

$2,000

With splitter No splitter

-0.8

$1,000

-10.0

Product sulphur (ppm)

Another 40% of refineries have high-pressure FCC feed hydrotreaters and/or hydrocrackers in addition to gasoline desulphurisers. Their octane loss is low. The remaining 20% of refineries have a high-pressure FCC feed hydro - treater and/or hydrocracker but no gasoline desulphuriser. High-pressure FCC feed hydrotreaters get the sulphur out of heavy and high sulphur intermediates before crack - ing in the FCC, resulting in the production of low sulphur FCC gasoline that meets or is easily desulphurised to Tier 3 specifications with low octane loss (like the upper dashed curve in Figure 1). Improving Tier 3 economics Refiners have succeeded in greatly improving Tier 3 eco - nomic performance through seven strategies: • Feed opportunities • Revamp opportunities • New process opportunities Referring again to Figure 1, the position of the perfor - mance curve (ΔRON octane vs product sulphur) is strongly dependent on the feed composition. This means big oppor- tunities for feed optimisation. For example, in the field test shown in Figure 1, a detailed analysis of the feed and products during the field test revealed that an H₂S-bearing stream was bringing H₂S into the unit, reducing catalyst activity and selectivity. Correcting that problem reduced octane loss by $7 million per year and extended cycle life, with a present value of $60 million. A field test in a different refinery generated the lower solid black performance curve in Figure 4 . The upper dashed curve represents the calculated impact of adding a splitter that removes light FCC naphtha from the feed. With a splitter, the light FCC naphtha bypasses the desulphuri - sation reactor and is not subject to octane destruction that otherwise occurs. • Catalyst opportunities • Credit opportunities • Lab opportunities • Capital investment opportunities. Detailed analytical data from this field test enabled the refinery to convincingly quantify a large benefit for a Figure 4 The lower curve, measured in a field test, combined with ‘blood test’ data, made a convincing case for a new splitter project that was quickly approved, funded, and implemented

Figure 3 The Tier 3 sulphur credit price has increased seven-fold since Jan 2022

The credit price is a good measure of the actual cost of compliance because it is known that refineries are paying that credit price today to avoid the actual cost of reduc - ing sulphur to 10 ppm, which means their actual cost must exceed the cost of credits. Cost for the US In 2017, Hoekstra Trading predicted the cost of octane destruction in US refineries would be $10 billion/year when Tier 3 fully kicked in.² That was based on pilot plant and commercial field test data showing that high octane loss (like the lower solid curve in Figure 1) would occur in many US gasoline desulphurisers. That $10 billion/year estimate compares with the Environmental Protection Agency (EPA)’s estimate of $1.3 billion per year. 2,4 But the EPA’s estimate included a capital charge for $3 billion of capital investment, mostly in FCC feed hydrotreaters, that was anticipated but did not occur. 2,5 The reason for the high cost of Tier 3 compliance is the high-octane destruction occurring in refineries not well-equipped for Tier 3 duty Those FCC feed hydrotreaters were expected to reduce octane loss from levels indicated by the lower solid curve in Figure 1 to levels indicated by the upper dashed curve. That would have greatly reduced octane destruction and the cost of compliance compared to what is being realised. Why is the cost so high? The reason for the high cost of Tier 3 compliance is the high-octane destruction occurring in refineries not well- equipped for Tier 3 duty. Forty per cent of US refineries rely exclusively on low-pressure selective FCC gasoline desul - phurisers to reduce the sulphur in FCC naphtha to levels compatible with a 10 ppm sulphur gasoline pool. They suf - fer high octane loss.

PTQ Q4 2023