Aug-2012

Hydrogen - the key refinery enabler

In the 21st century, the term “scraping the bottom of the barrel” has become quite literal to the refining industry and hydrogen comes to the fore as a means to do just this

Stephen Harrison, Linde HiQ

Article Summary

Only a few decades ago, the thick, heavy crudes being utilised today would not have even been a consideration for the production of mainstream products and were used mainly as bunker fuels. Thirty years ago crude quality was a good match with what was being demanded by the market, but today’s refiners are being compelled to dig deeply into the dregs of the remaining resources and must upgrade these crudes to reduce sulphur content and to keep up with market demand and environmental regulations. Hydrogen is therefore absolutely critical to convert this poor quality crude oil into modern-day products, and to comply with strict environmental mandates.

Although these heavy crudes are actually cheaper, refineries are faced with the additional expense of upgrading to sophisticated processes to refine them to the required standards and product slate meeting demand. The alternative is to pay a premium for the lighter crudes. This awkward choice has already impacted many refineries, notably on the east coast of the US , where refineries originally built to process light and sweet crudes have had to shut down because they could not fund the technology upgrade necessary to process heavier crudes. The cost of hydrogen is part of the premium that the refiners must pay to process cheaper crudes economically.

The challenge is made more complex by the fact that no two refineries are alike and that the naturally occurring hydrocarbon distribution in crude does not always match customer demand. Various additional processing steps are required to re-adjust the molecules, reshape them and remove contaminants to ensure the refinery products meets the requirements for end-use and the product demand profile, as well as environmental performance.

Hydrogen is a key enabler allowing refineries to comply with the latest product specifications and environmental requirements for fuel production being mandated by market and governments and helping to reduce the carbon footprint of their plants.

Margins are tight in the highly competitive refinery business, a situation exacerbated by the costs of creating low sulphur fuels from heavier, more sour crude, as the world’s crude oil resources dwindle. The sulphur content of the world’s diminishing crude oil resources is higher than ever before as oil companies are forced to tap into a cheaper but lower quality of crude that requires more refining to meet tightening environmental standards and while maximising margins. Product sulphur levels are lower than ever before — for instance, 30 parts per million (ppm) in gasoline and 15 ppm in diesel fuels.

Growth in demand
From a global perspective hydrogen is demonstrating significant growth. Large heavy crude oil reserves, still under development, may increase the hydrogen demand ever further. Two examples are the extra heavy crude oil in the Orinoco Belt in southern of Venezuela and the Canadian Oil Sands. While there are many refinery configurations, all refineries harness large quantities of hydrogen across a spectrum of operations. Hydrogen is utilised in several refining processes, all aiming at obtaining better product qualities. The main processes include hydrotreating of various refinery streams and hydrocracking of heavy products.

While the lighter, sweet crudes require less processing, the heavier, sour crudes contain higher levels of sulphur, other contaminants and fractions. Processing them typically begins with the same distillation process as for the sweet crudes to produce intermediate products, but additional steps are necessary.

Hydrotreating is one such process, introduced to remove sulphur, a downstream pollutant, and other undesirable compounds, such as unsaturated hydrocarbons and nitrogen from the process stream. Hydrogen is added to the hydrocarbon stream over a bed of catalyst that contains molybdenum with nickel or cobalt at intermediate temperature, pressure and other operating conditions. This process causes sulphur compounds to react with hydrogen to form hydrogen sulphide, while nitrogen compounds form ammonia. Aromatics and olefins are saturated by the hydrogen and lighter products are created. The final product of the hydrotreating process is typically the original feedstock free of sulphur and other contaminants. Single or multiple product streams (fractionated) are possible, depending on the process configuration.

The hydrocracking process is a much more severe operation to produce lighter molecules with higher value for diesel, aviation and petrol fuel. Heavy gas oils, heavy residues or similar boiling-range heavy distillates react with hydrogen in the presence of a catalyst at high temperature and pressure. The heavy feedstocks are converted (cracked) into light distillates — for example, naphtha, kerosene and diesel — or base stocks for lubricants. The hydrocracker unit is the top hydrogen consumer in the refinery. Hydrogen is the key enabler of the hydrocracking to reduce the product boiling range appreciably by converting the majority of the feed to lower-boiling products. Hydrogen also enables hydrotreating reactions in the hydrocracking process; the final fractionated products are free of sulphur and other contaminants. Other refinery processes including isomerisation, alkylation and tail gas treatment also consume small amounts of hydrogen.

Critical decision
Considering that the cost of a refinery expansion can be in the order of US$1billion, with hydrogen supply representing in some cases about 10% of this investment, the decision concerning the optimum way to source this hydrogen has become a critical one. In many cases, refinery operators see the investment into hydrogen supply as a defensive outlay necessary to remain competitive in the market.

Hydrogen is required in large volumes – typically 10-200 000 Nm3/hr on a refinery, but is needed for a variety of applications in several different scales of supply. Due to hydrogen representing a significant percentage of a refinery’s total investment, a pivotal decision confronting operators is the supply method. There are essentially three options for large scale hydrogen supply.

Firstly, the refiner can build an on-site hydrogen production plant, which it owns and operates using its own personnel. An advantage of this option is that hydrogen production becomes fully integrated with the other refinery processes. While this enables the refinery to keep control of its own hydrogen supply, this option requires more capital and demands skilled attention from the refinery labour force for efficient operation, maintenance and repair. If the in-house team is unable to operate the plant efficiently, the refinery will incur financial losses, including increased consumption of natural gas and even other more costly raw materials such as naphtha, water and power. Loss of hydrotreated products attributed to poor reliability may also be a concern.