Apr-2014

Advanced solutions for efficient crude blending

The use of nuclear magnetic resonance based process analysers supports the production of blends at lowest cost

Gregory Shahnovsky, Tal Cohen and Ronny McMurray
Modcon-Systems Ltd

Article Summary

In the past, refineries were constructed to distill conventional light crude oils. Current economics, variations in the price of crude oils and shifting demand for distillates have forced refineries to reduce the cost of their distillation feedstock. Commonly, this is achieved by blending high-value light crude oils with heavy (unconventional) crude oils of inferior quality, or by buying ready-made blends. Low quality crudes include heavy crudes from known locations, as well as opportunity crudes that are brought on the market by traders worldwide. These crudes, of lower quality, can be purchased at low cost. Blending of these with costly crudes is inevitable to produce crude blends that bear optimal properties to be processed, and at minimum cost.

Refineries worldwide are constructed from an engineering point of view and from materials that enable the distillation of well-defined types of crude oils. These refineries were built based on the availability of certain types of crude oils in their neighbourhoods, the cost of certain crude oils on the market, and demand for predominantly light distillates for gasoline production.

Distillation of crude oil was mainly targeted to produce gasoline components, such as light and middle distillate. More recently and especially in the US and in Europe, demand for fuels has shifted from gasoline towards diesel fuels. This means that while in the past predominately light crudes were distilled, today refineries must be able to distil heavier crude oils to increase the amount of middle and heavier distillates. Refining margin for many refineries which were not able to adapt to the changing situations decreased. Technological limitations caused many refineries to buy expensive light crudes that do not produce specifically those distillates that are most needed in the market. For many refineries, the losses were too large. Many closed or changed their activities from distilling toward blending.

Nowadays, crude blending is performed either by blenders or by refineries themselves which buy various types of low cost crude oils. They upgrade their chemical and physical properties to produce a synthetic crude oil at lowest cost, which can be processed in refinery equipment and will yield high value distillate.

Characteristics of crude oils
Quality properties determine the market value of each type of crude. The most important quality characteristics are the density, the total acid number (TAN) and the sulphur content. The API ranges from light crudes (high API, low density) to heavy crude oils (low API, high density). Sulphur is present in crude oils as hydrogen sulphide and as polysulphides. These sulphur containing molecules will partially decompose during distillation, while hydrogen sulphide evolves. The sulphur content and other acidic components in crude oil, such as naphthenic acids, are highly corrosive, and responsible for crude oil to be of a sour or sweet character. These characteristics mostly lead the price paid for different types of crude oils.

Refinery equipment
High TAN crude oils are characterised by fewer light components, high density and viscosity, low solidification point, high nitrogen content, high gel-asphalt content, high salts and high heavy metals contents and a low yield of light oil distillates. Oil separation in the desalter is more difficult than in conventional crudes. These properties also cause these crudes to give low quality products and they are very corrosive. Commonly, high TAN crude oils are called ‘opportunity crude oils’. The price is about 80% that of conventional crude oil. The additional cost of processing high TAN crude is within the range $1.15–10.73/bbl, but the savings compared to conventional crude processing are $43.54–62.7/bbl. Utilising these crude oils in any way possible is therefore very attractive to refiners.¹

In the past, most refineries were designed and constructed from materials according to the crude oil available and its ease of purchase. This limits the versatility of many refineries to purchase other crude oils of different qualities. Many of those refineries that are constructed to distil light and low sulphur crude oils are restricted as regards processing heavy fuels.

Critical differences in their physical and chemical properties make heavier crudes oils more difficult to distil than light crudes. Heavy crude oils are sour and more corrosive than light crudes. Higher viscosities, fouling tendencies and different flow streams make it more difficult to maintain stable crude charge rates, which are required for stable product yields, quality and reliability. Differences in boiling points between light and heavy crudes require different process temperature requirements such as pre-heating, different distillation temperatures, overheads and so on. Heavy fuels are rich in asphaltenes and metals and other contaminants which cause poorer desalting performance.

Product shifting
Demand for certain distillates and refinery products is shifting. It is expected that middle distillates will comprise some 45% of global demand per barrel by 2015, which is a rise of 10% compared to 2005. It can be expected that production of diesel gas oil in developing nations will increase by 10 million b/d from 2009 to 2030^.2

The US is the largest consumer of crude oil. While US demand remains stable, today China is in second place with an annual 4% increase in demand for crude oil. New refineries, built nowadays, are already designed as such that they are not limited to a small range of crude oils.
The major operational cost of the refinery is contributed by the price of the crude oil, an estimated by 80-90% of cash flow. Reducing the cost of the crude feedstock, without changing the range and volumes of high valued distillates, increases the refining margin. Refinery profits are a direct outcome of the strategy applied by the refinery to purchase low cost crudes and to produce distillates with a high market value. To increase refining margin and remain competitive, refineries are obliged to minimise the cost of their crude feed, without affecting their capacity to produce high value distillates. As heavier crudes are more difficult to process, and with the increase of consumption of diesel oil as compared to gasoline, light sweet crude oils are marketed at a higher price than heavy crudes. Reducing the cost of the crude input, without changing the range and volumes of high valued distillates increases the refining margin.

Potential crude blenders
Two broad types of organisation deal with the business of crude blending, refineries and blend producers/trading companies. Crude blending is applied directly by refineries to prepare low-cost and compatible blends for internal consumption or for trading in the market. Efficient crude blending opens opportunities for oil blenders, oil trading companies and terminals to bring low cost blends onto the market. These blends can be sold to refineries with a high market value and quality.

Crude mixing can be applied throughout the entire supply chain of crude oil, from its well enabling transportation, through terminal blending to the refineries. The final crude supply to the distillation unit may be a combination of these activities.