© 2018 UOP LLC. A Honeywell Company All rights reserved.

Maximizing Profitability with High Residue ConversionHoneywell UOP Uniflex™ TechnologyGary R. Brierley

19 February 2018 Honeywell UOP ME-TECH SeminarDubai, UAEUOP 8080F-0

Current Marine Bunker Demand by Region1

9

43 22

12 19

63 89

14 34

20

71

NA LA EUR

6

CIS

3

AFR ME AP

6

2015

RFO

Dem

and,

MTP

A

ProductionOtherBunkers

Source: IHS

Residual Fuel Oil Demand

• Marine bunkers represents a high proportion of residual fuel demand• Marine Bunkers is major outlet for RFO in key segments of Asia Pacific

(45%), Middle East (24%), Latin America (24%) and Europe (60%)• Over Abundance of Residual Fuel Oil in CIS and EUR: Calls for conversion

UOP 8080F-1

MARPOL Annex will have Worldwide Effects on High Sulphur Fuel Oil (HSFO) Demand and Price

2

• Significantly reduced HSFO use for bunkering as a result of new regulations

• Surplus residue expected after residue conversion and power generation usage

• Will significantly impact product price differentials in 2020

• HSFO expected to be priced at significant discount after 2020 compared with 2016 (~40% lower) -50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2040

Ultra-low sulfur diesel LS Bunker (0.5 % S)ECA MGO (0.1 % S) Gasoil 0.1% sulfurResidual fuel oil 1% Residual fuel oil 3.5%

Product Price, $/BBL

Price Recovery Assumes Ships Will

Install ScrubbersSource: IHS

UOP 8080F-2

Refinery Decision Dilemma3

How long should I wait? • Ship owners strategy? • Wait for others to move and join the herd?

What should I do?• Sell Bunker into HS fuel oil market• Convert HS Bunkers to distillates / gasoline• Convert HS fuel to LS Bunkers (0.5% S)

UOP 8080F-3

Refinery Options to Upgrade HS Fuel4

Uniflex Units Give Highest NPV Based On Our Analysis

Conversion Options• Slurry bed process such as Uniflex™ process

‒ Good payback• Ebullated bed process

‒ Limited conversion• Delayed coking process

‒ Similar capex. Lower payback.

Treating Options

• Desulphurise HS bunkers with process such as RCD Unionfining™ process

‒ Limited product value uplift

• Process VR in new SDA and desulphurise DAO

‒ Lowest capex, but still makes some HSFO

UNIFLEX

Uniflex Performance with Integrated Distillate Unionfining™ Unit5

95% conversion : Higher conversion comparable to other residue conversion processes Euro V Diesel : Highest yield of diesel compared to other slurry processes Minimum VGO : Can be accommodated in existing conversion units Naphtha : < 1 wppm S and N Pitch: : Cement Plant, Gasification Unit, Boiler/Kiln, or solidified into pellets

UNIFLEX UNIT(Wt-%)

100

12-15

55-60

8-10

Vacuum Residue Feed

Naphtha

Diesel

VGO to HCU feedCatalyst

H2S, NH3

Gas, LPG

PitchH2

Hydrotreated in Integrated DHT

4 - 6

1-48-11

UOP 8080F-5

UOP Uniflex Unit Including Integrated Hydrotreater6

Integrated Hydrotreater Significantly Minimizes the Number of Pieces of Equipment, therefore Capex is Reduced. External Diesel Streams could be Hydrotreated to Euro 5

Uniflex Fractionation

SectionCLPS

UniflexReactor

FeedHeater

Recycle Gas

Heater

DHTHeater

HydrotreatingReactor

ExternalFeeds

To DHTFractionation

SectionRecycle HVGO fromUniflex Fractionation

Section

CHPS

WHPS

VacuumResidue

Feed

Make-upHydrogen

Catalyst

WLPS

HLPS

HHPS

WLPS

ExternalDiesel

UOP Uniflex Process Licensed Units Update7

Name Location Capacity, MMTA Feeds Start-up

Petro-Canada, Montreal Canada 0.3

Venezuelan, Mexican, North Sea, Cold Lake,

Visbroken VR

1985S/D 2003

NRL, Pakistan Pakistan 0.6 Light Arabian, Pakistani 2020

Shandong Longgang China 1.35 Med Arab, Merey,

Russian Export 2019

Oil Gas Trade CJSC Russia 0.4 SDA Pitch Cancelled

Undisclosed China 0.8 Merey, Russian Export, Shengli Delayed

Undisclosed China 0.9 Arab Light, Russian Export Delayed

Undisclosed China 0.8 Arab Light, Russian Export Delayed

UOP 8080F-7

Uniflex Process - Continuous ImprovementBased on Voice of the Customer

8

Uniflex MC - Further Improvements to a Commercially Proven Process

Uniflex Process Continuous

Improvement

• High conversion to valued products

• Process design for sustained operability and reliability

• Economically efficient catalyst systems, and manufacturing capability

• Economically advantaged disposition for all products

• Robust feed and product characterization

• New catalyst innovations • Process enhancements

Molybdenum-based MicroCat™ CatalystKey Enabling Technology

9

Feed

MakeupH2

Recycle fromFractionation

• Moly on a carbonaceous base• High-activity catalyst allows for

smaller reactors• No proprietary catalyst purchases

‒ Produced at the refinery from raw materials readily available on the open market

• Low injection rate required

MicroCat CatalystPreparation Section

UOP 8080F-9

Two Reactors in Series:Enhanced Reliability and Performance

10

• Higher single-train capacity• Staged conversion

‒No incompatibility issues• Pitch (Vacuum Tower Bottoms) recycle

‒ Lower light ends yield‒ Lower hydrogen consumption‒Heavier product slate

Feed

MakeupH2

Recycle fromFractionation

MicroCat CatalystPreparation Section

UOP 8080F-10

External Reactor Circulation: Low Conversion per Pass, Improved Yields

11

• Low recycle gas rates• Low liquid feed heater duty• Operates in low-foaming regime• Carries solids out of reactor

Also contributes to improvedyield slate

Feed

MakeupH2

Recycle fromFractionation

MicroCat CatalystPreparation Section

UOP 8080F-11

Solids Removal Enables Conversion up to 98%12

• Removes metals, mesophase, beta resins from unconverted pitch

• Individual process steps well proven• Dried solids to metals recovery• Attractive option if environmental

regulations prohibit burning the pitch

Recycle H2

Naphtha

Diesel

C4-

LVGO

Flash Gas

Diesel

SolidsRecovery

UOP 8080F-12

Next Generation Uniflex MC13

no net HVGOFeed

Microcat CatalystPreparation Section

Recycle H2

Naphtha

Diesel

C4-Makeup

H2

LVGO

VTB & Slop Wax Recycle

Flash Gas

Diesel

SolidsRecoveryHVGO

VRMatrix

CatalystMade by

refiner on site

NoQuench or Anti-foam

2 Reactorsw Interstage Sep

Pump-Around

No Heater

UOP 8080F-13

Uniflex MC Process – Enhancement Benefits14

Reduced catalyst addition rate• Injection rate in

ppm of fresh feed• Highly efficient

molybdenum based catalyst

• On-site catalyst manufacturing capability

Reduced CAPEX and OPEX • Smaller reactors• Lower recycle

gas rates• Lower fired

heater duty

Enables 95 to 98 Wt-% conversion (525°C+ material)• 95% base

conversion, 98% conversion with solids recovery option

Improved VTB (Vacuum Tower Bottoms) quality• Low solids

content, low sulfur level, and no iron

• Fungible product (e.g. fuel, low sulfur petcokeor asphalt production)

Solids recovery from VTB • Recovered oil

product quality upgraded, or

• Recycle operation in unit for higher conversion and yields

• Recovered solids to metals recovery

UOP 8080F-14

UOP Heavy Oil Development Center15

• Expanded capabilities to support Bottom of Barrel Technology Development

• New facility for pilot plant expansion at UOP– High throughput Feed Preparation / Fractionation:

• 3 BPD capacity multi-column fractionation unit– Uniflex pilot plant:

• High capacity operation with multiple reactors capable of staged operation

– Solvent De-asphalting (SDA) pilot plant:• Multi solvent capability: Propane, Butane, Pentane

– Flexible Heavy Oil Hydroprocessing pilot plant:• Heavy Oil Technologies fully integrated with UOP

Unicracking™ and RCD and Distillate Unionfining™pilot plants

• Capable of high pressure (5000 psi) operationwith reactor configurable in all Hydrocracking and Hydrotreating modes

UOP 8080F-15

Conclusions16

• HS bunkers, restricted in ships after 1st Jan 2020, will have negative effect on high sulphur fuel oil (HSFO) pricing

• Refineries with significant HSFO production will require profitable residue conversion projects

• For zero HSFO, the Uniflex MC Process provides for conversion at an excellent payback

• Huge R&D effort by UOP with Uniflex MC Process results in a high-conversion design with low catalyst consumption and better pitch quality

UNIFLEX

UOP 8080F-16

17

UOP 8080F-17