IYQ Upgrading: Leveraging Scientific pg g g gAdvances into Upgrading EconomicsISA 2011

March 8, 2011

ETX Systems Inc. © 2007

PerspectivePerspective

ETX Systems has a mandate to commercialize IYQ Upgrading

Focus on ‘Upgrading 101’

This is not a sales pitch

ETX Systems Inc. © 20072

What is unconventional oil?What is unconventional oil?

Characterized by high 40

45

WTI

density (“heavy”)

Fraction will form 25

30

35

o API

)

Maya

Lago TrecoArab Light

Hibernia

Arab Heavy

condensed byproduct under reduced thermal conditions 10

15

20

Gra

vity

(o

Heavy

Conventional

Cold Lake

Maya

MCR represents a standardized set of thermal

0

5

0 2 4 6 8 10 12 14MCR Content (%)

Ultra-Heavy (Bitumen)

processing conditions

Source: CanWest

C C (%)

3

Source: CanWest

Why is unconventional oil challenging?Why is unconventional oil challenging?

Large fraction of condensed aromatics

Hydrogen deficienty gContain bulk of metalsRich in heteroatoms (nitrogen, sulfur)

OHN

Mostly in the heptane insoluble fraction (asphaltene)

S

Unsuitable for conventional refineries

S

(Based on Speight, “The desulfurization of heavy oils and residua”, 2000)

4

Unconventional oil requires additional processingUnconventional oil requires additional processing

Primary Upgrading

Secondary Upgrading RefiningProduction

100

nt

50

Per

cen

PitchDistillate -G il

0

ETX Systems Inc. © 20075

GasoilSulfur

The upgrading arsenalThe upgrading arsenal

Physical separationBoiling point (distillation)Solubility (deasphalting)

Chemical conversionThermal crackingHydrogen addition/thermal crackingy g gHeteroatom removal (hydrogen addition)

Cracking is required to maximize resource utilizationCracking is required to maximize resource utilization

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The universal upgrading flowsheetThe universal upgrading flowsheet

Primary upgrading:MCR and pitch destructionHeteroatom removal

ENERGY SINK

NATURAL GAS

Metals removalIncrease in H/C

HYDROGEN PRODUCTION

ENERGYEXPORTS

CONDENSED BYPRODUCT

ENERGY GENERATIONSTOCKPILE

Secondary upgradingHeteroatom removalIncrease in H/C SECONDARY

UPGRADINGSKIMMINGBITUMEN HEAVY FEED

SOUR GAS

PRIMARY UPGRADING

HYDROGEN

UPGRADINGUNSTABILIZED

LIQUIDSSTABLE LIQUID

PRODUCTS

UPGRADING

7

Why so many choices?Why so many choices?

Chemical reactions similar for all processes

Overall result is kinetically controlled

Effectively trying to maximize an intermediate

A B C

Therefore, result is path dependent, and can be significantly affected through engineering efforts

8

Approaches to primary upgradingApproaches to primary upgrading

Two general strategies:Hydrogen & Catalyst

Hydrogen addition

Add hydrogen with aid of catalystS k f ti

Oil Feed Liquid

Gas

Suppress coke formationSynergy between thermal and catalytic processes

Hydrogen “reshuffling” (coking)

“Rob” hydrogen from least valuable sub- Oil F d

Liquid

Gas

fraction and incorporate into product liquidsCreate product at expense of low value byproduct (coke)Thermal process

FeedLiquid

Solid

9

Thermal process

Current understanding of thermal conversion processes

Both mass transfer and kinetics are important

Liquid products lost by both overcracking and product condensation

Products OvercrackedgasesGas

phase

Liquid

Products

Feed

Liquidphase

Coke

10

Just when we thought we knew everythingJust when we thought we knew everything…

Influence of mass transfer in liquid phase

11

(From: Gray et al. Ind. Eng. Chem. Res. 2001)

New developments (cont’d)New developments (cont d)

Influence of liquid phase severity74

75

76

Both yield and quality affected positively

70

71

72

73

74

d Yi

eld

(%w

t/wt)

67

68

69

70

440 460 480 500 520 540 560

Liqu

id

1.54

38

40

%)

Temperature (oC)

1 48

1.50

1.52

28

30

32

34

36

C (a

tom

ic)

arbo

n C

onte

nt (%

1.44

1.46

1.48

20

22

24

26

28

460 480 500 520 540

H/C

Aro

mat

ic C

a

Aromatic Carbon

H/C

12

460 480 500 520 540

Temperature (oC)

Upgrading metricsUpgrading metrics

Need measures to evaluate effectiveness of upgrading technologies

QualityH/C an excellent primary indicator

Fuel H/CMethane 4.0

Gasoline Diesel 1 9H/C an excellent primary indicator

Liquid Yield (C5+)K d i f h fl

Gasoline, Diesel 1.9

Light (conventional) crude 1.8

Bitumen (Unconventional) 1.4-1.6

Key driver for cash flow

Cost per flowing barrel

Asphaltene 1.15

Coal 0.5-0.8

Includes operating costs

To winner is better by at least one metric and no worse in the others

13

To winner is better by at least one metric, and no worse in the others

The scoop on hydrogen additionThe scoop on hydrogen addition

Synergy between hydrogen addition and thermal cracking

Hydrogen addition opens up molecule to cracking

Increased liquid yields and coke suppression

-C=C- + H2 -C-C-2

14

Hydrogen consumption varies with yieldHydrogen consumption varies with yield

As yield increases molecules become more aromatic

Leads to increase in gas production and hydrogen consumption

Loss of hydrogen

1500200025003000

CF/bbl)

5000

50010001500

sumption (SC

‐1500‐1000‐500

0 20 40 60 80 100

H2 Co

ns

C i (%)

15

(From Speight, “The desulfurization of heavy oils and residua”, 2000)

(From Sanford, 1994. Ind. Eng. Chem. Res. 33:109-117)Conversion (%)

The scoop on hydrogen reshuffling processesThe scoop on hydrogen reshuffling processes

“Hydrogen reshuffling” processes not “reject carbon”

More a “catalyst poison” rejection process

16

(From Wiehe AIChE Spring meeting 2005)

Basis for “engineered” coke reductionBasis for engineered coke reduction

Some molecules will never form coke when placed in a reduced thermal environment

Others molecules will always form coke

Other molecules can “swing either way”. Have the ability y yto influence the fate of these species through engineering.

17

Wish list for “ideal” hydrogen reshuffling unitWish list for ideal hydrogen reshuffling unit

Gas phase

Reduce residence time to zeroInstantly reduce temperature

Products OvercrackedgasesGas

Instantly reduce temperature to <350oC

Liquid phaseProducts

phase

Liquid phase

Keep feed in thermal environment until completely

Feed

Liquidphase

Cokep y

reacted (30-90 s)Remove product from feed as soon as produced

18

Some upgrading successesSome upgrading successes

Various schemes have captured the imagination of the markets

No option is the optimum under all economic conditions

Only selected options considered, based on interest level

19

Delayed CokingDelayed Coking

Sour fuel gasSour fuel gas

Unstablized liquids

Bitumen

Coke drums

P-216BitumenFractionation Furnace

20

Attributes of delayed coking processAttributes of delayed coking process

Feed heated in furnace until point of phase separation is encountered

Feed pushed to coke drums just before coke formation begins (hence the name “delayed coking”)

Conversion limited by the adiabatic nature of the process

Products are of higher quality (less aromatic) than other hydrogen reshuffling processes due to low temperature in gas phasereshuffling processes due to low temperature in gas phase

Severity in liquid phase is large, resulting in trapping of product and higher coke make

Semi-batch process

21

Fluid CokingFluid Coking

Burner Off‐GasFuel Gas

Feed Scrubber

Naphtha

BurnerReactor

Fractionator

Steam HotCoke

Air

Elutriator

ProductCoke

Cold Coke Gas Oil

22

Attributes of Fluid Coking processAttributes of Fluid Coking process

Process decouples heating of feed with reaction temperature

Allows higher reaction temperatures to be achieved

Leads to higher liquid yields and lower coke formation

Fl id h i i t l d t ti l h llFluid mechanics in reactor lead to operational challenges

Managed by increasing severity of conditions in the reactor

23

LC FiningLC-Fining

(From Lummus publication)

24

Attributes of LC Fining processAttributes of LC-Fining process

Operation at relatively high pressures (10-15 MPa) and relatively moderate temperatures (425-450oC)

Catalyst is added in a fed batch arrangementy g

Temperature drops as catalyst deactivates due to deposits of coke and metalscoke and metals

Catalyst is quite expensive and is not regenerated on site

25

Nexen/Opti SCONexen/Opti SCO

NGL

Hydrocracker Gas treatmentFuel gas

Bitumen Vacuum Distillation

Solvent Deasphalting

Thermal Cracking

AirGasification Syngas Sulfur

Hydrogen

Gasification y gTreatment

26

SyngasSteam

Attributes of Nexen/Opti schemeAttributes of Nexen/Opti scheme

Integrated design for SAGD

No net byproduct

Tailored units for pitch and MCR destructionLow severity thermal crackingDeasphalting/gasificationDeasphalting/gasification

Asphaltene stream is large (~30% of vacuum resid)Forced to produce high quality product

Highly integrated process

27

The challenger: IYQ UpgradingThe challenger: IYQ Upgrading

Technology that leverages current understanding of upgrading science

Benefits relative to commercial benchmark:Incremental 9% yield of liquidsReduced environmental footprintIncreased hydrogen retentionIncreased hydrogen retention25% reduction in capital scope

ETX Systems Inc. © 201128

IYQ Upgrading – The Benefitspg gProduces 9% more quality liquids with 25% reduction in capital scope

$20 000+ of incremental NPV value per nameplate barrel$20,000+ of incremental NPV12 value per nameplate barrelHigher return on capitalDirect 9% reduction of upstream environmental intensity metrics

IYQ Ad t D l d C ki *

$10

$12

bbl

IYQ Advantage vs. Delayed Coking*

$4

$6

$8

emen

tal V

alue

$/

$0

$2

Liquid Yield Operating Advantage Capital Advantage Netback Advantage

Incr

e

29

* When processing whole Athabasca bitumen, $75 WTI

ETX Systems Inc. © 2011

Advantage

ConclusionsConclusions

Upgrading is a vital component in addressing energy needs

Two different approaches to upgrading: coking and H2 addition

The upgrading metrics are: Yield, Quality and Capital intensity

Th i till f i t i ti tThere is still room for improvement upon existing art

ETX Systems Inc. © 200730

Questions?Questions?

Wayne Brown, CTOETX Systems Inc.

(403) 265-3155 X222(403) 265 3155 X222wayne.brown@etxsystems.ca

ETX Systems Inc. © 200731