Residue Upgrading Technologies – Key Technologies, Considerations & Options for your Refinery

Russia BBTC 2015 MOSCOW

Colin CHAPMAN

April 2015

© Euro Petroleum Consultants

PRESENTATION SUMMARY - RUSSIA BBTC 2015 MOSCOW

BRIEF MARKET OVERVIEW

OIL DEMAND & OIL PRICE

RESIDUE UPGRADING DRIVERS

RESIDUE UPGRADING OPTIONS

TECHNOLOGIES FOR RESIDUE UPGRADING

PROJECT STATUS & TECH SELECTION

SUMMARY & CONCLUSIONS

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BRIEF OVERVIEW OF REFINING SECTOR FOCUS ON EUROPE

Low refining margins trend continues

Major oil companies plant closures & selling of assets

Some growth in diesel demand

Flat or declining demand for gasoline

Reduced imports to the region

Changes to Bunker fuel specs

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Shale gas & tight oil heralded new era for NA refining

NA refiners increased their profit margins

Favorable conditions encouraged refinery capacity expansion and increased oil product export.

Lighter crudes. Challenges for Refiners

Impacted ME, Russian & European refiners

Tougher times ahead with low crude oil price

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BRIEF OVERVIEW OF REFINING SECTOR FOCUS ON NORTH AMERICA

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BRIEF OVERVIEW OF REFINING SECTOR RUSSIA FOCUS

Changing Export tariffs.

Need to address changing Global markets.

Impact of US and ME Projects

Changing Fuel Oil & Bunker markets.

Gas replacing Fuel Oil for Power Generation.

Increased conversion for Improved margins.

Need latest technologies & equipment to meet specific regional market demands.

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Crude price - 10 month fall

Jun 2014: 110 $/Bbl

Apr 2015: 55 – 60 $/Bbl

Resid Upgrading projects need large Investments There are many uncertainties, so running

a number of scenarios when considering new investment is absolutely essential

WHAT WILL HAPPEN TO OIL PRICE IMPACT ON REFINING

SPECIAL CHALLENGES RESIDUE UPGRADING RUSSIA & CIS COUNTRIES

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Company procedures

Inefficient procurement processes

Lack of project experience

Difficult logistics & climatic conditions

Transportation issues with large equipment

LOCAL STANDARDS versus WESTERN ( Licensor requirements)

Project implementation strategies

RESIDUE UPGRADING OPTIONS IMPORTANT QUESTIONS:

Market needs & opportunities

Max Gasoline or Diesel?

Outlet for Petcoke or Anode Coke?

Power Generation?

Use of unconverted materials?

What are the budget constraints?

How to best integrate with existing refinery units?

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ALL ISSUES TO BE STUDIED IN EVALUATE PHASE

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TECHNOLOGIES FOR RESIDUE UPGRADING FOCUS ON DELAYED COKER

Most installed Residue Upgrading process:

Process has evolved over the years:

Safety

Wide ranging feedstocks

Product slate:

Gas

Naphtha

Gasoils

Coke

Sound Economics

Technology licensed by:

Axens H-Oil process

CLG LC-fining

Proven technology with a significant number of commercial units.

Conversion levels: typically 50 85%

Combined with other technologies: EB with Delayed Coking.

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TECHNOLOGIES FOR RESIDUE UPGRADING FOCUS ON EBULLATING BED PROCESSES

UOP Uniflex process

5 licenses including 1st in Pakistan

KBR VCC process

4 recent licenses

In Russia & China notably

1st unit started-up end 2014 – china

ENI slurry HCK ENI process

Unit at Sanazzaro has started up last year

RAS/CLG Demo plant to be installed at Tatneft 12

TECHNOLOGIES FOR RESIDUE UPGRADING FOCUS ON SLURRY HYDROCRACKING PROCESSES

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PROJECT STATUS & TECHNOLOGY SELECTION PROS & CONS

Process PROS CONS

Delayed Coking Lots of experience in Russia and world-wide Fully proven

Petcoke – Power production or Sales

Flexicoking Good product qualities Full conversion.

Flexigas – no transportation, can be used locally only. Need special equipment.

EB Hydrocracking Good product qualities Fully proven Can combine with Coking

Residue – Blending to meet LSFO spec or Power production onsite Only ~70% conversion

Slurry Hydrocracking

Good value product yields Highest Conversion

Little relevant operating experience Pitch utilisation

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PROJECT STATUS & TECHNOLOGY SELECTION RUSSIA & CIS

Many clients have selected Delayed Coking options: Naftan, Perm, Volgograd,Orsk, & Flexicoker at Tuapse & Moscow.

Ebullating bed options have been selected for Lukoil Bourgas, Lukoil NNOS & Mozyr.

Slurry hydrocracking [VCC] selected for TAIF.

There is a strong need for many refiners to increase conversion.

Choice of configuration & technology will require in depth study to evaluate which scheme best fits your requirements for markets & budget.

Need to follow closely the ongoing projects underconstruction to see results.

Selected project implementation strategy will be key to success.

Multi – technology option provides a number of alternatives to a single process unit approach

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SUMMARY & CONCLUSIONS

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Thank you for your attention

The information upon which this presentation is based comes from our own experience, knowledge

and databases, supplemented by reference to primary sources and published industry data.

Any opinions expressed are those of the author as of this date. They have been arrived at following

careful consideration and enquiry but we do not guarantee their fairness, completeness or accuracy.

We do not accept any liability for your reliance upon them.

Euro Petroleum Consultants is a specialist consultancy firm working in oil, gas and petrochemicals.

We offer technical consultancy and we also deliver high quality training courses and conferences.

For further details contact colin_chapman@europetro.com