We didn’t build the first Boiler.
But in all your born days, you won’t find a manufacturer today that makes a boiler that performs better than a RENTECH boiler. It’s no yarn. Each of our boilers is custom-designed by RENTECH engineers and built in state-of-the-art facilities to operate efficiently in its unique application in a variety of industries. Our innovative, cost-effective technology will add value to your day-to-day operations with lasting benefits for the competitiveness of your business. Don’t wait another day, call us about your next boiler project.
325.672.3400
WWW.RENTECHBOILERS.COM
HydrocarbonProcessing.com | JULY 2014
®
BONUS REPORT: LNG
Data monitoring and simulationimprove LNG transport and terminal design
CHANGING
HPI ECONOMICS
New conversion technology cuts ethylene production costsSPECIAL REPORT:
Refinery of
the Future
We didn’t build the first Boiler.
But in all your born days, you won’t find a manufacturer today that makes a boiler that performs better than a RENTECH boiler. It’s no yarn. Each of our boilers is custom-designed by RENTECH engineers and built in state-of-the-art facilities to operate efficiently in its unique application in a variety of industries. Our innovative, cost-effective technology will add value to your day-to-day operations with lasting benefits for the competitiveness of your business. Don’t wait another day, call us about your next boiler project.325.672.3400
WWW.RENTECHBOILERS.COM
JULY 2014 | Volume 93 Number 7
HydrocarbonProcessing.com
SPECIAL REPORT: REFINERY OF THE FUTURE 49 How to make anything with a catalytic cracker
W. S. Letzsch and C. Dean
55 Consider high-fidelity online motor fuel characterization
M. Trygstad
59 Case history: Modernization of Russia’s refining industry—Part 1
V. V. Galkin, V. Makhianov and M. I. Levinbuk
65 Which margin levers impact Group I and Group II base stock competitiveness?—Part 2
I. Moncrieff
BONUS REPORT: LNG
71 How sensitive is your treating plant to operating conditions?
R. Weiland, J. Santos, A. Praderio, N. Maharaj and M. Schultes
77 Maximize LNG carrier efficiency through integrated optimization
P. Guillemin
HPI FOCUS: CHANGING HPI ECONOMICS
81 Ethanol-to-ethylene process provides alternative pathway to plastics
C. Moffatt, S. Hodge and D. Cook
Cover Image: Eni’s Venice biorefinery is the first refinery in the world to convert from a conventional refining complex into a biofuel production operation based on the company’s patented Ecofining technology. The refinery is producing mainly high-quality green diesel in balance with the available hydrogen from the former hydroskimming unit. After 2015, the refinery’s biofuel production will be maximized to achieve 500,000 tpy with the addition of a dedicated hydrogen plant.
DEPARTMENTS 4 Industry Perspectives 10 News 21 Industry Metrics 85 Events 86 Marketplace 88 Advertiser Index 90 People COLUMNS 9 Editorial Comment
What is the ‘refinery of the future’? 23 Reliability
Things to know and do before starting new initiatives 27 Automation Strategies
HPI demands higher availability of rotating equipment 29 Project Management
What skills will project managers need in the next decade?—Part 1 31 Global
The reshaping of Latin America’s petrochemical industry 35 Petrochemicals
Major US players bet on propane dehydrogenation
37 Gas Processing
Eastern nations look to LNG for energy, environmental solutions 41 Boxscore Construction Analysis
South Africa—Africa’s clean fuels leader?
45 Viewpoint
The journey to a value-adding refinery project
70
48
4JULY 2014 | HydrocarbonProcessing.com
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Tale of two continents
Growing supplies by non-OPEC countries has introduced some calm for crude oil prices. However, other factors are in-fluencing profitability and margins. In the US, the abundance of shale oil and the 40-year ban on exporting crude oil has created unusual conditions. Now, North American refineries have an advantage as compared to European refiners. Accord-ing to a new US Energy Information Administration report, companies with refineries primarily located in North America are reaping $6/bbl in profits as compared to those operators with assets in Europe.
As illustrated in FIG. 1, the shift in earnings potential began in 2010. That is the same time in which significant supplies of shale oil began entering the North American market. This trend also coincides with the economic recovery of the US. Some of the additional profits can be attributed to the discounting of WTI due to infrastructure bottlenecks. However, these perks will dissipate as more effective distribution infrastructure evolves.
According to a recent Wood Mackenzie study, US demand for refined transportation fuels increased on average about 400,000 bpd in 2013. Much of the new demand is for diesel. However, looking forward, the demand increase for diesel will moderate and gasoline demand will effectively endure losses of 200,000 bpd beginning in late 2015.
ACROSS THE POND
The European refining industry contends with a difficult environment. Much of this region’s refineries were configured for gasoline production. The full effects from dieselization are now being seen. Result: Europe must import diesel to meet regional demand. From an economics position, European re-finers are at a disadvantage to refine more crude to produce much-needed diesel and coproduce more unwanted gasoline. For Europe, the supply and demand situation for transporta-tion fuels is out of balance, and utilizatransporta-tion rates are below 80%, thus compounding the situation further (see Industry Metrics, pg. 21). The true winners are those refiners that can export high-quality refined products to Europe at this time.
-2 2004
Source: US Energy Information Administration, based on Evaluate Energy database *Note: 2014 includes data for the first quarter of 2014
2005 Compan y earnings per bbl pr oc essed, 20 13, $/bbl 2006 2007 2008 2009 2010 2011 Companies with refineries
mainly in Europe
Companies with refineries mainly in North America
Companies with refineries throughout the world
2012 2013 2014* 0 2 4 6 8 10 12
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JULY 30–31, 2014
Norris Conference Centers – CityCentre
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2014
GTLTechForum.com
Explore Cutting–Edge GTL Technology & Solutions
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Specifi c topics to be discussed include: syngas, the future of non-FT GTL, what’s new in small scale GTL, catalysts, modular construction and emerging technology and future users.
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Vice President – Business Development Primus Green Energy
Jeff McDaniel
Commercial Director Velocys
Mitch Hindman
ExxonMobil Research & Engineering Company
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For more information on registration or to register offl ine, please contact: Gwen Hood, Events Manager, +1 (713) 520-4402 or [email protected] General Inquiries: Melissa Smith, Events Director, +1 (713) 520-4475 or [email protected] Exhibit or Sponsor: Lisa Zadok, Events Sales Manager, +1 (713) 525-4632 or [email protected]
Wednesday, July 30, 2014 Agenda
7:30 a.m. REGISTRATION
8:30 a.m. OPENING REMARKS: John Royall, President and
Chief Executive Offi cer, Gulf Publishing Company 8:45—9:15 a.m. KEYNOTE PRESENTATION: TBD
9:15—9:40 a.m. The Economics of Monetizing North American
Natural Gas
Tom Jones, Manager of Studies, Bechtel Hydrocarbon Technology Studies, Inc. 9:40—10:10 a.m. COFFEE BREAK
SESSION ONE: SYNGAS
10:10—10:35 a.m. Co–processing of Waste CO2 with Natural Gas to Produce High Value Transport Fuels
Paul E Koppel, Vice President, Process Technology, Fluor Enterprises
10:35—11:00 a.m. Autothermal Reforming—a Preferred Technology for Conversion of Natural Gas to Synthesis Gas in Industrial GTL Applications
Soren Martin Olsen, Haldor Topsoe
11:00—11:25 a.m. Partial Oxidation Gas–Turbine Based Turbo–POx Syngas Generation Technology for GTL Applications Dr. Steven Fusselman, Program Manager–
Energy Services, Aerojet Rocketdyne and Dr. Arunabha Basu, Institute Engineer, Gas Technology Institute
11:25—12:25 p.m. LUNCH
SESSION TWO: THE FUTURE OF NON–FT GTL
12:25—12:50 p.m. CO2 and CO Fermentation: A Route from Waste to Fuels and Chemical Building Blocks at Scale Dr. Michael Schultz, Vice President, Engineering, LanzaTech, Inc
12:50—1:15 p.m. A New Era in GTL: Cost–Effective Technology Enables Conversion of Natural Gas to Drop–In Liquid Fuels at Small Scale
Dr. George Boyajian, Vice President,
Business Development, Primus Green Energy 1:15—1:40 p.m. TBD
1:40—2:10 p.m. COFFEE BREAK
SESSION THREE: WHAT’S NEW IN SMALL–SCALE GTL
2:10—2:35 p.m. Microchannel Fischer–Tropsch Reactors: Enabling Smaller Scale GTL
Jeff McDaniel, Commercial Director, Velocys 2:35—3:05 p.m. Case Study: GTL Technology Development—The
Optimal Path to Micro–GTL Commercialization Ebrahim Salehi, Process Engineer, Hatch 3:05—4:20 p.m. PANEL DISCUSSION: MODULAR GTLS Invited participants include: EmberClear, Oberon
Fuels, Velocys and others
4:20 p.m. CLOSING REMARKS: John Royall, President and
Chief Executive Offi cer, Gulf Publishing Company
Thursday, July 31, 2014 Agenda
7:30 a.m. REGISTRATION
8:30 a.m. OPENING REMARKS: Stephany Romanow, Editor,
Hydrocarbon Processing
8:45—9:15 a.m. KEYNOTE PRESENTATION: The Economics of Gas- to-Liquid Conversion Technologies: Annual Energy
Outlook 2014
Vishakh Mantri, Ph.D., P.E., P.M.P., Offi ce of Petroleum,
Natural Gas and Biofuels Analysis, U.S. Energy Information Administration
9:15—9:40 a.m. Economics of Ammonia Production from
Off–Gases
V.K. Arora, Director–Process & Operations, Kinetics Process Improvements, Inc. 9:40—10:10 a.m. COFFEE BREAK
SESSION FOUR: EMERGING TECHNOLOGY AND FUTURE USERS 10:10–10:35 a.m. Mixed Alcohols as an Oxygenate and Fuel Extender Peter Tijm, Chief Technology Offi cer, Standard
Alcohol Company
10:35–11:05 a.m. Case Study: Refi nery Integration with Gasifi cation Dr. K.S. Balaraman, Chief Consultant,
Wissenschaftler Consulting Engineers
11:05–11:30 a.m. Methanol to Gasoline Technology - an Alternative for Liquid Fuel Production
Mitch Hindman, ExxonMobil Research &
Engineering Company
11:30–11:55 a.m. TBD 11:55–12:55 p.m. LUNCH SESSION FIVE: CATALYSTS
12:55–1:20 p.m. Effect of Addition of Zeolite to Iron–Based Activated–Carbon–Supported Catalyst for Fischer– Tropsch Synthesis in Separate Beds and Mixed Beds Avinash Karre, Jacobs Engineering
1:20–1:45 p.m. The New CatFTTM Process, Dr. Thomas Holcombe,
President & CEO, Green Impact Fuels, LLC
1:45–2:10 p.m. Revolutionary Fixed Bed Reaction System for GTL -
FT/MeOH/DME
Tim Gamlin, V.P. Gas Conversion, Johnson Matthey Davy Technologies Ltd
2:10–2:40 p.m. COFFEE BREAK SESSION SIX: MODULAR CONSTRUCTION 2:40–3:05 p.m. TBD
3:05–4:05 p.m. PANEL DISCUSSION: MODULAR CONSTRUCTION Invited participants include Chemex, Zeton, Maverick Synfuels and others
4:05 p.m. CLOSING REMARKS: John Royall, President and
Chief Executive Offi cer, Gulf Publishing Company
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Editorial
Comment
STEPHANY ROMANOW, EDITOR
Hydrocarbon Processing | JULY 20149
For years, technology experts and en-gineers have discussed the elements and operations that will define the refinery of the future. The refining industry has made great progress from the early days. How-ever, old and older does not directly cor-respond to being obsolete. The American Refining Group (ARG) Inc. still operates the oldest continuously running US-based refinery at Bradford, Pennsylvania. This 10,000-bpd refinery began operations in 1881, and it still produces high-quality waxes, lubricant base oils, gasoline and fuels, as well as a wide variety of spe-cialty products. Much has changed in the 130-plus years since this ARG refinery be-gan, and it continues to upgrade Pennsyl-vania crude into consumer products. By definition. “The refinery of the fu-ture is a place where advanced technolo-gies and highly skilled workers will raise to new levels the standards for efficiency, safety and plant intelligence,” said Lance Gyorfi, vice president of refining, Chev-ron Products Co. He made that statement in 1998 at Chevron’s Salt Lake City, Utah, refinery, when this site was celebrating its 50th anniversary. Gyorfi also said, “Future refineries will meet society’s transporta-tion needs, regardless of how vehicles are powered. They (refineries) will also adapt to a changing slate of raw materials.”
In 1998, refineries and petrochemical plants had made huge changes in opera-tions, methodologies and automation. At that time, instrumentation, automation and software companies pushed through old boundaries regarding the connectiv-ity of process information and control, and laid the foundation to bring more “in-telligence” to the field and process equip-ment. That trend still continues.
Moving forward. In 2003, an HP edito-rial discussed the digital refinery or pet-rochemical facility as the future. To get to the digital age, the HPI would rely on continued improvement and innovations
for process technologies, catalysts, equip-ment, automation and software. The digital age used advanced communication systems that moved the intelligence to field devices. The information/monitor-ing network no longer needed direct input from operators. Through advanced com-puters, software development and minia-turization, operators could now focus on other tasks to increase profitability. Developments. A key to better opera-tions involves improvements between the operator and machine (process) interfac-es. Refineries operate on a 24/7 schedule; keeping plant staff at 100% efficiency, es-pecially during night operations, remains a problem. Honeywell has addressed this problem with a new control room console, the Experion Orion Console. This new console uses a large, flexible, ultra-high-definition display that provides clear status assessments of the process for the opera-tors’ needs (FIG. 1), thus improving their performance on the job, which impacts the safety and efficiency of the facility.
The refinery of the future involves both technology and the changing roles of people. Together, amazing tasks can be ac-complished; this means that better prod-ucts, more efficient operations and safer facilities are possible.
INSIDE THIS ISSUE
45
Viewpoint. Capital projects are a means of creating value from assets. The more thorough a project’s planning and management, the more successful it is likely to be. Süleyman Özmen, vice president of refining and chemical licensing for Shell Global Solutions International BV, discusses the journey to ensure that your investment plans remain technically and economically robust in the new environment.48
Refinery of the future. How will crude oil refineries operate in the future? To be profitable, refiners must have the flexibility to adapt to numerous forces; many are beyond the control of the industry. Here are a few new technologies and trends now shaping the international refining industry.70
Bonus report: LNG. The natural gas market is dominated by upstream development in shale gas production, particularly in North America, and by downstream progress in liquefied natural gas (LNG) technologies and projects. The July bonus report features advances in technologies and market developments for LNG.81
HPI focus: Changing HPI economics. Tight operating margins make the ethanol-to-ethylene technology marketplace a challenging space in which to compete. However, a second-generation route has emerged that can deliver market-leading conversions at lower cost and complexity than existing technologies.What is the ‘refinery of the future’?
FIG. 1. Experion Orion Console brings the plant control room of the future to life by meeting the changing needs of the increasingly mobile plant operator.
| News
API releases three new standards to improve refinery safety
The American Petroleum Institute (API) issued three new first-edition standards to enhance refinery safety and inspection programs:
• RP 583, Corrosion under insulation and fireproofing: This standard will assist with industry inspection and allow maintenance personnel to fully understand the complexity of corrosion under insulation and fireproofing, as well as the subsequent ways to reduce its occurrence at refineries
• RP 584, Integrity operating windows: A key part of process safety is the facility’s
inspection program, and this standard was written to assist industry in developing the most efficient and effective inspection program based on each unit’s unique operational history • RP 585, Pressure equipment integrity incident investigation: This standard describes
how an effective investigation can be structured so organizations can learn from each incident and use this knowledge to reduce the likelihood of future incidents.
Hydrocarbon Processing | JULY 201411
BILLY THINNES, TECHNICAL EDITOR [email protected]
News
Security of energy
supply in the EU
The European Commission presented a report on European energy security to the European Council in late June. The report points out that the EU’s energy dependence is not new, but it did gain an added dimension in the light of re-cent geopolitical events (specifically the Ukrainian crisis). Temporary disruptions of gas supplies in the winters of 2006 and 2009 already provided a wake-up call for the EU, underlining the need of infra-structure development, increased cooper-ation and of a common European energy policy. Since then, the EU has worked to strengthen its energy security in terms of gas supply. However, the work is not com-pleted yet and further steps are needed.
The EU’s energy import dependence has been on the rise since the mid-1990s. Today, the EU spends more than €1 bil-lion every day on importing energy. This is almost a fifth of the EU’s total import bill. In 2012, 53% of the EU’s energy con-sumption was linked to imports (FIG. 1). In particular, the EU imported 88% of crude oil, 66% of natural gas, 42% of sol-id fuels (coal, lignite and peat) and 95% of uranium.
Who supplies the EU with oil? Based on the latest figures from 2013, a third of imports came from Russia, 11% from Norway and 8% from Saudi Arabia. The EU paid about €300 billion for the crude oil imports. On the subject of gas sup-ply, the 2013 figures show about 39% of imports came from Russia, 34% from Norway and 14% from Algeria. Six EU member states depend on Russia for their entire imported gas supply: Fin-land, Slovakia, Bulgaria, Estonia, Latvia and Lithuania.
In the realm of solid fuels, about 26% of imports came from Russia, 24% from Colombia and 23% from the US. About 240 million tons of solid fuels were im-ported in the EU in 2012, of which ap-proximately 220 million tons came from non-EU countries.
EU energy mix. Overall, a gradual de-crease in solid fuels consumption and a growth in the use of renewables can be observed for all EU member states. In 2012, EU energy demand stood slightly above 1,700 million tons of oil equiva-lent (MMtoe), almost 130 MMtoe be-low the 2007 pre-crisis level, and similar to 1995 levels.
Petroleum products provide 34% of the EU’s energy. The bloc is the second largest oil consumer in the world after the US. Most of it is used in transport (95% of transport fuel comes from oil) and the petrochemical industry.
Gas provides 23% of the EU’s energy. Gas is mainly used for heating and in electricity production. Almost 19% of all the electricity generated in the EU comes from gas. The residential and ser-vice sectors account for approximately 40%, while industry accounts for about 25% of gross inland consumption.
Solid fuels contribute 17% to the EU energy mix. The EU is the third-largest coal-consuming region, after China and North America. Solid fuels are mostly used in electricity production and dis-trict heating plants.
Europe relies on nuclear for 13% of its energy needs, with 27% of its electricity coming from nuclear sources from plants
in France, the UK, Sweden, Germany, Belgium and Spain.
Compared to other world regions, the EU has few fossil fuel resources. At the end of 2012, the EU’s proved oil reserves amounted to only 0.4% of global re-serves. Its natural gas reserves amount to 0.9% of global reserves, and coal reserves form 6.5% of global reserves. Comphensive information on shale gas re-serves is not yet available, as exploration is still at an early stage.
Between 1995 and 2012, the EU’s primary energy production decreased by almost one-fifth. Natural gas production dropped by 30%, production of crude oil and petroleum went down by 56% and production of solid fuels decreased by 40%. Renewable energy production, on the other hand, has significantly grown during recent years; renewables account for 22% of primary energy production.
Increasing the security of supply has been an overarching goal of the EU en-ergy policy for several years. Since the gas crisis in the winters of 2006 and 2009, the Commission has worked to strengthen the EU’s energy security in terms of gas supplies and to reduce the number of member states exclusively dependent on one supplier. Significant progress has been made toward the
1995
%
Source: ESTAT SIRENE v2
0 10 20 30 40 50 60 1996 1997 1998 1999 2000 Others Renewable energies Crude oil Solid fuels Natural gas 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
News
12
completion of an internal energy mar-ket. Rules for network use have been put in place to avoid congestion in cross-border infrastructure. Another important step to secure uninterrupted supplies in case of external supply dis-ruption involves installing reverse flow options that provide a possibility to op-erate the pipelines in both directions.
To further the EU’s energy security, the report recommends a risk assessment
(energy security stress test) of the EU en-ergy system to identify supply disruption risks in the upcoming winter. This would be conducted on the regional or EU level by simulating a disruption of the gas sup-ply. The aim is to check how the energy system can cope with security of supply risks and, based on that, develop emer-gency plans and create backup mecha-nisms. The exact details of these stress tests have not yet been agreed upon.
A new way to harness
waste heat
Vast amounts of excess heat are gen-erated by industrial processes, and re-searchers around the world have spent decades seeking ways to harness some of this wasted energy. Most such efforts have focused on thermoelectric devices (solid-state materials that can produce electricity from a temperature gradient), but the efficiency of such devices is lim-ited by the availability of materials.
Now researchers at MIT and Stanford University have found a new alternative for low-temperature waste-heat conver-sion into electricity, in cases where tem-perature differences are less than 100°C. The new approach, based on a phenom-enon called the thermogalvanic effect, is described in a paper published in the journal Nature Communications by a col-lection of postdocs and professors at Stanford and MIT.
Since the voltage of rechargeable bat-teries depends on temperature, the new system combines the charging–discharg-ing cycles of these batteries with heat-ing and coolheat-ing, so that the discharge voltage is higher than charge voltage. The system can efficiently harness even relatively small temperature differences, such as a 50°C difference
To begin, the uncharged battery is heated by the waste heat. Then, while at the higher temperature, the battery is charged. Once it is fully charged, it is al-lowed to cool. Because the charging volt-age is lower at high temperatures than at low temperatures, once it has cooled, the battery can actually deliver more elec-tricity than what was used to charge it. That extra energy, of course, doesn’t just appear from nowhere—it comes from the heat that was added to the system.
The system aims at harvesting heat of less than 100°C, which accounts for a large proportion of potentially harvest-able waste heat. In a demonstration with waste heat of 60°C, the new system has an estimated efficiency of 5.7%.
The basic concept for this approach was initially proposed in the 1950s, but a key advance is using material that was not around at that time for the battery electrodes, as well as advances in engi-neering the system.
That earlier work was based on tem-peratures of 500°C or more, while most
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INNOVATIVE SOLUTIONS FOR THE
HYDROCARBON PROCESSING INDUSTRY
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Bilfinger’s engineering department constantly works to offer the best and innovative solutions to the Hydrocarbon Processing Industry:
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Australia - Asia Pacific Phone +61 7 3867 5555 Fax +61 7 3265 2768 [email protected] France Phone +33 5 4902 1600 Fax +33 5 49021616 [email protected]
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News
14
current heat-recovery systems work best with higher temperature differences.
While the new system has a signifi-cant advantage in energy-conversion effi-ciency, for now it has a much lower power density (the amount of power that can be delivered for a given weight) than ther-moelectrics. It also will require further research to assure reliability over a long period of use, and to improve the speed of battery charging and discharging.
“Virtually all power plants and manu-facturing processes, like steelmaking and refining, release tremendous amounts of low-grade heat to ambient tempera-tures,” the researchers said in a state-ment. “Our new battery technology is designed to take advantage of this tem-perature gradient at the industrial scale. Plus, this technology has the additional advantage of using low-cost, abundant materials and manufacturing processes
that are already widely used in the bat-tery industry.”
Asia to remain dominant
force in chemical
production
Global spending on chemical produc-tion capacity addiproduc-tions will peak in 2014 at $120 billion and then begin to decline, according to analysis from IHS. Asia, and China in particular, long the epicenter of global chemical supply and demand, will remain the dominant global force for chemicals beyond 2020. However, Asia will feel the pinch as some capacity ad-ditions shift to North America and the Middle East, where feedstocks are less costly—thanks, in part, to unconven-tional shale energy.
“Our analysis shows that global spend-ing on capacity additions will peak in 2014 and then begin to decline,” said Russell Heinen, director of technology and analyt-ics at IHS Chemical. “Since spending pre-cedes capacity additions coming onstream, spending starts to decline prior to the drop in capacity additions. As for Northeast Asia, and especially China, they are still gi-ants in terms of chemical production and demand, and will continue to account for a significant share of future global capac-ity additions. However, the rate of capaccapac-ity additions in the region will decline.
“Asian producers are starting to feel the effects of an economy that is grow-ing more slowly, but also the impacts of the feedstock cost advantages that their competitors enjoy in the Middle East and in North America. In response, Chinese chemical producers are adding coal-based capacity to take advantage of the one low-cost feedstock they have.”
During the last decade, chemical capac-ity additions on a global basis have largely been driven by Northeast Asia. Since 2000, the world has added nearly 1 billion metric tons of total chemical capacity and North-east Asia, specifically China, has accounted for more than 70% of this increase, which was driven by the rapid economic growth in China. However, this trend is chang-ing—and overall chemical capacity addi-tions will peak in Northeast Asia in 2014.
Capacity additions in North America, which had been very minimal for the last 20 years, Heinen said, are increasing due to the change in feedstock position caused by unconventional development.
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“We currently expect capacity addi-tions in the US to peak at more than 15 million (MM) metric tons in 2017, ac-counting for about 20% of the world’s ad-ditions,” he said.
Despite a reduction in spending on new capacity, China’s contributions to global production will continue to im-press. IHS Chemical estimates that, dur-ing the period 2000 to 2020, China will grow its basic chemicals capacity
pro-duction (which includes benzene, chlo-rine, methanol, propylene and ethanol) by nearly 170 MM metric tons. In other words, China will add 47% of the esti-mated global total additions expected for basic chemical production during the period. The two next largest producing countries for expected capacity additions in basic chemicals during the same period are Saudi Arabia, at 7% additions, fol-lowed by the US at 6%.
“From 2013 to 2018, China is going to add 9 MM metric tons of domestic poly-ethylene capacity alone, which is signifi-cant,” said Nick Vafiadis, senior director, global olefins and plastics at IHS Chemical. “Equally significant is the fact that much of this new production capacity will be quite competitive on a cash-cost basis due to ad-vances in coal-to-olefins technologies.”
Iraqi Kurdistan exports
first crude cargo
via Turkey
Several weeks before the ISIS terrorist army began its chaotic and deadly incur-sion into Iraq from war-torn Syria, Iraqi Kurdistan exported its first cargo of crude oil through Turkey’s Mediterranean port of Ceyhan. This was despite a long-stand-ing dispute with Baghdad over the shar-ing of oil revenues. Reuters reported that the first 1 million-barrel cargo of piped oil was loaded in Ceyhan, where around 2.5 million barrels of Iraqi Kurdish crude has been stored. The sale was carried out by the Kurdistan Regional Government.
Baghdad’s central government claims the sole authority to manage and sell Iraqi oil. Months of talks between the semi-au-tonomous enclave and the central govern-ment have made little progress.
Iraqi Kurdistan sent the oil into storage tanks at Ceyhan through a new pipeline in which crude flow started last Decem-ber. The Turkish government had been waiting for Baghdad’s approval before al-lowing the independent oil exports. But Turkey felt it had allowed enough time for diplomacy and that there was little point in delaying further.
US EPA advisory
committee suggests
tightened ozone
standards
The US Environmental Protection Agency’s (EPA’s) Clean Air Scientific Ad-visory Committee (CASAC) has decided that the agency should tighten its ozone national ambient air quality standard (NAAQS) from 75 parts per billion (ppb) to a range between 60 ppb and 70 ppb. The CASAC also agreed to suggest to the EPA that a range of 60 ppb to 65 ppb is prefer-able. The overall 60-ppb to 70-ppb range for the primary helth-based standard is similar to the range that CASAC
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ed in 2008, when the Ozone NAAQS was last revised. Several environmental and health groups are urging the EPA to set a standard no higher than 60 ppb.
Bakken crude properties
are similar to other types
of light oil
The American Fuel & Petrochemical Manufacturers (AFPM) has released find-ings from a new report that examines the characteristics of Bakken crude oil and the standards required to transport by rail. The report results demonstrate that Bak-ken crude is well within the safety stan-dards for current rail car designs. More specifically, Bakken crude is comparable to other light crudes and does not pose risks that are significantly different than other crudes or flammable liquids authorized for rail transport. In particular, Bakken crudes are well within the regulatory limits for pressure, flashpoint, boiling point and corrosivity for use in US Department of Transportation (DOT) approved railcars.
The data clearly show that the current classification of Bakken crude oil is accu-rate and appropriate. Bakken crude oil is designated as a flammable liquid under the Hazardous Materials Regulations (HMR) and, as such, is subject to evaluation of its flashpoint and initial boiling point for clas-sification purposes. While Bakken crude and other light crudes may contain higher amounts of dissolved flammable gases compared to some heavy crude oils, the percentage of dissolved gases would not cause Bakken crude to be transported un-der a DOT hazard class other than Class 3 Flammable Liquid. Therefore, the report says there is no need to create a new DOT classification for crude oil transportation.
The maximum vapor pressure ob-served, based on data collected, was 61% below the vapor pressure threshold limit for liquids under the HMR, demonstrat-ing that Bakken crude oil is properly clas-sified as a flammable liquid. Further, the highest reported value was more than 90% below the maximum pressure that DOT-111 rail cars were built to withstand.
“The US is very fortunate to be expe-riencing an increase in domestic energy production and, as a result, more crude oil is being shipped by rail,” said AFPM President Charles T. Drevna. “Although, the transportation of crude oil by rail is extremely safe, we strive to make
con-tinuous improvements and work toward a zero incident rate.”
The report is based on a survey of AFPM members conducted in response to information requested by the DOT. In a letter to Cynthia Quarterman, administra-tor of DOT’s Pipeline and Hazardous Ma-terials Safety Administration (PHMSA) sent in late February, AFPM confirmed that the process was underway to obtain the data necessary to inform future
regu-latory actions. AFPM members were sur-veyed to determine whether Bakken crude oil poses substantially different transpor-tation risks compared to other crude oils transported by rail. In addressing concerns raised by the DOT, data was collected stemming from an analysis of approxi-mately 1,400 samples of Bakken crude oil. “Rail safety is a shared responsibility and AFPM is committed to doing our part,” said Mr. Drevna.
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Industry Metrics
HP STAFF
Hydrocarbon Processing | JULY 201421
Global energy markets are reaching a new equilibrium, according to Wood Mackenzie analysts. As demand shifts to the East, it will expand to extraordinary proportions. However, the world finds itself in an era of robust energy supplies. A shift from volume to value is rebalancing the energy market to a “supply-push” condition as demand softens. New non-OPEC supplies are contributing to the situation. After the mid-June 2014 meeting, OPEC countries announced that the nations will keep the target production at 30 million bpd for another six months.
0 10 20 30 40 50 60 70 80 0 1 2 3 4 5 6 7
Monthly price (Henry Hub) 12-month price avg. Production A M F J D N O S A J J M A M F J D N O S A J J M A Pr oduc tion, Bcfd Gas pric es, $/Mcf 2012 2013 2014
Production equals U.S. marketed production, wet gas. Source: EIA.
Monthly price (Henry Hub) 12-month price avg. Production
US gas production (Bcfd) and prices ($/Mcf)
45 60 75 90 105 120 135 Dubai Fateh W. Texas Inter. Brent Blend A M F J D N O S A J J M A M F J D N O S A J J M A 2013 2014 2012 Source: DOE Oil pric es, $/bbl
Selected world oil prices, $/bbl
Global refining margins, 2013–2014*
WTI, US Gulf Arab Heavy, US Gulf Brent, Rotterdam Dubai, Singapore LLS, US Gulf -5 0 5 10 15 20 25 30 35 40 Margins, US$/bbl
May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14
Global refining utilization rates, 2013–2014*
60 70 80 90 100 Utilization rates, % US EU 16 JapanSingapore May 14
May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14
US Gulf cracking spread vs. WTI, 2013–2014*
-10 0 10 20 30 40 50 60
Cracking spread, US$/bbl
Prem. gasoline unl. 93 Jet/kero
Gasoil/diesel, 0.05% S Fuel oil, 1% S
May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14
Rotterdam cracking spread vs. Dubai, 2013–2014*
Prem. gasoline unl., 10 ppm S Jet/kero Gasoil, 10 ppm S Fuel oil, 1% S -30 -20 -10 10 20 30
Cracking spread, US$/bbl
0
May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14
Singapore cracking spread vs. Brent, 2013–2014*
-20 -10 0 10 20 30
Cracking spread, US$/bbl
Prem. gasoline unl. 92
Jet/kero Gasoil, 50 ppm SFuel oil, 180 CST, 2% S
May 14
May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14
78 80 82 84 86 88 90 92 94 96 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 Stock change and balance
World consumption World production 2015-Q1 2014-Q1 2013-Q1 2012-Q1 2011-Q1 2010-Q1 2009-Q1
Supply and demand, MMbpd
St
ock change and balanc
e, MMbpd
Source: EIA Short-Term Energy Outlook, June 2014.
Forecast
World liquid fuel supply and demand, MMbpd
* Material published permission of the OPEC Secretariat; copyright 2014; all rights reserved; OPEC Monthly Oil Market Report, June 2014.
Brent Dated vs. sour crudes (Urals and Dubai) spread, 2013–2014*
Light sweet/medium sour crude spread, US$/bbl
Dubai Urals -2 0 2 4 6 8
© 2014 Schneider Electric, All Rights Reserved. Schneider Electric, SimSci and SimSci APC 2014 are owned by Schneider Electric, or its affiliated companies in the U.S. and other countries.
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Hydrocarbon Processing | JULY 201423
Reliability
HEINZ P. BLOCH, RELIABILITY/EQUIPMENT EDITOR
[email protected]Things to know and do before starting new initiatives
HP editors frequently attend
techni-cal conferences to keep informed on the many factors impacting the hydrocarbon processing industry (HPI). The focus of these conferences often differs. However, one particular conference on failure analy-sis stands out. No exhibitors were present at the event; the majority of the presenters were users or beneficiaries of best-of-class (BOC) root-cause failure analysis meth-ods. The core of the program concentrat-ed on two or three best root-cause failure analysis methods available.
Accidents remain an issue. The HPI still struggles with accidents according to a Chemical Safety Board (CSB) statistic. In the report, the CSB noted the “consid-erable frequency of significant and deadly incidents at refineries over the last decade.” In 2012 alone, the CSB tracked 125 signifi-cant incidents at US petroleum refineries.1 These are disappointing findings. One solution is encouraging HPI management to invest more in training budgets such as technical conferences and workshops. Failure avoidance and safety are insepara-ble. The mix is a key ingredient to respon-sibly achieving and sustaining profitability. Continuing education. HP editors also attend reliability-focused forums. These conferences offer different programs. A recent conference incorporated about 80 vendor-exhibitors. A high percentage of the event presentations were closely associated with the exhibitors. Impressive products on view included compact accelerometers and underwater velocity sensors. These and other components have migrated from the aerospace industry to the process and manufacturing industries. Much of this technology transfer will benefit the HPI. More importantly, there are an impressive number of new companies and consultan-cies now entering the reliability field. Terminology. Exhibitors often use at-tention-getting terms in their quest to
attract clients. The old “lean and mean” mantra has run its course. A number of exhibitors now select company names or designations that promise “optimiza-tion,” “detec“optimiza-tion,” “compliance,” “man-agement,” “reliability ecosystems,” “auto-mated” and so forth. There is a market for collective, as well as detailed reliability-focused, programs.
Vendors want to sell “new” initiatives that are really older products or programs with updated names. Using an admittedly sweeping generalization, we characterize these companies as upbeat purveyors of implementation strategies for unrealisti-cally optimistic clients. Both purveyors and clients obviously desire low-budget fixes for persistent problems. But to the ex-perienced and informed, the clients’ prob-lems are often very deeply rooted in past indifference and neglect—which begs the question: Who will do the uprooting? An observation. Some conferences give much visibility to newly formed consul-tancies. These companies offer expertise in operational excellence (OE), a close cousin to asset management. There is nothing wrong with parties seeking, and offering, such visibility. Yet, the existing and potential OE consumer-clients will make progress only if they finally start to address the more fundamental issues. These companies should implement well-focused efforts to learn and become more fully informed.
The word “learning” prompts another key point on OE—be fully aware of your
conditions that will shape the final outcome.
There are a few solid prerequisites to de-veloping meaningful and sustainable OE programs. Prerequisites to successful ini-tiatives and pursuits are never optional; they are unalterable and non-negotiable requirements. These prerequisite require-ments involve hiring, grooming, em-powering, compensating, retaining and rewarding the right people. The men and women who will move entire facilities
from being average to becoming BOC performers have to be ethical, competent and highly motivated. Such employees and their managers must make important contributions before either project content or monetary appropriations are finalized. These employees will ensure that the proj-ects include safety and reliability and are solidly based on the cost of reliable equip-ment, and not just on the lowest initial bid. In other words, the cost-estimating manu-als at the core of such projects must reflect pricing for a reliable plant—especially reli-able machinery.
A realistic project budget estimate must also include the cost of machinery quality assessments (MQAs).2 Remem-ber: You get what you inspect, not what you expect. Implementing and conduct-ing MQAs will typically require a 5% ad-dition to the as-purchased cost for reliable machines. This incremental outlay will often be retrieved within a year.
Initiative success. When examining reliability improvement and failure avoid-ance needs for an HPI facility, let’s be sure of one fact: The next “initiative”—by any name or acronym—can be successful only if and when the stated prerequisites are in place. These prerequisites involve intelligent hiring, nurturing, empowering, compensating, retaining and rewarding the right people. The managers authoriz-ing the prerequisites mentioned above must give guidance by demonstrating per-sonal ethics, competence and persistently high motivation.
Every one of these commendable at-tributes is required from the top to bot-tom layers for a successful organization. Because people with these attributes cannot be acquired or trained on short notice, each prerequisite is a highly tan-gible long-range action step. Companies and management must stop looking for the “magic bullet,” and organizations must cultivate a new environment for OE and reliability. Unfortunately, there will
Reliability
24 Select 155 at www.HydrocarbonProcessing.com/RS
still be those managers who still seek out a “magic bullet” solution. In truth, there really is no cheap implementation route. There are no effective, yet previously un-known, quick-fix initiatives.
Back to basics. To achieve effective re-sults, HPI companies must use only the best available investigation and root-cause failure analysis (RCFA) processes. No one single RCFA process suits all situations.
Organizations must discover and report the root causes of failures, whether they are equipment or process related. Once uncovered, do not rest until the sources of these root causes are eliminated. Modify the management strategy and steer train-ing dollars to the right direction.
Hard look. This editorial is critical of how certain issues are now addressed by HPI companies. The purpose is not to gloss
over misdirected efforts, especially when addressing safety. Caution is warranted. To always seek salvation in new initiatives will have a price in wasted time and money. Irrespective of names, designations and code letters, any initiative whatsoever will succeed only if it is tightly interwoven with highly motivated and competent employ-ees. Because these men and women are the prerequisites to success, our industry must continue sending young engineers to technical conferences that teach both inci-dent investigation and inciinci-dent avoidance. Advice for event organizers. Finally, an important suggestion to organizers of reliability-focused conferences: When selecting motivational speakers, pick the ones who can lay out the full story. At two recent conferences, the keynote speakers spoke about our shrinking world and the marvels of building the latest-generation passenger plane. The speakers reminded their respective audiences that suppliers from 17 nations around the globe provid-ed major components and subassemblies for the new plane. Glitches with onboard batteries were solved in less than one year by competent contributors stepping up to whiteboards and doing sketches for ease of visualization. “Yes, but,” some of us mumbled; it is also known that the new-generation passenger plane experienced years of delivery delays. Neither that fact nor its underlying causes were mentioned, and, more importantly, learning opportu-nities were missed at these conferences. Most conference attendees want to hear the full story and nothing less will do.
LITERATURE CITED
1 “Investigation shines new light on fatal 2010 Tesoro
refinery explosion,” Hydrocarbon Processing, March 2014, pp. 12–14.
2
Bloch, H. P. and F. K. Geitner, Compressors: How to
achieve high reliability and availability, McGraw-Hill
Publishing, New York, New York, 2012.
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HEINZ P. BLOCH is the Reliability/Equipment editor of HP. He has authored 18 textbooks and over 570 papers or articles and was a senior engineering associate for Exxon Chemicals. He is in his 52nd year as a reliability professional, and continues to advise process plants worldwide on reliability improvement, failure avoidance and maintenance cost reduction opportunities. He holds BS and MS degrees from the New Jersey Institute of Technology.
Sulzer Chemtech
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Tower Technical Bulletin
Troubleshooting Distillation Columns – Part 1: The Basics
BackgroundProperly designed and operated distillation columns can provide long-term, trouble-free service. However, mechanical failure, process upsets, and other factors can occur, preventing the distillation system from achieving the expected design performance.
Taking a tower off-line is time consuming and expensive; before doing so it is important to have a good idea of what is causing the problem. A systematic study of the column should be made (often with the assistance of the column equipment provider). After careful study, a tower inspection should be performed to confirm the cause of the problem and to determine and/ or provide a proper solution. In emergency cases, expected replacement equipment may need to be on site prior to the column opening.
Understanding Mass Transfer Fundamentals Is Critical Knowledge of the column thermodynamic and hydraulic functions is the key starting point. Any problem that develops that does not allow the vapor and liquid to contact each other in the manner for which the device was designed, or keeps the vapor and liquid from separating after contact, will adversely affect column performance. For example, the packing shown below will not provide good flow or vapor/liquid contacting efficiency because some of the packing is blocked off by fouling.
Working Toward A Solution
The simple checks should be made first. Check the instrumentation to ensure that flows, levels, temperatures, and pressures are correct. Check to make sure that feed compositions and analyses are correct. Conduct a single gauge pressure survey and a temperature survey as possible. Perform a mass balance across the column—a closure of 3-5% is normally considered acceptable. Once you have this information, review the information with plant engineering and operations. Consult with your equipment vendor to further investigate the problem. Decide on the feasibility of a column gamma scan. If practical, schedule a tower inspection at the first opportunity in order to personally examine the internals. In the meantime, the problem may be temporarily alleviated by reducing rates, changing the reflux and reboiler duties, changing the feed location, and increasing or decreasing the tower pressure. Where To Start
Ask yourself the following questions:
t 8IBU TQFDJmDBUJPOT BSF OPU CFJOH NFU 8IBU DPVME IBQQFOJOUFSOBMMZUPDSFBUFUIJTJTTVF
t *T UIJT B DBQBDJUZ QSPCMFN )BT UIF DPMVNO FWFS SVO TVDDFTTGVMMZBUUIFTFSBUFT *GOPU UIFJOUFSOBMTNBZCFBU their capacity limit.
t )BWF UIFSF CFFO BOZ VQTFU DPOEJUJPOT UIBU NBZ IBWF EBNBHFJOUFSOBMT
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Hydraulic Evaluation
Symptoms of hydraulic flooding include excessive or erratic pressure drop, reduced bottoms flow, reduced column temperature profile, and excessive liquid carryover. Conversely, low pressure drop is an indication of missing trays or packing.
Select 88 at www.HydrocarbonProcessing.com/RS
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Hydrocarbon Processing | JULY 201427
Automation
Strategies
SAL SPADA
ARC Advisory Group, Dedham, Massachusetts
HPI demands higher availability of rotating equipment
The performance and uptime of heavy rotating equipment play an important role in business profitability in a wide range of industries, including upstream and midstream gas processing and downstream refining and petrochemical processing.
In the North American chemical industry, the shale gas boom has been a windfall opportunity as large manufacturers shift from producing ethylene from oil to ethylene from lower-cost meth-ane and natural gas. The cracked gas compressor, at the heart of these operations, must often deal with multiple feedstocks and is subject to fouling from contaminants. If the compressor should go down, lost production in these types of operations is estimat-ed to cost about $1 million/day.
Closing the gap. Compressors, pumps, and fans used in these and other heavy process industries are often custom-engineered systems. Since each component is often sourced from a different vendor, engineers produce systems that are delivered with a wide range of availability guarantees for the different components. Unfortunately, these don’t always meet the demanding uptime guarantee (with minimum 24-hr advance notice of an event) sought by most end users. To close this performance gap, ma-chine builders need to consider incorporating more advanced condition monitoring, predictive maintenance, and improved equipment designs into their rotating machinery systems.
Engineering firms face challenges throughout every facet of design when developing heavy rotating equipment. Require-ments for the most critical design eleRequire-ments: AC drive, motor, mechanical drive and coupling are all interrelated, yet, with very few exceptions, the mechanical drives come from different sup-pliers than do the electrical motors and AC drives.
In an interview with a large, global chemical manufacturer, ARC Advisory Group learned that the manufacturer’s internal organization has developed advanced algorithms intended to drive equipment as “close to the edge” of performance as possi-ble, while still protecting equipment and people. This multi-lay-ered strategy integrates equipment protection algorithms, adap-tive control algorithms and predicadap-tive condition monitoring.
The equipment protection algorithms increase resilience to false trips, allowing equipment to stay operational for much lon-ger periods of time. The adaptive control algorithms, which are generally developed for individual pieces of equipment, operate in real time to dynamically modify the control parameters based on the current operating conditions. The predictive condition monitoring systems used in conjunction with real-time control algorithms provide predictive maintenance information. Machinery providers face problems. Based on our inter-views with several original equipment manufacturers equipment producers, there appears to be a measurable gap between the
capabilities they can integrate and what leading manufacturers seek. This creates a productivity and performance gap.
Failure analysis and predictive maintenance solutions are generally limited to information from a single sensor. The solu-tions rarely correlate information from multiple sensors. Further, many equipment vendors don’t appear to understand the full potential of the equipment. Most employ off-the-shelf program-mable logic controllers (PLCs) and AC drives (some with em-bedded PLCs) to control and monitor the machinery.
Intelligence-to-edge devices. The biggest challenge faced by equipment providers and users alike is the limited process-ing power provided by the automation embedded in the rotatprocess-ing equipment. The processing power in most PLCs and AC drives is not adequate to execute complex algorithms such as pattern matching, covariance analysis, regression analysis and fast Fou-rier transforms in real time.
Advanced predictive condition monitoring requires process-ing of large blocks of sampled stochastic data. Furthermore, to close the performance gap, sensors need to incorporate more in-telligence for auto calibration, advanced filtering or stochastic sig-nal processing to eliminate electrical noise. In some cases, sensors need to be interconnected. Vibration, acceleration, pressure, and temperature sensors often rely upon external signal analysis sys-tems to perform filtering in noisy environments. This inhibits ma-chine builders from integrating more advanced sensor solutions. Sensors. The “connected machine” will require not just more sensors, but also more intelligent sensors. Sensors must perform more sophisticated signal processing “at the edge” to provide ac-curate signals that filter out the noise before it gets to the auto-mation system. Machine builders need to work in partnership with sensor suppliers to embed more intelligent sensors into the machinery, and with automation suppliers to embed com-plex condition monitoring algorithms into automation systems. Automation suppliers, in turn, must strive to provide solutions with the prerequisite processing power to run the advanced algo-rithms and scan rates that are fast enough for demanding rotat-ing equipment requirements.
SAL SPADA is research director for ARC Advisory Group. He has over 15 years of direct experience in motion control system design as a software developer, project manager and product marketing manager. Mr. Spada has been with ARC since 1997 and holds a BS degree and an MS degree in electrical engineering from the University of Massachusetts and an MBA degree from Babson College.
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