Hydrocracking Technologies as Competitive Imbalance Factor in the Downstream Industry

da Silva, MBA, Author, Dr. Marcio Wagner

Introduction and Context

            The necessity to reduce the environmental impact and the higher sustainability of the industrial processes normally is translated in stricter regulations and higher control upon the industries activities, mainly to those that have a high environmental footprint as the crude oil production chain. This fact is positive and welcome, in view of the necessity to preserve the natural resources and the needed technological development to meet these regulations.

            One of the most impacting regulations to the downstream industry is the necessity to reduce the sulfur content in the maritime fuels, known as IMO 2020, this regulation established which from the maximum sulfur content in the maritime transport fuel oil (Bunker) is 0,5 % (m.m) against the previously 3,5 % (m.m). The main objective is to reduce the SOx emissions from maritime fleet, significantly decreasing the environmental impact of this business.  

            The marine fuel oil, known as bunker, is a relatively low viscosity fuel oil applied in diesel cycle engines to ships movement. Before 2020, the bunker was produced through the blending of residual streams as vacuum residue and deasphalted oil with dilutants like heavy gasoil and light cycle oil (LCO), due to the new regulation, a major part of the refiners will not be capable to produce low sulfur bunker through simple blend.

            Due be produced from residual streams with high molecular weight, there is a tendency of contaminants accumulation (sulfur, nitrogen, and metals) in the bunker, this fact makes difficult meet the new regulation without additional treatment steps, what should lead to increasing the production cost of this derivative and the necessity to modifications in the refining schemes of some refineries. Figure 1 presents a schematic diagram of how the bunker was produced before the IMO 2020.


Figure 1 – Bunker Production Process before IMO 2020

            The drastic reduction of sulfur content in the final product, lead refiners to look for alternatives to reduce the sulfur content in the intermediate streams, and this is a hard task to refiners processing heavy and extra-heavy crudes.

            Beyond the necessity to add value to bottom barrel streams in compliance with the IMO 2020, the increasingly restrict environmental regulations requires even more capacity to produce cleaner distillates, imposing another challenge to refiners processing extra-heavy crudes. The growing trend of petrochemical integration is another great challenge to refiners with access to extra-heavy crudes once requires more complex and expensive refining hardware, in this sense, the hydrocracking and deep hydrocracking technologies can be a fundamental tool to allow the refiners with high capital investment capacity to reach a highlighted competitive positioning in the downstream market through adequate balance of bottom barrel conversion capacity and petrochemicals maximization.

            The COVID-19 pandemic reduces the spread between the 0,5 % sulfur and 3,5 % sulfur marine fuel oil in 88 %, from 321,50 US$/ ton in January of 2020 to 38,0 US$/ton in June at the same year, as presented in Figure 2, based on data from S&P Global Platts Company.

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Figure 2 – VLFSO and HSFO Fuel oil Spreads (S&P Global Platts, 2021)

            Despite this fall in the spread, it’s important to considering the increasingly stricter regulations and the trend of reduction of the HSFO market in the middle term (as presented in Figure 3), this fact plus the trend of reduction in transportation fuels demand and growing demand of petrochemicals at global level tends to favor refiners relying on most complex refining hardware that are capable to processing heavy crude oils and maximize the added value to the processed crude.

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Figure 3 – Growing Participation of VLFSO in the Bunker Market (IEA, 2021)

Processing Extra Heavy Crudes – The Hydrocracking Alternative

Refiners processing heavy and extra-heavy (or high sulfur) crudes face a great challenge to meet the IMO 2020 once is extremely difficult to comply with the new regulation through carbon rejection technologies, in this case, the hydrogen addition technologies are fundamental.

The hydroprocessing of residual streams presents additional challenges when compared with the treating of lighter streams, mainly due to the higher contaminants content and residual carbon (RCR) related with the high concentration of resins and asphaltenes in the bottom barrel streams. Figure 4 shows a schematic diagram of the residue upgrading technologies applied according to the metals and asphaltenes content in the feed stream.

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Figure 4 – Residue Upgrading Technologies According to the Contaminants Content (Encyclopedia of Hydrocarbons, 2006)

        Higher metals and asphaltenes content led to a quick deactivation of the catalysts through high coke deposition rate, catalytic matrix degradation by metals like nickel and vanadium or even by the plugging of catalyst pores produced by the adsorption of metals and high molecular weight molecules in the catalyst surface. By this reason, according to the content of asphaltenes and metals in the feed stream are adopted more versatile technologies aiming to ensure an adequate operational campaign and an effective treatment.

As exposed above, extra-heavy crude oils or with high contaminants content can demand deep conversion technologies to meet the new quality requirements to the bunker fuel oil. Hydrocracking technologies are capable to achieve conversions higher than 90% and, despite, the high operational costs and installation can be attractive alternatives.

The hydrocracking process is normally conducted under severe reaction conditions with temperatures that vary to 300 to 480 oC and pressures between 35 to 260 bar.  Due to process severity, hydrocracking units can process a large variety of feed streams, which can vary from gas oils to residues that can be converted into light and medium derivates, with high value added.

 Figure 5 shows a typical process arrangement to hydrocracking units with two reaction stage and intermediate gas separation, adequate to treat high streams with high contaminants content.  

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Figure 5 – Typical Arrangement for Two Stage Hydrocracking Units with Intermediate Gas Separation

            The residue produced by hydrocracking units have low contaminants content, able to be directed to the refinery fuel oil pool aiming to produce low sulfur bunker, allowing the market supply and the competitiveness of the refiners.

The process shown in Figure 5 presents a fixed bed hydrocracking unit, to heavier crudes, this unit can be inadequate due to the low operating life cycle, in this case the ebulated bed and slurry phase reactors can be more effective, despite the higher capital spending.  The capital requirement is one of the most important restrictions to refiners to adopt the hydrocracking technologies both to capital and operating capital due to the necessity of larger hydrogen generation units, catalysts costs, etc. Figure 6 presents a comparison between residue upgrading alternatives related to the capital investment (CAPEX) and effectiveness in the bottom barrel processing.

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Figure 6 – Capital Spending x Residue Conversion to Residue Upgrading Technologies (Shell Catalysts and Technologies, 2019)

            As presented in Figure 6, the hydrocracking technologies present the higher level of required capital spending, on the other side offer the higher conversion to bottom barrel streams, a necessity to refiners processing heavy and extra-heavy crudes. According to Figure 3, the other alternatives are not effective to treating residue streams with high carbon residue and metals, common characteristics of extra-heavy crude oils. In this case, the hydrocracking alternative is the most technically adequate solution.

Deep Hydrocracking Technologies – Recovering More Added Value from the Crudes

As aforementioned, despite the high performance, the fixed bed hydrocracking technologies can be not economically effective to treat residue from heavy and extra-heavy due to the short operating lifecycle. Technologies that use ebullated bed reactors and continuum catalyst replacement allow higher campaign period and higher conversion rates, among these technologies the most known are the H-Oil and Hyvahl™ technologies developed by Axens Company, the LC-Fining Process by Chevron-Lummus, and the Hycon™ process by Shell Global Solutions. These reactors operate at temperatures above of 450 oC and pressures until 250 bar. Figure 7 presents a typical process flow diagram for a LC-Fining™ process unit, developed by Chevron Lummus Company while the H-Oil™ process by Axens Company is presented in Figure 8.

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Figure 7 – Process Flow Diagram for LC-Fining™ Technology by CLG Company (MUKHERJEE & GILLIS, 2018)

Catalysts applied in hydrocracking processes can be amorphous (alumina and silica-alumina) and crystalline (zeolites) and have bifunctional characteristics once the cracking reactions (in the acid sites) and hydrogenation (in the metals sites) occurs simultaneously.


Figure 8 – Process Flow Diagram for H-Oil™ Process by Axens Company (FRECON et. al, 2019)

An improvement in relation of ebullated bed technologies is the slurry phase reactors, which can achieve conversions higher than 95 %. In this case, the main available technologies are the HDH™ process (Hydrocracking-Distillation-Hydrotreatment), developed by PDVSA-Intevep, VEBA-Combicracking Process (VCC)™ commercialized by KBR Company, the EST™ process (Eni Slurry Technology) developed by Italian state oil company ENI, and the Uniflex™ technology developed by UOP Company. Figure 9 presents a basic process flow diagram for the VCC™ technology by KBR Company.

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Figure 9 – Basic Process Arrangement for VCC™ Slurry Hydrocracking by KBR Company (KBR Company, 2019)

            In the slurry phase hydrocracking units, the catalysts in injected with the feedstock and activated in situ while the reactions are carried out in slurry phase reactors, minimizing the reactivation issue, and ensuring higher conversions and operating lifecycle. Figure 10 presents a basic process flow diagram for the Uniflex™ slurry hydrocracking technology by UOP Company.


Figure 10 – Process Flow Diagram for Uniflex™ Slurry Phase Hydrocracking Technology by UOP Company (UOP Company, 2019).

            Other commercial technologies to slurry hydrocracking process are the LC-Slurry™ technology developed by Chevron Lummus Company and the Microcat-RC™ process by Exxon Mobil Company. Figure 11 presents a basic process flow diagram for the LC-Slurry™ technology developed by Lummus Company.