Milestones of technical development of the Czech Refining Co. in per iod 1996 2007 Hugo Kittel, Ph.D., Str ategy and Long –Ter m Technical Development Manager tel. +420 315 71 8306, email hugo.kittel@cr c.cz Czech Refining Co. (CRC), O.Wichter leho 809, 278 52 Kr alupy n.Vlt.
1. Introduction Crude oil processing represents traditional and matured business activity. For this reason could be considered as profitable, stabile, low risky and profitable enterprise. However it is not completely. Last decade was for refiners extremely demanding and volatile. Refiners have been confronted with all considerable market forces – suppliers, customers, substitutes, new entrants, and increasing competitiveness. To stay in business, refiners had to develop proper strategies and invest heavily into more efficient and environmentally friendly technologies. This paper lists the main business drivers in crude oil processing in the last decade and summarizes CRC´s response to them on technical and technological level. In the same time, it presents an overview of publication activity of CRC´s specialists to reported topics.
2. Analysis of problem Main drivers of development of oil industry in the analyzed period of time were [SOUČEK, 1998; KITTEL, 2004b]: · Extensive legislative changes generally concerning economy, environment, quality, and product lines. · Tightening of refinery products quality standards, first of all Pb phaseout, reduction of sulfur content in oil products and aromatics in motor fuels [PODRAZIL, 2000b; SOLAR, PRAŽÁK, 2000]. · Stress put on protection of environment / increased environmental performance [VITVAR, 1998a, 1999d]. · Fully liberalized market for oil products – for the Czech Republic specifically related to EU accession in May 1, 2004. · Mergers and divestments in the refinery business. As specific and interesting phenomenon of discussed period can be considered fact that industry leaders have started to withdraw from relatively risky refinery operations (EXXONMOBIL, SHELL, etc.). · Privatization of refinery industry and petrol stations in the East European countries, often changing market situation and sometimes also interrupting in the longterm established relations and synergies. · Growing and volatile prices and increasing risk in availability of crude oils. · Market demand significantly changing over the time (first of all decreasing consumption of mogas and heating oils, an apparent shift to high octane mogas, and soaring request on diesel) [KITTEL, 2003a; ŠTĚPÁN, HURTÍK, 1998; PODRAZIL, 1998, 2000a; PODRAZIL, ŠMÍDOVÁ, KITTEL, 2004; PRAŽÁK, 1999, 2003, 2004, 2005a, b, and c, 2006; PRAŽÁK, SOLAR, 2001].
· New emerging components and substitutes (CNG, LNG, BTL/CTL/GTL products, bioethanol, biobutanol, and FAME as examples). · Very volatile refinery margin, complicating justification of investment projects. · Increasing cost of energy and utilities. · Growing capacity of new and revamped units as a way how to reduce fixed costs (new Leuna refinery as a benchmark for MidEurope refineries). · Focus on bottom of the barrel solutions as a form how to improve competitive position, resulting into growing complexity of refineries (Slovnaft EFPA Project as a good example). · Increasing competitiveness between refineries promoted and “provoked” by even more sophisticated and widely exploited benchmarking studies. Considering only conservative “stay in business concept”, it required from refiners in the past decade preparation of clever strategy, realization of new complex projects, huge investments far above depreciation, and fundamental reorganization and reengineering of refineries. Oil market in the CR was quickly and precipitously liberalized fully in early 90s, e.g. for entire in this paper considered period CRC worked in fully competitive business environment [PODRAZIL, 2000a]. On the other hand, commissioning of a new IngolstadtKralupy pipeline on the end of 1995 and privatization of the Czech oil industry offered possibility to share new owners expertise, to consider alternative crude oils sources, and to develop strategic and technological concepts based on much more diversified resources. Opinion related to competitive position of CRC vs. neighboring refineries was published and was not much optimistic [ŠVAJGL, 2003].
3. CRC´s solution CRC was registered as a new business entity in March 28, 1995, joining refinery Litvínov and Kralupy into one company. It was privatized by Unipetrol, ConocoPhillips, ENI, and Shell. In Jan.1, 1996 CRC started its real business activities. Privatization was accompanied with a promise of new owners of capital expenditures (CAPEX) of 500 mil US $ over next 10 years [KUMMINS, 1997]. To synchronize its operating activities with business priorities of shareholders and to stop negative market share development, in August 2003 CRC was transformed into processing refinery [SOUČEK, KRÁL, 2003]. In 2005 Unipetrol was bought by PKN Orlen and during 2007 ConocoPhillips withdrew from CRC selling its share to ENI. Responding to all forces stated in previous chapter, CRC first of all: · Prepared new investment projects and mothballed also some old, low capacity and efficiency units. · Striven to increase utilization of both refineries. · Strengthened and optimized cooperation with petchem partners / customers. · Reconfigured / reduced product portfolio. · Applied new catalytic systems, additives, and chemicals Management of investment projects in CRC has been well described [SVÁTA, 2006]. Reason, why CRC preferentially focused on revamps, has been also communicated well
[VITVAR, 2006]. Operating two refineries in parallel, all mandatory projects have to be “mirrored” in both refineries. CRC´s achievements and vision of development alternatives have been outlined in the past [KITTEL, 2004; SOUČEK 1998, SOUČEK, KITTEL, BALLEK, 2005; VITVAR 2001]. For the response of CRC to the main legislative mandates see exhibit 1. Exhibit 1: Legislative mandates Pr oblem Control system of motor fuels quality by authorities Motor fuels according to Czech norms only Selected EU 2000 parameters Recuperation Pb phaseout Benzene 1% max vol 1% wt S in heating oils 50 ppm S
10 ppm S
Aromatics 35% max vol
Blending of FAME Blending of bioethanol
REACH
Date Since 1996
Implemented in CRC Continuously
Document Notice 102/1995
Since 1998
Continuously
Act 22/1997
Since Jan. 1998
Since Jan.1998
ČAPPO 1997 initiative
Since Jan.1999 Since Jan.2001
In 1998 Since Oct. 2000
Air Act Notice 244/1999; “National program of Pb phaseout” Since Jan. 2001 Since Jan.2001. See ČSN EN 228 (Jan. 2001) also ČAPPO initiative Since 2001 Since 2001 fully Notice 244/1999 Since Jan.2005 Since Oct.2004 Directive 2003/17/EC, Notice 229/2004 ČSN EN 228 (Nov. 2004) Since Jan.2009 Since Jan.2008 Directive 2003/17/EC, Notice 229/2004 ČSN EN 228 (Nov. 2004) Since Jan. 2005 Since Jan. 2005, see Directive 2003/17/EC, also ČAPPO initiative Notice 229/2004 ČSN EN 228 (Nov. 2004) Since Sept.2007 (2,5% Prepared by Dec. 2006, Air Act 86/2002 & vol) practices Sept. 2007 Amendments, Since Jan.2008 Prepared by Dec. 2006, Air Act 86/2002 & practices since Jan. Amendments, Ethanol Act 2008 61/1997 Since 2008 Since 2008 Regulation 1907/2006 EC
In 1997 ČAPPO formulated an “Ecological Initiative”, which was focused on early implementation of specific qualitative 2000 year parameters of motor fuels. CRC joined this initiative from Jan.1, 1998. For technological response of CRC to the main business challenges see exhibit 2. As concerns CAPEX, majority of investment activities have been part of the next complex projects: · “Deep processing of crude oil”, to increase CRC´s competitiveness (1996–2001) [KITTEL, 2007; SOUČEK, KITTEL, HÁJEK, 2008; VITVAR 1999b]. · “Clean Fuels”, first of all to solve mandated reduction of sulfur and aromatics in motor fuels (20022007) [KITTEL, 2003b, 2003c, 2004a; SOUČEK, KRÁL, 2003; SVÁTA, KITTEL, 2005a, 2005b; VITVAR, 2004]. · “Energy Efficiency Program” (entire considered period of time). · “Implementation of biocomponents” (20042007) [KITTEL, CIONOVÁ, PELANT, 2004; SOUČEK, 2006; SOUČEK, 2008a; SOUČEK, KITTEL, PRAŽÁK, 2008]. · “Assets Rationalization”, see dismantled and mothballed units in exhibit 3.
Exhibit 2: New or fundamentally r econstructed units Unit LITVÍNOV New Continuous Catalytic Reforming unit New Mogas blending facility (damaged by fire in Nov. 1996) New Vapor Recovery unit (rail and road terminals) New Visbreaking unit (VBU), (Shell); [VITVAR, 1998b, 1999a, 2003]
POX revamped, a Unitetrol RPA unit, however strategically linked to CRC NHC, 1 st revamp (100 à 130 t/h, conversion not increased, e.g. 40 – 60%; to process vacuum distillates from a new VBU) (Unocal, now UOP); [SOUČEK, 2008b; SOUČEK, KITTEL, HÁJEK, 2008] New central laboratories New Claus IV unit Sulfreen revamp Additization of Mogas 91 with VSRPA PS 3620 (GO HDS) reconstruction [SOUČEK, KRÁL, 2003] PS 2304 (GO HDS) reconstruction [SOUČEK, KRÁL, 2003] New control room New Bitumen Loading facility K#11 revitalization New Bioethanol Blending facility [SOUČEK, 2006] New FAME Blending facility [SOUČEK, 2006] NHC, 2 nd revamp (130 à 160 t/h, conversion increased to 70%, to increase production of middle distillates ) (Unocal, now UOP); [SOUČEK, 2008b; SOUČEK, KITTEL, HÁJEK, 2008] KRALUPY Connection to crude line Ingolstadt Kralupy New Vapor Recovery unit (rail and road terminals) New Isomerization unit (UOP, Penex) Additization of Mogas 91 with VSRPA New Vacuum Distillation unit [SOUČEK, KITTEL, BALLEK, 2005] New FCC (UOP) [HORSKÝ, WEISENBORN, 1998; SOUČEK, KITTEL, BALLEK, 2005] Revamp of MTBE unit (Hüls, now UOP) New Sulfreen unit Second stage desalter New control room [SOUČEK, KITTEL, BALLEK, 2005] Modernization PS 2514 (GO HDS) [SOUČEK, KRÁL, 2003; SOUČEK, KITTEL, BALLEK, 2005] New 3Cut Splitter (Shell) [SOUČEK, KRÁL, 2003] New Bioethanol Blending facility [SOUČEK, 2006] New FAME Blending facility [SOUČEK, 2006] New Selective Desulfurization (Axens, Prime G+) [KITTEL, 2005a; SVÁTA, KITTEL, 2007]
Date 1995 1997 199 1999 1999 1999
1999 2000 2001 2000 June 2003 July 2004 2001 2002 2006 2006 2006 Oct. 2007
Jan. 1996 1997 1997 2000 May 2001 May 2001 May 2001 May 2001 2001 2001 Apr. 2004 2005 2006 2006 Oct.2007
Exhibit 3: Mothballed / dismantled units Unit Mogas Pb Additization Aromatics extractive distillation Solvents production facility Semiregenerative reformer Litvínov (mothballed)
Date 2001 2003 2003 2006
Deep processing of crude oil: Naturally, solution was based on shareholders´ strategic approach to requested CRC´s future performance. It was clearly a “development project”. Central investments were construction of a new semiresidual FCC complex in Kralupy (it consists of more individual technologies, inclusive new vacuum distillation; it represents the biggest investment CRC project in the past decade.), a new Visbreaking unit (VBU) with Vacuum Flasher in Litvínov, two step revamps of the new hydrocracker (NHC), and refurbishment of the old high pressure hydrogenization chamber 11 (K#11) in Litvínov. Investments in Litvínov would not be possible without corresponding reconstruction of Unipetrol RPA POX unit, to process visbroken residue and deliver hydrogen back to CRC. This demanding project was of course joined with revision, reconstruction, or revamp majority of already existing CRC´s production and auxiliary units, and tank farm. Important factor for construction of a new FCC complex was CRC´s connection to crude line TAL / Ingolstadt – Kralupy since Jan. 1996. Effectiveness of in parallel operated NHC and FCC units in CRC has been than optimized later exploiting a Development Linear Programming model [KITTEL, PELANT, 2004]. Clean Fuels: It represents a typical “stay in business” project, e.g. driven by legislative changes. 10 ppm S motor fuels were finally targeted in this project. Exactly here CRC made difficult decisions between focus alternatively on fully new units or reconstruction already operated ones. Different solution has been implemented finally for mogas and diesel desulphurization. The main issue related to “clean mogas” was desulphurization of FCC gasoline, containing about 400 ppm S, because FCC unit commissioned in 2001 did not anticipate well future sulfur reduction. 50 ppm S was targeted constructing a new 3Cut Splitter (3CS) and reconstructing existing Naphtha hydrotreater (new quench, new booster compressor) to treat unselectively “heart / middle cut” from 3CS. Than later, 10 ppm S level in gasoline has been achieved commissioning a new “heartcut” Selective Desulphurization unit and relocating already existing gasoline MEROX (light cut) and nonselective hydrotreating UNIONFINER (heavy cut) technologies from upstream to downstream position of 3CS. This concept has been reported repeatedly [KITTEL, 2005a, b, c; SVÁTA, KITTEL, 2007]. As concerns diesel desulphurization, three in CRC already existing GO HDS have been reconstructed directly to 10 ppm S content: · Unit PS 2304 in Litvínov (New Refinery Litvínov), constructing a fully new reactor section for pressure of about 8 MPa. · Unit PS 3603 (original AVD complex in Litvínov), installing a new distribution tray into existing reactor and increasing slightly volume of catalyst there. · Unit 2514 in Kralupy, adding in series second big reactor and a new membrane unit, to increase hydrogen partial pressure in the reactor circle. Processing of light cycle oil from FCC unit was also considered in this project.
Energy Efficiency Program: Focus was put on increase of heaters´ efficiency (air preheating, new burners), better control of big electric devices and waste heat boilers. An expansion turbine is part of NHC and heat pump of FCC. This program is still in progress. Implementation of biofuels: Blending of biocomponents as regular mogas and diesel components was solution preferred in CRC to alternative adding biocomponents on terminals. New unloading and storage facilities have been constructed and blenders modified adding new line for biocomponents in both CRC´s refineries. In parallel, CRC continues to produce certain volume of motor fuels without biocomponents, therefore proper segregation of both qualities is necessary. CRC experienced ETBE production organizing three testruns in the past (5 – 10 days production) [KITTEL, 2002]. Nevertheless, it is continuing with MTBE production now and blends ethanol directly.
Other important changes related to technical development of CRC are: Lead phase out: It was controlled by a “National Lead Phaseout Program” [PODRAZIL, 2000; SOLAR, PRAŽÁK, 2000; VITVAR, 1999c]. It represented for CRC necessity to increase octane pool of base components of about 1.5 ON. In CRC, it was possible exploiting the new FCC, Isomerization, and revamped MTBE units in Kralupy and optimizing reformate pool [KITTEL, 2005c]. Moreover, CRC examined repeatedly possibility to produce ethers based on C5+ olefins and from SC [KITTEL, POSUCH, LEDERER, 2002] and newly also from FCC units. Unfortunately, due to content on aromatics limited to max 35 % vol only, CRC is short on motor octane number since this moment. Dismantling of Pb additization units in both refineries was very costly. Increased Diesel production: It was possible utilizing projects listed in “deep processing” and “clean fuels” projects. Together with better utilization of CRC capacity and with optimization of feed diet for Unipetrol RPA Steam Cracker unit, these projects contributed to increase of Diesel production about 50 % in the last decade. Reduction of emissions: CRC invested into a new Claus unit IV in the Litvínov refinery, new / revamped Sulfreen units, Vapor Recovery units, and secondary sealing of tank roofs in both refineries. In Litvínov, gases from vacuum system of PSP Vacuum Distillation (VDU) have been redirected from flare to VDU furnace. Modernization of Waste Water plant in Kralupy and a new SCOT unit in Litvínov is in approval phase now.
Product mix: Based on realized investments, CRC is delivering products in line with 2009 quality mandate and with biocomponents. Optimizing product portfolio, aromatics, solvents, and aviation gasolines have been canceled in the last decade. Other projects: CRC invested in both refineries also significant CAPEX into new control system and rooms, health and safety projects.
4. Conclusions Passing significant organizational and ownership changes, CRC managed in the last decade to find relevant response to all business challenges and opportunities, to increase market share, and to satisfy all shareholders expectation. Several major projects have been developed, prepared, and realized. In the center of these activities were commissioning of the new FCC complex in Kralupy, new VBU unit and significant revamp of NHC unit in Litvínov and modernization of all GO HDS units. Based on these projects, CRC managed to improve capacity utilization, increase diesel production, and reduce yield of bottom products. Realizing a mix of new investments and revamps CRC managed to optimize its capital expenditures. CRC is continuing to work on its longterm development strategy.
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33. SOUČEK, Ivan; KITTEL, Hugo; BALLEK, Pavel: " Nová r afinér ie Kr alupy od hydr oskimmingu k hlubokému zpr acování r opy" . Sborník konference APROCHEM 2005, str.17. Milovy 2426.10.2005. 34. SOUČEK, Ivan; KITTEL, Hugo; HÁJEK, Jiří jun.: " Integrating r efinery and petr ochemicals the Czech appr oach" . Proceedings of 5th Global Petrochemical Conference. WRA, Düsseldorf, 46.3.2008. 35. SOUČEK, Ivan; KITTEL, Hugo; PRAŽÁK, Václav: " The r ole of biocomponents in moder n r efiner y" . Proceedings of the 9th Annual European Fuels Conference. WRA, Paris, 1112.3.2008. 36. SOUČEK, Ivan; KRÁL, Josef: " Pr ogr am čistá paliva" . Sborník konference APROCHEM 2003, str.172. Milovy 13.15.10.2003. 37. SVATA, Josef; KITTEL, Hugo: " Postup výr oby čistých motor ových paliv (<10 ppm S) a mísení biosložek v ČeR a.s.“. Autotec 2005, ČAPPO konference" Moderní pohonné hmoty pro motorová vozidla", Brno 6.6.2005a (poster). 38. SVÁTA, J.; KITTEL, H.: " Vývoj a vzájemná konkur ence automobilového benzínu a motor ové nafty jako r ozhodujících paliv pr o automobily" . 7.sjezd chemických společností, Tatranské Matliare, 4. 8.9.2005b. 39. SVÁTA, Josef: " Pr ůběh a ř ízení investičního pr ocesu" . Sborník konference APROCHEM 2006, str. 1321. Milovy, 2426.4.2006 40. SVÁTA, Josef; KITTEL, Hugo: " Selection of the Best Technology for Selective Hydr ogenation of FCC Gasoline for CRC and Impact on the Refinery Configur ation" . Proceedings of APROCHEM 2007 conference, p.1357. Milovy, 16 – 18.4.2007. 41. ŠVAJGL, Oldřich: " Modifikace r afinér ských pr ocesů k výr obě motor ových paliv do r oku 2010" . Ropa, uhlie a petrochemia, 2003/45/12/59. 42. ŠTĚPÁN, Petr; HURTÍK, Tomáš: " Současnost a př edpokládaný vývoj a spotř eby topných olejů v ČR" . Sborník konference APROCHEM 98, str. 63. Mílovy, hotel Devět skal, 1921.10.1998. 43. TLUSTÝ, Jiří: " Zpr acování r opy a r opné pr odukty České r afinér ské a.s." . Sborník konference APROCHEM 98, str.20. Mílovy, hotel Devět skal, 1921.10.1998 44. VITVAR, Milan: " Ekologické aspekty r afinér ských výrob ve světle výsledků České r afinér ské a.s. 19961997" . Energie 1998a/03/5,6/110. 45. VITVAR, Milan: " J ednotka visbr eaking v Rafinér ii Litvínov" . Sborník konference APROCHEM 98, str.52. Mílovy, hotel Devět skal, 19/21.10.1998b. 46. VITVAR, Milan: " V Litvínově byla zahájena výstavba nové technologické jednotky visbr eaking" . Energie 1999a/04/1,2/107. 47. VITVAR, Milan: " 55 let hydr okr akování v ČR" . Energie 1999b/04/3,4/110. 48. VITVAR, Milan: " Vyř azení olova z výr oby autobenzínů" . ČAPPO seminář, Autotec 1999, Brno, 7.6.1999c. 49. VITVAR, Milan: " Minimalizace emisí České r afinér ské" . Energie 1999d/04/11,12/90. 50. VITVAR, Milan: " Technologie pr o řešení kvality r oku 2005" . Sborník konference APROCHEM 2001, Rožnov p.Radhoštěm, 2224.října 2001. 51. VITVAR, Milan: " Někter é aspekty výr oby asfaltů v litvínovské rafinér ii a využití visbr eakingového zbytku" . Sborník konference APROCHEM 2003, str.309. Milovy 13.15.10.2003. 52. VITVAR, Milan: " Výr oba čistých paliv z pohledu pr ocesních hydr or afinačních r eakcí a vývoj technologií pr o přípr avu čistých paliv hydr ogenací" . Sborník konference APROCHEM 2004, str.251. Milovy, 20.22.9.2004. 53. VITVAR, Milan: " Revamp jednotek ve zpr acování r opy" . Sborník konference APROCHEM 2006, str.1327. Milovy, 2426.4.2006.
6. Index of abbreviations 3CS BTL CAPEX CNG CRC CTL ČAPPO ČSN EN EFPA FAME GO HDS GTL K#11 LNG MTBE NHC POX PSP REACH SC TAL VBU VDU VSPRA
3Cut Splitter Biomass To Liquid Capital Expenditures Compressed Natural Gas Czech Refining Company Coal To Liquid Czech Association of Petroleum and Petrochemical Industry and Trade Czech Standard of Quality European Norm Environmental Fuel Project Apollo Fat Acid Methyl Ester Gas Oil Hydrodesulphurization Gas to Liquid Chamber 11 Liquefied Natural Gas Methyl Tertiary Butyl Ether New Hydrocrack unit Partial Oxidation of residuum Preparation of feed for petrochemistry Registration, Evaluation, Authorization and Restriction of Chemicals Steam Cracker Transalpine Crude Pipeline (Trieste – Ingolstadt) Visbreaking Unit Vacuum Distillation Unit Valve Seats Protection Recession Additive