Over the next few weeks leading up to Emerson Exchange, we’ll be sharing a series of Q &A’s with our refining consultants on their areas of expertise. The first in our series is a discussion with Gary Hawkins and me on the topic of tight oil.
1. What are the major trends impacting tight oil refining today?
Tight oil production has been increasing significantly in the United States over the last few years, with additional production expected in the near future. As of today, crude oil cannot be exported from the U.S. due to laws; this means U.S. refiners will need to process a higher percentage of tight oil over the next few years.
2. What are the major challenges to refining tight oil?
Some of the major challenges are related to tight crude oil being composed primarily of lighter hydrocarbons (a higher API gravity) than conventional crudes requiring blending with other crude oils to get the right properties for the design conditions of the refinery processes. Tight oil tends to have compatibility issues when blended with other crude oils resulting in accelerated fouling in crude unit heat exchangers from asphaltene precipitation. Asphaltenes do not dissolve in crude oil but exist as a colloidal suspension. The percentage of tight oil blended with other crude oils can make a difference whether the resultant blend is a stable crude oil or an instable blend that is prone to increased rates of asphaltene precipitation. Refiners need to learn what crudes can be successfully blended with tight oil, and in what proportions to mitigate accelerated fouling conditions within crude unit heat exchangers.
In addition, these tight oils have paraffin waxes and high filterable solids that can foul heat exchangers prior to desalting, and these heat exchangers are typically not monitored online. Finally, tight oil has affected yields and quality of products initially, but catalyst manufacturers are quickly making adjustments to realign catalyst formulae for improved performance for tight oil.3. What are the largest opportunities involving tight oil today?
The relatively low price makes it attractive to process for higher profit margins, once the challenges with instability, filterable solids, and processing a blended feed that is consistent with the capabilities of the refinery are sorted out.
4. How can refiners get ahead of the challenges and take advantage of these opportunities?
Refiners need to change their method of monitoring fouling in the crude unit heat exchangers. In the past, fouling was relatively predictable and an offline spreadsheet was adequate. With tight oils that have higher probability of crude incompatibilities, a refiner needs to have online monitoring and analysis capability for crude unit heat exchangers. When the rate of fouling increases, the crude unit process engineer and operations manager can be alerted to change operating conditions (blend percentage) to mitigate the accelerated fouling.
*Be sure to attend my presentation, Automation Solutions for Processing Light Tight Oil (Session 3-2053), at the upcoming Emerson Exchange in Orlando on Tues., Oct. 7, at 9:00 am and 2:00 pm.
Gary will be presenting the following sessions:
Also don’t miss this year’s Refining and Petrochemical Industry Forum on Monday, October 6th at 2:30 pm, and the Refining Industry Mixer Monday evening from 8-10pm.
US Refineries have spent more than $100 billion in recent decades reconfiguring their equipment to process heavy, lower-quality crude oil and they are still doing investments to accomodate their refineries to produce more diesel products.
Tight oils produce lighter products but as I said after years of preparing for heavy sour crudes and adding hydrocracking and coking capacity, refiners are needing to reconfigure again. Tight crudes will shift the investments to the front end of the refinery with the need to add crude pre-wash towers or crude topping units. It may be necessary to add a two-stage desalting unit and in addition we had the added problem of extra-paraffinic, extra care is warranted in blending feeds to avoid precipitation of asphaltenes.
Are we really expecting Refiners to invest again? Is this a profitable business?
In reply to Sergio Jimenez:
Refining globally will be a profitable business as long as fossil fuels are part of our lifestyle. The profitability of any given refinery is a function of many things, including the condition and capacity of the refinery assets and ability to maximize the time on-line, geographic location, energy efficiency, availability of crude, and path to market of products. Ultimately it is the consumer that pays the bills. If the consumer can no longer afford to maintain a certain lifestyle, then I'll leave it to the futurists to comment further.
Processing the light tight oils does not necessarily result in large investments. If not blended with heavier crude oils, a refinery could consider shutting down certain units that process the bottom of the barrel, like shutting down the vacuum column and running the atmospheric residuum through an FCC unit. If they have one.
Most of the recent investment in refining has been a response to government regulations to produce fuels with lower and lower levels of sulfur to reduce acid rain. High sulfur crude oils are still prevalent and those refiners that have invested in processing a heavy high sulfur crude will continue to do so.
If the refiner is not in need of increasing overall capacity,a large investment in the front end of the refinery (the Crude and Vacuum units) may not be necessary. One can consider that the LTO's are already the upper end from a topping unit with no bottoms products. Topping units are generally to strip the easy to process light ends from a crude oil for local gasoline and diesel needs and then pump the remainder back into the pipeline (or other distribution system) for other refiners to process that have the necessary conversion units. So processing LTO's isn't necessarily driving investment in the crude unit - especially if the LTO can be blended with a heavier crude to mimic the composition of a crude oil that is within the capability of the refinery to process. Others may find that the top half of the crude unit will have bottlenecks to production if the equipment is hydraulically limited or heat transfer limited if they start processing a crude oil with a higher volume of the lighter fractions then what it was designed for.
Two stage desalting is current design practice. Some of the lowest cost and most important investment is to do a better job of filtering the crude oil to remove suspended solids and to do a better job of removing the water and salts from the crude oil. This will reduce the corrosion and plugging in the top of the crude column and the overhead condensing system and even in downstream conversion units. If a refiner has substandard filtering and desalting they should upgrade regardless of the type of crude being processed.
Refiners considering to add LTO to their mix of crude oils should invest in studying the impact on their facility and invest in improved monitoring of their heat exchangers (relatively low cost), for example, since understanding the instability of blended crude oils is even more important when adding the LTO's to the mix as you stated.