Hydrocarbon Engineering

March

2017

HYDROCARBON

ENGINEERING

How do these processes work in practice? The

remainder of this article describes three case studies

that show the benefits of adopting a carefully

defined and well structured approach to continuous

improvement.

Case studies

Hyundai Oilbank, Daesan, South Korea:

Group II base oil plant

Hyundai Oilbank was keen to enter the lubricant base

oil market because of the growth in sales, particularly

in Asia. The company’s plan was to build a Group II

base oil plant connected to its Daesan refinery that

could process low value hydrocracker bottoms, with

the focus on heavy base oils (up to 12 centistokes

[cSt]).

Shell Global Solutions was asked to help revamp

the hydrocracker to provide the right amount of feed

at the right quality, and to revamp the high vacuum

unit to Shell’s deep flash technology mode. Planning

the work was undertaken in cooperation with key

stakeholders. Project execution was exemplary and

disciplined, and deadlines were met. Hyundai Oilbank

ran key activities in parallel, which helped to bring the

project online well ahead of schedule and under

budget. The whole project took just 27 months to

complete.

The new plant started up in 2014, and the

performance guarantees were met in full. Since the

start of operations, Hyundai Oilbank has made

further adjustments to reflect a significant change in

the crude diet and is implementing more expansion

projects. Another cycle of plan-execute-operate has

started.

Grupa LOTOS, Gda

sk Poland: residue

upgrading complex

To improve the economics of its Gda

sk refinery

further, Grupa LOTOS identified an opportunity to

build a residue upgrading complex that would feature

a KBR ROSE solvent deasphalting unit and a Shell

deasphalted oil hydrocracker. The project started up

in 2011 and has increased Grupa LOTOS’s margins by

US$5/bbl.

The phasing of the overall investment was critical

to the project’s viability. The project planning and

execution were well implemented.

Following the acceptance test run, the operators

worked with Shell and Criterion Catalysts &

Technologies to optimise the unit further. These

optimisation efforts focused on lowering costs by

reducing energy consumption and increasing margins

through higher conversion for diesel production.

After optimisation, the deasphalted oil

hydrocracker was processing approximately 50%

deasphalted oil and 50% vacuum gas oil at up to

90% conversion directly into Euro 5 diesel. The

operators reached a limit at 90% owing to hydrogen

availability.

The next phase for this facility is the

construction of a delayed coker with increased

hydrocracker capacity. Plans for a further project are

also in development. Despite a tough economic

climate that has caused many of its competitors to

slow down or even halt their investment plans,

Grupa LOTOS can see the benefits of the continuous

improvement model and is not content to stand still.

Valero, USA: increasing hydrocracking

capacity

Valero is North America’s largest refiner and well

known for its appetite for continuous improvement.

In 2012 – 2013, the company brought two new

50 000 bpd hydrocrackers licensed from Shell Global

Solutions online at its St Charles and Port Arthur

refineries. These were massive investments, the

largest capital projects that Valero had ever

approved in its company history, but it was keen to

meet the rapid growth in demand from European

and South American markets.

The hydrocracking units at Port Arthur and

St Charles have a unified design and Valero’s

approach to these projects can be characterised as

'design a plant once, build it twice'.

Both hydrocrackers met all the process

guarantees regarding throughput, product yields and

product quality. Following this success, Valero

planned a revamp programme to increase capacity to

75 000 bpd to gain even greater benefits from the

booming distillate products market. This was yet

another successful cycle.

Conclusion

Every step of the plan-execute-operate cycle is

important and each contribution from the refinery

team and its partners provides the basis for

delivering sustainable profits to investors and

satisfying consumer demand.

During the planning phase for new projects,

operators will have a choice of options that they

could implement. Working with an experienced

partner to evaluate these options should help to

ensure that the final selection offers the best

economic impact for each specific situation, and is

one prepared to cope with market changes.

Reaching optimal operation in the shortest

possible time is also vital for business success.

Meticulous project management and experienced

oversight are the key factors in this area. Once the

project is operating, leading refiners look for

improvement opportunities in response to changing

external factors and the availability of new and more

powerful technologies or catalysts.

Companies such as Hyundai Oilbank, Grupa

LOTOS and Valero show that, to be successful,

refineries cannot stand still. Sustained success

requires continuous planning of new projects, rapid

execution of these projects, optimisation during

operation and continuous repetition of this cycle.