CRUDE OIL QUALITY ASSOCIATION CONFERENCE 2013 Dallas, TX, USA

CRUDE OIL QUALITY ASSOCIATION CONFERENCE 2013 Dallas, TX, USA USE OF PETRO-SIM TM AS A TOOL TO ENCHANCE DECISION MAKING M. Scott Green 2013 KBC Advanced PROPRIETARY Technologies plc. INFORMATION All Rights Reserved. 7 November 2013

Agenda Introduction Personal Brief commercial Distillate Hydrotreater Study Basis Technical Discussion Study Results Case Study Examples Closing Questions 2

Introduction KBC is the leading consultancy to the global energy, process and natural resource sectors. Formed in 1979, KBC has offices in the UK, USA, Canada, Singapore, the Netherlands, India, Russia, China, and Japan. Specialize in improving the profitability of clients in the refining, petrochemical and energy and processing industries worldwide. Our core service offering includes technical, commercial & environmental risk management, profit improvement and improving operating performance to the oil refining, petrochemical, and other process industries worldwide.. 3

Introduction KBC has assisted over 200 clients globally, providing improvements of over US$ 5 billion per year to their collective bottom line profits. KBC also ensures that the benefits that clients gain from our services are sustainable by transferring knowledge and relevant best practices to our clients organizations. Our client base includes national oil companies, major multi-national oil companies and independent refiners, with projects executed on both grass roots and older, more established refinery and petrochemical sites. 4

Introduction A few of our most recent clients are shown below: 5

Introduction KBC s rigorous, first-principles, simulation software (Petro-SIM TM ) is uniquely qualified to holistically study unit specific configurations and identify any associated plant-wide impacts to arrive at optimum configuration decisions during Front-End Engineering Design (FEED). This presentation examines a specific example in detail (i.e. configuration study for Distillate Hydrotreating) and follows with general examples of others KBC has performed (e.g. evaluation of LTO processing in existing assets). 6

Basis Distillate Hydrotreater Configuration Study Client directive to perform a study for different Distillate Hydrotreater (DHT) configurations: Capital Expenditure (CAPEX) Operating Expenditure (OPEX) Licensor package for reaction section only Configuration of Separation and Fractionation Impact enhanced because of clone unit 7

Basis Optimum configuration is driven by many factors Capital Expenditure (CAPEX) Operating Expenditure (OPEX) Product Recovery Product Specifications Maintenance Flexibility 8

Basis Multiple Options to produce on-spec Product Limited by Constraints Minimize FEED schedule impact Licensor providing reaction section guarantees (thus no changes to that section) Same Product Recovery/Specifications 9

Basis Licensor provided base configuration (RX and 2-Drum Separation with steam stripper and vacuum drying of product) Client directive to limit to 3 configurations Case 1: Base (Licensor configuration) Case 2: Base with fired-reboiling on LP Stripper and overhead compression Case 3: 4-Drum Separation with LP Stripper, fired-reboiler and overhead compression 10

Basis Study Approach: Petro-SIM TM simulations for each case Utilize simulation results to assess impact on critical equipment (size, duty) Assess INCREMENTAL CAPEX/OPEX for each of the 3 cases Purpose was NOT to identify the total CAPEX /OPEX of each configuration. 11

Technical Discussion Distillate Hydrotreater Configuration Study Common Features of 3 Cases: 2-year target cycle length Max Operating Pressure subject to flange class (>800psig partial pressure; 1200psig operating) Reactor dt rise <80 F (3 bed with quench) LHSV target of approx. 0.8 hr -1 Amine scrubbing on recycle gas Cold Low Pressure Separator Wash Water Injection Configuration Recycle purity >88mol% H2 12

Technical Discussion Petro-SIM TM Reactor Setup 13

Technical Discussion Case 1 (Licensor Base Configuration) 14

Technical Discussion Case 1 (Licensor Base Configuration) STRIPPER COLUMN Diesel Product To Storage 15

Technical Discussion Case 1: Wet system utilizing MPS Advantages: No Compression Smaller diameter than reboiled tower Disadvantages: Corrosion tendencies in overhead system of stripper Level of water remaining in the bottoms product Increased utility demand and equipment count to achieve haze (water) specs Added sour water 16

Technical Discussion Case 2 is same as Case 1 except in Stripping Case 1 17

Technical Discussion Case 2 is same as Case 1 except in Stripping Case 2 18

Technical Discussion Case 2: 2-Drum w/ Fired-Reboiler, Compression Advantages: Dry system Improved ability to meet water/flash Greater flexibility to blend (flash) Aids better back-end cutpoint on naphtha No added sour water production Disadvantages: Compression in overhead system of Stripper Typically larger diameter than steam stripped tower Fired-heater-environmental point source 19

Technical Discussion Summary of Key Parameters Stripper Case 1 2 Drum Case 2 2 Drum Case 3 4 Drum Steam Reboiler Reboiler Column Diameter ft 8.5 10 9 Operating Pressure psia 130 50 50 Overhead Temperature F 110 110 110 Bottoms Temperature F 447 565 564 Bottoms Distillate Flash Pt F 140 140 140 Sulfur ppmw 8 8 8 20

Technical Discussion Summary of Key Parameters Stripper Reboiler Case 1 2 Drum Case 2 2 Drum Case 3 4 Drum Duty mmbtu/h N/A 22.8 30.8 Steam Rate lb/h 19600 N/A N/A Stripper Overhead Comp Power hp N/A 101 98 Combined Feed Heater Duty mmbtu/h 34.7 34.7 6.2 Total Htr Duty (Reb+Feed) mmbtu/h 34.7 57.5 37.0 21

Technical Discussion Description CASE 1 Two Drum Separation, Steam Stripping and Vac Drying CASE 2 Two Drum Separation with Fired Stripper Reboiler mm Btu/Hr HP Misc lb/h mm Btu/Hr HP Misc lb/h Abs Heater Duty (mm Btu/Hr) Fired Heater Duty (mm Btu/Hr) 35.0 65.4 58.3 76.9 Electric Motor (kw) 2,232 2,087 Cooling Water (gpm) 373 192 150# Steam (Lb/Hr) 16,394 0 Lb/Hr of Sour Water 15,394 0 Pieces of Equipment 31 22 H2 Consumption (mmscfd) 13.95 13.95 22

Technical Discussion Table 2: Case 1 vs. Case 2 OPEX Analysis Case 1 = 2-Drum Separation with Stm Stripping and Vacuum Drying Case 2 = 2-Drum Separation with Fired Reboiling Cost of Energy Basis $0.063 USD / kwh incremental electrical power cost 3 $5.26 USD / mm Btu fuel gas cost 3 $7.51 USD / klb of Steam 2 $1.00 USD / 1000 Lb for sour water treating $0.62 USD / 1,000 gal Cooling Water* $1.870 USD / 1000 SCF Hydrogen 4 Delta Energy Case 2 - Case 1: 18.6 mm Btu/Hr Fuel Gas (145) kw Elect Motors (181) gpm of Cooling Water (16,394) Lb/Hr of 150# Steam (9) No. Pcs of Equipment 0mm SCFD H2 ($495,590) OPEX (Savings/year) Case 1 Case 2 Cost of Energy $306.83 per hour fuel gas $404.71 per hour fuel gas 140.84 per hour Elect 131.71 per hour Elect 123.17 per hour Steam 0.00 per hour Steam 15.39 per hour Sour Water 0.00 per hour Sour Water 13.92 per hour Cooling Water 7.17 per hour Cooling Water $163.04 per hour Hydrogen $163.04 per hour Hydrogen $763.20 per hour $706.63 per hour $6,685,672 per year $6,190,082 per year Notes: 1 The cost of cooling water per KBC 12-Mar-08, is 1058 peso per 1,000 gal. (1,700 peso = 1 USD) 2 The cost of steam equals the cost of fuel x 1200 btu/lb / 90% eff. plus $.50/kLb for demin water. 3 The cost of fuel and electricity are from the KBC Energy Analysis for the year 2012 4 H2 cost 1.3 x Hydrogen Btu of Fuel Gas=$1.87/1000CF (per KBC). 23

Technical Discussion Case 2 vs Case 3: Same Stripper Config Case 2 24

Technical Discussion Case 3: 4-Drum (HHPS / HLPS / CHPS / CLPS) R 25

Technical Discussion Case 2: 2-Drum Separation (CHPS/CLPS) Advantages: Lower soluble hydrogen loss (OPEX), NH3 is removed prior to Separation and Stripper section Lower equipment count (CAPEX). Disadvantages: Significant heat lost to air/water cooling (CAPEX/OPEX) Significant additional heat exchange required to reheat CHPS liquid prior to Stripper (CAPEX) 26

Technical Discussion Case 3: 4-Drum Sep (HHPS/HLPS/CHPS/CLPS) Advantages: Better heat recovery (OPEX) Smaller reactor effluent air cooler (CAPEX) Slightly smaller Stripper (CAPEX) Improves oil-water separation in CHPS (though not a significant concern for the DHT) Disadvantages: soluble H2 loss (OPEX) purity recycle H2 (OPEX) Higher equipment count (CAPEX) Possible NH3 slip to Stripper 27

Technical Discussion Summary of Key Parameters Stripper Case 1 2 Drum Case 2 2 Drum Case 3 4 Drum Steam Reboiler Reboiler Column Diameter ft 8.5 10 9 Operating Pressure psia 130 50 50 Overhead Temperature F 110 110 110 Bottoms Temperature F 447 565 564 Bottoms Distillate Flash Pt F 140 140 140 Sulfur ppmw 8 8 8 28

Technical Discussion Summary of Key Parameters Stripper Reboiler Case 1 2 Drum Case 2 2 Drum Case 3 4 Drum Duty mmbtu/h N/A 22.8 30.8 Steam Rate lb/h 19600 N/A N/A Stripper Overhead Comp Power hp N/A 101 98 Combined Feed Heater Duty mmbtu/h 34.7 34.7 6.2 Total Htr Duty (Reb+Feed) mmbtu/h 34.7 57.5 37.0 29

Technical Discussion Description Abs Heater Duty (mm Btu/Hr) Fired Heater Duty (mm Btu/Hr) mm Btu/ Hr Electric Motor (kw) 2,087 CASE 2 Two Drum Separation with Fired Stripper Reboiler CASE 3/ Case 4 Four Drum Separation with Fired Stripper Reboiler (Cracked/Virgin Feed) HP Misc lb/h mm Btu/Hr HP Misc lb/h 65.4 38.3 / 37.0 76.9 45.1 / 43.5 2,410 / 2,269 Cooling Water (gpm) 192 72 / 72 150# Steam (Lb/Hr) 0 0 Lb/Hr of Sour Water 0 -- Pieces of Equipment 22 29 / 29 H2 Consumption (mmscfd) 13.95 15.0 / 15.0 30

Technical Discussion Table 3: Case 2 vs. Case 3/4 OPEX Analysis Delta Energy Case 2 - Case 1: Delta Energy Case 3 - Case 2: Delta Energy Case 4 - Case 2: 18.6 mm Btu/Hr Fuel Gas (13.27) mm Btu/Hr Fuel Gas (14.80) mm Btu/Hr Fuel Gas (145) kw Elect Motors 322 kw Elect Motors 37 kw Elect Motors (181) gpm of Cooling Water (301) gpm of Cooling Water (301) gpm of Cooling Water (16,394) Lb/Hr of 150# Steam (16,394) Lb/Hr of 150# Steam (16,394) Lb/Hr of 150# Steam (9) No. Pcs of Equipment (2) No. Pcs of Equipment (2) No. Pcs of Equipment 0 mm SCFD H2 1.1 mm SCFD H2 1.1 mm SCFD H2 ($1,222,679) Opex Saving per yr. ($1,370,673) Opex Saving per yr. ($495,590) OPEX (Savings/year) ($2,593,352) Case 2 Case 3 Case 4 $404.71 per hour fuel gas $237.01 per hour fuel gas $228.96 per hour fuel gas 131.71 per hour Elect 152.04 per hour Elect 143.19 per hour Elect 0.00 per hour Steam 0.00 per hour Steam 0.00 per hour Steam 0.00 per hour Sour Water 0.00 per hour Sour Water 0.00 per hour Sour Water 7.17 per hour Cooling Water 2.69 per hour Cooling Water 2.69 per hour Cooling Water $163.04 per hour Hydrogen $175.31 per hour Hydrogen $175.31 per hour Hydrogen $706.63 per hour $567.06 per hour $550.16 per hour $6,190,082 per year $4,967,403 per year $4,819,409 per year 31

Study Results Distillate Hydrotreater Configuration Study Case 1 vs 2: Assessed changing from steam stripping to a fired reboiler (both with 2-Drum separation scheme). Result-OPEX/CAPEX savings for each unit. OPEX alone would justify if CAPEX were neutral Case 2 vs 3/4: Analyzed changing from 2-Drum to 4-Drum separation scheme (both with fired-reboiled Stripper) Result-OPEX savings that met CAPEX payout hurdle 32

Typical Opportunities Analysis can be performed on grassroots projects at feasibility stage to speed schedule and costs (avoid iteration) Modelling of existing assets for optimum feed selection or operational settings for a given feed Linear Program vector generation tools within Petro-SIM TM to update LP vectors, improve planning Typical Study Project Uses Crude Feedstock Selection & Optimization Feed / Product Blending Aromatics Optimization Recover Light Gases from Fuel Gas Hydrogen Optimization Share C3 Splitter between Refining & Chemicals Propylene Upgrading in Refinery Light gas recovery (various) Environmental permitting/support Costs Low Low-Med Low Medium Medium High High High Low 33

Case Study Example 1 N. American evaluation of facility to process Light Tight Oil Options: Repurpose existing equipment/units (evaluating fit for proposed range of feedstocks) New Construction (simpler process) Other (confidential) KBC assay characterization methods Further, KBC has proprietary kinetic models capable of calibration to existing or yield prediction from new units and throughout a site-wide flowsheet model. Tracks key characteristics for product blending through catalytic processes (sulfur, octane, cetane, etc.). Gives ability to examine cutpoint optimization or feedstock/product blending to fill to capacity existing units (or set fit-for-purpose design capacities for new construction and given feed). 34

Case Study Example 2 Latin America grassroots entire refinery build + integration with existing adjacent facility Multiple catalytic processes (licensed and open-art) KBC has proprietary kinetic models capable of calibration to existing or yield prediction from new units and throughout a site-wide flowsheet model. Tracks key characteristics for product blending through catalytic processes (sulfur, octane, cetane, etc.). Ability to speed project timeline by enabling parallel execution with different licensors. KBC served as Owner s Technical Advisor (OTA) working with EPC firms and licensors, OEMs, and firms performing due-diligence (for project finance) KBC Configuration withstood scrutiny of multiple EPC firms as flexible, optimal ( bang/buck ) configuration. 35

Case Study Example 3 Asian refinery plus multiple nearby petrochemicals Potential synergies had been discussed since the start-up with little success: Process streams, fuel, utilities, services, infrastructure KBC assisted to further their integration efforts: Impartially estimated a fair split of benefits Prioritised opportunities: benefit, capital cost and difficulty Fully defined implementation plan 3 rd party facilitation of the integration team Opportunities worth 20+ M$ /yr with little capex, over 100 M$ /yr with capital projects 36

Case Study Example 4 Far East refiner screening project benefits using integrated flowsheets with rigorous process models. Energy and emissions benefits also modelled using site-wide utility model. Incremental refinery production backs out cracker import naphtha. Opportunities in the order of 60-90 M$ /yr ballpark. 16 M$ /yr utility balancing credits identified through significant CO 2 reductions from H 2 integration LP vector generation directly from Petro-SIM TM common flowsheet and process models to update LP Program 37

Closing Level of analysis for DHT study could not have been performed holistically without each case developed in Petro- SIM TM Fidelity of information allowed verification and quantitative examination of expectations Results in alignment with perceived advantages/disadvantages Client was able to make an informed decision from a capital cost, operating cost, maintainability and operational flexibility perspective KBC experience in operating plants world-wide (using Petro- SIM TM and other tools in our technology suite) means the tools are rigorously tested/vetted in the real world. 38

Questions 39

Thank You For more information visit: www.kbcat.com or contact me at: sgreen@kbcat.com 40

Acknowledgements Ohmes R., Larson M., and Streit E., KBC Advanced Technologies Technical Memoranda, 2008. Popov S. and McDonald D., Distillate Hydrotreater CAPEX/OPEX Study, Technical Memoranda, 2008. McIntee, Andrew, KBC Advanced Technologies, Critical Success Factors for Achieving Refinery-Petrochemical Integration, Maximising Propylene Yields Conference, Frankfurt, June 2013. Palmer R.E., Harwell L., Thakker S., Polcar S., and Desai P., Design considerations for ULSD Hydrotreaters, 2003 NPRA Annual Meeting (AM-03-89). Palmer R.E., Polcar S., and Wong A., Clean Diesel Hydrotreating, Petroleum Technology Quarterly, Q1 2009. Shargay, C. A., Turner J., and Messer B., " Design Considerations to Minimize Ammonium Chloride Corrosion in Hydrotreater REAC s," NACE Corrosion/01 Conference, NACE Houston TX, Mar. 2001, Paper 01543. 41