FUTURE REFINERY -- FCC'S ROLE IN REFINERY / PETROCHEMICAL INTEGRATION

FUTURE REFINERY -- FCC'S ROLE IN REFINERY / PETROCHEMICAL INTEGRATION Authors: Phillip K. Niccum - KBR Maureen F. Gilbert - KBR Michael J. Tallman - KBR Chris R. Santner - KBR Publication / Presented: 2001 NPRA Meeting Date: March 18, 2001

Future Refinery -- FCC's Role In Refinery / Petrochemical Integration Phillip K. Niccum, Maureen F. Gilbert Michael J. Tallman and Chris R. Santner Kellogg Brown & Root, Inc. Houston, Texas USA Presented at 2001 NPRA Meeting (18 March 2001) Introduction Light olefins, ethylene, propylene and butylenes, have long been basic building blocks for the manufacture of a variety of petrochemical products and fuels. Today, light olefins are used for the production of gasoline, polymers, antifreezes, petrochemicals, explosives, solvents, medicinals, fumigants, resins, synthetic rubber, and many other products. Ethylene is the largest volume petrochemical industry feedstock, and almost all of the ethyene supply comes from thermal (steam) cracking of hydrocarbon feedstocks such as ethane, propane, naphthas and gas oils. Propylene is second in importance to ethylene as a raw material for petrochemical manufacture. The largest source of petrochemical propylene is that produced as the primary byproduct of ethylene manufacture. Ethylene plants charging liquid feedstocks typically produce about 15 wt% propylene and provide almost 70 percent of the propylene consumed by the petrochemical industry, as shown in Figure 1. Petroleum refining, nearly all from fluid catalytic cracking (FCC), is by far the next largest supplier Figure 1: 2000 World Propylene Supply To Petrochemicals 51.2 Million Tons per Year Steam Cracker 66% Other 2% Orthoflow FCC From Refineries 31.7 Million Tons per Year Dimersol of propylene, supplying about 30 percent of the petrochemical requirement (1). In the U.S., FCC supplies about one-half of the petrochemical propylene demand. Propylene demand has been increasing at a faster rate than that of ethylene. Since steam crackers are limited in the amount of propylene they are able to produce, alternate sources of propylene are becoming of increased interest, including increasing production from FCC units. From Refineries 32% To Chemical 52% & Poly 2% LPG/Fuel 26% Alkylation 20% CMAI Page 1

This paper discusses the evolution of the propylene market and catalytic fluid bed processes designed to meet the rising petrochemical industry demand. Propylene Market The demand for propylene has increased rapidly during the past twenty years, primarily driven by the demand for polypropylene manufacture as shown in Figure 2. The demand for propylene by the petrochemical industry has increased more rapidly than the demand for ethylene, and this trend is expected to continue. In the next 20 years, the demand for propylene is expected to more than double. During the next five years, the demand for ethylene, propylene and gasoline/distillates are expected to increase annually by 5.3, 5.6 and 3.0 percent, respectively (2). Since ethylene plants produce more ethylene than propylene, and since the construction of ethylene plants is tied to the demand for ethylene not propylene, significant increases in FCC produced propylene will be required to meet the increased propylene demand. At the same time, since installation of new FCC units is driven by the demand for gasoline rather than propylene, most of the increased propylene supply will have to come from investments in existing FCC installations. Chemical Market Associates, Inc (CMAI) estimates that during the next five years 4.1 MM tons per year of propylene must be pulled from existing refinery sources to meet the projected petrochemical propylene demand. This increased propylene production from existing FCC units for petrochemicals will be obtained by (1) increasing propylene yield from the FCC units, as well as by (2) increasing the percentage of FCC propylene recovered for petrochemical manufacture as opposed to other uses. Figure 2: PROPYLENE DEMAND FORECAST Overall Growth of 4% - 5% per year Million Tons per Year 160 140 120 80 60 40 20 0 Others Cumene Propylene Oxide Acrylonitrile Polypropylene 1995 2000 2005 2010 2015 2020 Orthoflow FCC CMAI History of Fluid Catalytic Light Olefins Production During the latter 1930's, propylene and butylene were largely supplied as a byproduct of thermal cracking of petroleum, and the major use of these light olefins was for the manufacture of gasoline using catalytic polymerization (3). During WW II, fluid catalytic cracking was developed for the production of high octane aviation gasoline and C4's (isobutylene and butadiene precursors for a new and rapidly expanding U.S. synthetic rubber industry as the supply of natural rubber was being cut-off). Page 2

The first commercial FCC unit was built by The M.W. Kellogg Company in Standard Oil of New Jersey s Baton Rouge, Louisiana refinery and commissioned in May 1942. Between 1942 and 1944 Kellogg built 22 of 34 FCC units constructed throughout the U.S and the FCC process quickly became a major contributor to worldwide propylene and butylene production. Rare Earth exchanged Y zeolite catalyst was first synthesized by Mobil in 1959. By the late 1960's, over 90% of U.S. FCC units were operating with the Mobil invented zeolite catalyst. The high activity of the zeolite catalysts, compared to the earlier amorphous catalysts, greatly improved gasoline yield and reduced coke and dry gas yields from the FCC units, but the catalyst's high hydrogen transfer characteristic greatly reduced light olefin yield and gasoline octane (4). These changes in product selectivity are demonstrated in the following data. Table 1 Fixed Bed Pilot Plant Data Waxy Gas Oil Feedstock over Commercial Equilibrium FCC Catalysts 950 F cracking temperature at constant conversion Amorphous Zeolite Yields Catalyst Catalyst Hydrogen, wt% 0.08 0.04 C1 + C2 s, wt% 3.8 2.1 Propylene, vol% 16.1 11.8 Propane, vol% 1.5 1.3 i-butane, vol% 7.9 7.2 n-butane, vol% 0.7 0.4 Butylenes, vol% 12.2 7.8 C5+ Gasoline, vol% 55.5 62.0 LCO, vol% 4.2 6.1 Bottoms, vol% 15.8 13.9 Coke, wt% 5.6 4.1 Gasoline Octane RON Clear 94.0 89.8 In the 1970's after introduction of zeolite catalyst, FCC unit design and operation evolved to regain some of the lost octane and light olefin yield, primarily with higher reactor operating temperature and riser cracking (5). Increasing reactor temperatures increased light olefin yield, but this came at the expense of increased yield of dry gas, a lower value FCC product. During the 1980's Mobil introduced two new technologies with application to increasing the production of light olefins and octane while limiting incremental dry gas production: (1) Mobil developed ZSM-5 catalyst additive to crack low octane (linear) gasoline boiling range olefins and paraffins into light olefins, and (2) Mobil invented Closed Cyclones which minimize product vapor residence time between the riser outlet and the main fractionator. Refinery Options for Production of Petrochemical Feedstocks In March 1998, Kellogg (now Kellogg Brown & Root (KBR)) and Mobil (now ExxonMobil) introduced the MAXOFIN FCC Process for maximization of propylene yield from FCC feed- Page 3

stocks (6). While FCC operations typically produce less than 6 wt% propylene, the MAXO- FIN FCC Process can produce as much as 20 wt% or more propylene from traditional FCC Feedstocks. Another fluidized catalytic process offered by KBR, the SUPERFLEX SM Process, is based on Arco Chemical Company (now Lyondell Chemical Company) developments and patents together with KBR s more than 50 years of catalytic cracking experience. SUPERFLEX is designed to produce ultimate propylene yields as high as 40 wt% or more from selected naphthas and C4 feedstocks. Refiners can choose to increase production of light olefins through revamp and debottlenecking of the entire FCC Unit (reactor, regenerator, main fractionator and VRU). In general, revamping an FCC unit to incorporate MAXOFIN FCC Technology will require addition of the second riser system, including a standpipe, catalyst control valve, feed injection system, and riser. The mechanical layout of the FCC converter and its structure is studied to determine the optimum placement and configuration of the new riser system. And lastly, because of the substantial increase in light ends production, modifications to the FCC vapor recovery unit will be required (unless FCC feedrate is reduced while operating in the maximum propylene mode of operation). As the FCC unit operates at higher and higher reactor temperature to increase propylene yield, the yield of ethylene from the FCC unit reactor also increases. In the past, ethylene produced by the FCC unit has been viewed almost exclusively as a component for use in refinery fuel gas, and its yield has been minimized with such technologies as Closed Cyclones and ATOMAX feed injection nozzles. Today, however, a MAXOFIN FCC unit or a SUPERFLEX unit can produce an economic volume of ethylene for petrochemical consumption if there is ready access to a petrochemical plant or ethylene pipeline. For instance, while traditional FCC operations have produced less than about 2 wt% ethylene, the MAXOFIN FCC Process can produce as much as 8 wt% ethylene, and SUPERFLEX can produce ethylene yields as high as 20 wt% from C 4 to C 8 olefincontaining feedstocks. Refiners can choose to make investments to increase the purity of propylene produced relative to a traditional refinery grade propylene product. Higher purity options include chemical grade propylene and polymer grade propylene, with typical specifications shown in Table 2 below. Table 2 Typical Propylene Quality Specifications Component Propylene (% min) H2, CO, CO2, N2 (ppm max) C2 & Lighter (ppm max) Ethylene (ppm max) C4 & Heavier (ppm max) Butadiene (ppm max) MAPD (ppm max) Sulfur (ppm max) Water (ppm max) Refinery Grade 65.0 10,000 10,000 10,000 200 150 20 Chemical Grade 92.0 4000 800 20 1 30 Polymer Grade 99.5 5 150 150 10 10 1 10 Page 4

Some of these options for increasing petrochemicals feedstock production from existing FCC units are further discussed below: Recovery of refinery grade propylene typically requires investments in a depropanizer (C3/C4 splitter), metering systems, storage tanks, railcar/tank truck loading facilities, or pipeline connections. Recovery of chemical grade propylene would typically include investments in a propylene splitter in addition to the other facilities described above. Production of polymer grade propylene is an even more expensive option, but one with potentially higher return. In addition to the investments listed above, this option would typically include addition of a deethanizer tower as well as COS/Arsine removal reactors and dryers. Hydrogenation reactors may also be required to meet the tight specifications on dienes/acetylenes. Production of 99.9 vol% purity petrochemical grade ethylene requires the addition of still more fractionation towers as well as equipment designed to remove associated contaminants such as acetylene, water, oxygen, carbon monoxide, sulfur and nitrogen compounds. Design of a low temperature FCC vapor recovery system to meet all these requirements will more than double the cost of a VRU installation relative to that of a traditional absorption oil based VRU system. Alternatively, a dilute ethylene stream may be sent directly to a nearby petrochemical plant for use as feed to an ethylbenzene unit or steam cracker gas recovery system. Balancing Supply and Demand The relative production rates of propylene and ethylene from units in the refinery and petrochemical plant are key considerations in refinery / petrochemical plant integration. Within each type of process unit, selection of feedstock and operating conditions, as well as catalyst systems where applicable, can dramatically alter light olefin production rates and propylene to ethylene ratio (P/E). Figure 3 shows typical propylene and ethylene yield characteristics of various processing options, including data on steam cracking for reference. Figure 3: Process Characteristics Relative production of ethylene vs. propylene Ethylene Yield, wt%.0 10.0 1.0 0.1 Ethane Feed Steam Cracker C 3, C 4 & Liquid Feed Steam Cracker MAXOFIN SUPERFLEX Orthoflow FCC 1 10 Propylene Yield, wt% Although propylene demand is high, refiners are still cautious about committing large capital investments for propylene production alone because of the historically large swings in propylene-fuels margins. A recent study by CMAI estimated the margin and Return on Investment (ROI) for installation of facilities for recovering polymer grade propylene from ex- FCC Page 5

isting FCC unit operations. The analysis was based on estimates of the margin between polymer grade propylene value to a petrochemical plant and the refinery propylene cost (assumed equal to the alternative value of propylene in a fuels refinery). ROI is estimated from the margin assuming a typical investment cost of $75 MM for a 250,000 ton per year polymer grade propylene recovery facility (1). Dollars per Ton Figure 4: U.S. Refinery Propylene Profitability The variability of VRU Revamp project margins 600 500 400 300 200 0 US Cost US Margin ROI 1994 1996 1998 2000 2002 2004 Orthoflow FCC 80 70 60 50 40 30 20 10 0 Percent ROI Figure 4 summarizes the margins and resultant ROI estimated for U.S. refiners over the period of 1994 through 2004, and shows the variability in the recovered propylene margin during the period. The data in the figure show a strong recovery from lower margin levels experienced during the 1998 and 1999 time frame. The data also suggest that now is a very good time to invest in propylene recovery facilities that can come on steam to take advantage of the peak expected in 2003 and 2004. MAXOFIN FCC The proprietary MAXOFIN FCC Process, licensed by KBR and depicted in Figure 5, is designed to maximize the production of propylene from traditional FCC feedstocks and selected naphthas. The process increases propylene yield relative to that produced by conventional FCC units by combining the effects of MAXOFIN- 3 catalyst additive and proprietary hardware, including a second high severity riser designed to crack surplus naphtha into incremental light olefins. Figure 5: MAXOFIN Highlights FCC s will supply much of increased Propylene demand MAXOFIN combines advanced catalyst & hardware High ZSM-5 MAXOFIN-3 Additive KBR Orthoflow Hardware MAXOFIN provides flexibility for light olefins or fuels production Orthoflow FCC ZSM-5 In addition to processing recycled light naphtha and C4 LPG, the riser also can accept naphtha from elsewhere in the refinery complex, such as coker naphtha streams, and upgrades these streams into additional light olefins. Olefinic streams, such as coker naphtha, convert most readily into light olefins with the MAXOFIN FCC process. Paraffinic naphthas, such as light straight run naphtha, also can be upgraded in the MAXOFIN FCC unit, but to a lesser extent than olefinic feedstocks. Page 6

The following table shows the result of MAXOFIN pilot tests which demonstrates the flexibility of the MAXOFIN Process with respect to propylene to ethylene ratio. The tests were performed on a single feedstock while operating conditions and catalyst formulation differ between the runs. This flexibility allows the MAXOFIN unit performance to be tailored to the needs of the refinery/petrochemical complex. Table 3 MAXOFIN FCC Circulating Pilot Plant Data Hydrocracked Gas Oil Feedstock Yields, wt% Run A Run B Run C Run D Ethylene 3.2 3.9 6.4 8.2 Propylene 16.0 18.7 19.1 21.5 C5+ Gasoline 37.9 28.8 26.2 25.0 P/E (wt/wt) 5.0 4.8 3.0 2.6 The number of product streams, the degree of product fractionation and several other aspects of the vapor recovery process will differ from unit to unit, depending on the market requirements of the application. Design of a vapor recovery unit to produce polymer grade ethylene and propylene products includes consideration of several factors not typically addressed in FCC VRU design. The cold fractionation train begins with a Depropanizer system, followed by a Demethanizer, Deethanizer and ethylene-ethane Splitter. Polymerization fouling is minimized in both columns as a consequence of the low operating temperatures. Facilities are required to remove impurities from the process gas and to prevent freezing and hydrate formation in low temperature operations. In the recycle tower, the heavy gasoline components (200 F +) are removed from the overhead C4 s and lighter gasoline components. The C4 s and lighter gasoline components from the recycle tower overhead are recycled to the MAXOFIN FCC reactor. The Deethanizer separates the feed to the column into an overhead C2 stream and a bottom C3 stream. The overhead C2 s are routed to the C2 splitter, where polymer grade ethylene product is produced. The feed to C3 Splitter comes from the bottoms of the Deethanizer. This column produces a polymer-grade propylene product from the mixed C3 feed. Page 7

SUPERFLEX SM The SUPERFLEX process provides an economic option for petrochemical producers (or refiners) to increase propylene production and the overall cracking complex propylene-toethylene ratio using low value, olefin rich, light hydrocarbon feedstocks generally in the carbon range of C 4 to C 8 (7). The process coproduces ethylene at a typical ratio of 1 weight ethylene per 2 weights of propylene (P/E ~ 2). The gasoline byproduct is highly aromatic and thus can contribute octane for gasoline blending or may be valued as a chemcals feedstock. Figure 6: The SUPERFLEX Process Feed Flue Gas System Catalyst Storage Air Compressor/ Air Heater Reactor Effluent Waste Heat Boiler Fuel Oil Orthoflow FCC To Fractionator Feedstocks with the highest conversion and best selectivity to propylene are those rich in olefins. The ideal feedstocks for the SUPERFLEX process found in the olefins plant are pyrolysis generated C 4 and C 5 streams which have been selectively hydrogenated, converting acetylenes and diolefins to olefins. If butadiene has a high value relative to propylene and the producer has an extraction plant, then Raffinate-1 can be used. Other possible feedstocks are MTBE Raffinate-2, aromatics plant raffinate, and refinery streams that are rich in olefins, such as naphthas from the FCCU, coker, or visbreaker. Refinery steams do not require pretreatment nor hydrogenation of dienes. There is no limit on feed aromatic or diene content. Paraffins are partially converted with each pass through the reactor, contributing to ultimate light olefins yield and allowing recycle to extinction operation. The SUPERFLEX reaction system is based on years of design and operating experience with FCCU s in the refinery and is easily integrated into ethylene plants, sharing a common product recovery section. Catalyst is continuously regenerated and it is quite robust in terms of feed impurities. No feed pretreatment is required for typical trace components. The system is comprised of the riser reactor/regenerator vessel, air compressor and catalyst handling, flue gas system, and feed/product heat recovery equipment. SUPERFLEX reactor effluent enters the ethylene plant recovery section at the main fractionator or process gas compressor suction. SUPERFLEX effluent may also be processed in a refinery vapor recovery unit. A refiner in close proximity to a petrochemicals facility may consider a partial fractionation scheme, where the light ends (C 3 -) are sent to the neighbor for purification, the middle cut is recycled to extinction, and the gasoline cut is sent to fuels or chemicals use. Page 8

As shown in the Table 4 below, a typical C4 Raffinate, after butadiene extraction, yields approximately 65 wt% propylene plus ethylene. On a similar basis, almost 60% of a partially hydrogenated C5 stream is converted to light olefins (P+E). Where refinery cracked naphthas may have low value to the blending pool, an alternate use would be to upgrade the stream(s) to valuable petrochemicals. A typical light FCC naphtha could ultimately yield more than 30 wt% propylene and 15 wt% ethylene. Table 4 SUPERFLEX Ultimate Yields Partially FCC Lt. Yields, wt% C4 Raffinate Hydrog. C5's Naphtha Fuel Gas 7.2 12.0 13.6 Ethylene 22.5 22.1 20.0 Propylene 48.2 43.8 40.1 Propane 5.3 6.5 6.6 Gasoline 16.8 15.6 19.7 SUPERFLEX can be used in concert with a steam cracker to increase the product P/E of the petrochemical cracking complex. Ultimate olefin plant propylene to ethylene (P/E) ratios for a low severity naphtha steam cracker are typically limited to 0.60 to 0.65. However, with SUPERFLEX, new plants can be designed for P/E ratios of about 0.80. Using the SUPERFLEX process within the olefins complex provides a higher ultimate value as shown in the table below: Table 5 SUPERFLEX/Steam Cracker Integration Steam Cracker Complex Material Balance (KTPA) Feed: Without SUPERFLEX With SUPERFLEX Naphtha 1891 1995 Products: Ethylene 700 700 Propylene 419 535 Fuel Gas 327 299 Gasoline 390 421 P/E Ratio 0.60 0.76 Economic analyses show that the alternate including the SUPERFLEX reactor in the olefins complex has about a 1½ year simple payout on gross margin for a plant designed to produce 700 KTPA ethylene. SUPERFLEX technology is also available as a standalone unit with its own separation section. Both Arco and KBR have extensively piloted process performance for SUPERFLEX. KBR s inhouse pilot facilities are available for evaluating client feedstocks. Page 9

Conclusion For more than 50 years, FCC has been a major contributor to worldwide production of propylene and butylene for the expanding petrochemical industry. Due largely to the rising demand for polypropylene, propylene demand continues to outpace the petrochemical industry demand for other light olefins, and much of this increased demand will have to be supplied from fluid catalytic processes that are particularly adept at propylene manufacture. In addition to traditional FCC and Resid FCC units, much of the increased demand will likely be satisfied with new generation fluid catalytic processes such as MAXOFIN and SUPERFLEX. As these processes proliferate, they are also expected to make significant contributions to the supply of the most common, yet smallest, petrochemical feedstock ethylene. Epilog Old Mesopotamian writs mention strange wells near the caravan road which do not contain water but liquid earth. A man there boils the earth until it becomes water, which makes torches burn brighter. Evidently this man knew how to distill crude oil and burn it over 2000 years ago. Almost 2000 years later in 1938, at the worlds oldest known oil refinery located in Baba Gurgur, Iraq, a man is photographed standing in a pool of oil and collecting crude oil in buckets as it gushes from the earth. He will carry the oil to the ovens, where it will be heated and run to a retort from which nondescript products flow off. This man may be wondering - what will we do when the oil runs out? How can we improve the process to get the most value from this dwindling resource? What will the future refinery look like? We are still asking ourselves these same questions. Even today, petroleum is still mostly consumed as a fuel, refined to the specifications of the day. However, as petroleum supplies becomes scarce relative to the demand for higher value petrochemical products, the thought of distilling and burning good quality crude oil will seem as foreign to us as the appearance of the old Baba Gurgur oil refinery pictured below. Page 10

References 1. Steven J. Zinger; The Critical Role of the Refinery in the Propylene Market; 2000 World Petrochemical Conference; Houston, Texas; March 29 30, 2000. 2. Steven J. Zinger, Chemical Market Associates, Inc.; e-mail, September 2000 3. C.E. Jahnig, D.L Campbell, and H.Z. Martin; History of Fluidized Solids Development at Exxon; Fluidization, Ed John R. Grace and John M. Matsen, Perseus Books, January 1980 4. J.J. Blazek; Oil & Gas Journal; 1971 5. E.L. Whittington, J.R. Murphy, and I.H. Lutz; Catalytic Cracking Modern Designs; American Chemical Society, New York Meeting, August 27 to September 1, 1972. 6. Phillip K. Niccum, Rik B. Miller, Alan M. Claude, Michael A. Silverman, Nazeer A. Bhore, Ke Liu, Girish K. Chitnis and Steven J. McCarthey; MAXOFIN : A Novel FCC Process for Maximizing Light Olefins using a New Generation of ZSM-5 Additive; NPRA Paper AM-98-18; San Francisco, California; March 15-17, 1998 7. Maureen F. Gilbert, Michael J. Tallman, William C. Petterson, and Phillip K. Niccum; Light Olefin Production from SUPERFLEX SM and MAXOFIN FCC Technologies; ARTC Petrochemical Conference, Kuala Lumpur, Malaysia, February 2001. Page 11