Advances in Crude to Chemicals

Refinery of the Future:

Opportunities Through Bottom of the Barrel Conversion
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Introduction
In mature markets like the US, refineries are revisiting their
Authors
business models, asset base and technology options.
This is due to regional and global changes in both fuels
specifications and demand. It is anticipated that fuels demand
will continue to soften and that petrochemical demand
growth will remain strong throughout the world.

US refiners must now determine how to remain competitive

and grow in the face of these changing market dynamics.
They must start embracing the future today, in order to pave
Stan Carp the way to continued profitable growth. Future-forward
refiners will rethink their business models and will transform
existing assets into a Refinery of the Future.

The Refinery of the Future will have the flexibility to meet

rapidly changing market needs, will be integrated into
petrochemicals to unlock new value, and will also contain the
connected technology required to optimize performance every
day. Today, US refineries have access to a host of new
Marion Burlak technologies that create an alternative path to profitability.
They can unlock new value from the heavy end of crude, as
well as manage molecules efficiently to produce immediately
marketable products or their own intermediates for
petrochemicals.

This paper presents a potential stepwise integration strategy

that unlocks $30/barrel of additional value from crude.
The strategy utilizes the latest bottom-of-barrel, maximum
conversion hydrocracking and aromatics technologies.
Matthew Griffiths
Integrating these technologies enables an existing refiner to
profitably diversify into petrochemicals and create their own
Refinery of the Future.
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Table of contents
3 Changing Market Dynamics

8 Case Study – Create a Pathway to the Refinery of the Future

20 Commercial Application – The Refinery of the Future is Here Today

22 Conclusions
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Changing Market Dynamics

Fuels demand in the US is expected to peak near 2020, and by 2035 gasoline demand is anticipated
to be 16% lower than in 2018. Similarly, diesel demand will be down 6 percent. See Figure 1.
This decline is due to anticipated changes in fuel specifications (such as 95 RON), continued
advancements in automobile technology and changes in demographic behaviors. Automobile
technology advancements include internal combustion engines, electric/autonomous vehicles and
shared/connected vehicles.

Figure 1 – North American Gasoline & Diesel Demand

Source: IHS Markit

Globally, fuels demand continues to grow slowly with compound annual growths rates (CAGR) from
Flexibility to 2018 to 2028 of <1% for both gasoline and diesel. See Figure 2. Large scale, modern refineries will
adjust product be built in regions where demand for fuel exists, and they will shift the global supply and demand
balance. These changing dynamics will put downward pressure on gasoline and diesel cracks in
slate is the key to
oversupplied markets, and will drive down margins for refiners unable to adjust their product slate.
improving margin.
Figure 2 – Fuels & Petrochemical Products Growth Rates (%CAGR, 18-28)

Source: IHS Markit; WoodMac; UOP Analysis

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In addition to demand changes, tightening global fuel specifications are expanding beyond
traditional vehicle fuels such as gasoline and diesel. The International Maritime Organization’s
revision of MARPOL Annex VI is the first major specification change for maritime fuels since 2008.
By reducing sulfur content from 3.5% to 0.5% in bunker fuel, the specification will significantly
reduce the demand of high sulfur heavy fuel oil (HSFO). In addition, the specification potentially
sets the stage for further sulfur reductions and changing demand in the future. In 2035, US fuel oil
demand is expected to be 25% lower than 2018. See Figure 3. This revision is changing the product
slate, requiring refineries to upgrade heavy fuel oil into higher value products.

Figure 3 – North American Resid Fuel Oil Demand

Source: IHS Markit

With uncertainty in product demand and global trade dynamics, many refineries are under increasing
The long-term pressure from shareholders, boards, institutional investors and their executive management to chart
their path forward for growth and continued competitiveness. Those refiners with the ability to
outlook for gasoline
increase margin without changing crude run capacity will be successful.
and diesel is not
favorable. Stay in Some refiners will stay their course and serve local markets. Some will grow by expanding exports to
fuels and invest to growing markets like Latin America and Africa, an opportunity bolstered by less stringent fuel

compete; or diversify specifications and limited refining investments. However, single new complexes in these regions can
have a significant impact on trade flows. Take for instance, the Dangote refinery in Nigeria, expected
into petrochemicals
to come online in 2020. This single refinery has a capacity of 650,000 barrels per day and it could
and grow.
eliminate nearly half of the current refined products that are imported into Africa.

Many others in the industry are turning to petrochemical integration, an adjacent market with strong
growth potential and high margins. The global demand growth rates for fuels are very low in
comparison to petrochemicals, where global demand is growing nearly 1.5 times GDP with CAGRs of
3-4% (2018 to 2028). Increasing middle class consumer demand for more packaging, plastics and
synthetic fabrics in developing regions is driving this demand growth. For example, demand for
para-xylene, the base chemical for polyethylene terephthalate (PET) that is used for plastic bottles
and clothing, is expected to grow with a CAGR of 3.5% from 2018 to 2028. Similarly propylene, the
base chemical used for polypropylene (PP), is poised for significant global demand growth with a
CAGR of 3.5% from 2018 to 2028. See Figure 2. Unlike ethylene, in which the majority of the feed
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ends up as a single use plastic, only 35% and 30% of para-xylene and propylene, respectively, is
used for single use plastics. See Table 1. So these petrochemical feedstocks are far more insulated
from any shocks to the plastics market that may result from single use bans or further environmental
regulations.

Table 1 – Petrochemical Derivatives – Single Usage & Recycle Rates

Polyethylene
Linear Low-Density High-Density Polyethylene Polypropylene
Low-Density Polyethylene Polyethylene Terephthalate / (PP)
Application
Polyethylene (LDPE) (HDPE) Polyester (PET)
(LLDPE)
Market Size, $B 40 28 54 70 80
Single Use,% 90 80 55 35 30
Recycle Rate, % 5 5 8 11 3
30% Bottles 30% Bottles 18% Bottles
Source: IHS Markit, SBAcci, WoodMac

In addition to growing petrochemical demand, new production technology is enabling massive

economies of scale that lower the cost of petrochemical production, changing the landscape of
tomorrows export market. World-scale refineries employing these new technologies are being built in
regions with growing fuels demand and are targeting 50-70wt% petrochemicals while making
on-specification fuels. Refineries are extending into petrochemicals to improve their project internal
rate of return (IRR), as net cash margins for petrochemicals tend to be higher than those for fuels
given the value of the product stream. See Figure 4.

Figure 4 – North American Price Outlook

Recent projections
show that by 2022,
the top quartile of
refineries by margin
will be integrated
with petrochemicals.
Source: IHS Markit

These new, world-scale integrated plants are a foretaste of what will be required to remain
competitive in the future. They will be considerably more resilient to contracting gasoline and diesel
crack spreads and will continue to stay in business while others may not.
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Refiners have the opportunity to position themselves for long term profitable growth, but this will
require strategic investment decisions and moves further downstream. Fortunately, US refiners have
Chinese para-xylene
a key competitive advantage given their high utilization rates, access to feedstocks, low energy costs
demand shortfall:
and developed infrastructure. However, US refiners will need to shift from their traditional fuel-
here today and still
centric business models, and solve the challenges of market channel access to Asia where demand
there tomorrow. An for petrochemicals is the highest.
opportunity for US
China is the predominant consumer of para-xylene in Asia, and it is driving the demand growth for
refiners who wish
para-xylene in that region. See Figure 2. China is investing heavily in large-scale para-xylene capacity
to diversify into
to drive towards self-sufficiency, but it will be nowhere close to being independent in the next decade.
petrochemicals. Not all naphtha is suitable for the production of aromatics. Heavy naphtha is required, but it is in
limited supply. Lack of available merchant heavy naphtha is the reason that existing Asian
(non-Chinese) para-xylene capacity expansion is limited, and it is also the reason that the Chinese
para-xylene consumers are “back-integrating” into refining. Back-integration overcomes the heavy
naphtha constraint, by allowing VGO and distillate to become heavy naphtha via Hydrocracking. Even
though there is significant investment in para-xylene capacity, China will still be importing close to
14,000 kMTA of para-xylene in 2028. See Figure 5. This presents an opportunity for US refiners
wishing to diversify into petrochemicals. Is it possible to produce para-xylene at a low enough cost
to cover shipping to China and still make a profit?

Figure 5 – Global Net Trade of para-xylene

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A state-of the art, world-scale para-xylene complex, integrated into an existing US refinery would
have a $120 per metric ton cash cost of production advantage over the existing smaller, less efficient
complexes in China. See Figure 6. World-scale production, efficient technology and low energy cost
enable a US refiner to produce para-xylene, ship to China, cover their debt service and still make a
profit over 80 percent of the installed para-xylene base capacity. Today, older generation para-xylene
complexes are being shut down as they are no longer competitive.

Figure 6 – Global para-xylene (pX) Cash Cost of Production Curve

US cost advantage
enables global export
of para-xylene.

Source: UOP

The existing benzene shortfall in the US is forecasted to continue, even with the addition of a world-
scale para-xylene complex. In fact, 2.1 million metric tons of benzene is estimated to be imported in
2023(1) to meet demand. This presents an opportunity for refiners to produce on-purpose benzene
from naphtha currently being used in the gasoline pool. Benzene can be perceived negatively by
those not already in that market. Refiners will have to change their negative mindset and their
business models to take advantage of the aromatics opportunity.

The key to unlocking these opportunities lies in stepwise investments in new process technology with
advanced molecular management, targeting the lowest value stream for conversion first, including:

• Bottom-of-the-barrel conversion with slurry hydrocracking technology to

upgrade heavy oil to fuels or intermediates for petrochemicals.

• Vacuum gas oil (VGO) and distillate hydrocracking to unlock the naphtha
constraint and enable world-scale production of para-xylene.

• Full extension into an aromatics complex for para-xylene.

The next section discusses a potential stepwise integration strategy that utilizes these technologies,
enabling a refiner to profitably move into petrochemicals, and transform their existing facility into a
Refinery of the Future.
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Case Study – Create a Pathway

to the Refinery of the Future
An integration case study has been developed to illustrate a potential pathway that profitably
transforms an existing refinery into a Refinery of the Future. The cases will evaluate processing
options that would enable a refiner to:

1. Improve bottom-of-barrel conversion: Upgrade heavy oil from

a distressed commodity to higher value products.

2. Produce petrochemicals: Take advantage of opportunities

in the flourishing petrochemicals market.

Basis of Evaluation
This integration study is based on a 500 kBPD refinery configuration that includes a Hydrocracking
Unit, the UOP Unicracking™ Process, as the main VGO conversion unit and a Delayed Coking Unit for
vacuum residue conversion. The refinery is configured for diesel production with no gasoline
production. The base refinery is integrated with Steam Cracking and an Aromatics Complex to
produce light olefins and aromatics base petrochemical feedstocks. Light cracked naphtha, light
straight run naphtha, LPG and off-gases from the complex are fed to a 1,500 kMTA Steam Cracker.
Ethylene and propylene from the Steam Cracker are polymerized to high density polyethylene
(HDPE) and polypropylene (PP), respectively. Heavy cracked and heavy straight run naphtha is fed to
the Reformer (after hydrotreatment) for aromatics production. The Reformer is configured to operate
in a maximum aromatics mode (104-106 RON). Benzene and para-xylene (pX) are produced from a
state-of-the-art reformate-based Aromatics Complex. The Aromatics Complex produces 2,600
kMTA of pX product and utilizes the latest generation of Light Desorbent Parex™ Technology. This
industry leading technology currently sets the capital cost and energy efficiency benchmark for pX
production. The VGO and HCGO from the Delayed Coker are fed to the VGO Hydrocracker that is
operating to produce diesel. There are also a number of Hydrotreaters in the refinery: a Straight Run
Naphtha Hydrotreater; a Distillate Hydrotreater for cracked and straight run distillates; and
Hydrotreaters for the light and heavy naphtha from the Delayed Coker. A schematic of the base
configuration can be seen in Figure 7. This base configuration predominantly produces 63 wt% / 65
vol% diesel (on crude), but also produces 25 wt% total petrochemicals (on crude), including HDPE,
PP, benzene and pX. Additionally, 6 wt% coke (on crude) is produced from the Delayed Coker. As
previously mentioned, there is no production of gasoline – all naphtha is processed in either the
Steam Cracker or the Aromatics Complex. Any C2+ material from the off-gasses becomes feed for the
Steam Cracker, and any C1 becomes either fuel gas for energy or is used to produce hydrogen.
Approximately 6wt% fuel gas (on crude) is produced in the base case. Natural gas is purchased as
required to meet the energy and hydrogen balance needs of the complex.
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Figure 7 – Base Case Configuration

The base case refinery is configured for processing 500 kBPD of Arab Light. The price set used is
the average annual USGC prices over a five year period (from 2013 to 2017) as shown in Table 2.

Table 2 – Study Price Set Note 3

Feeds Price Unit

Arab Light 72.23 $/BBL
Natural Gas 3.22 $/MMBTU
Methanol 361 $/MT
Products (Fuels)
Diesel (ULSD) 85.64 (638) $/BBL ($/MT)
Coke 61 $/MT
Products (Petrochemicals)
Benzene Note 1 970 $/MT
Para-xylene Note 2
1,159 $/MT
Polyethylene (HDPE) Note 2 1,094 $/MT
Polypropylene Note 2
1,149 $/MT
Butadiene Note 1
1,214 $/MT

Notes:
1. For sale in the US.
2. Sold in China, and the price is based on NE Asia, adjusted for transportation costs.
3. Source: IHS Markit
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Four cases were conducted in this analysis, and each case builds upon the previous case. Each case
can be considered a discrete investment step that can be implemented sequentially. In each case, the
crude capacity was maintained at 500 kBPD. See Table 3 for a detailed summary of the objectives for
each case.

• Case 1: Replace the Delayed Coking Unit with a Slurry Hydrocracking Unit, in this case UOP
Uniflex™ MC™ Technology.

• Case 2: Replace VGO Hydrocracking to diesel with maximum conversion VGO Hydrocracking
to naphtha.

• Case 3: Replace Diesel Hydrotreater with maximum conversion Distillate Hydrocracking

to naphtha.

• Case 4: Integrate Toluene Methylation technology into the Aromatics Complex.

Table 3 – Study Case Objectives

Case Number Base 1 2 3 4

Fuels & Fuels & Fuels &
Production Goal Petrochemicals Petrochemicals
Petrochemicals Petrochemicals Petrochemicals
Vacuum Residue Uniflex MC Uniflex MC Uniflex MC Uniflex MC
Delayed Coker
Upgrading Unit Unit Unit Unit
VGO Hydrocracker
Diesel Diesel Naphtha Naphtha Naphtha
Operating Mode
Distillate Hydrocracker
None None None Naphtha Naphtha
Operating Mode
Aromatics Complex Included Included Included Included Included
Steam Cracking
Included Included Included Included Included
Complex
Toluene Methylation None None None None Included

Figure 8 provides a summary of the economic performance for each case. The study demonstrates
an economically feasible integration pathway for a refiner to move from fuels, into fuels with
petrochemicals, and ultimately to maximum petrochemicals with zero fuels. Figure 9 illustrates the
changing product slate for each investment step. Elimination of all fuels production is possible, if
desired. See the case summaries for more details on each investment step.
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Figure 8 – Summary of Economic Results

Petrochemical
integration provides
opportunity to
increase net cash
margin by up
to $30/BBL.

Figure 9 – Production Profile

Case 1: Uniflex MC processing increases residue conversion to higher

value products
In response to the International Maritime Organization’s 2020 Rule on sulfur content, refiners are
looking for ways to upgrade heavy fuel oil into higher value products. The Uniflex MC Process is a
Slurry Hydrocracking technology that can facilitate this objective.

In Case 1, the Delayed Coker has been replaced by Uniflex MC Technology. A Delayed Coking Unit
typically converts about 30wt% of the vacuum residue to low value coke. Vacuum residue is now
processed in the Uniflex MC Unit. See Figure 10 for the configuration for Case 1. Rather than
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producing coke, the Uniflex MC Unit upgrades the vacuum residue to products that can be further
refined and sold at much higher value than coke. In this case, 98% of the vacuum residue is
converted to distillate, naphtha and LPG with Uniflex MC processing. The distillate is then
hydrotreated and sold as ULSD. The 2% unconverted product is called “pitch”. This material can be
pelletized for shipment and used as a fuel in cement plants, boilers/kilns, fluidized bed boilers,
gasifiers, etc.

The overall diesel production from the facility is increased by 5% over the Base Case. Uniflex MC
naphtha replaces the Delayed Coker naphtha to the Reformer, and pX production remains at the
same rate as the Base Case. Light naphtha and LPG from the Uniflex MC Unit are converted to
olefins in the Steam Cracker. The total petrochemical production from the facility remains at
approximately the same level as the Base Case. Production of coke is now eliminated and a small
amount of pitch is produced instead. Tables 4 and 5 present a summary of the results for this case.

Figure 10 – Case 1 Configuration – Add Uniflex MC Unit

Hydrogen consumption increases to 2.8 times the Base Case to support the additional hydrogen
required by the Uniflex MC Unit, and the increased capacity Distillate Hydrotreater. Natural gas
imports rise to 11% over the Base Case as there is not sufficient fuel gas in the facility to sustain both
energy and hydrogen supply requirements.
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The Net Cash Margin (NCM) has increased 580 $MM/year over the Base Case, and the NPV is 3,850
$MM more than the Base Case. The capital cost for this case is 10% higher than the Base Case, but
is still a very high quality investment with an incremental IRR of 24% relative to the Base Case.
Upgrading the vacuum residue from 61 $/MT, to diesel at 638 $/MT (85.64 $/BBL), is the clear driver
for these economic results. Upgrading to products that can be further refined and sold, rather than
producing coke, will also relieve a refiner of the many complexities involved with the storage and
handling of coke.

The capital cost increase is due to the addition of the Uniflex MC Unit; additional Distillate
Uniflex MC Hydrotreating capacity; additional Hydrogen Plant capacity; and additional capacity in the Steam
Technology provides Cracker and Polyolefins Plants.

the expanded Uniflex MC Technology is a profitable option for those refiners who need to change their product
flexibility to upgrade slate and upgrade heavy fuel oil into high value products versus low value coke. A Uniflex MC Unit
heavy oil to fuels can also process FCC slurry oil and can therefore enable elimination of fuel oil sales in a FCC
or petrochemicals based refinery.

feedstocks.
While diesel demand and price remain strong, Uniflex MC Technology can be used to produce diesel.
The current US diesel crack spread is higher than the gasoline crack spread, driving refiners to
maximize diesel production. This trend is expected to continue. In the US, both demand for diesel and
gasoline is expected to decline in the future. See Figure 1. Cracking diesel to naphtha for gasoline
would not be a profitable option, but cracking diesel to naphtha for petrochemicals would be a
profitable option. To offset the expected decline in US fuels demand, a refiner can choose to reduce
crude capacity or they can diversify into higher value petrochemicals. Products from a Uniflex MC
Unit can be sold as fuels after further refining, or serve as intermediate feeds for Steam Crackers and
Aromatics Complexes. A Uniflex MC Unit provides a refiner with the expanded flexibility to enter into
the petrochemicals market and the forthcoming cases will show how investing in Uniflex MC
Technology can enable petrochemical production.
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Table 4 – Summary of Results – Production Profile & Asset Utilization

Case Number Base 1 2 3 4

Feedstock Rates % of Base % of Base % of Base % of Base
Crude 100 100 100 100 100
Natural Gas Imports 100 111 140 202 215
Methanol Imports
(Included?) N N N N Y

Production Rates % of Base % of Base % of Base % of Base

Diesel (ULSD) 100 105 69 0 0
Coke/Pitch 100 19 20 20 20
Benzene 100 104 149 289 0
Para-xylene 100 100 138 300 436
Polyethylene (HDPE) 100 108 226 365 388
Polypropylene 100 107 251 399 419
Butadiene 100 112 317 479 481

%Total
Petrochemicals 25 26 44 82 89
(On Crude Processed)

Asset Utilization
% of Base % of Base % of Base % of Base
Rates
CDU 100 100 100 100 100
VDU 100 100 100 100 100
Delayed Coker 100 0 0 0 0
Uniflex Unit (Included?) N Y Y Y Y
Coker LN Hydrotreater 100 0 0 0 0
Coker HN Hydrotreater 100 0 0 0 0
VGO Hydrocracker to
100 94 0 0 0
Diesel
VGO Hydrocracker to
N N Y Y Y
Naphtha (Included?)
Distillate Hydrotreater 100 115 106 0 0
Distillate Hydrocracker
N N N Y Y
to Naphtha (Included?)
Reforming 100 100 102 243 243
Aromatics Complex
(based on pX 100 100 138 300 436
production)
Steam Cracking (based
100 108 226 365 388
on ethylene production)
Polyethylene (HDPE)
100 108 226 365 388
Plant
Polypropylene Plant 100 107 251 400 419
Hydrogen Plant 100 277 326 141 144
Toluene Methylation
N N N N Y
(Included?)
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Table 5 – Summary of Results – Capital Cost & Economic Performance

Case Number Base 1 2 3 4

Estimated Capital Cost % of Base % of Base % of Base % of Base
Total Installed Cost
100 110 151 222 242
(USGC)
Relative Economic
Performance
Net Cash Margin (NCM), Base Base + Base + Base + Base +
$MM/year 583 1,650 4,105 4,727
Net Cash Margin (NCM), Base Base + 3 Base + 10 Base + 25 Base + 29
$/BBL
Net Present Value (NPV), Base Base + Base + Base + Base +
$MM 3,845 8,444 21,436 24,547
Incremental IRR, % Base 24.1 13.5 16.6 15.6

Case 2: Maximum conversion VGO Hydrocracking unlocks heavy naphtha for pX

Both the Base Case and Case 1 include an Aromatics Complex with 2,600 kMTA of pX production.
The scale of pX production is limited by the available amount of straight run heavy naphtha. This
heavy naphtha is supplemented by heavy cracked naphtha from the Delayed Coker and the VGO
Hydrocracker in the Base Case; and for Case 1, the Uniflex MC Unit and the VGO Hydrocracker.
However, the amount of available heavy naphtha still constrains pX production. How can pX
production be increased? Can merchant naphtha be purchased? Heavy naphtha is available in the
market place, but its supply may be limited. So, to increase pX production, the refinery must produce
more heavy naphtha from the same amount of crude. Hydrocracking is the key to unlocking the
heavy naphtha constraint and enabling world-scale production of pX.

This case builds on Case 1 and replaces the diesel mode VGO Hydrocracker with a maximum
conversion naphtha mode VGO Hydrocracker. The Case 2 configuration is shown in Figure 11. Tables 4
and 5 present a summary of the results for this case. Additional heavy naphtha from the naphtha mode
VGO Hydrocracker enables pX production to be increased to 1.4 times that of the Base case and Case 1.
The production of benzene also increases to 1.5 times the Base Case. Light naphtha and LPG from the
Hydrocracker are fed to the Steam Cracker and converted to light olefins, increasing the production of
polyolefins by 2.3 times the Base Case. VGO is now being hydrocracked to naphtha rather than
distillate, and the overall diesel production rate drops to 69% of the Base Case. On a crude basis, total
petrochemical production from the facility rises from 25wt% for the Base Case to 44wt% for Case 2.
The facility continues to co-produce petrochemicals along with on-specification fuels.
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Figure 11 – Case 2 Configuration – Add Maximum Conversion

VGO Hydrocracker for Naphtha

Hydrogen consumption increases to 3.3 times the Base Case to support the additional hydrogen
required by the Uniflex MC Unit and the naphtha mode VGO Hydrocracking Unit. Natural gas imports
rise to 40% over the Base Case as there is not sufficient fuel gas in the facility to sustain both energy
and hydrogen supply requirements.

For this case, NCM and NPV improve by 1,070 $MM/year and 4,600 $MM (respectively) relative to
Naphtha mode Case 1. The capital cost is 51% more than the Base Case, but still results in a reasonable investment
Hydrocracking with an incremental IRR of 14% relative to Case 1. The economic driver is the improved economy of
technology enables scale of petrochemical production. Adding the naphtha mode VGO Hydrocracker has enabled overall

diversification into petrochemical production to increase by almost a factor of two compared to the Base Case.
Improving the economy of scale in the Aromatics Complex enables an acceptable return on the
petrochemicals and
investment that is required to increase pX production.
reduces economic
exposure to softening The cost of a VGO Hydrocracker targeting maximum naphtha is similar to the cost for one targeting
fuels demand. maximum diesel. In this case, the increase in capital cost is due to additional Aromatics Complex
capacity; additional Hydrogen Plant capacity; and additional capacity in the Steam Cracker and
Polyolefins Plants.

Implementing the naphtha mode VGO Hydrocracking Unit is the second investment step. Maximum
conversion Hydrocracking to naphtha for aromatics makes strategic sense in a world where
petrochemicals demand is strong, but gasoline and diesel demand is weak, providing a potential
solution for refiners wishing to diversify into petrochemicals and hedge against fuels. This second
step could also be performed in conjunction with the third step described next in Case 3. The next
step transforms the facility into a true maximum petrochemical facility.
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Case 3: Maximum conversion Distillate Hydrocracking enables full

elimination of diesel
The changes made in Case 3 could be implemented in conjunction with the changes made in Case 2,
but for the purposes of this study they have been broken into two separate steps. Case 3 builds on
Case 2 where a maximum conversion naphtha mode VGO Hydrocracker was added to produce
additional heavy naphtha for pX production. Case 3 extends that strategy to the remaining distillate
in the facility. After the naphtha mode VGO Hydrocracker was added in Case 2, the diesel production
rate was decreased to 69% of the Base Case. This next step will take us into a scenario where no fuels
are produced. A maximum conversion naphtha mode Distillate Hydrocracker is added to convert all
of the remaining distillate streams to heavy naphtha for additional aromatics production. These
remaining streams are the straight run distillate and Uniflex MC distillate streams. Fuels production
has now been reduced to zero. The configuration for Case 3 is shown in Figure 12. Tables 4 and 5
present a summary of the results for this case.

This new influx of heavy naphtha from the naphtha mode Distillate Hydrocracker allows pX
production to be increased to 3 times that of the Base Case (or 2.2 times Case 2 pX production).
Production of benzene is also nearly 3 times the Base Case. Light naphtha and LPG from the new
naphtha mode Hydrocrackers are fed to the Steam Cracker and converted to light olefins, increasing
the production of polyolefins by 3.8 times the Base Case. On a crude basis, petrochemical production
from the facility rises from 25wt% for the Base Case to 82wt% for Case 3. This case now represents
a fully integrated maximum petrochemicals (zero fuels) facility.

Hydrogen consumption increases to 1.4 times the Base Case to support the additional hydrogen
required by the Uniflex MC Unit and both naphtha mode Hydrocracking Units. Note that the overall
Hydrogen requirement here is far less than Case 2, where hydrogen consumption was 3.3 times
the Base Case. As the Reformer capacity increases to 2.4 times the Base Case to accommodate
the additional heavy naphtha, more hydrogen is produced and this decreases the size of the
Hydrogen Plant.

Figure 12 – Case 3 Configuration – Add Maximum Conversion Distillate

Hydrocracker for Naphtha
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Natural gas imports rise to 2 times the Base Case as there is not enough fuel gas in the facility to
sustain both energy and hydrogen supply requirements.

For Case 3, NCM and NPV improve by 2,550 $MM/year and 13,000 $MM (respectively) relative to
Case 2. The capital cost for Case 3 is 2.2 times more than the Base Case, but still results in a very
reasonable investment with an incremental IRR of 17% relative to Case 2. As in Case 2, the economic
driver is the improved economy of scale of petrochemical production. Adding the two naphtha mode
Hydrocrackers enables overall petrochemical production to increase by a factor of more than three
compared to the Base Case. Further increasing the economy of scale in the Aromatics Complex
improves the return on the investment that is required to achieve this pX production.

The increase in capital cost is due to the addition of the naphtha mode Distillate Hydrocracking Unit;
additional Reforming capacity; additional Aromatics Complex capacity; and additional capacity in the
Steam Cracker and Polyolefins Plants. The reduction in Hydrogen Plant capacity helps to offset the
overall capital cost increase.

Case 2 began the move towards zero fuels production, but Case 3 moves the facility to a maximum
Integration of Uniflex petrochemical/zero fuels mode of operation. Adding the naphtha mode Distillate Hydrocracker is the
MC Technology third strategic investment step, and results in positive economic results. The naphtha mode Distillate
with naphtha mode Hydrocracker enables world-scale production of pX, elimination of fuels production, and illustrates
how integration can facilitate a potential maximum petrochemical solution. This third step is feasible
Hydrocrackers
with or without Uniflex MC Technology, but in this case, there is an opportunity to convert Uniflex MC
increases uplift of
distillate, as well as straight run distillate, into petrochemicals and increase profitability. As such, we
heavy oil to higher can see that the Uniflex MC Process has become the strategic foundation of this fully integrated
value petrochemicals. complex, as it enables greater uplift of vacuum residue to higher value products. In Case 1, a Uniflex
MC Unit was added to increase bottom-of-barrel conversion and produce additional fuels. However
in a scenario where fuels demand is in decline, Cases 2 and 3 can be implemented to either reduce or
eliminate fuels production while maintaining the same crude rate to the facility.

In Case 3, a significant amount of benzene is produced along with the pX product. For those not
interested in producing benzene, the next case will present a feasible solution for eliminating
benzene and further increasing pX production.

Case 4: Toluene Methylation increases pX from the same amount of reformate

One of the key limitations for operators that want to maximize the production of pX is the availability
of methyl groups in a typical reformate. A pX molecule has two methyl groups that are located on
opposite sides of the aromatic ring, and has a methyl-to-phenyl ratio of 2. By comparison, toluene
has a methyl-to-phenyl ratio of 1, and benzene has a methyl-to-phenyl ratio of 0. Typical reformates
only have a methyl-to-phenyl ratio of about 1.4-1.6, and therefore, there are not enough methyl
groups to convert all of the aromatic molecules to pX. As a result, approximately 20%-40% of
the aromatic molecules in the reformate will leave the Aromatics Complex as benzene. Although
benzene is a valuable by-product, it usually sells at a lower price than pX. In the study price set,
the pX – benzene differential is 189 $/MT.
Advances in Crude to Chemicals – Refinery of the Future:
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The UOP Toluene Methylation Process is a newly developed process that selectively produces a
mixed xylene product, containing more than 90% pX, through alkylation of toluene with methanol.
See Figure 13. The new process provides independent control of the methyl-to-phenyl ratio by
introducing additional methyl groups into the Aromatics Complex, increasing the methyl-to-phenyl
ratio, and enabling production of more pX. This ultimately provides improved flexibility, allowing the
benzene and pX production rates to be adjusted according to market demands.

Figure 13 – Toluene Methylation Reaction

CH3 CH3

+ CH3 OH

CH3
Toluene Methanol para-xylene
Case 4 uses the Case 3 configuration as a starting point, and then integrates the new UOP Toluene
Methylation technology into the Aromatics Complex. See Figure 14. Uniflex MC, Hydrocracking and
Reformer capacities remain the same as Case 3.

Figure 14 – Case 4 Configuration – Integration of Toluene Methylation into

an Aromatics Complex

Integrating the UOP Toluene Methylation Process into a UOP Aromatics Complex can reduce or
completely eliminate benzene. The cumulative impact of all the earlier improvements, plus the
addition of the UOP Toluene Methylation Process, is an increase in pX production that is 4.4 times
the Base Case. Compared to Case 3, pX production is increased by almost 50% by integrating
Toluene Methylation into the Aromatics Complex. This means that more pX can be produced from
the same heavy naphtha feed to the Reformer. For this case, total petrochemical production from the
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facility is now at 89wt% on a crude basis. Note that the methanol used in Toluene Methylation is an
imported feed and a portion of the methanol ends up in the pX product. On a crude plus methanol
basis, the total petrochemical production is at 78wt%, but pX production has been preferentially
increased at the expense of benzene. Tables 4 and 5 present a summary of the results for this case.

The NCM and NPV for this case improve by 620 $MM/year and 3,100 $MM (respectively) relative to
Case 3. This additional investment results in a very reasonable incremental IRR of 16% relative to
Case 3. The main economic drivers for this case are: 1. the increase in pX production through
improved pX selectivity in the Aromatics Complex (benzene reduction); and 2. upgrading low value
methanol to pX. The capital cost for Case 4 is 2.4 times the Base Case (approximately 20% greater
than Case 3).

Hydrogen consumption is roughly the same as Case 3 because the capacities for the Uniflex MC
Unit, the two naphtha mode Hydrocrackers and the Reformer remain constant.

Integrating Toluene Natural gas consumption continues to increase to 2.2 times the Base Case as there is not enough
Methylation into fuel gas in the facility to sustain energy requirements.
an Aromatics
Integrating the UOP Toluene Methylation Process into the Aromatics Complex is the fourth strategic
Complex increases
investment step. This step eliminates a lower value product (benzene), upgrades low value methanol
pX production up to and makes additional higher value product (pX). The results of the study show that this step is a
50% from the same profitable investment, and it eliminates exposure to volatility in the benzene markets.
amount of reformate,
Toluene Methylation technology can be implemented to maximize the amount of pX from the same
and can eliminate
amount of reformate to the Aromatics Complex (as is the case here), or alternatively, produce the
exposure to volatility
same amount of pX from 30% less reformate. Benzene is a by-product of pX production and as seen
in benzene markets. in Figure 2, its global demand is lower than that for pX. Toluene Methylation provides the flexibility
to adjust the production rates of pX and benzene according to market demands, and if required
benzene production can be reduced to zero.

Commercial Application –
The Refinery of the Future is Here Today
The case study demonstrated a potential integration pathway that would allow a refiner to profitably
move from fuels, into fuels with petrochemicals, and ultimately to a maximum petrochemicals mode
with zero fuels. Projects similar to this example are actually happening today. Engineering has
recently started on an integrated refining and petrochemicals complex based in China. The existing
refinery produces fuels and has a capacity of 100 kBPD. The refiner’s goal is to improve margins by
producing petrochemicals while continuing to make fuels.

Honeywell UOP technologies are at the core of this integrated refinery and petrochemicals complex:
a Uniflex MC Process with an integrated Distillate Hydrotreater, the UOP Unionfining™ Process, for
maximum bottom-of-barrel conversion; UnicrackingTM Process for maximum conversion of VGO and
distillate to heavy naphtha; UOP CCR Platforming™ Process to reform the heavy naphtha for
aromatics production; UOP Polybed™ PSA to produce hydrogen from Platforming off-gas; and the
Aromatics Complex to produce pX from reformate. See Figure 15. Having the ability to integrate
these units drives down capital and operating cost, reducing the cost of producing pX. Integrating
 Advances in Crude to Chemicals – Refinery of the Future:
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these technologies into the refinery results in 35wt% petrochemicals (all aromatics) and 43wt%
fuels (gasoline, diesel and LPG). The fuels have been demonstrated to meet Euro V specifications.

Honeywell UOP also identified a pathway to a maximum petrochemicals production mode that will
be implemented in a later phase. This will include a UOP C3 Oleflex™ unit to produce on-purpose
propylene from propane, and a Steam Cracking Complex to produce ethylene. Additional LPG will be
purchased to enable a world-scale C3 Oleflex unit as there in not enough propane production from
the facility. The propane is preferentially fed to the C3 Oleflex rather than the Steam Cracker, as it is an
inherently more efficient process for producing propylene.

Compared to the Steam Cracker, and on a constant propane feed basis, the C3 Oleflex Unit produces
22wt% more total olefins, 19wt% less fuel gas, and consumes 10% less utilities on an equivalent
fuel basis. This second phase will reduce fuels production to almost zero and increase
petrochemicals production to 66% (olefins and aromatics). Only diesel will be produced (2 wt%),
with gasoline and LPG production eliminated. This is a real example where an existing facility has
been transformed into a Refinery of the Future.

Figure 15 – UOP Technology Integration Example

The Refinery of the

Future is a reality
now. Existing
facilities and new
complexes around the
world are integrating
Overseas refineries are embracing the petrochemical integration model, and US refiners can
into petrochemicals
replicate the model as well. Refineries in the US produce gasoline, and a move into pX production
today. US refiners would require careful evaluation and planning. The first step would be to process the lowest value
can replicate this heavy naphtha, but this step may not be economically feasible depending on the availability of
model to remain the heavy naphtha. The next step would be to operate the Reformer in an aromatics mode, and
competitive and grow. reroute some (or all) of the reformate from the gasoline pool to pX. This step will increase scale
and improve pX production economics, but will impact the ability to produce salable gasoline.
RVP and octane will suffer, but there are solutions to help compensate for the loss of high octane
reformate. Add new or upgrade existing light naphtha Isomerization capability to improve octane.
Running the FCC at higher severity will improve the octane of the FCC naphtha. Alkylate has
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traditionally been limited by the production of C4’s from the FCC, but if more could be produced, it
would be possible to add octane, reduce RVP and dilute aromatics in the gasoline pool. Leveraging
low cost C4’s in the US, and adding a Butane Dehydrogenation Unit to produce alkylate feed, is a
possible avenue for increasing alkylation capacity. The last step into pX production is to Hydrocrack
distillate to naphtha to produce additional feed for pX. Now, the refiner can reduce both gasoline
and diesel production, continue meeting fuel specifications, maintain crude capacity, diversify
into petrochemicals, and remain competitive. This was discussed in Honeywell UOP’s 2018
AFPM Presentation, Refining and Petrochemicals – A New Look at Integration Opportunities.

Conclusions
As fuels demand declines and global competition increases, diversifying into petrochemicals and
leveraging low-cost energy will enable refiners to maintain crude capacity and improve margins.
On-specification fuels can be co-produced, but at a reduced rate. Petrochemical integration is a
complex and capital-intensive problem, requiring a strategy that is definitively quantified to maximize
value at each step. Optimization, not maximization is the key. Optimization means better molecule
management and improved configurations.

The case study in this paper identified a potential diversification pathway to petrochemicals through
a series of economically viable investments in bottom-of-barrel conversion, Hydrocracking to
naphtha technologies, and an Aromatics Complex integrated with Toluene Methylation. These
technologies enable production of enough heavy naphtha to support profitable world-scale pX
production from the same crude rate. Each step of this plan resulted in a high quality investment with
case-by-case incremental IRR’s up to 24% and no less than 14%. Following this plan, a refiner can
unlock new value from crude oil, potentially improving net cash margin by almost 30 $/BBL overall.
Each existing refinery and new complex will require a tailored configuration that embodies the
technologies and concepts discussed in this paper. With the right retrofit technology and domain
expertise, the Refinery of the Future is now within reach.
 Acknowledgements
The authors would like to thank the following individuals for their
assistance generating data and for providing their support.

• Dave Banks, Configuration Specialist, Integrated Project Solutions

• Keith Couch, Senior Director, PT&E Sales Support & Integrated Project
Solutions

• Joe Ritchie, Solution Development Leader, Integrated Project Solutions

This material was originally presented and published at AFPM 2019.

References

1. IHS Markit. Data retrieved from market databases.

2. Wood Mackenzie. Data retrieved from market databases.

3. SBAcci. Data retrieved from market databases.

4. Honeywell UOP’s 2018 AFPM Presentation, Refining and Petrochemicals – A New Look at
Integration Opportunities.

For more information

For more information, please contact your UOP
representative or visit us online at www.uop.com.
UOP LLC, A Honeywell Company
25 East Algonquin Road
Des Plaines, IL 60017-5017, U.S.A.
www.uop.com
© 2019 UOP LLC. All rights reserved.
The information in this Honeywell
Company document should not be
construed as a representation for
which UOP assumes legal
responsibility, or an authorization or
recommendation to practice a
patented invention without a license.
UOP8402 February 2019