Tackling the gasoline/middle distillate

imbalance
An oligomerisation technology can produce a significant increase in middle
distillate production

MARIELLE GAGNIÈRE, ANNICK PUCCI and EMILIE ROUSSEAU

Axens

T
he varying constraints on the
refining industry result in a 1.8
market that is in constant Average annual growth 1.6
Gasoline
evolution. Regulations on low-sul- Diesel & kerosene
1.4
phur gasoline and diesel fuel, curbs Total oil products
1.2
on refinery emissions and the
rate, %

increase in heavy crudes over the 1.0

past years have influenced the refin- 0.8
er’s market. Today, new forces have 0.6
emerged, with improvements in 0.4
light vehicle fuel economy, the prev-
0.2
alence of emerging markets, and the
rise of shale oil and gas shifting the 0
2000-2010 2010-2020 2020-2030
outlook. In this article, we present
the market trends and outlook
ahead to 2020 and 2030, and foresee Figure 1 Growth in world demand for oil products
that the current thirst for middle
distillates will be accentuated in the
US and Europe, but also in emerg- 1000
ing markets. In the second section,
the oligomerisation technology,
500 Surplus
PolyFuel, which can adjust refinery
Exports, kboe/d

output towards middle distillates, is

presented. Finally, an economic
0
evaluation of the performance of
PolyFuel assesses its value to the
refinery based on 2012 prices and –500 Deficit
costs.
Gasoline
Diesel
Market outlook –1000
Kerosene
In 2012, global oil demand was 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
around 89.7 million b/d according
to the latest IEA estimates, driven Figure 2 European (EU-27) net exports of gasoline, kerosene and diesel Source: JODI
by growth in emerging countries.
Broken down by product, global (AAGR) were 1.6%/year and 1.3%/ year, middle distillates still stay a
growth in demand for oil is driven year, respectively. In 2020, contin- primary driver with an annual
by middle distillates, comprising ued robust global demand for growth above that of oil (see
kerosene and diesel, unbalancing distillate is expected, with a growth Figure 1).
the product slates in some regions. rate still at 1.6%/year, above total
growth in demand for oil. By Atlantic basin gasoline/distillates
World’s appetite for middle distillates contrast, growth in demand for balance
From 2000 to 2010, growth in world gasoline is forecast to be weak, Since 1998, Europe has experienced
consumption of middle distillates with an increase of 0.7%/year. excess volumes of gasoline produc-
exceeded growth in demand for From 2020 to 2030, while global tion. Much of the excess European
gasoline and total oil products: the growth in demand for oil is gasoline has been exported to
annual average growth rates expected to be restrained at 0.6%/ North America, a light vehicle

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 efficiency for new light duty vehi-
1000 cles (CAFE standards) and ethanol
blending requirements.
On the crude supply side, a game
500 Surplus changer is also modifying US refin-
Exports, kboe/d

ing dynamics: rapid growth in

shale oil production. US crude
0
production is surging in states
where shale oil is available. The
–500 Deficit
Bakken field in North Dakota and
Gasoline
Eagle Ford field in South Texas are
Diesel
Kerosene
the largest, but many other finds
–1000 are spread across the country. This
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 development has transformed the
US refining industry. Refiners in
Figure 3 North America net exports of gasoline, kerosene and diesel the US Gulf Coast, where 44% of
the US refining capacity is located,
gasoline market. Today, however, middle distillates (see Figure 2). benefit from this cheap crude.
gasoline production within the US The North American situation is Yet, there are some disparities:
has increased, while demand for completely different (see Figure 3): refiners on the East Coast struggle
gasoline from petroleum has • US diesel net exports have and experience closures. In PADD
reduced. Consequently, European increased considerably since 2008, (Petroleum Administration for
gasoline exports to the US have reaching more than 1 million boe/d Defense  District) 1, refiners cannot
decreased. With a gasoline surplus in 2012 easily access the new shale oil
exceeding 800 000  boe/d (see • Kerosene imports and exports are supplies; they remain dependent on
Figure 2), European refiners have balanced crude imports and face competition
found other export destinations in • North America gasoline imports from European gasoline imports.
Latin America, Africa and the have reduced by 75% when Nevertheless, imports of crude and
Middle East. compared to 2006 and should be oil products are collapsing and the
Accounting for half of the total about 230 000 boe/d for 2012. US has become a net exporter of oil
oil demand, diesel remains the With world growth in middle products. Furthermore, US Gulf
principal product consumed in distillates and reduced domestic Coast refineries that run shale oil
Europe (EU-27) mainly due to the demand for gasoline, US refiners will produce more light products
transportation sector. The mismatch have developed diesel exports over due to this light sweet crude
between gasoline and diesel supply the past few years, increasing distil- supply, and natural gas liquids
and demand increases the pressure late yields by changing distillation (NGLs) associated with shale
on European refineries that cannot cut-points or adapting their refin- production will increase in the
satisfy their market. As a result, net ery units’ operational mode with coming years. All of these factors
diesel imports remain significant, small-scale capital investment. will weigh on the whole light ends
reaching a maximum of US petroleum-based gasoline complex and may lead to a naphtha
560 000  boe/d in 2010, originating imports have collapsed since 2011, surplus in the US.
mostly from the CIS and the US. due to a reduced demand for
Furthermore, Europe is short of finished motor gasoline, which has Non-OECD economies dominate
kerosene, with a strong and stable been declining by 1.6%/year since global oil demand growth
deficit of around 300  000 boe/d, 2007 because of economic condi- Predictions point to the non-OECD
heightening the European thirst for tions and improved engine energy share in demand for oil rising from
48% to 60% in 2030, most of this
concentrated in Asia, the Middle
80
East and Africa (see Figure 4).
OECD
70 Emerging countries, particularly
Non-OECD 60%
Oil demand, Mb/d

60 non-OECD Asia, are forecast to

48% dominate growth in demand for
50
40 middle distillate, with a significant
shift towards diesel in the passen-
30
ger vehicle market in India and a
20 demand growth driven by commer-
10 cial freight in China.
0 In conclusion, with a global
2012 2020 2030 surplus of gasoline reducing export
opportunities and a growing deficit
Figure 4 OECD and non-OECD total oil demand from 2012 to 2030 in middle distillates regionally,

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 either in OECD countries or emerg-
ing economies, refiners are led to Reaction section Splitter
rebalance their product slates. New Recycle for
maximum distillates Gasoline
technologies are needed to respond
to these trends, producing more
Fixed-bed
middle distillates and compensat- swing reactors
ing for a reduction in demand for
IP 811: in-situ
gasoline in OECD countries and a or ex-situ
potential over-supply of light prod- regeneration
ucts and gasoline in the US.

PolyFuel technology Middle

distillate
Optimisation of the products slate Olefinic
around the FCC unit feed
Since demand for middle distillates
is growing faster than that of gaso- Figure 5 PolyFuel process general flow diagram
line, increased interest in process
options to shift the ratio of diesel to In the process, light olefins are process utilises the IP 811 catalyst,
gasoline production has been regis- oligomerised catalytically in a which can be operated at high
tered. This trend has been seen in series of two fixed-bed reactors. severity to maximise the middle
FCC units, along with an increased Conversion and selectivity are distillate fraction as a result of its
demand in propylene from FCC to controlled by reactor temperature high activity and stability.
help satisfy the much faster grow- adjustment, while the heat of reac- Typically, the middle distillate
ing demand for petrochemicals. An tion is simply removed by feed yield exceeds 70% as compared to
underlying theme has been effluent heat exchange (see Figure feed olefins. The IP 811 catalyst can
increased regulation to sharply 5). The reactor section effluent is undergo multiple regeneration
reduce the sulphur content of both fractionated, producing gasoline cycles, with over 95% activity
gasoline and diesel, and limit the depleted in olefins and middle recovery demonstrated. Catalyst
olefin content in gasoline. distillate fractions. The gasoline regeneration can be performed in
An increasingly popular technol- fraction is partly recycled to the situ or ex situ.
ogy option to address the fuels reaction section to enhance middle Like PolyNaphtha, PolyFuel
imbalance and product flexibility distillate production. The distillate produces a high-quality Jet A1 frac-
requirements is olefin oligomerisa- fraction is typically sent to existing tion after hydrotreatment to
tion. Reactive olefins can be kerosene and diesel hydrotreating saturate olefins. The smoke point
oligomerised, mainly into dimers directly. exceeds 35 mm, which is far above
and trimers, to increase the size of The reaction section uses swing the Euro V specification.
the molecules and shift the product reactors to allow for continuous Feedstock selection for PolyFuel
slate towards heavier components. operation with on-stream catalyst depends on the availability of
A well-proven technology to regeneration or replacement. The olefin-rich streams and the refin-
convert C3-C4 olefins into gasoline management of the reactors is opti- ery-specific product requirements.
and diesel range components has mised to maximise catalyst run When distillate is more favoured
been in commercial operation since length. With the objective to than gasoline, portions of the FCC
1986 under the trade name of produce high-quality distillate, the gasoline product are logical feeds.
PolyNaphtha. Unlike older polym-
erisation technology oriented to
gasoline production and based on
Cumulative sulphur
solid phosphoric acid catalyst, this Alkyl-benzo-
Olefins
process uses a regenerable catalyst Thiophenes
Cumulative sulphur, %

with the ability to produce gasoline C5/C6 feed

and distillate fuels. It offers a to polyfuel
Benzo-
Olefins, %

low-cost alternative to alkylation C5 Thiophene

S
C6
and an alternative outlet for propyl-
ene, particularly when recovery is C3-Thiophene
C7
not economic.
When distillate production is C2-Thiophene
favoured, an extension of this S C8
Mercaptans C1-Thiophene C9 C10
concept can be used to convert Thiophene C11 C
12
C5-C9 gasoline olefins to distillate in
a simple, low-cost PolyFuel process. Increasing cut point
A generic block flow diagram of
the process is shown in Figure 5. Figure 6 Typical FCC gasoline olefins and sulphur profile

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 PolyFuel feed. When the FCC unit
Prime-G+ is operated at high severity to
first step Splitter Optional C3/C4 maximise propylene, the concentra-
ULS gasoline tion of C5-C6 olefins is very high in
Prime-G+ SHU PolyFuel
LCN and distillate the gasoline and may result in an
selective
hydrogenation off-spec gasoline pool. As a result,
the new process can help to satisfy
the need for increased distillate and
improve the gasoline pool’s
Prime-G+ properties.
selective ULS gasoline In order to prepare the feed to
HDS
the PolyFuel unit, one can take
HCN
FRCN advantage of existing FCC gasoline
H2 selective desulphurisation unit
Make-up
design. The most widely selected
technology is the Prime-G+ process
Figure 7 Prime-G+ integration with PolyFuel for contaminant control with 214 licensed units as of
January 2013. The Prime-G+ first
In principle, the process can accept content in the remaining gasoline step, which consists of a selective
the full range of C5-C9 gasoline cut product. hydrogenation unit (SHU) on the
produced from the FCC unit. The The previous point on olefins full-range cracked naphtha (FRCN)
C5-C6 portion contains the highest reduction in the remaining gasoline with a downstream splitter,
concentration of reactive olefins. pool can be significant in regions provides an ideal feed pretreatment
The heavier C7+ portion contains by removing the diolefins and
fewer olefins and can have a high reducing the sulphur content of the
content of contaminants (sulphur,
To maximise refinery light C5-C6 cut. In refineries that
nitrogen and oxygenates), which profitability, the include Prime-G+, a PolyFuel unit
reduce catalyst cycle length. To can easily be installed on the light
illustrate, a typical gasoline profile feedstock can also cracked naphtha (LCN) from the
of olefins and sulphur as a function splitter top, thereby minimising the
of boiling point is shown in include olefinic C3 pretreatment cost of the process
Figure 6. (see Figure 7).
Based on these observations, and/or C4 fractions, To maximise refinery profitabil-
Axens has identified the C5-C6 ity, the feedstock can also include
olefin-rich cut as the preferred feed depending on the olefinic C3 and/or C4 fractions,
to be processed in the PolyFuel unit depending on the refinery’s objec-
to reach the highest profitability by:
refinery’s objectives tives and economics. Olefin-rich
• Maximising the amount of feed components can come from
oligomer product where olefins content is tightly any cracking process such as FCC,
• Maximising catalyst run length regulated. Typically, the olefins in coking, steam cracking or any other
• Minimising feed pretreatment the C5-C6 cut are reduced by over olefin sources, such as effluent from
• Significantly reducing the olefin 80% as compared to the C5-C6 paraffin dehydrogenation or
alcohol dehydration. Specific
pretreatment options are adapted,
FCC PolyFuel depending on feed origin and
Max distillate contaminants level.
An attractive FCC-based refinery
configuration to maximise middle
C3-C6 distillates consists of mixing availa-
olefins ble LPG with a C5-C6 LCN cut and
Products
feeding the blend to a PolyFuel
unit. Available sources of LPGs in a
refinery may be:
• C3s when not sent to
Raffinate
petrochemicals
• C4s when no C4 cut upgrading
Gasoline Distillate to DHT
Motor fuel processes are present
• Or excess C4s in the case of an
existing C4 cut upgrading processes
bottleneck (alkylation unit and so
Figure 8 PolyFuel in a FlexEne configuration oriented to distillates production on).

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 The relative amounts of LPG and
C5-C6cuts and the operating sever- Catalytic cracking Petrochemical
ity of the PolyFuel unit can be unit with FlexEne integration
optimised to adjust the distillate C3– Polymer
Steam grade
product rates in accordance with cracker ethylene
market demand while reducing the Propane
Mixed C3 Polymer
gasoline surplus. PRU grade
In summary, the new technology propylene
Mixed C4
addresses the gasoline/middle FCC
distillates imbalances by selectively Oligomer Paraffinic C4-C6
converting unwanted olefinic R2R recycle
PolyFuel
streams in the C3-C6 range into VGO
resid
distillate fuels while meeting DCC LCN
Aromatics
increasingly tight product specifica- Gasoline HCN
complex
HS-FCC Prime-G+ BTX
tions. A PolyFuel unit can be ParamaX
designed to operate over a wide Distillate/
range of LPG and/or C5-C6 olefinic fuel oil
feed compositions and with the
flexibility to adjust the gasoline/
middle distillates product ratio to
regional requirements.
In addition to a stand-alone Figure 9 Refining and petrochemicals integration with FlexEne and PolyFuel
configuration, the process can be
applied within the FlexEne cracker to produce more petrochem- • Further optimise distillate or
concept, which is Axens’ combina- icals or gasoline blend stock. propylene production when inte-
tion of FCC and oligomerisation As is indicated in the name, the grated with FCC in a FlexEne
processes. This combination FlexEne concept utilising FCC with configuration
enhances product flexibility by PolyFuel provides great flexibility • Improve the overall refinery
controlling the balance of propyl- to optimise the production of economics as feed and product
ene, gasoline and middle distillates propylene, gasoline and distillates prices fluctuate.
production with a low additional according to market demand.
capital investment to the FCC In the context of faster worldwide Economic appraisal
complex. This flexibility is achieved growth in demand for distillates The following economic appraisal
via oligomerisation of light FCC and propylene than for gasoline, evaluates the difference in return
olefins into heavier fractions and but with regional disparities, Axens between the sale of products from a
recycle of undesired oligomer cuts has developed a new process with classic FCC configuration and
for further cracking in the FCC the flexiblility to: the cost of installation of a PolyFuel
unit, thus increasing the desired • Process lower-valued olefinic unit downstream of the FCC unit,
product slate – often an increase in feeds in the C3-C6 range from a and the revenue associated with the
propylene and distillate. variety of sources increased middle distillates and
A typical distillates-oriented flow • Maximise distillate production upgraded gasoline.
scheme of PolyFuel integrated in and reduce gasoline production The present case study assumes
the FlexEne concept is shown in according to market demand the following feedstocks:
Figure 8. Operation of the FCC
unit, selection of feedstock cuts,
operating severity and oligomer LPG
product cut recycled to the FCC
unit are all parameters subject to Reaction section Splitter
optimisation, depending on prod-
uct demand and pricing.
Gasoline
Refining/petrochemical integration
When the refinery is integrated with
a petrochemicals complex, there are
further opportunities to share feed
and product streams to improve
profitability. The oligomers from the Middle
distillate
PolyFuel unit can be entirely recy- Mixed
LPG/C5-C6
cled to the FCC unit to maximise
from FCC
propylene production and the
paraffinic raffinate sent to the steam Figure 10 PolyFuel case study

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 Utilities costs
35

30 Utilities Cost Unit

Electricity 75 $/Mwh
25 HP steam 30 $/ton
MP steam 25 $/ton
20
IRR, %

LP steam 20 $/ton
15% IRR
Cooling water 0.20 $/ton
15

10 Table 1

5 prices, to achieve an internal rate of

–96 $/t
return (IRR) of 15%, the price of
0
–120 –100 –80 –60 –40 –20 0 20 40 middle distillate has to be $38/t
Spread kerosene-gasoline, $/t higher than the gasoline price.
When compared with the 2008
Figure 11 IRR sensitivity for PolyFuel based on mixed LPG-LCN feed according to middle middle distillate/gasoline price
distillate — gasoline price spread with 2012 USGC-based price difference, which was $154/t for
kerosene and $102/t for diesel, this
• C5-C6light cracked naphtha (LCN) Investment and economics break-even differential is not
from an existing Prime G+ unit, hypothesis excessive.
currently sent to the gasoline pool The PolyFuel unit inside battery Due to the excess of gasoline
• Available LPG olefinic cut limit (ISBL) capital investment cost production in Europe, all the gaso-
currently sent to the LPG pool with is $29  million for a capacity of 16 line produced is not sold at the
a ratio of 50%LPG:50%LCN. 500  b/d. The depreciation duration European gasoline market price.
The capacity chosen is 16 500 b/d is 15 years, with a discount rate of Part of the production has to be
to illustrate a median case 10% and a profit tax rate of 30%. exported, possibly at lower prices
for economic evaluation of than the European market value.
PolyFuel. Utilities and catalyst cost The local difference between gaso-
The utilities costs used in the line and middle distillates prices at
Feeds and products economic evaluation are shown in the outlet of a refinery is thus most
The light cracked naphtha and LPG Table 1. Overall, utilities and cata- probably lower than the market
cut from FCC are highly olefinic lyst costs for this case study were price difference, leading locally to
streams. Olefins in the feed are calculated to be $19/t of feed or economics that are already profita-
converted by oligomerisation in the $1.8/bbl of feed. ble for the implementation of
PolyFuel unit into middle distil- PolyFuel technology.
lates. After hydrogenation, the European economics Today, the price differentials
middle distillates produced can be Prices observed between gasoline and
sold either as diesel or Jet A1 In Europe in 2012, the Brent crude middle distillates do not seem to
kerosene. price was $112/bbl, while the correspond with market conditions.
The quality of the remaining spread between gasoline and diesel In the near future, with even more
gasoline is improved by the was $57/t and for gasoline/Jet A1 pressure on middle distillates on the
oligomerisation process, olefin and was $23/t. The prices of feedstock demand side, we can expect that
sulphur content being reduced, and products in 2012 were as middle distillate prices are likely to
while maintaining good octane shown in Table 2. be higher than those of gasoline,
numbers. The gasoline product is reversing the current price structure.
thus sent directly to the gasoline Results
pool. Considering 2012 LPG and gasoline US economics
Prices
Feedstock and products prices in Europe Feedstock and products prices in the In the US in 2012, because of the
in 2012 US in 2012 shale gas effect, the average price
for LPG was $636/t, while the
2012 - Europe $/t $/bbl
2012 - US Gulf Coast $/t $/bbl
gasoline price reached $1129/t. The
Brent 843 112 prices of feedstock and products in
WTI 718 94
Premium 95 10 ppm 1037 124
Propane 861 74
Premium gasoline 1129 136 2012 were as shown in Table 3.
Propane 523 45
Butane 859 74
Butane 750 64
LPG 860 74
LPG 636 55
Results
Kerosene Jet A1 1014 129 In 2012 in the US, the IRR for
Kerosene Jet A1 1018 130
Diesel 979 136
Diesel 936 130 PolyFuel based on mixed LPG-LCN
feed is 13% with a net present
Table 2 Table 3 value of $12 million.

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 The new technology is profitable It is in Europe where the refiner and particularly the ability
taking into account today’s US difference between refinery yield to anticipate market needs in differ-
market prices even if the middle structure and market demand is ent regions as constraints evolve.
distillate price is lower than the critical, especially since conven-
PolyFuel and PolyNaphtha are trademarks of
gasoline price. Indeed, as a result of tional refining tools do not have the
Axens.
shale gas production, LPG prices are flexibility to reduce excess gasoline
low. Adding LPG (C3 and/or C4) cut production and to increase the Marielle Gagnière is Technology Manager
in a PolyFuel unit lowers feedstock amount of middle distillates. for hydroprocessing and olefins technologies
costs and contributes to increased Moreover, with European refineries downstream FCC, especially oligomerisation
and etherification technologies, in Axens’
profitability, while maximising facing increasing difficulty in find-
Marketing, Technology and Technical
middle distillates production in the ing export markets for their excess
Assistance Department. She is an engineering
refinery. gasoline and given the tensions in graduate from the Ecole Nationale Supérieure
To reach 15% IRR for PolyFuel middle distillate supply, PolyFuel de Chimie de Paris, and holds a post-graduate
with prices based in 2012 in the US should fulfil a primordial role in engineering degree from the IFP School.
Gulf Coast, the middle distillate adjusting the gasoline-distillate Annick Pucci is Deputy Product Line Manager
price can be $96/t lower than gaso- production to better fit market in the field of light ends hydrotreatment and
line. If the middle distillate price demand. a specialist in refining olefins processing,
were equal to the gasoline price In other regions, new tendencies particularly for FCC effluent upgrading.
($1129/t) and the LPG price kept at such as shale oil and shale gas are She holds a bachelor’s degree in chemical
$636/t, the IRR would reach 28%. revolutionising the US market, engineering from Ecole Nationale Supérieure
des Industries Chimiques de Nancy, France.
providing additional light products
Emilie Rousseau is a Strategic Marketing
Conclusion and consequently influencing
Engineer in Axens’ Marketing Department. She
With the world market for middle market balance and prices. Today holds a chemical engineering degree from the
distillates growing and a reduced in the US, as a result of the impact Ecole Nationale Supérieure des Ingénieurs en
demand for gasoline in certain of shale gas on the cost of LPG, Arts Chimiques et Technologiques de Toulouse,
regions, the new process for olefinic PolyFuel is already profitable for a a master’s in chemical engineering from
gasoline oligomerisation allows the mixed feed of LPG and C5/C6 cut. Imperial College in London and a master’s in
refinery scheme to be adapted to a The flexibility of the new process energy economics and corporate management
maximum distillate mode. offers many advantages to the from IFP School.

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