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Economic Comparison of RESID FCC and H-Oil

IP.com Disclosure Number: IPCOM000218663D
Publication Date: 2012-Jun-06

Publishing Venue

The IP.com Prior Art Database

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Resid FCC i s compared with resid hydro- cracking (H-Oil) and visbreaking in a grassroots setting. Economics based on 1989 crude and product prices are compared with those of 1983. Sensitivity evaluations include the effect of crude quality (light through heavy) and the price of heavy fuel oil relative t o crude price.

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R. Ragsdale

G. L. Ewy

The M. W. Kellogg Company

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Industry experts are predicting the return of a more traditional price spread between light and heavy crudes, a significant reduction in the demand and price of heavy fuel o i l , and a trend toward processing heavier crude blends. Such events would accelerate interest in the installation of new resid conversion
faci 1 i t i e s .

Because the planning, design, and construction of new f a c i l i t i e s require years of lead time, many refiners are currently evaluating their alternatives. Throughout Europe, for example, where cleaner gas i s predicted t o replace high sulfur fuel o i l , studies not unlike those of the late 70s and early 80s are being performed.
are comparing the merits of the available proven technologies. One resid hydrocracker project has already been announced in northern Europe, and others are in late stages of planning.

These studies

This paper describes the results of a new study by The M. W . Kellogg Company comparing the economics of two commercially proven and widely accepted resid conversion processes, namely, resid TTuid catalytic cracking and H- O i l . I t i s customary in studies of this nature t o compare the more capital intensive alternatives with either visbreaking or coking.



Overall conclusions of this study can be summarized as follows:

0 New resid conversion f a c i l i t i e s w be needed. Projects should begin now. To meet the changes in high sulfur heavy fuel oil demand requ three years lead time. H-Oil and resid FCC technoloqies are



particularly attraztive alternatives t o f i l l this need.

0 Based on 1989 crude and product prices, the internal rates o f return ( I R R ) show an advantage for resid FCC with light crudes, and visbreaking with heavy crudes. (H-Oil unit conversion i s set a t 65% f o r these comparisons .)

0 Based on 1983 crude and product prices (a stable period before the crude price collapse) , visbreaking

We selected visbreaking for t h i s

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IRRs are slightly higher than the other processing schemes for light crudes, and significantly higher for the heaviest crudes.

0 For both sets of prices, 1983 and
1989, processing heavier crudes are shown t o be significantly more profitable than processing lighter crudes, regardless of the processing scheme selected.

0 A reduction in heavy fuel oil price will favor resid FCC and H-Oil over
vi sbreaki ng. Using Lloydminster crude as an example, a reduction in fuel oil price of 23% i s the point at which H-Oil begins t o indicate invest...