IBP1268_12 HYDROPROCESSING AND PREMIUM II REFINERY: A NEW REFINING PHILOSOPHY FOR AN ERA OF CLEAN FUELS Caio V. P.

Delgaudio1, Rafael Pinotti2

Copyright 2012, Brazilian Petroleum, Gas and Biofuels Institute - IBP

This Technical Paper was prepared for presentation at the Rio Oil & Gas Expo and Conference 2012, held between September, 1720, 2012, in Rio de Janeiro. This Technical Paper was selected for presentation by the Technical Committee of the event according to the information contained in the final paper submitted by the author(s). The organizers are not supposed to translate or correct the submitted papers. The material as it is presented, does not necessarily represent Brazilian Petroleum, Gas and Biofuels Institute opinion, or that of its Members or Representatives. Authors consent to the publication of this Technical Paper in the Rio Oil & Gas Expo and Conference 2012 Proceedings.

Resumo O presente trabalho aborda um breve histrico da evoluo das especificaes brasileiras para emisses e combustveis, desde o surgimento do PROCONVE at as recentes fases do programa, para veculos movidos gasolina e leo diesel. O desenvolvimento do refino brasileiro analisado paralelamente a esta evoluo, quando perceptvel o aumento da complexidade do sistema medida que novas restries so impostas pelo rgo regulador. Ela fica ainda mais evidente quando detalhado o esquema geral de processo da refinaria Premium II e uma de suas principais unidades, o Hidrocraqueamento Cataltico (HCC), ainda no existente na Petrobras e que figurar em trs das quatro novas refinarias da empresa. Os novos projetos representam o pice do uso intensivo de energia e matria-prima para a obteno dos produtos nas novas especificaes. A esta evoluo est associado um preo, seja em aumento de investimentos ou de custos operacionais, devido maior complexidade do sistema. Para se adequar era de combustveis limpos, as refinarias enfrentaro uma srie de desafios, que as levaro a buscar processos mais eficientes e excelncia operacional, alm de constantes esforos para reduzir suas emisses, com o objetivo de garantir margens de refino positivas. Abstract This paper discusses a brief history of Brazilians emission and fuel specifications, since the appearance of PROCONVE until the late stages of the program for vehicles powered by gasoline and diesel. The development of the Brazilian refining is analyzed taking into account the emission and specification evolutions, and it can be perceived that the systems complexity increases while new constraints are imposed by the regulator. This aspect is even more apparent when the detailed scheme of the Premium II refinery and its main unit, the catalytic hydrocracker (HCC, which has not yet been part of Petrobras refining park and will appear in three of the four new refineries of the company) is described. The new projects represent the culmination of the intensive use of energy and raw material for obtaining the products with the new specifications. There is a price for this development, both in investments and increased operating costs due to greater complexity of the system. To adapt to the era of clean fuels, refiners will present a series of challenges that will lead them to seek for more efficient processes and operational excellence (and ongoing efforts to reduce their emissions) in order to ensure positive refining margins.

1. Introduction
Fuel regulation around the world has experienced a common evolution behavior. The restrictions on allowed permitted emissions and fuel contaminants have become increasingly stringent along the years, first in Europe and North-America and then in the rest of the world, including Brazil. Figure 1 shows the maximum allowed sulfur content applied around the world in 2011. As can be seen, North-America, Europe, Australia, and Japan adopt a maximum sulfur content of 10 to 15 ppm, but Brazil is in its way to also restrict its specification.

______________________________ 1 Process Engineer Petrobras 2 M.Sc., Process Engineer - Petrobras

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Figure 1. On-road diesel maximum sulfur content (IFPQ, 2011) The evolution regarding fuels specification and emissions became a reality to the oil companies also, which had to adapt their processes to the conditions imposed by the regulatory agency. The adaption means investment in new and intensive processes, mainly in the hydroprocessing field, that led the average hydrotreatment level around the world to increase to almost 50% of the total processed oil. In countries such as USA, Canada, and German it reaches more than 80% (WRPR, 2011), increasing as well the operational cost and complexity in refineries. This paper is structured as follows: in section (2) the evolution of Brazilians fuel and emissions specifications is explored from its very beginning justifying the adaption of the countrys refining scheme, that are described in section (3). Section (4) depicts the challenges related to the era of clean fuels that the refineries will have to face in the following years.

2. Evolution of Brazilians emission specification

The regulation of fuel specification has been a common concern among countries around the world. It directly affects the performance of combustion motors, influencing its efficiency and emissions. The regulations focus is on pollution control and public health, both directly influenced by the emissions level, which is a consequence of the type of fuel and motor used in internal combustion. In Brazil, the Environment National Council (CONAMA) created the PROCONVE in 1986, a program with many goals: control and regulate these types of emissions, promote technological developments regarding motors manufacture, improve fuels quality, and alert the population about the pollution generated through vehicle emissions (Gomes, 2011). Since the nineties, the program established subsequently goals regarding fuel specification and emissions generated by their combustion, mirroring the European program in this field. For light vehicles powered by gasoline, the subsequent phases are called L and its emissions reduction profile is depicted inFigure 2. The current and future main gasoline properties are summarized in Table 1.

Rio Oil & Gas Expo and Conference 2012 Table 1. Gasoline specification. Now and in 2014 (ANP, 2012) Current specification (maximum) 1000 45 30 2014 (maximum) 50 35 25

Property Sulfur Content (ppmw) Aromatics (%v/v) Olefins (%v/v)

Figure 2. Emissions' limits for gasoline vehicles (Adapted from Joseph Jr., 2009) Similar goals were established through the years for diesel specification and its motors emissions. Table 2 shows how the emissions limits and the sulfur content in the fuel have evolved. The P phases, in this case, are temporally related to the L phases in the gasoline case. Table 2. Allowed emissions for diesel motors and maximum sulfur content in the fuel (IBAMA, 2012) PROCONVE phases and related EURO phases PROCONVE EURO Maximum Emission allowed for diesel motors (g/kWh) CO 14,00 11,20 4,90 4,00 2,10 1,50 1,50 HC 3,50 2,45 1,23 1,10 0,66 0,46 0,46 NOx 18,00 14,40 9,00 7,00 5,00 3,50 2,00 Particulate Matter 0,60 0,40/0,70 0,15 0,10/0,13 0,02 0,02 Historical data Duration 1989 to 1993 1994 to 1995 1996 to 1999 2000 to 2005 2006 to 2008 2009 to 2012 from 2012 Resolution (Conama) Res. 18/86 Res. 08/93 Res. 08/93 Res. 08/93 Res. 315/02 Res. 315/02 Res. 403/08 Diesel Property Fuel's Sulfur Content (ppmw) 3000 to 10000 3000 to 10000 3000 to 10000 500 to 2000 50 10

Phase I (P1) Not Related Phase II (P2) EURO 0 Phase III (P3) EURO 1 Phase IV (P4) EURO 2 Phase V (P5) EURO 3 Phase VI (P6) EURO 4 Phase VII (P7) EURO 5

As it can be seen, the initial goals focused on reducing emissions related to carbon monoxide, nitrogen oxides, and particulate matter, and were less restrictive about sulfur content in the fuel (both for diesel and gasoline). It has been an important restriction since 2006 (P5, P6, and L5), culminating in the P7 and L6 phases, which set 10 ppmw as a limit for the sulfur content in diesel and 50 ppmw for gasoline. 3

Rio Oil & Gas Expo and Conference 2012 After almost twenty years, PROCONVE program can be considered very successful. The limit imposed for new motors emissions controlled the air pollution in big Brazilian cities and even reduced it, while the national fleet of diesel vehicles doubled and the one of gasoline vehicles tripled in the same period.Figure 3 shows an estimated behavior for the CO and particulate matter emissions during these years and projects it until 2020.

Figure 3. Estimated CO and PM Emissions (IBAMA, 2011) The result depicted in Figure 3 could be reached only due to changes both in the fuel and in the technology used in the vehicles motors. New fuels applied to old motors (and the opposite) dont take advantage of the better quality or the better motor technology. So, the production and distribution of new and better (restricted specifications) grades of fuel are strictly attached to the national fleet renovation, which occurs gradually. Focusing on the diesel fuel, Petrobras has, until 2012, provided the market with three grades (for vehicles): S1800, S-500, and S-50. In all three titles, the number stands for the sulfur content in the fuel (Pinotti and Delgaudio, 2011). However, it is not the only property that changes from one to the other: distillation temperatures, cetane number, and specific gravity change as well. In order to comply with the PROCONVEs P7 phase, the S-10 grade will be introduced from 2012 onwards, substituting the S-50 grade. Due to the fleet renovation, the S-1800 will also be replaced by the S-500 grade and it is expected that, by 2015, only the S-10 and S-500 grades will be available in the country. Table 3 summons the main properties of this four grades of diesel. Table 3. Diesel grades' specification (ANP, 2012) Grade Property Cetane Number (minimum) Sulfur Content (ppmw, maximum) Distilation (C) Specific Gravity (kg/m) Flash Point (C, minimum)

S-1800 42 1800

S-500 42 500

S-50 46 50

S-10 48 10

T85% = 370 T85% = 360 T90% = 360 T95% = 370 Min = 820 Max = 880 38 Min = 820 Max = 865 38 Min = 820 Max = 850 38 Min = 820 Max = 850 38

Taking into account the differences in properties of these four grades and the scenario of increasing demand for fuels in Brazil (especially diesel), Petrobras has been planning several ventures, considering in addition both the expansion of its current refining system and the construction of new refineries. The solution to reach and survive in the era of clean fuels is to invest in technology, towards a more complex refining scheme, with the hydrotreating and hydrocracking processes as the key to achieve these goals. 4

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3. Brazilian refining scheme and the specifications evolution

Originally, Petrobras refineries were designed to process imported light oils and to produce fuels with less restricted qualities than today. Such refinery schemes were based in separation processes, with conversion and hydrotreatment levels being very low. The first movement to improve the refining park was to increase the conversion, motivated mainly by economic reasons. As the national, and heavier, oil production increased, Petrobras invested in Delayed Coker and Fluid Catalytic Cracking units, which helped to increase the refining margin, by converting heavy streams into lighter ones, reducing the production of fuel oil and expanding the one of diesel, kerosene, and gasoline. The second investments wave came as an answer to restrictions imposed to the fuel quality, as presented in the previous section. In order to meet the increasingly tightened specifications, the company had to invest in hydrotreating units, besides the hydrogen generation and all auxiliaries (sulfur recovery unit, sour water treatment unit, and amine regeneration unit). The initial hydrotreatments consisted in few units, no more than one per refinery, with low severity processes, because initial restrictions were easier to achieve. This movement started in the early nineties and lasted until the middle of the last decade, increasing the hydrotreatments level in Petrobras to around 23% of the processed oil, a number much smaller than the main international players. For example, the average level in USA is around 78% and, in Europe, 70% (WRPR, 2011). This huge difference is explained considering that European and North-American markets restrained their specification earlier, obligating oil companies to expand their hydrotreatment capacity. One way to verify the Brazilian system evolution is through complexity indexes, widely used in the oil industry and by consulting firms. The indexes allow measuring the complexity of refining schemes in a homogeneous base, and the comparison among different schemes becomes feasible. One of these indexes is the Nelsons complexity index, well developed in a series of articles in the seventies. It relates the units in a refining scheme to the atmospheric distillation, considering differences in installation costs observed at the time. It generated a table with a factor for each unit that should be weighted by its capacity. Periss (2007) calculated the Nelsons complexity index for the Brazilian refining system along the years, as depicted in Figure 4. The index evolution testifies the scenario described above, since the complexity increases through the decades, when conversion and hydrotreating units were incorporated to the refineries.

Figure 4. Nelson's Complexity Index of Brazilian Refineries (Periss, 2007) The recent requirement on sulfur content (50 and 10 ppmw for diesel and 50 ppmw for gasoline) has led Petrobras to revamp existent hydrotreatment units (increasing their severity and capacity) and to invest in a new set, composing the diesel and gasoline portfolios. In 2011, a total of fourteen units from both portfolios were concluded and in the following years, with the conclusion of other projects, the hydrotreatment level is expected to reach the mark of 60%. At the same time that new hydrotreatment units are been installed in existent refineries, Petrobras conducts the project and construction of four new refineries, scheduled for startup in this decade. The four ventures totalize 1,295 million bpd of processing capacity, with more than 80% of hydrotreated products and hardware designed to maximize the production of diesel and kerosene. The new refineries will contribute to increase the Petrobras hydrotreatment level from 60% in 2015 to almost 75% by 2020, a number consistent with international standards. Such leap in the hydrotreatment level is due to the introduction of a new unit in the Petrobras refining scheme: the catalytic hydrocracker, referred to in Brazil as HCC. The unit converts heavy gasoils generated in the atmospheric/vacuum tower and in the delayed coker unit into hydrotreated products, through an intensive use of hydrogen and energy. The Brazilian refining system has maintained for decades a tradition of gasoline maximization 5

Rio Oil & Gas Expo and Conference 2012 aimed at the domestic market, which called for a standard refining scheme that included an FCC (fluid catalytic cracking) unit as the main conversion unit. The scenario changed with the increasing demand for diesel and for cleaner fuels, guiding all the investments stated above and pointing to the use of the HCC in three of the four new refineries. It substitutes the so called FCC, the main conversion unit in almost all the existent refineries. Premium II refinery, to be installed at Cear State, near Fortaleza, is one of the new ventures of Petrobras to receive a HCC unit. Its refining configuration differs from the existent ones and is aimed to produce mainly ultra low sulfur diesel, using hydrogen based processes at an unprecedented level in the history of Brazilian oil refining. It will have the capacity to process 300,000 bpd of domestic oil, and will be strategically located near the PECEM harbor. Together with its twin refinery in Maranho (Premium I), which will have two processing trains identical to the one of Premium II, they will add 900,000 bpd of refining capacity to the northeastern region of Brazil, and contribute to the economy of the respective states in a considerable way. In this new refining route chosen by Petrobras, the refinery relies on the HCC as its main conversion unit as indicated above, along with the delayed coker unit, completing the conversion sector. Besides the atmospheric and vacuum distillations, the refinery has yet two hydrotreating units, one dealing with a mixture of kerosene and coker naphtha and the other one, with straight run diesel and light coker gasoil. The association among the hydrocracker and the hydrotreating units is responsible for the mark of 80% of hydrotreated products. Figure 5 shows the refinerys overall refining scheme and product profile, also depicting the hydrogen generation and auxiliary units.

Crude and Vacuum Distillation Unit

Delayed Coker Unit

Figure 5. Premium Refining Scheme The catalytic hydrocracker makes intensive use of hydrogen and severe operational conditions, when compared to hydrotreating units, in order to reach the desirable conversion. Premium IIs hydrocracker is a two stage process unit, with the first stage presenting eight catalytic beds, five for hydrotreating and three for hydrocracking. There are two other hydrocracking catalytic beds in the second stage. Despite having two stages, there is no intermediate separation after the hydrotreating beds in the first stage and the ammonia produced through the reactions reaches the first hydrocracking beds. As the presence of ammonia could induce the catalyst deactivation, higher temperatures are adopted in these beds, which lead to a lower quality diesel production. The fuel specification (mainly cetane number) is reached only through blending with the second stage product, which is a top quality diesel. 6

Hydrocracking Unit

Diesel Hydrotreatment Unit

Naphtha and Kerosene Hydrotreatment Unit

Rio Oil & Gas Expo and Conference 2012 In general aspects, the hydrocracking unit could be divided into two sections: The reaction section and the fractionation section. Figure 6 depicts Premium IIs hydrocracker overall scheme.

Figure 6. Premium II's hydrocracker scheme (UOP, 2012) In the reaction section, the feed is pre-heated in the heat exchange battery, mixed with hydrogen, and it is final heated in the furnace before going through the first stage reactor and then to the sequence of separation vessels, which is a common section between the first and second reaction stages. The feed of the second stage is the unconverted oil (UCO) from the fractionators bottoms and its effluent also flows to the separation vessels, mixing to the first stage effluent. The vessels allow for hydrogen recovery in distinct pressure levels, sending the liquid hydrocarbons straight to the fractionation section. The first tower in the fractionation section is the stripper tower, which generates in its top the lighter naphtha cut of the unit after going through the debutanizer tower. Its bottom suffers for heat recovery and then follows to the preflash vessel. The vapor from this vessel enters the tower directly and the separated liquid suffers a final heating in the furnace before joining the tower. The main tower has two side draws, allowing kerosene and diesel withdrawal. Both products follow to their respective stripper and then to final destination. Kerosene goes to storage and diesel is directed to the vacuum tower in the DHT unit (diesel hydrotreating unit) to be dried. The top of the tower follows to the naphtha splitter tower, generating another two naphtha cuts: An intermediary one, to be added to the petrochemical naphtha pool, and a heavy one, to be added to the diesel product. From the fractionators bottom, the UCO stream follows to the second reaction stage and only a small part of it is recirculated and stripped with superheated steam to remove any lighter hydrocarbons from the UCO and concentrate it in heavy polyaromatics. The stripped UCO leaves the bottom and goes to bunker production. The introduction of the HCC unit will add a great deal of complexity to the new refineries. The operational conditions involved in such processes are extreme (pressures around 200 kgf/cm and temperatures up to 400 C), making the necessary investments quite considerable. In Premium II venture, the HCC and its group of auxiliary units count for more than 25% of the total investment. Moreover, the intensive use of hydrogen puts the new generation units in another level of capacity, which increases not only the investment but also the emission of greenhouse gases of the complex. These aspects are part of the challenges for an era of clean fuels.

4. Challenges in reaching the new specifications

As stated in the last section, the process hardware necessary in refineries to reach the new fuels specifications is much more complex than the current scheme in Petrobras. Due to this aspect, there are heavy impacts on the necessary investment and on the operational costs to run the refinery, when compared to the old pattern (Periss, 2007). These, 7

Rio Oil & Gas Expo and Conference 2012 allied with the fact that, generally, fuels prices are not linked to the costs involved in quality improvement, constitute challenge number one. In order to meet the cost issue mentioned above, the refineries need to work on their processes, increasing their efficiency to maintain positive operating margins and make the new investments worthwhile. For the existent plants, this can be achieved through operational excellence, minimizing reprocessing, reviewing the production chain from a sustainable angle, and maximizing the operations reliability. For the new refineries, beyond the last points, much more can be achieved during the design phase. All the possible integration aspects should be considered and adopted in order to reduce the necessary investment, since they dont affect the operational safety, and always balancing the duet integration versus operational flexibility. The integration can be achieved through several initiatives, like heat integration inside and among refinerys units, for example. Through it, the heat generated in a process is utilized for steam generation or to heat up another process stream. It reduces the amount of fuel necessary to run the plant, impacting both equipment sizing and operational costs. Another way of integration is to concentrate processes that are common to a set of units. For example, all the hydrogen necessary to the refinery should be generated in a single unit and its compression to the different pressure levels required can also be done in a unique compressor with multiple extractions. These are all initiatives to reduce the required investment and increase the operation margin of the new refinery. Challenge number two is both economic and environmental. As stated before, the hydrogen consumption to reach the new fuels specification is intensive and the required generation units capacity is almost eight times the average capacity of the units operating in Petrobras today. Just for comparison, in Premium II, the hydrocrackers hydrogen consumption corresponds to 70% of the average hydrogen production rate in Petrobras refineries in 2011. Such big units have a direct impact on the investments for the new refineries, but it cant be avoided: the contaminants level required in the new regulations is extremely low and can only be achieved through intensive hydrogen use. However, there is an embedded trade-off between contaminant reduction and carbon dioxide emissions: The hydrogen generation process (steam reforming) comes from a reaction between water and light hydrocarbons (such as natural gas and light naphtha) producing hydrogen to be used in the processes and also carbon dioxide, which is emitted to the atmosphere. Today, carbon dioxide is a non-regulated pollutant and its emission doesnt have to cope with any regulation, despite of its effect on the environment as a greenhouse gas. However, with the environmental concerns evolution, it is expected that the carbon dioxide emission becomes regulated in the near future. The problem is that measures to control these emissions are both incipient and expensive, which can reduce the currently slim refining margins. This tendency should be considered as a potential risk for the refining industry in the years to come.

5. Conclusions
The three challenges presented above do not exhaust the many aspects that the oil industry will have to face to adapt it to the new regulations. Moreover, in the following years, new restrictions will certainly arise, generating challenges that cannot be predicted today. The restrictions that are already imposed on both emissions and fuel properties will be reversed. The role played by the regulatory agencies is very important, obliging the oil companies and motor manufactures to improve their processes and technology. However, there is a thin line between feasible improvements and costly and prejudicial changes that could not lead to practical and expressive results. The regulatory policy should not be a copy of what has already been adopted abroad, but a reality adapted to local conditions and necessities.

6. Acknowledgements
We would like to thank Solange Lins Klein, Glenda Rangel Rodrigues, Paolo Contim Nicolato, Mario Jos Dias Tavares, and Oscar Rotava for our helpful discussions and their disposal to read and review this paper, making relevant contributions to its final form.

7. References
ANP, Agncia Nacional do Petrleo. Legislao, available at <http://www.anp.gov.br/?id=478>, acessed in April 17th, 2012. GOMES, H. O. O leo Diesel e a Influncia do Hidrotratamento na sua Qualidade. PETROBRAS, 2011. 8

Rio Oil & Gas Expo and Conference 2012 IBAMA, Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renovveis. Regulations Manual of PROCONVE, p. 24 25, 2011. IBAMA Website. Available at <http://www.ibama.gov.br/areas-tematicas-qa/programa-proconve>, acessed in April 25th, 2012. IFQC International Fuel Quality Center. International Diesel Rankings Top 100 Sulfur. Available at: http://www.ifqc.org, accesed in May 2nd, 2012. JOSEPH JR., H. PROCONVE As Fases Passadas e Futuras. In: SEMINRIO SOBRE EMISSES DE VECULOS DIESEL, So Paulo. Presentation. So Paulo: ANFAVEA, 2009. PERISS, J. B. Evoluo do Refino de Petrleo no Brasil. Thesis for Master Degree in Chemical Engineering Chemistry Institute, Universidade do Estado do Rio de Janeiro, Rio de Janeiro, 2007. PINOTTI, R.; DELGAUDIO, C., Hidrorrefino e Enxofre no Parque de Refino de Petrleo Brasileiro: Evoluo e Perspectivas. Petro&Qumica Magazine 337, 2011. UOP, a Honeywell Company, available at <http://www.uop.com/wp-content/uploads/2010/12/HydrocrackingUnicracking_two_stage-900x4001.jpg>, accesed in May 4th, 2012. WRPR Worldwide Refinery Processing Review Hydrotreating and XTL. Hydrocarbon Publishing Company, second quarter, 2011.