麻豆传媒

The economic outlook for refineries across the regions remains uncertain.¹ Amidst navigating difficult macroeconomic trends, what day-to-day considerations should refinery operators be making to emerge resilient as the market rebounds?

To learn about the current challenges and future outlook for refineries in North and South America, we spoke to three of our experts in refining technology licensing.

• Pankaj Desai is director of strategic accounts licensing and services for U.S. and Caribbean-based accounts, with four decades鈥� experience in the oil and energy industry.
• Ward Koester is hydroprocessing licensing technology manager for the Americas with over 30 years鈥� experience in the oil and gas industry. He has worked with Shell since 2006 on catalyst and refinery revamp projects across North America.
• Patricia Scozzafave is director of strategic accounts licensing and services with a focus on Brazil. Her experience includes catalysts sales and technology licensing and services.

What challenges and responses are you seeing from refineries in your region?

Pankaj Desai: U.S.-based refiners are seeing a reduction in their cash flow, so many capex projects have been delayed. They are mainly focusing on projects that are necessary for operations, such as catalyst changes.

Some refiners are showing interest in alternative fuels, for example biodiesel, and reducing the CO₂ footprint. There are mandates for refiners to tap into biofuels and co-processing, which are necessary for a license to operate.

Patricia Scozzafave: Most of my customers have seen a huge decrease in demand. They are looking to see what kinds of products they can get better margin for and how they can optimise operations and reduce costs.

Refineries with better flexibility have been more successful, as they鈥檝e been better able to adapt to this low-demand period. They are able to produce a different type of fuel, like low-sulphur bunker, that will give them the margin they need to keep profitable or to process more opportunistic crudes.

Most of our customers are prioritising cash preservation and postponing capex intensive projects. In addition, a few countries in Latin America are progressing towards clean fuels production.

Ward Koester: We鈥檙e focusing on what we refer to as 鈥渟weating the assets,鈥� where we go in and see what we can do with the existing refinery kit that is less costly than greenfield construction.

We鈥檙e working on smaller, lower capital projects, like debottlenecking studies on existing assets for capacity increase or revamping existing units to process higher margin feeds, because customers now are focused on cash preservation.

They鈥檙e looking at things like lowering costs by lengthening the cycles in their units and having fewer turnarounds. They鈥檙e interested in reliability projects, things like wash water studies to look at corrosion improvement and energy optimisation studies to improve the energy efficiency of their sites.

Discover: 

What kinds of low capex projects would you recommend during this time period?

Patricia Scozzafave: Refineries still have to do catalyst change outs, and catalyst is usually one of the biggest operating costs in a refinery. Having reactor internals that perform well can help to extend the catalyst life, reduce turn-around costs and increase safety.

As mentioned, some countries in Latin America are moving to clean fuels, and diesel hydrotreating unit (DHT) revamps that are cost effective, such as changing to state-of-the-art catalyst and reactor internals, could be an alternative to improve fuel specifications. 

I think that the type of projects we will see moving forward will shift. We will see more projects focused on 鈥渟weating the assets,鈥� unit revamps and optimisation projects such as increasing energy efficiency that will help to reduce both emissions and costs.

Pankaj Desai: Changing reactor internals can optimise a unit in multiple ways, such as increasing catalyst cycle length as well as processing more throughput or heavier crudes to increase product quality.

Fluid catalytic cracking (FCC) units, which produce gasoline, are important for refineries in the U.S. and Brazil. For an FCC unit, we work with the refiner ahead of the turnaround time to create a feasibility study on what change outs will bring the most value.

We baseline their current operation with our models and duplicate the product quality, quantity and unit operations that they currently have. Then we go through the optimisation process by replacing the existing hardware with hardware designs licensed by Shell, and make a list of the potential economic benefits, from which the refiner will consider and choose. These are low capex solutions compared to a full refinery revamp project.

Learn more about refinery equipment & hardware

Ward Koester: Debottleneck studies can show refiners how to increase the capacity of a unit within the bounds of existing infrastructure, so major modifications aren鈥檛 needed. These small unit upgrades are ones that can pay back quickly with minimal cost or effort.

鈥淢olecule management,鈥� is making sure the right feeds are going to the right unit. For instance, we had a situation where the customer wanted to process more coker gasoil in a DHT. We showed them how they could reconfigure and then revamp the existing unit to enable greater quench capability to enable this change, which resulted in a more profitable DHT operation.

In the current economic environment, we have also helped customers determine how to minimise their jet fuel production. There are ways to optimise the fractionation and severity of the conversion units to move jet fuel molecules up into the heavy naphtha space, or drop it down into the diesel.

How can a refinery revamp or upgrade project during this downturn be applicable in the next five to ten years?

Ward Koester: Changes refiners make now could translate to future improvements. For example, with the new IMO 2020 regulations implemented at the start of this year, in order to reduce their exposure to a diminishing high-sulphur fuel oil market, refiners are looking to invest in cokers, gasifiers and other high-capital upgrades.²

If they took on smaller projects now, like hydrogen purification to extend the cycle life of their existing hydroprocessing units, it could enable a staged investment strategy toward the installation of higher-conversion projects later.

Beyond just improvement of existing refinery assets, there鈥檚 a big push now around reducing the carbon footprint from operation of these assets. There鈥檚 growing interest around the question of what to do with the CO₂ that鈥檚 produced, and we can offer solutions that handle the CO₂ that鈥檚 generated through application of our carbon capture technologies.

Explore: Shell CANSOLV庐 CO₂ capture system

Pankaj Desai: Refiners have certainly become more conscious of the environment and many are working towards carbon neutral emissions. New technologies will be required, and I expect to see growth of new technologies in that area, such as biodiesel.

Looking at the U.S. from a macro level, I think the commute for many traditional office workers has been permanently disrupted. So, in the long term, I don鈥檛 expect the demand for gasoline to go back to where it was prior to this situation. Diesel is consumed mostly in the heavy trucks that carry goods from coast to coast, so that will likely continue.

Patricia Scozzafave: We see a growing interest in CO₂ emission reduction and energy transition. The pace of this discussion may be different in each country, but this will come. Technologies that mitigate emissions and support better energy efficiency could be an interesting option.

1 _{https://www.eia.gov/outlooks/steo/pdf/steo_text.pdf}

2 _{http://www.imo.org/en/MediaCentre/HotTopics/Pages/Sulphur-2020.aspx}