Hydrocarbon Processing - June 2021 - 33

Special Focus Process Optimization
J. CHRISTIANSON and V. SCALCO,
General Atomics, San Diego, California
Separating from the competition:
Recovering profits after the pandemic
As recovery from the COVID-19 pandemic begins, so will a
return to normal life. However, fuel and petrochemical demand
may never return to normal. Shelter-in-place orders have devastated
global demand, and climate change policies are designed
to maintain lower demand. In this ever-changing world, refiners
must target profit improvements.
At the beginning of 2020, the refining industry anticipated a
year of profitability, with projects anticipated to support refinery
expansions, upgrades and new grassroot efforts. The global
COVID-19 pandemic introduced an unseen assailant on the industry
worldwide, with its effect on oil and gas production still
reverberating throughout the refining community.
The pandemic shockwave. Even though global oil prices
closed at previous-year averages of $51/bbl, 2020 remained
a year of volatility spurred on by countries adopting climate
change policies to limit carbon emissions, and by the growing
global pandemic crisis. Starting in mid-2020, the refining industry
desperately tried to reinvent itself as the pandemic destroyed
fuel demand, exposing an unforeseen future reality of a world
operating with a much lower hydrocarbon dependency. That
reality portends a high probability that, in the coming years,
hydrocarbon production could remain weak as recovery efforts
from the pandemic begin to take hold.1
Therefore, to survive this volatility, the modern refinery
must increase opportunities to remain profitable. Reducing lost
profits from the refinery process and investing in more efficient
technologies that improve profitability are of utmost urgency as
the industry moves into post-virus stability.
Even before the events of 2020, a major topic of concern was
the impending implementation of the International Maritime
Organization's (IMO's) 2020 sulfur cap regulation, a marine
fuel regulation mandating the reduction of sulfur content in
marine fuels to a maximum of 0.5% and total ash content below
60 ppm. Although the IMO 2020 regulation was not fully enforceable
because of the global pandemic, it has had an impact
on refiners who are no longer working at peak capacity-and
who are unable to make the investment in fuel oil and/or have
been forced to close their facilities altogether.
During the post-pandemic shift, it is important that refiners
evaluate key technologies to become more sustainable,
target new market opportunities, and reduce operating costs
to ensure that lost revenue can be obtained by the most efficient
processes. The lack of refined product demand, coupled
with refineries operating significantly below peak capacity, is
delaying turnaround periods and postponing planned facility
upgrade activities. Delaying these projects directly affects future
profits and operating growth, particularly if key enabling
technology improvements have been neglected because of the
pandemic.1
The transition began before the pandemic. Saudi Arabia's
decision to cut oil production and postpone expansion projects
into 2021 reflects expectations for demand to weaken further as
business operations across the globe continue to be impacted by
the pandemic crisis. Reducing waste and stabilizing profits from
key refining assets are paramount and are the only actualities
that can support growth in 2021.2
In addition to a buildup in primary distillation capacity, AsiaPacific
refiners invested heavily in catalytic cracking, hydrocracking
and petrochemical production. It is apparent that the growth
in petrochemicals and the utilization of refined products will
support profitability in the post-pandemic Asia-Pacific market.
National oil companies in China and India are revisiting plans to
expand refining capacities from earlier mandates prior to the outbreak.
Conversely, Japanese refiners appear to be heading into a
second round of capacity reductions.3
Overall, the long-term transition from fuel to petrochemicals
appears to be the right direction for the market to take to remain
strong. The route for middle distillate conversion to chemicals
with existing technologies is challenging, and technology improvements
are required to support this transition. Long-term
demand and uncertainty concerning middle distillates have
added to this issue. This long-term drive for petrochemicals
will increase the use of catalytic cracking, resulting in increased
slurry production and lost revenue if not addressed by applying
the right separation technologies.
Dynamic demand on the reactors. The first commercial fluidized
catalytic cracker (FCC) was introduced 70 yr ago. To keep
FCC technology evolving and current, a continuous string of
mechanical and catalyst improvements have been implemented
to respond to factors, such as the degradation in feedstocks and
the need for product quality improvement, and to other factors,
including petrochemical drivers and environmental pressures. In
many cases, improved catalysts have led to innovation, such as the
advent of zeolites, which has also led to the implementation of
riser cracking. Catalyst advances have also led to improved selecHydrocarbon
Processing | JUNE 2021 33
Hydrocarbon Processing - June 2021

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