Interview article by Cuckoo James
BARCELONA (ICIS)--Tailoring fluid catalytic crackers (FCC) to produce more propylene and diesel could lift low European refinery margins, a senior executive at UOP said on Wednesday.
“On an FCC you can make propylene as well as gasoline by running at a higher severity. The usual problem is you have to manage the increased quantity of co-products such as butene or pentenes ” said Nigel Orchard, UOP general manager, Europe, Africa and CIS, in an interview with ICIS on the sidelines of the 8th annual Global Refining Summit in Barcelona.
In an FCC - primarily used in producing additional gasoline in the refining process - the butane and lighter hydrocarbons are processed further to separate them into fuel gas - mostly methane and ethane - propane, propylene, butane, and butane for end-markets or for further processing.
"We are developing a technology to help the FCC make more propylene at the same time as making diesel by converting light olefins to diesel," he added.
In effect, refineries will have the option to use new technologies at their FCC units to correct the imbalance between market demand for diesel and gasoline, whilst producing more propylene.
Propylene supply has been tight in Europe in recent times, which makes it an interesting market for refiners keen to increase profit margins while simultaneously producing high-demand transport fuels.
Europe is net short on diesel and is currently importing to meet its increasing demand.
Orchard says the closure of European refineries has outpaced European growth in diesel demand, increasing the opportunities for diesel importers, especially from the commonwealth of independent states (CIS) and the Middle East, and more recently the US.
"There will be some diesel coming from the US but it is nowhere near CIS and Middle East imports into Europe," he added.
When asked about the European petrochemical industry he added, "It is going to have a tough time because of higher feedstock cost versus the US and the Middle East."
The impact of US shale gas on Europe will be "only to the extent shale gas liquids or NGLs [natural gas liquids] get shifted to Europe. Already ethane is being contracted into Europe," he said.
"Also, downstream petrochemical products such as polymers made using the NGLs can be imported from the US," Orchard added.
"These products based on US NGLs would be cheaper in the same way Middle East products are cheaper. The shale gas impact on petrochemicals would be the same as shale gas impact on oil products."
The senior executive at the technology firm, which provides technology solutions to the refining industry, said it was not aware of any shift in LPG production versus naphtha among European refiners.
"LPG production is pretty much involuntary except for FCCs. The amount of LPG that is made is fixed by the crude type and by the severity of conversion processes. The higher the severity, the more LPG you produce," he said.
Production of naphtha on the other hand is about making a choice between gasoline and naphtha, he said. "It is driven by the markets. Naphtha margins today are weak but nor is it very profitable to make gasoline," he said.
However, refineries are committed to making gasoline for technical reasons, Orchard said: "The problem is that refiners have to run their reformers to produce gasoline in order to make enough hydrogen."