Lube Oil Base Stocks (LOBS) Future Plans For Group II / III

OUT LINE Base Oil production Details of LOBS Processing schemes LOBS quality Basics of LOBS Manufacturing Technologies Details of LOBS Processing schemes Observations & Conclusions

LOBS Quality Present LOBS quality fall under API Group I. Spindle Appearance B&C VI 98-100 100-101 95-97 Pour point C -6 -1 Color, ASTM 0.5 <1.0 <2.5 <3.5 Sulphur, wt% 0.8– 0.9 1.0-1.1 1.2-1.3 1.3-1.4 Saturates, wt% NA @ 67 @ 65 Present LOBS quality fall under API Group I.

LOBS Quality American Petroleum Institute (API) LOBS Categories API Sats Sulfur VI Typical Manufacturing Process I <90% >0.03% 80-119 Solvent Processing II >90% <0.03% 80-119 Hydroprocessing III >90% <0.03% 120+ Wax Isomerisation IV n.a n.a Polyalphaolefins (PAO) V All other Basestocks American Petroleum Institute (API) LOBS Categories

LOBS Quality API specs are not regulatory as in case of automotive fuels, but are set by market & customer requirements. API specs are very broad. What level of API specs the LOBS need to comply with? A refiner may meet the bare minimum saturates as per Group II (90%) and yet may not meet market demand for 99% saturates.

LOBS Quality The refiner with this situation must address many questions. What are the target specs of each product? What are the various technology options available? Product slate (Grades of LOBS & whether wax is a product or not?) Integration of Lube block & Fuel block How doest it affect the over all profitability?

Base oil Manufacturing Technology Crude Source V.I. Upgrading Dewaxing Finishing Base Oil Low pressure Hydrotreating Conventional Solvent Refining Solvent Dewaxing Modern Hydrocracking CatalyticDewaxing Hydrofinishing Hydrofinishing Alternate Hydrocracking Isodewaxing/MSDW Solvent Refining/ Hydrotreating Isodewaxing/MSDW Alternate Hydrofinishing

Base oil Manufacturing Technology Crude Source Base Oil Hydrocracking/Hydrotreating Dewaxing Noble Metal HF Hydrocracking/Hydrotreating High Yield Feed Flexibility Satisfy Fuel & Lubes Demand HCR/HDT boosts V.I. By converting low V.I. components to high V.I. base oils and also by cracking low V.I. components to lower boiling ranges----- Solvent refining simply removes low V.I. Aromatic components

Base oil Manufacturing Technology Crude Source Base Oil Hydrocracking/Hydrotreating Dewaxing Noble Metal HF Isodewaxing(IDW, CLG)/Mobil Selective Dewaxing (MSDW, EMRE) High V.I. Retention resulting in higher overall Yield for Lube train Ability to handle high wax feeds such as Slack wax. IDW/MSDW reduces pour point primarily by Catalytic Wax Isomerization, giving higher overall product Yield and V.I. Than Solvent Dewaxing or conventional Catalytic Dewaxing.

ISODEWAXING Isomerization With Minimum Branching Maintains V. I ISODEWAXING Isomerization With Minimum Branching Maintains V.I. and Lowers Pour Point V.I Melting Point, oC N-Paraffin I-Paraffin r C20 174 164 36.6 -2.5 39.1 C30 156.5 143 66 8.6 57.4 Example of how isomerization can lower pour point, yet maintain high VI

Comparison of Dewaxing Processes Solvent Dewaxing Catalytic Dewaxing IDW/MSDW Wax removal Product Pour Point Yields Dewaxed Product V.I. By – Products Operating costs Physical – Wax Crystallization and filtration -10 to –15 o C Base Case Slack wax Base (100%) Chemical – wax Cracking with shape selective catalyst -10 to –50 o C Same or Lower Generally 5 –10 Numbers Lower Gas, Naphtha 50 –60 % Chemical – wax Isomerization with shape selective catalyst Same or Higher Generally 5 –10 Numbers Higher Gas, Naphtha, Jet, Diesel 55 – 65% Comparison of Dewaxing Processes

Isodewaxing preserves V.I. and viscosity of waxy oil. Product Comparison of Different Dewaxing Processes – Constant Refining Severity IDW/MSDW SDW V.I Waxy V.I. CDW Dewaxed V.I. Dewaxed Viscosity CDW Viscosity Waxy Viscosity SDW IDW/MSDW

ISODEWAXING During the Dewaxing Step, Wax Molecules Are Either Removed, Cracked, or Converted Example: nC20, 174 V.I., Melting Point 37 oC ^^^^^^^^^^^^^^^^^^^^^^^^^ Isodewaxing/MSDW Solvent Dewaxing Conventional Catalytic Dewaxing ^^^^^^^^^^ ^ + ^^ C3 C4, C5, C6 ^^^^^^^^^^^ iC20: 164 V.I., Melting Point –2.5oC Wax Wax Cracked to Light gases & Naphtha Wax Isomerized to Lube Oil Wax separated from Oil

Existing Refinery – Over view Integrated Lube and Fuel complex which operate in tandem Segregated crude/vacuum units which process low sulfur/non lube bearing and lube bearing crudes. Fuel Block Fluid Catalytic Cracking (FCC) Diesel Hydrodesulphuriser Lube Block Extraction units Hydrofinishing units Solvent dewaxing unit

SIMPLIFIED REFINERY- EXISTING C D U 1 SIMPLIFIED REFINERY- EXISTING LPG High Sulfur Crude NAPHTHA CDU 2 DHDS DIESEL Low Sulfur Crude F C GASOLINE VDU 1 SR Naphtha H2 H2 FUELS BLOCK S E U S D U SPINDLE V DU 2 150 N 500N V DU 3 BS LUBE BLOCK IO-100 DAO PDA VR IO-1600

LUBE REFINERY PROCESS UNITS TOBS SEU VDU 150N PG LOBS 500N P DU RCO ( 3 Nos ) 1300N BS IOH IO-100 PDA VTB ASPHALT

Base Oil Processing Scheme- Existing Group I Base Oil Extracts Spindle Raffinate VPS Spindle EXTRACTION NMP S DU Spindle SS-I 150 N Raffinate 150 N SS-II 500 N 500 N Raffinate BS Raffinate BS IO-100 IO-100 SDA IO- 1600 IO -1600 DAO Notes Arab Mix Crude processed in Lube block

VACUUM DISTILLATION UNIT DISTILLATION IS SEPARATION OF PRODUCTS BY DIFFERENCE IN BOILING POINT DISTILLATION OF REDUCED CRUDE OIL UNDER VACUUM SEPARATION UNDER VACCUM TO AVOID DECOMPOSITION OF CRUDE MAIN PRODUCTS ARE VACUUM GAS OIL, DISTILLATES FOR LUBES & VTB. COLOR, VISCOSITY, FLASH POINT OF SIDESTREAMS AND VTB PEN ARE MONITORED.

SOLVENT EXTRACTION UNIT REMOVAL OF AROMATICS FROM DISTILLATE USING NMP AS SOLVENT BY LIQUID - LIQUID EXTRACTION PROCESS . ORIGINALY PHENOL WAS USED AS SOLVENT. IMPROVES VISCOSITY INDEX. IMPROVES COLOR, THERMAL & OXIDATION STABILITY. REDUCES AROMATIC CONTENT

HYDROFINER UNIT FIXED BED CATALYTIC HYDROGENATION PROCESS HYDROGEN IS USED AS TREAT GAS IMPROVES COLOR,COLOUR STABILITY, OXIDATION STABILITY. REDUCES SULPHUR & NITROGEN CONTENT

PROPANE DEWAXING UNIT PHYSICAL SEPARATION PROCESS WAX IS CRYSTALLISED AT LOW TEMPERATURES AND REMOVED BY FILTERING IN ROTARY DRUM FILTERS PROPANE IS USED AS SOLVENT AND AUTOREFRIGERANT. IMPROVES THE POUR POINT OF LUBE OIL BY REMOVING WAX

PROPANE DEASPHALTING UNIT PRODUCES DE ASPHALTED OIL BY REMOVING ASHPHALT FROM VACUUM TOWER BOTTOMS (VTB) ASPHALT REMOVAL CARRIED OUT BY COUNTERCURRENT LIQUID - LIQUID EXTRACTION PROPANE USED AS SOLVENT PRODUCES HIGH QUALITY BRIGHT STOCK OR FEEDSTOCK FOR FCC UNIT AND ASPHALT FROM VTB. DECREASES ASPHALTENE, RESIN, CARBON RESIDUE, SULPHUR AND NITROGEN CONTENT. IMPROVES COLOUR

Existing LOBS Processing scheme Solvent Extraction Units (SEU) + Hydrofinishers + Solvent Dewaxing unit Multiple units (SEU & HF) are provided to allow simultaneous processing of different grades. No wax production is considered. Slack wax is processed in FCC. DAO from SDA is processed in SEU & SDU to produce BS.

Existing LOBS Processing scheme Present quality of LOBS (especially Sulfur & saturates ) are far away from Group II specifications. Existing Hydrofinishers are low pressure (58 bar) and hence are not suitable for meeting Group II specs. Even with deeper extraction level of aromatics & sulfur can not be of Group II quality Production of Group II base oils require some form of hydroprocessing route.

Demand Pattern Demand Pattern Setting Demand Pattern Total make 200,000 TPA 300,000 TPA API category Remarks Base Oil (‘000 TPA) Spindle 15 Group II Saturates >99% 150 N 25 80 500 N 115 160 IO-100 5 Group I/Present IO-1600 BS 35 Total Group II base oils 155 255

Base oil Upgrading scheme -1 Group –II oils 255, 000 TPA Add a New 150 bar Hydrotreater (HDT) to existing scheme. Raffinates from existing SEU are processed in a high pressure hydrotreater. Hydrotreated raffinates are further processed in existing Solvent Dewaxing unit.

Base Oil Upgrading Scheme- 1 Group II Base Oil : 255,000 TPA Distillate to fuel Complex Extracts Spindle Raffinate VPS Spindle EXTRACTION NMP HDT (150 bar) 350,000 S DU Spindle 15,000 SS-I 150 N 80,000 150 N Raffinate SS-II 500 N 160,000 500 N Raffinate BS 35,000 IO-100 5,000 SDA IO-100 IO -1600 5,000 IO- 1600 DAO Notes Arab Mix Crude processed in Lube block 2) VI of 500N 104

Base oil Upgrading scheme -1 Group –II oils 255, 000 TPA Findings of the scheme. Advantages: Base oils meet all the bare minimum Group II specs. Aromatic levels in base oils, especially 500 N will be around 10%. (disadvantage?) Aromatics in 150 N will be around 5% (disadvantage?)

Base oil Upgrading scheme -1 Group –II oils 255, 000 TPA Findings of the scheme. Disadvantages: Yield loss (for 500 N) from HDT is significant, for the same LOBS production, raffinate feed reqmt is more and hence higher HDT unit capacity. Higher capital cost because of higher HDT capacity

Base oil Upgrading scheme -2 Group –II oils 255, 000 TPA Add a New 150 bar Hydrotreater (HDT) + New Hydroisomerisation (HDW) unit to existing scheme. Raffinates from existing SEU are processed in a high pressure hydrotreater. Hydrotreated raffinates are further processed a new Hydroisomerisation unit. Other Base oils are processed in conventional route.

Base Oil Upgrading Scheme- 2 Group-II Base Oils : 255,000 TPA Distillate to fuel Complex Extracts Spindle Raffinate VPS EXTRACTION NMP HDT (150 bar) 289000 HYDRO ISOM/ HYF Spindle Spindle 15,000 SS-I 150 N Raffinate 150 N 80,000 SS-II 500 N Raffinate 500 N 160,000 SDA BS BS 35,000 SDU IO-100 IO-100 5,000 DAO IO- 1600 IO- 1600 5000 Notes Arab Mix Crude processed in Lube block 2) VI of 500N 104

Base oil Upgrading scheme -2 Group –II oils 255, 000 TPA Add a New 150 bar Hydrotreater (HDT) + New Hydroisomerisation unit to existing scheme. Hydroisomerisation catalyst is noble metal catalyst and can tolerate low levels of Nitrogen & other contaminants Hydrotreater prepares the feed for this unit. Hydroisomerisation unit upgrades this feed by converting wax to high value VI base oils. Hydrofinishing step is included in this scheme.

Base oil Upgrading scheme -2 Group –II oils 255, 000 TPA Findings of the scheme. Advantages: Base oils meet or exceed all Group II specs. Aromatic levels in base oils < 1 % Yield loss in HDT compensated in HDW unit. Lower raffinate feed reqmt less than scheme-1. Lower raffinate feed reqmt increases the feed to FCC unit.

Base oil Upgrading scheme -2 Group –II oils 255, 000 TPA Findings of the scheme. Advantages: The pressure levels of HDT & HDW can be kept same to facilitate integrated operation and both units will have a single recycle loop. Lower capital cost than scheme-1. Provides flexibility for staged investment. Implement scheme-1 and at a later stage integrate HDT with HDW.

Base oil Upgrading scheme -2 Group –II oils 255, 000 TPA Findings of the scheme. Disadvantages: Destroys wax. In this particular case, wax is not a product.

Base oil Upgrading scheme -3 Group –II oils 255, 000 TPA Add a New 150 bar Hydrotreater (HDT) + New Hydroisomerisation (HDW) unit for slack wax Raffinates from existing SEU are processed in a high pressure hydrotreater. Slack wax from SDU is processed in a new Hydroisomerisation unit. Other Base oils are produced in conventional route.

Base Oil Upgrading Scheme- 3 Group II Base Oil : 255,000 TPA Distillate to fuel Complex Extracts Spindle Raffinate VPS Spindle EXTRACTION NMP HDT (150 bar) 350,000 S DU Spindle 15,000 SS-I 150 N 80,000 150 N Raffinate SS-II 500 N 160,000 500 N Raffinate BS 35,000 IO-100 5,000 IO-100 SDA IO -1600 5,000 IO- 1600 DAO Slack wax 100,000 HDW/HF Notes 150 N 70,000 Arab Mix Crude processed in Lube block Group III 2) VI of 500N 104

Base oil Upgrading scheme -3 Group –II oils 255, 000 TPA Findings of the scheme. Advantages: Base oils from SDU meet bare minimum Group II specs. Slack wax processed in HDW produces 150 N of Group III. Maximum utilization of SDU capacity Option for staged investment.

Base oil Upgrading scheme - 3 Group –II oils 255, 000 TPA Findings of the scheme. Disadvantages: Aromatic levels in 500 N will be around 10%. Higher capital cost because of high RHT unit capacities & wax Isomerisation unit.

Base oil Upgrading scheme -4 Group –II oils 255, 000 TPA New Hydrocracker + New Hydroisomerisation All side streams from VDU are routed to Lube hydrocracker (LHCU). The waxy streams from LHCU processed in HDW. LHCU also produces hydrocracked VGO (non-lube material) which is routed to FCC.

Base Oil Upgrading Scheme- 4 Group II Base Oil : 255,000 TPA 360ºC & lighter Light Feed Heavy <360ºC Lube Hydrocracker Blocked Operation 1340,000 TPA 290,000 TPA HDW Diesel Spindle Oil Spindle Streams 150 N Waxy 150N 500N VDU Side Streams Waxy 500N Heavy Feed Hydrocracker DS VGO 0.005% Sulfur FCCU 870,000 Notes Arab Mix Crude processed 2) VI of 500N > 120

Base oil Upgrading scheme -4 Group –II oils 255, 000 TPA Findings of the scheme. Advantages: Flexibility to process higher volumes of high sulfur crudes. Greatest crude flexibility. Base oils exceed Group II quality. FCC feed quality has significantly improved which results in high yields of value distillates such as LPG, gasoline. Quality of FCC products w.r.t sulfur significantly improves.

Base oil Upgrading scheme - 4 Group –II oils 255, 000 TPA Findings of the scheme. Disadvantages: High Hydrogen consumptions and hence additional hydrogen plant required. Existing Lube processing facilities become redundant. Highest capital costs.

Utilization of Existing Lube processing facilities Existing 60 bar Hydrofinishers. The pressure levels of HDT & HDW are around 150 bar. Existing HF can not be used because the product quality as measured by aromatics and color would actually degrade by using these HF Existing Solvent Dewaxing Unit: In scheme-2 only BS & IO’S are processed in SDU. This results in underutilization of SDU. Reduce the 500 N Group II requirements. Utilize the existing scheme to produce 500 N, BS & IOs of Group I quality. This will allow the refiner the greatest flexibility to produce Group I as well as Group II depending on market demand.

Integration of Hydroprocessing and Solvent Extraction Hydroprocessing can be Integrated with Solvent Extraction plants to improve product Quality/Yield & flexibility to make Group II/III Oils SEU SDW HF Group I Slack Wax/Soft Wax Raffinate Group III HDT Hydro ISOM HDF Group II

Base Oil Upgrading Scheme- 5 Group-II Base Oils : 155,000 TPA Distillate to fuel Complex Extracts Addl feed to FCC Spindle Raffinate VPS EXTRACTION NMP HDT (150 bar) 176000 HYDRO ISOM/ HYF Spindle 150 N 25,000 SS-I 150 N Raffinate Spindle 15,000 SS-II 500 N Raffinate 500 N 115,000 SDA BS Raffinate BS 35,000 SDU IO-100 DAO IO-100 5,000 IO- 1600 IO- 1600 5000 Notes Arab Mix Crude processed in Lube block 2) VI of 500N 104

Observations & Conclusions If an Extraction unit is present, it is more economical to produce Group II LOBS via raffinate HDT route. Staged investment is an option for the refiner. In the first phase HDT can be considered and at a later stage Hydro Isom can be added.

Observations & Conclusions Quantity of 500 N affects the over all economics. Since the trend is to move towards lighter viscosity grades, refiner has to judiciously decide the break up of Group I & Group II. Consider VI of LOBS (especially 500 N with in Group II). Increasing the VI beyond Group II requirements will reduce the yields, increase the capital investments and hence not economical. While revamping the FCC unit, consider additional feed in FCC unit, keeping in view the fluctuating demand of LOBS.

Observations & Conclusions Can LOBS quality improvement alone justify investment? This is a difficult question to answer. With 255,000 TPA of Group II LOBS, revenues are better but these do not give better IRR because of higher capital costs & impact on Fuel block products. With 155,000 of Group II LOBS, IRR could be better. Thus each refiner should evaluate the economics based on target LOBS production. While maximizing LOBS production, consider maximizing value added products such as LPG from FCC etc. to improve over all refinery profitability.

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