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Multi-Client Strategic Report

Publication date:January 2017
Item#: C01600

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Crude management and flexible operations to meet changing crudes and shifting product slate

Proposed production cut of 1.8MM b/d by OPEC and non-OPEC producers effective Jan. 1, 2017 has apparently halted the slide of oil prices since mid-2014. However, there are uncertainty and skepticism in the market because of various factors such as potential cheating by some producers, the cut agreement only good for six months, overall global economy potentially impacted by Brexit and new US administration under Donald J. Trump, rising US interest rate and strengthening of the dollar, well-being of Chinese and other emerging economies, and so on. Therefore, price volatility will remain in 2017. As a result, refinery oil traders and buyers will continue to favor spot purchases as in the last two years. The rewards from shopping for relatively cheaper oil on the spot market are there, but changing crude types more frequently and increased blending of different crudes pose challenges for refineries. The problems go beyond crude-refinery mismatch as "improper" blending of light and heavy grades to make look-alike crudes will create feedstocks with dumbbell qualities and generate undesirable product mix. Also, the changing and blending of crudes could lead to equipment failures, poor catalyst performance, unit shutdowns, and safety issues.

This very timely study is written for refiners, oil traders and buyers, and technology vendors. It is divided into three main sections to address challenges of changing crudes and shifting product slate.

Crude Management

The choice of crudes greatly affects a refinery's profitability because crude purchases cover as much as 80% of a refinery's operating expenses. Therefore, sourcing inexpensive crudes is the most paramount refining strategy in achieving good margins and sustaining business. However, it is vital for refiners to consider also any characteristics that might make particular oil more difficult to process, significantly change the product slate, or increase refinery emissions, particularly GHG emissions. Optimized crude blending can help minimize incompatibility problems, stabilize process operations, and improve product quality.

Resolving Crude-Refinery Mismatch in Processing Unconventional Oil

The ongoing volatility in crude prices is playing a major role in dictating which crudes are cheapest and/or most accessible to refiners around the world, with a number of refiners expressing greater interest in sourcing crudes from the spot market in order to obtain the best price. So-called "opportunity crudes" (sometimes interchanged with "unconventional oil") are priced at a discount to conventional grades. Because of the unique properties of the opportunity crudes, refiners with conventional processing units face crude-refinery mismatch problems and are required to revamp exiting facilities or/and acquire different technologies in order to convert the feedstocks into desirable products. This Report presents two separate sections: bottom-of-the-barrel upgrading and tight oil processing.

Conventional Oil Processing to Make Products in Demand

In addition of increased crude changes, low crude prices have also brought forth fuel demand shift. Lower retail prices have boosted gasoline sales worldwide. Meanwhile, the dieselization trend is not expected to happen soon for several reasons including ban of use in certain big cities and advancement of fuel-efficient hybrid vehicles. Now, the question is "Should a refiner focus on light distillates or middle distillates?" The answer may be both. This Report focuses on the latest advancements of major processing units—FCC, hydrocracking, hydrotreating, catalytic reforming, isomerization, and alkylation—in allowing refiners to maximize throughput and produce high quality fuels and petrochemical feedstocks to meet market demand.

Who Can Benefit from this Report?

The answer is anyone working in the refining industry because thriving in an environment of changing crudes requires proper decision making to determine how best to take advantage of the cheap and diverse crude oils available to a given facility. Generally, refiners can decide between purchasing a different conventional crude, transitioning to an unconventional crude (i.e. LTO, Canadian oilsands, Venezuelan tarsand), or employing a cheap blend (e.g. heavy oil, acidic/high TAN oil) to form a "look-alike crude" that matches certain desired properties. The key is to make right decisions when choosing the preferred crude oil or blend. The Report provides detailed discussions of every step of the decision process so that clients have the most up-to-date technology information and options in dealing with conventional and unconventional crudes. Furthermore, the Strategic Analyses and Recommendations provide in-depth analyses based on various refinery configurations (such as a refinery with resid upgrading, a refinery without resid upgrading, a gasoline-centric refinery, and a diesel-centric refinery) and product slates using different crudes.

Pricing Information

Individual Use Multiple Users/Library/Site license
Subscription Type Electronic version Print version Others Contact for pricing
Pricing (US $) pre-publication $6,500.00

This Report is sold for the exclusive use of the subscribing companies and their employees. No other use duplications, storage in a retrieval system, transcriptions in any form or in any language or by any means of this Report or any part contained therein is permitted without written consent from Hydrocarbon Publishing Company, P.O. Box815, Paoli PA 19301-0815 (USA).

petroleum refining, oil price volatility, oil market rout, spot purchases, oil trading, unconventional oil, conventional oil, opportunity crudes, shale oil, light tight oil (LTO), look-alike crudes, dumbbell oil, fouling, corrosion, incompatibility, changing crudes, product demand shift, crude management, crude blending, bottom-of-the-barrel upgrading, tight oil processing, high TAN oil, FCC, hydrotreating, hydrocracking, alkylation, catalytic reforming, isomerization, coking, visbreaking, resid hydrocracking