Transcript LCRC OWNERSHIP

A Quick Lesson On Crude Oil
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Crude oil is composed of thousands of different chemical
compounds, all with different boiling points.
A typical crude oil may begin to boil ~150°F; at 1000°F
there is still crude oil which has not boiled.
Crude oil is generally described as being light/heavy or
sweet/sour.
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There are no strict definitions describing these measures.
In general a heavy crude is <25°API while a light crude is >30°API.
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API is an index which is a relative measure of weight; the lower the
number the heavier the material.
In general sour crude has more than 2% sulfur, while sweet has
less than 0.5%.
The majority of Venezuelan oil is heavy and sour.
Value Creation At The Refineries
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Refineries add value in two primary ways:
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Separating oil into its more valuable components
 The
primary process is fractionation.
 Another
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widely used process is extraction.
Chemically reacting the components to create more
valuable products
 Primary
examples are:
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Hydrodesulfurization
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Reforming
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Cat Cracking
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Coking
Separation Processes
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Most refinery equipment is for separation, which
exploits the chemical differences of the compounds
in crude oil.
Separation Processes
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Fractionation (atmospheric and vacuum) takes
advantage of the fact that different compounds have
different boiling points.
Extraction takes advantage of the solubility of different
compounds for a solvent.
Other separation processes (less common):
crystallization, etc.
The Refining Process
Atmospheric Fractionation
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The crude oil is heated to over 700°F at
atmospheric pressure.
The smaller/lighter compounds come out of
the top, the heaviest out of the bottom.
For CITGO’s complex refineries, the products
are further processed in the refinery:
 Butane and lighter are further processed.
 Propane is recovered and sold.
 Butane is blended to gasoline during the
winter.
 Naphtha is sent to the Reformers.
 Kerosene & light gas oil are hydrotreated
and blended turbine & diesel respectively.
 Heavy gas oil is sent to the Cat Crackers.
 Straight run resid is further processed in
the Vacuum Units.
Vacuum Fractionation
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Further processing of straight run resid (50% of the yield) in the
atmospheric unit would tend to crack it and form coke at elevated
temperatures.
Since boiling points are reduced as pressure decreases, we can boil the
atmospheric residue in a vacuum at temperatures low enough to
prevent cracking and coking.
The vacuum unit separates about half its feed into vacuum gas oil,
which is further processed at the Cat Cracker. The residue (“bottom of
the barrel”) is sent to the Coking Unit for further processing.
Extraction
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CITGO’’s main uses of extraction: petrochemicals and lubricants.
Oil and water are not mutually soluble. Likewise, certain solvents
dissolve different oil compounds better than in the original oil.
Taking advantage of this allows us to separate aromatics from
reformates and lube base oils and waxes from vacuum gas oils.
Chemical Reactions
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The value addition so far has only come through the
separation of the molecules created by nature.
Changing the chemical composition of the crude oil
is the main source of value addition in the refining
business.
Numerous catalysts are used throughout the refining
process to facilitate the chemical reactions.
Crude oil itself will yield only ~30-40% of
gasoline/diesel fuels.
When our refineries are finished processing the oil,
we are able to yield ~90% as gasoline/diesel fuels.
Chemical Reactions
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Reforming changes the molecular structure of naphtha to
produce reformate (a primary gasoline blending stock).
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Fluid catalytic cracking mixes vacuum gas oil with a
catalyst at temperatures over 1000°f, promoting numerous
chemical reactions. By breaking long molecules down into
shorter ones (“cracking”), over 75% of the feed is
converted to more valuable gasoline and lighter products.
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Cokers process vacuum resid, which is heated to over 900°f
and put into the coke drums, where it undergoes thermal
cracking as the oil decomposes under the extreme heat.
Products include butanes and lighter, naphtha for the
Reformers, turbine and diesel fuel, gas oil for the Cat
Crackers, and petroleum coke, which is sold as a fuel.
Chemical Reactions
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Alkylation combines small molecules into larger ones to
create alkylate, a high-octane gasoline component.
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Hydrocracking also converts big molecules to smaller ones,
but can process a much wider range of feedstocks.
Expensive to operate, but very flexible. Operarions can be
tailored to suit economic oportunities.
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Hydrotreating removes impurities (primarily sulfur and
nitrogen) by combining hydrogen with refined products
over special catalysts at high temperatures.
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Sulfur recovery converts H2S from the coking, cracking
and hydrotreating processes and converts it to pure sulfur
for sale.
Putting It All Together
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The simplest refineries generally consist of crude,
vacuum, reforming and some hydrotreating capacity.
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If a refinery such as this would process heavy sour
crudes, it would at best be able to produce ~35% of
finished gasoline, turbine and diesel. The majority of
the balance would be vacuum gas oil and asphalt type
material.
These refineries, therefore, are usually limited to light,
sweet crudes.
Most of these refineries have already ceased operations
due to poor profitability. The remaining refineries of
similar configuration are usually operating in a niche.
Putting It All Together
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The next level of complexity adds cat crackers and
some additional hydrotreating.
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If a refinery like this processed heavy, sour crude, it
would at best be able to produce ~65% of finished
gasoline, turbine and diesel, with the majority of the
balance being asphalt type material.
These refineries, therefore, usually process lighter sweet
crudes. However, they can process heavy sour if they
can obtain a secure outlet for the large volumes of
asphalt they produce
Putting It All Together
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The most complex refineries add cokers, more
hydrotreating and possibly hydrocracking.
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Refineries like this can process heavy sour crude with
the capability of yielding ~85% as finished gasoline,
turbine and diesel. Petroleum coke and petrochemicals
make up most of the balance