© 2018 UOP LLC. A Honeyw ell Company All rights reserved.

Heavy Oil Upgrading Strategies for Improved Refinery Economics

Honeywell UOP Uniflex™ Technology

Gary R. Brierley │ Honeywell UOP

UOP 8230A-0

MARPOL Annex Will have Worldwide Effects on High Sulphur Fuel Oil (HSFO) Demand and Price

1

• Significantly reduced HSFO

use for bunkering as a result

of new regulations

• Surplus residue expected

after residue conversion

and power generation usage

• Will significantly impact

product price differentials

in 2020

• HSFO expected to be priced

at significant discount after

2020 compared with 2016

(~40% lower)

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

30.00

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2040

Ultra-low sulfur diesel LS Bunker (0.5 % S)

ECA MGO (0.1 % S) Gasoil 0.1% sulfur

Residual fuel oil 1% Residual fuel oil 3.5%

Product Price, $/BBL

Price Recovery

Assumes Ships Will

Install Scrubbers

UOP 8230A-1

Refinery Options to Upgrade HS Fuel

2

Conversion Options

• Slurry bed process such as Uniflex™

process‒ Good payback

• Ebullated bed process‒ Limited

conversion

• Delayed coking process

‒ Similar capex. Lower payback.

Treating Options

• Desulphurise HS bunkers with process

such as RCD Unionfining™ process

‒ Limited product value uplift

• Process VR in

new SDA and desulphurise DAO

‒ Lowest capex,

but still makes

some HSFO

UNIFLEX

Uniflex Units Give Highest NPV Based On Our Analysis

Uniflex Performance with Integrated Distillate Unionfining™ Unit

3

95% conversion : Higher conversion comparable to other residue conversion processes

Euro V Diesel : Highest yield of diesel compared to other slurry processes

Minimum VGO : Can be accommodated in existing conversion units

Naphtha : < 1 wppm S and N

Pitch: : Cement Plant, Gasification Unit, Boiler/Kiln, or solidified into pellets

UNIFLEX UNIT(Wt-%)

100

12-15

55-60

8-10

Vacuum

Residue Feed

Naphtha

Diesel

VGO to HCU feed

Catalyst

H2S, NH3

Gas, LPG

PitchH2

Hydrotreated in

Integrated DHT

4 - 6

1-4

8-11

UOP 8230A-3

UOP Uniflex Unit Including Integrated Hydrotreater

Integrated Hydrotreater Significantly Minimizes the Number of Pieces of Equipment, therefore Capex is Reduced. External Diesel Streams

Could be Hydrotreated to Euro 5

4

Uniflex

Fractionation

SectionCLPS

UniflexReactor

FeedHeater

Recycle Gas

Heater

DHTHeater

HydrotreatingReactor

ExternalFeeds

To DHTFractionation

SectionRecycle HVGO fromUniflex Fractionation

Section

CHPS

WHPS

VacuumResidue

Feed

Make-upHydrogen

Catalyst

WLPS

HLPS

HHPS

WLPS

ExternalDiesel

Petro-Canada Montreal CANMET Unit

• 15 years of operation

• Achieved 95% conversion

• Processed many vacuum residues

• Also processed

– VGO

– Visbroken VR

– FCC Slurry Oil

• Long term operational learning curve resulted in 97%+ availability

5

UOP 8230A-5

Uniflex Process - Continuous ImprovementBased on Voice of the Customer

6

Uniflex Process Continuous

Improvement

• High conversion to valued products

• Process design for sustained operability and reliability

• Economically efficient catalyst systems, and manufacturing capability

• Economically advantaged disposition for all products

• Robust feed and product characterization

• New catalyst innovations

• Process enhancements

Uniflex MC - Further Improvements to a Commercially Proven Process

Molybdenum-based MicroCat™ CatalystKey Enabling Technology

7

Feed

Makeup

H2

Recycle from

FractionationMicroCat Catalyst

Preparation Section

• Moly on a carbonaceous base

• High-activity catalyst allows for smaller reactors

• No proprietary catalyst purchases

‒ Produced at the refinery from raw materials readily available on the open market

• Low injection rate required

UOP 8230A-7

• Higher single-train capacity

• Reduced reactor size

‒ Closer to true plug flow

• Improved yields

‒ Product disengagement

• Staged conversion

– Lower conversion per stage

– Optimize yields and stability

by controlling conversion in

each reactor

Two Reactors in Series:Enhanced Reliability and Performance

8

Feed

Makeup

H2

Recycle from

Fractionation

MicroCat Catalyst

Preparation Section

UOP 8230A-8

• Reduced recycle gas rates

‒ Liquid recycle mixing

• Reduced utilities

‒ Lower heater duty, use heat of reaction

• Operates in non-foaming regime

‒ No anti-foam required

‒ No Si in products

• Carries solids out of reactor

External Reactor Circulation: Low Conversion per Pass, Improved Yields

9

Feed

Makeup

H2

Recycle from

Fractionation

MicroCat Catalyst

Preparation Section

UOP 8230A-9

Maximise High Value Products

Heavy Product and Bottoms Recycle

• Active catalyst recycled to 2nd

reactor

• Improved Stability

– No precipitation

– Staged aromaticity

• Selective conversion of heavy product

• HVGO used in process and recycled to extinction

10

• Removes metals, mesophase, beta resins from unconverted pitch

• Individual process steps well proven

• Dried solids to metals recovery

• Recovered liquid to fuel oil or recycled to reactors

• Attractive option if environmental regulations prohibit burning the pitch

Solids Removal Enables Conversion up to 98%

11

Recycle H2

Naphtha

Diesel

C4-

LVGO

Flash Gas

Diesel

Solids

Recovery

UOP 8230A-11

Next Generation Uniflex MC

12

no net HVGOFeed

Microcat Catalyst

Preparation Section

Recycle H2

Naphtha

Diesel

C4-Makeup

H2

LVGO

VTB & Slop Wax Recycle

Flash Gas

Diesel

Solids

Recovery

HVGO

VR

Matrix

CatalystMade by

refiner on site

NoQuench or Anti-foam

2 Reactorsw Interstage Sep

Pump-Around

No Heater

UOP 8230A-12

Typical Uniflex MC Yields – Solids Recovery

98% Effective Conversion

13

UNIFLEX

UNIT(Wt-%)

8

56

2

12

Vacuum

Residue

Feed

L Naphtha

Diesel

LVGO

Catalyst

H2S, NH3

PitchH2

May be

Hydrotreated in

Integrated DHT

to improve

quality

6

4

100

3

5

C1 - C2

LPG

9 H Naphtha

12

66

2

13

L Naphtha

Diesel

LVGO

Pitch

10 LPG

12 H Naphtha

Weight % Yields Liquid Vol % Yields

UOP Uniflex Process Licensed Units

14

Name LocationCapacity,

MMTAFeeds Start-up

Petro-Canada, Montreal

Canada 0.3Venezuelan, Mexican, North Sea, Cold Lake,

Visbroken VR

1985S/D 2003

NRL, Pakistan Pakistan 0.6 Light Arabian, Pakistani 2023

Shandong Longgang

China 1.35Med Arab, Merey, Russian Export

2021

Oil Gas Trade CJSC

Russia 0.4 SDA Pitch Cancelled

Undisclosed China 0.8Merey, Russian Export,

ShengliDelayed

Undisclosed China 0.9Arab Light,

Russian ExportDelayed

Undisclosed China 0.8Arab Light,

Russian ExportDelayed

UOP 8230A-14

Licensing Activity Since Uniflex MC Introduction

Name LocationCapacity,

MMTAFeeds Status and Start-up date

NRL, Pakistan

Pakistan ~1.0 Light Arabian,

Pakistani

Reconfig Study for higher refinery feed rate – Re-engineering to follow

Start Up – 2023

Shandong Longgang

China 1.35Med Arab, Merey, Russian Export

Basic Engineering in Progress, on hold pending partner financing

Start Up – 2021

Oil Gas Trade CJSC

Russia 0.4 SDA PitchRefinancing in progress, upgrade to

Uniflex MC

Undisclosed Europe 0.84Russian Export

Visbroken VR and FCC Slurry

Basic Engineering in progress,Completion in Feb 2019

Start Up – 2022

ZhongGuPetro-

ChemicalChina 1.54

Arab BlendVR and FCC

Slurry Oil

Basic Engineering in progress, Completion in Mar 2019

Start Up – 2020

15

UOP 8230A-15

Uniflex Doubles Refinery Margin, 3-year Payback

Case Study for 350 KBPD Russian RefineryProves Uniflex Economics

Vac Flash +

Uniflex

Vac Flash +

Coker

SDA +

Uniflex

ISBL Capex $MM 1372 1204 1609

OSBL Capex $MM 686 602 756

Total Capex $MM 2058 1806 2365

Net Margin Relative to Base Case

$MM/yr765 414 764

Net Margin Relative to Base Case $/bbl 6.16 3.33 6.15

Simple Payback Yr 2.7 4.4 3.1

2X

16

17Uniflex MC Process the First Step in Crude-to-Chemicals Project

• C1-C2:

– Fuel Gas or Steam Cracker feed

• LPG:

– Ideal Steam Cracker feed for olefins production

– Enhanced LPG Recovery option to recover 99% of LPG as product

– High normals content 77% versus 44% typical from HCU

• Light Naphtha:

– Steam Cracker feed

– High normals content (C5) 77% versus 44% typical from HCU

• Heavy Naphtha:

– Reformer feed for Fuels or Aromatics

• Diesel

– Produce Euro V diesel directly from Uniflex unit with Integrated DHT

reactor, or

– Feed to HCU for additional Naphtha (Aromatics) production

Diesel Product can be Processed in Low-pressure HCU for Chemical Production

Case Study for a 20 MMTA Petrochemical Complex

Uniflex Process Enables Zero Fuel Oil, Max Petrochemicals Complex

18

Crude

20,000 KMTA

Crude Unit

Vacuum

Unit

SR Naphtha

SR Diesel

SR VGO

VacuumResidue

Pitch Solids toCement Plant

Uniflex Naphtha& Diesel

UniflexLVGO

FCC CSO

FCC LCO

HC UCO

3400 KMTA

8400KMTA

4300KMTA400

KMTA

Unicracking1st Stage

Unicracking2nd Stage

Isomerization

NHTU3200 KMTA

AromaticsComplex

3 x 2800

KMTA

LPG

BTX

GASOLINE

DIESEL

IntegratedUniflex/DHT

2 x 2800

KMTA

CCRPlatforming

4 x 3200

KMTA

FCC3200

KMTA

C3

OLEFINS

500KMTA

Optimised Configuration – Superior Economics

19

UOP 8230A-19

•Reduced unit and equipment count

‒Lower capital and smaller plot space

‒Lower hydrocracking capacity required

‒Can produce diesel even when hydrocracker

shut down

•Higher-quality feed to existing FCC unit

‒ Higher hydrogen content

‒ Higher gasoline and propylene yields

•Richest feed to Platforming unit

‒ Highest aromatic yield for BTX production

‒ High hydrogen yield

Uniflex MC Process – Enhancement Benefits

20

Reduced

catalyst

addition rate

• Injection rate

in ppm of fresh feed

• Highly efficient molybdenum based catalyst

• On-site catalyst manufacturing capability

Reduced CAPEX

and OPEX

• Smaller reactors

• Lower recycle gas rates

• Lower fired heater duty

Enables 95

to 98 Wt-%

conversion

(525°C+

material)

• 95% base conversion, 98% conversion with

solids recovery option

Improved VTB

(Vacuum Tower

Bottoms)

quality

• Low solids content, low sulfur level, and no iron

• Fungible product (e.g.

fuel, low sulfur petcoke or asphalt production)

Solids recovery

from VTB

• Recovered oil product quality upgraded, or

• Recycle operation in

unit for higher conversion and yields

• Recovered solids to metals recovery

UOP 8230A-20

UOP Heavy Oil Development Center

21

• Expanded capabilities to support Bottom

of Barrel Technology Development

• New facility for pilot plant expansion at UOP

– High throughput Feed Preparation / Fractionation:

• 3 BPD capacity multi-column fractionation unit

– Uniflex pilot plant:

• High capacity operation with multiple reactors capable of staged operation

– Solvent De-asphalting (SDA) pilot plant:

• Multi solvent capability: Propane,

Butane, Pentane

– Flexible Heavy Oil Hydroprocessing pilot plant:

• Heavy Oil Technologies fully integrated with UOPUnicracking™ and RCD and Distillate Unionfining™pilot plants

• Capable of high pressure (5000 psi) operationwith reactor configurable in all Hydrocracking and Hydrotreating modes

UOP 8230A-21

Conclusions

22

UNIFLEX

• HS bunkers, restricted in ships after 1st

Jan 2020, will have negative effect on

high sulphur fuel oil (HSFO) pricing

• Refineries with significant HSFO

production will require profitable

residue conversion projects

• For zero HSFO, the Uniflex MC

Process provides for conversion

at an excellent payback

• Huge R&D effort by UOP with

Uniflex MC Process results in a high-

conversion design with low catalyst

consumption and better pitch quality

UOP 8230A-22

23

UOP 8230A-23