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Raising the Bar – Premium Base Oils Produced by the All-Hydroprocessing Route

Presented at ARTC 7th Annual MeetingApril 2004Singapore

Mr. Sook-Hyung (Sam) Kwon

Vice President and Project Director

SK Corporation

Dr. Ashok Krishna

Managing Director

Chevron Lummus Global LLC and

ChevronTexaco's Technology Marketing

Raising the Bar – Through Partnership

• The Past – History of Hydroprocessing at SK,

ChevronTexaco, the partnership begins…

• The Present – Influence of SK, CLG on base oil

market, development of technology and catalyst,

the partnership evolves…

• The Future – Extending the hydroprocessing

chain for further improvement, the bar is raised,

the partnership innovates…

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The Past – Hydroprocessing at ChevronTexaco

• 1963: Pascagoula ISOCRACKING Unit #1

• 1966: Richmond ISOCRACKING Plant

• 1969-70: Pascagoula ISOCRACKING Unit #2 and El Segundo ISOCRACKING Unit

• Mid-1970’s and Early 1980’s: LSFO projects (diesel, VGO, RDS and VRDS Hydrotreaters) in all three refineries

• 1984: Richmond Lube Oil Plant (RLOP), world’s first all-hydroprocessing route to base oils

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Development of ISODEWAXING/ Hydrofinishing

• 1985-1993: Invention, development and commercialization of ISODEWAXING® Catalyst

• 1993: First generation, ICR 404, installed at RLOP

• 1993-Now: Multiple industry awards, licensing takes off

• 1996: Second generation ISODEWAXING® Catalyst commercialized, ICR 408

• ChevronTexaco ISODEWAXING/Hydrofinishing become industry leaders

• Base Oil Market driven by supply and demand from finished lubricants evolving specifications

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Licensing of ISODEWAXING/ Hydrofinishing

Operator Plant Location Design Capacity,

BPSD Unit

Startup

Chevron California 1993 PetroCanada Canada 1996 Excel Paralubes Louisiana 1996 SK Corp. Korea 1997 Fortum Finland 1997 Motiva Texas 1998 Chevron, 2nd Train California 1998 Daqing China 1999 Motiva 2 Texas 2000 Lukoil Russia 2002

Total (Operating) 106,000

SK Corp. Asia 2004 Glimar Poland 2004 Gaoqiao, China Asia 2004

BPCL, India Asia 2005

Petrobras Brazil 2007

Total (Design/Construction)

45,000

Three Projects Asia, Europe On Hold

Total 22,000

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1993 – ISODEWAXING Application at RLOP

Light

HCR

Heavy

HCR

Solvent

Dewax -

Hydro-finishing Unit

ISODE-WAXING Unit

Hydro-finishing Unit

Light Neutral

Medium Neutral

Heavy Neutral

Light & Heavy

VGO

Heavy

VGO Shut Down

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Pre- 1993 –RLOP

Light

HCR

Heavy

HCR

SolventDewax

Hydro-finishing Unit

CatalyticDewaxer

Hydro-finishing Unit

Light Neutral

Medium Neutral

Heavy Neutral

Light & Heavy

VGO

Heavy

VGO

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Present, All-Hydroprocessing

Light

HCR

Heavy

HCR

ISODE-WAXINGUnit

Hydro-finishingUnit

ISODE-WAXINGUnit

Hydro-finishing Unit

Light Neutral

Medium Neutral

Heavy Neutral

Light & Heavy

VGO

Heavy

VGO

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Marketplace Evolution

1990 Now

Classification None API Group II/III

Market Share (North America) 10% > 50 %

Premium Over Group I None Yes

0

10

20

30

40

50

60

1995 1996 1997 1998 1999 2000 2001

% of Paraffinic Base Oil

Market In North America

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Current Events

• SK challenges CLG to improve lube quality/yield further

• CLG’s catalyst development program results in next-generation ISODEWAXING® and ISOFINISHING® Catalysts

• SK and CLG do joint testing, validation -- ICR 422 currently operating in LBO #1

• ICR 418 selected for new plant LBO #2, to be started up in 3Q 04

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Yield and V.I. Improvements on LN Feed (Group II, 150N)

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100N Performance (Feed-Normalized)

CDW ICR 408 ICR 422

Yield, LV % Base +20 +23

Viscosity Index Base +10 +12

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Higher Performing Lubricants Are Required for Future Automotive Applications

Transmission FluidHeavy Duty

Group II/II+/III

Base oil

Required

Passenger Car

GF-4 and Euro-IV 2004

Fuel Economy, Volatility

Oxidation Resistance

PC-10 and Euro-IV

2004-2006

Soot Handling, Volatility

Oxidation Resistance

DEXRON-IIIH

New Factory Fill Specs 2003-2005

Group III for Oxidation Resistance

Premium Base Oil Capacity

Continues to Grow –

SK Leading the Way

Refineries throughout Asia

are actively seeking ways

to upgrade to group II/II+/III

0

20

40

60

80

100

% Today % 2006

Global

Asia

North America

Market Share of Premium Base Oils

Future – Success

Through Partnership

• Finished lubricants specifications will continue to

drive base oil demand towards Group II, II+, III, GTL-

based

• SK/CLG drive to continually improve base oil yield,

qualities are now extending upstream of

ISODEWAXING/Hydrofinishing Unit to the

hydrocracking step

• Collaboration on studying feasibility of revamping

existing hydrocracker for greater capacity, improved

performance AND better base oil yields and qualities

• Process and catalyst developments are keys to

Raising the Bar on Performance

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Feasibility Case -Configuration, CLG Catalysts

• HCR debottleneck by >30%, using CLG’s Optimized Partial Conversion (“OPC”) concept.

• Increase amount of high quality feedstock for ISODEWAXING/Hydrofinishing Unit by >60%

• Minimal modification to H.P. loop, downtime for modifications reduced

• Better catalyst life, despite higher throughput

• Flexibility to select different viscosity grades

• Can segregate low viscosity, high V.I. material, SK’s primary product

• New CLG catalysts improve base oil V.I. for low viscosity material

• HCR bottoms enhance yields, V.I. in ISODEWAXING Process

• SK has done PP tests along with CLG to validate the concept

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ICR 240 – CLG’s Latest Catalyst, Uniquely Suited to SK’s Primary

Product Objective

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Partnership in Action

• SK and CLG have demonstrated the synergy and impact of a partnership in all-hydroprocessing base oil production

• Separately we have innovated, and profoundly influenced the base oil market

• Together we have raised the bar…

The Past – SK’s Growth

• 1962: Korea Oil Corporation established

• 1964: No. 1 Crude Distillation Unit commenced operation, 35 KBD

• 1992: Heavy Oil Upgrading (HOU) Plant commenced, including VRDS

• 1995: Lubricating Base Oils Plant (LBO #1) commenced, Hydroprocessing-based, included UCO Lube Process

• 1996: RFCC Plant commenced, also pre-treat RDS

• 1996: No. 5 Crude Distillation Unit

• 1997: LBO #1 commenced as ISODEWAXING/ Hydrofinishing Unit, with ICR 408/407

• Currently, second largest refinery in the world (OGJ)

• Major manufacturer/marketer of Group III base oils

Application of SK UCO

Technology - 1995

#2

VD

U

R1 R2 Fs

VDU

#2

VDU

R1 R2 Fs

VDU

Original

HCK Design

After SK UCO

Technology

Application VDU CDW

15,000

35,000 FF35,000 50,000 50,000

Diesel¯

5,000 15,000 20,000

30,000 FF

+5,00035,000 50,000 50,000 Unit : B/D

Unit : B/D

20,000

Diesel¯

Application of SK UCO

Technology - 1995

HT HC

Fractionator Distillation Intermediate

Storage

Existing HCK

Reactors

Recycle Oil

Surge Drum

Excess Distillates

VG

O

UCO

70D

100D

150/250D

Process Integration Scheme

SK’s UCO Lube Process, Properties – 1995-1997

Test Item Test MethodSolvent

Refining

Lube

Hydrocracking

SK UCO Lube

Process (Old)

Viscosity @ 100C, cSt ASTM D445 5.2 5.1 6.0

Viscosity Index ASTM D2270 97 99 123

Pour Point, C ASTM D97 -12 -12 -12

CCS Viscosity @ -20C, cP ASTM D2602 2,100 2,000 1,650

Flash Point, C ASTM D92 218 220 232

Noack Volatility, Wt % DIN 51581 17.0 16.6 7.8

Aromatics, Wt % ASTM D2007 27.7 3.5 0

Sulfur Content, Wt % ANTEC 0.58 0.03 0.00

IDW CDW

Dewaxing Isomerization Cracking

Pour Point -12°C -12°C

VI 132 123

Flash Point 250°C 232°C

Noack Vol 6.2 7.8

Yield

Naph. 10.5% 33.8%Dist’ 4.5% 6.0%

Lube 85.5% 64.5%

REMARK

-

-

+ 9

+ 18

- 1.5

- 23.3- 1.5

+ 21.0

M/U H2 1,900Nm3/hr 4,500Nm3/hr - 2,600

150N Case

Description

ISODEWAXING/Hydrofinishing

SK’s Project Result - 1997

Catalyst ConversionLube Product Yield

60.0%

65.0%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

0 90 180 270 360 450 540 630 720 810 900 990

OPERATION DAYS

YIE

LD

(%

)

70N 100N 150N

CDW

ISODEWAXING

Catalyst ConversionLube Product Quality

110

115

120

125

130

135

140

0 60 120 180 240 300 360 420 480 540 600 660 720 780 840 900 9601020

OPERATION DAYS

VI

0

1

2

3

4

5

6

7

8

9

10

NO

AC

K

VI NOACK wt %

CDW

ISODEWAXING

History of SK HCK &

Lube Process

#2

VD

U

R1 R2 Fs

VDU

#2

VDU

R1 R2 Fs

VDU

Original

Design

(HCK Only)

Combination

of HCK and

#1 LBO

VDU CDW

15,000

35,000 FF35,000 50,000 50,000

Diesel¯

5,000 15,000 20,000

30,000 FF

+5,00035,000 50,000 50,000 Unit : B/D

Unit : B/D

20,000

Diesel¯

History of SK HCK &

Lube Process

#2

VD

U

R1 R2 Fs

VDU

HCK Capa.

Increase #2

VDU IDW

10,000

42,000 FF42,000 52,000 52,000 Unit : B/D

Diesel¯

#2

VD

U

R1 R2 Fs

VDU

HCK Capa.

Increase #1

VDU IDW

10,000

40,000 FF40,000 50,000 50,000

Diesel¯

History of SK HCK &

Lube Process

#2

VD

U

R1 R2 Fs

VDU

HCK Revamp

+ # 1 LBO

+ # 2 LBO

VDU#1

IDW

45,000 FF45,000 55,000 55,000

VRDS/Asphalt

Diesel¯

VDU#2

IDWUCO

10,000

Feasibility Study –Modified Two-Stage HCK

Maximization of UCO for Lube Products

Maximization of Premium Lube Base Oil

(100N Product )

Upgrading Lube Quality (VI, CCS, Noack,etc)

1. Main Objectives of Feasibility Study

Feasibility Study –Modified Two-Stage HCK

#2

VD

U

R1 R2 Fs

VDU2-Stage HCK

Modification

+ #1 LBO

+ #2 LBO

VDU#1

IDW

60,000 FF

60,000

35,00030,000

Diesel¯

VDU#2

IDW

New

VDU

New

Fs 25,000

5,000

2. Study Concept

Feasibility Study –Modified Two-Stage HCK

3. Study Basis

Sub-items

Lube Production, B/D

Feasibility

Study CaseBase

Base

1st Stage Conversion, %

Fract Bottom fr 1st Stage, B/D

2nd Stage Conversion, %

-

-

-

Fract Bottom fr 2nd Stage, B/D

Waxy Distillate, B/D -

-

Hydrocracker Type Single Stage

Hydrocracker Capa., B/D 45,000

+ 6,000

30,000

28.6

50.0

20,000

25,000

Two-Stage

60,000

Recycle Oil Rate, B/D 10,500 35,000

Feasibility Study –Modified Two-Stage HCK

4. Feedstock of HCK

Typical Crude Slate : Middle East

Feed type : Mixture of SR VGO (85%) plus HGO (15%)

Feed Properties

Feed Type Unit Typical Feed Type Unit Typical

API 21.5 Metal

Sulfur wt% 2.9 - Ni wppm Total

Nitrogen wppm 1,100 - V wppm less than 1

Vis (40C) cst 50.4 - Fe wppm

Vis (100C) cst 6.75 Distillation

VI 80 0/5%LV Deg C 301/359

Pour Point Deg.C +36 10/30 Deg C 378/417

CCR wt% 0.35 50/70 Deg C 442/455

Aniline Pt Deg.C 79 90/95 Deg C 513/532

Feasibility Study –Modified Two-Stage HCK

5. Scheme developed

Naph

Kero

Diesel

35,000 RF

5,000

HHPS

HHPS

HLPS

HLPS

Unit : B/D

30,000

25,000

60,000 FF

20,000VDU

New

VDU

Feasibility Study –Modified Two-Stage HCK

6. Result of Feasibility Study

Feasibility Study Result

Yield, vol%

Vis. (@100C)

VI

Description

10%

3.0 cSt

104

Base

6 %

3.0 cSt

115

From New

Scheme

Yield, vol%

Vis. (@100C)

VI

10%

4.3 cSt

122

20 %

4.3 cSt

128

Yield, vol%

Vis. (@100C)

VI

11%

7.6 cSt

130

8 %

7.6 cSt

132

70N

100N

250N

+13

Delta

+6

+2

B/D Base + 6,000 Total Lube Product

Lube

Product

+10%

B/D Base + 7,500 100N Product

Feasibility Study –Modified Two-Stage HCK

7. Summary

FUELS HYDROCRACKER NAPHTHA, KEROSENE, DIESEL

UCO PROJECT VHVI BASE OILS

YUBASE UPGRADING VI, LUBE YIELD,WHITE OIL

HYDROCRACKER REVAMP

SINGLE TWO STAGE

- MORE PREMIUM LUBE

- BETTER QUALITY

- MORE PRODUCTION

SK UCO TECHNOLOGY

SK UCO TECHNOLOGY

+ ISODEWAXING

SK UCO TECHNOLOGY

+ CLG “OPC” HCK

+ ISODEWAXING