KEY LESSONS FROM SUCCESSFUL HYDROCRACKER PROJECTS

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KEY LESSONS FROM SUCCESSFUL HYDROCRACKER PROJECTS

Courtesy Grupa LOTOS SA

Special Supplement to

HYDROCARBON

PROCESSING ®

KEY LESSONS

FROM SUCCESSFUL

HYDROCRACKER PROJECTS

Shell Global Solutions


KEY LESSONS

from Successful Hydrocracker Projects

Süleyman Özmen

INTRODUCTION:

HYDROCRACKING:

Although industry analysts suggest that cost pressures and depressed

refining margins will remain, there is still significant growth in the

hydrocracking market. Following the successful implementation of

our recent hydrocracker projects at, among others, the Grupa

LOTOS and CNOOC refineries,, this supplement aims to capture

some important lessons, best practices and thought leadership that

may help other refiners to deliver their own value-adding initiatives.

As a result of the global economic downturn, numerous refinery

projects were slowed down, shelved or even cancelled outright.

And, although the economic recovery appears to be gathering

momentum, a new set of challenges is emerging for refiners.

For example, IHS CERA reports that the cost of refinery construction

projects is marching slowly back to pre-recession levels, with steel

prices in particular showing a high level of volatility.

Then there are the changes in demand patterns. The downturn

triggered a significant drop in the short-to-medium-term global

oil demand. Although it is now recovering, oil demand is now

swinging from the West to the East; the fall occurred mainly in

the OECD countries while the developing economies continued

their strong growth.

Moreover, there is a huge shift under way in the global gasoline–

distillate balance, as demand for high-quality low- and ultra-lowsulphur

diesel (ULSD) skyrockets in Asia and the Middle East.

Middle distillates such as diesel, jet fuel and kerosene now account

for 35% of global product demand and are expected to gain an

additional 10% by 2015.

The impact of these changes on refiners, who are already

contending with the changing feedstock slate and increasingly

stringent environmental standards, has been severe.

Nevertheless, there are success stories. For instance, the Polish

refiner Grupa LOTOS has not only succeeded in implementing a

residue conversion project at the Gdańsk refinery (as part of its

“10+ Programme”), it has also enhanced its margins by $5 a barrel

(see page 18). Meanwhile, CNOOC Ltd has brought the $3 billion

Huizhou refinery on-stream, which includes a 4-Mt/y hydrocracker

that is one of China’s largest in terms of single-unit capacity (see

page 20). Both of these hydrocrackers were licensed by Shell

Global Solutions.

Of course, these are all hydrocracking projects, but there

are other common denominators across these initiatives that

may explain why they have been successful in the current

economic climate where others have not. These common

factors include project phasing, solution integration

and optimising the conversion level, and are detailed

on page 14. Investigation of these factors may also

provide insights into the steps that operators can take

to help safeguard a project’s viability.

We are taking an in-depth look at hydrocracking in

this supplement because the technology is seeing

significant growth; consultancy firm The Catalyst Group

estimates that global hydrocracking capacity, which was

at 5,835,683 bbl/d in 2010, will have increased by

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TODAY’S ECONOMIC IMPERATIVE

supplement earlier this year, although the hydrocracker can play a

key role in the production of ultra-low-sulphur fuels, it is also

important to have a robust plan for dealing with the displaced

sulphur, as this will otherwise impact on refinery emissions. An

integrated solution is likely to be required.

Perhaps you are finding it difficult to make your planned investment

viable as the project market heats up again. Perhaps you have

concerns about costs, access to technology, how best to integrate

new hardware into your facility or your overall sulphur balance.

Whatever your challenges, I hope you can glean some valuable

insights from this supplement that will help you to deliver a

value-adding project.

Süleyman Özmen

Vice President, Refining and Chemical Licensing

Shell Global Solutions International BV

ABOUT US

■ Shell is one of the largest hydrocracker operators in the

world, with a capacity of 512,000 bbl/d.

40% by 2013. This is because refiners are leveraging

hydrocracking to respond to the momentum in global

dieselisation, especially as rising crude prices are forcing

refineries to consider upgrading distressed crudes and

difficult feedstocks. Almost 60% of the new hydrocracker

construction will be in the Middle East, Asia or Eastern

Europe, The Catalyst Group suggests. Meanwhile,

several hydrocracker projects will be implemented in North

America, including two new units for Valero licensed by

Shell Global Solutions.

In addition, the sulphur paradox – that crude supplies are

becoming increasingly sour while plant emissions legislation

seems set to continue tightening – remains vitally relevant.

As we highlighted in our Hydrocarbon Processing

■ Shell Global Solutions provides technical support to

over 50 sites worldwide. It has signed 12 hydrocracking

licences in the last five years, and has more than 60% of

the hydroprocessing reactor internals market.

■ Criterion Catalysts & Technologies (Criterion)

is a global leader in hydroprocessing catalysts and has

a track record of over 50 years.

■ Zeolyst International (Zeolyst) is a global leader

in commercial and speciality zeolites, and its advanced

hydrocracking catalysts are currently installed in more

than 70 of the world’s hydrocracking units.

■ Sulzer Chemtech is a leading supplier of mixing and

separation technology. With Shell Global Solutions, it

has developed a feed inlet device, the Schoepentoeter*

Plus, that can cope with the most severe applications.

*Schoepentoeter is a Shell trademark.

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KEY LESSONS

from Successful Hydrocracker Projects

DISPELLING THE MYTHS:

FOUR KEY

HYDROCRACKING

MISCONCEPTIONS

HYDROCRACKING CONTINUES TO EMERGE AS THE CONVERSION METHOD OF CHOICE

AROUND THE GLOBE, SO IT IS VITAL THAT OPERATORS UNDERSTAND THIS KEY PROCESS.

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CONTINUED ON PAGE 6


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KEY LESSONS

from Successful Hydrocracker Projects

MYTH 1: MYTH 2:

HYDROCRACKERS

ARE EXPENSIVE

By Robert Karlin, Licensing Technology Manager,

Shell Global Solutions (US) Inc.

Material costs for hydrocrackers can be high, particularly as

high-pressure equipment is required. In addition, hydrocrackers utilise

significant volumes of hydrogen. In the past, the economic justification

for a hydrocracker may have been weak at best, but today, through

the recent increase in the availability of natural gas, we have seen a

corresponding decrease in the price of hydrogen. This, combined

with increasing crude prices, has prompted refiners to push as much

hydrogen into liquid products as possible.

The economic case for hydrocracking is the production of high-quality

transportation fuels from difficult-to-process streams, and is further

strengthened by the volume gain that hydrocracking provides,

particularly towards jet fuel and diesel. This will usually outweigh the

capital and operating expenses, as there is such a large volume

expansion from a hydrocracker operation.

Combined with the volume gain advantage, hydrocrackers are

designed to meet the most stringent product quality specifications

from around the world. In this realm, hydrocracking is superior as

a conversion process when compared with fl uidised catalytic

cracking (FCC) for producing diesel, as it generates a ULSDquality

product that is sent directly to tankage without further

processing. In comparison, although FCC does not require

hydrogen, its diesel quality is poor, even for use as a blending

component. The FCC produces a light cycle oil (LCO) that has to

be further processed, which requires hydrogen.

In fact, although FCC used to be the conversion method of choice,

especially in the Americas, hydrocracking has increased in popularity

at the expense of FCC owing to the increase in demand for diesel

and jet fuel. Some grassroots refineries designed in the last few years

are based on a hydrocracker as the primary conversion unit, with no

FCC unit in the configuration.

Hydrocracking may have been dismissed in the past as an expensive

process but, now that the cost of hydrogen is much lower than product

values, it has developed into a very profitable operation. Despite the

high capital cost, hydrocracking projects can return a very attractive

net present value: payback periods of less than three years may be

possible with well-executed hydrocracking projects.

THE ECONOMIC CASE FOR

HYDROCRACKING IS THE PRODUCTION

OF HIGH-QUALITY TRANSPORTATION FUELS

FROM DIFFICULT-TO-PROCESS STREAMS

HYDROCRACKING CATALYSTS

ARE COMMODITY ITEMS

By Lawrence Kraus, Hydroprocessing Product

Manager, Criterion Catalysts & Technologies

Commoditising the catalyst you use in your hydrocracker will

diminish the value that the unit can generate. These are

complex units that utilise highly sophisticated catalytic

materials. The top-performing refiners understand that catalyst

selection is a critical part of unit optimisation and that the

catalyst can provide some real performance differentiators.

For instance, if you desire to process heavy feeds such as

deasphalted oil (DAO) in your hydrocracker, then your

catalyst company can help you to design a catalyst system

that will facilitate its efficient and reliable operation. Similarly,

if your diesel’s cold flow properties are an issue, you can

leverage catalysts to improve the cloud point or the pour

point of the distillate.

Or, if you are feeding an ethylene cracker (EC), high

hydrogen content bottoms is clearly an economic advantage,

as it helps to restrict EC residue yield and boost ethylene

production. Your catalyst supplier could, therefore, help you

to tailor a catalyst system that adds hydrogen selectively

into the bottoms’ products.

THE TOP-PERFORMING REFINERS

UNDERSTAND THAT CATALYST

SELECTION IS A CRITICAL PART OF

UNIT OPTIMISATION AND THAT THE

CATALYST CAN PROVIDE SOME REAL

PERFORMANCE DIFFERENTIATORS

It is very important to know the feedstock and process

objectives, and then to match them with tailored catalyst

systems. Experience in tailoring catalyst systems for

hydrocrackers to match the processing objectives is key.

Many refiners are benefitting from this tailored approach.

They may pay a premium, but it is more than offset by the

improved margin of the hydrocracker because they will be

making a higher value product. Catalysts can unlock so

much value and yet account for only a small part of a

hydrocracker’s total operating cost, so operators should

not compromise in this area.

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MYTH 3: MYTH 4:

HYDROCRACKERS CANNOT PROCESS

DIFFICULT FEEDSTOCKS

By Aris Macris, Licensing Technical Manager,

Shell Global Solutions (US) Inc.

Enormous advances have been made in processing

difficult feedstocks in recent years. Now, refiners worldwide

are using the latest Shell hydrocracking technology to

produce high-quality diesel and jet fuel from even the

most difficult feeds.

For instance, in the last five years Shell Global Solutions has

designed and started up three hydrocrackers for processing

DAO or heavy coker gasoil (HCGO), which, historically,

could only be processed in an FCC unit. One of these

DAO units is now in operation at Grupa LOTOS in Poland

(see page 18). The biggest design challenge with DAO is

removing the metals; a reliable demetallisation catalyst is vital.

DAO also has high Conradson carbon levels, but that is dealt

with using pretreatment catalyst, and then it is all about

conventional hydrocracking.

In North America, a Shell Global Solutions licensed

hydrocracker is co-processing HCGO, which has

traditionally been routed to the FCC unit via hydrotreating.

In China, HCGO is also the feed to the hydrocracker at

CNOOC’s refinery, which is the first plant in the world

specially designed to process 100% heavy, high-acid crude

oil. Complications arise with HCGO because it contains

high levels of nitrogen, sulphur, aromatics, olefins and silicon.

But, once these are saturated across the pretreatment

catalyst, it is actually a very simple feedstock to handle.

Similarly, the two-stage hydrocracker at Shell’s Martinez

refinery in California, USA, is co-processing HCGO and

heavy cycle oils from the FCC unit.

At Shell Global Solutions, Criterion and Zeolyst, we have

a lot of experience with processing straight-run vacuum

gas oil (VGO) and non-straight-run feedstocks such as DAO,

HCGO and even thermally cracked gasoils and cycle oils

from FCC units. We have processed them all, and designed

hydrocrackers for all of these streams.

REFINERS WORLDWIDE ARE USING

THE LATEST SHELL HYDROCRACKING

TECHNOLOGY TO PRODUCE HIGH-

QUALITY DIESEL AND JET FUEL FROM

EVEN THE MOST DIFFICULT FEEDS

HYDROCRACKERS ARE NOT FLEXIBLE

ON PRODUCT SLATE

By Ward Koester, Hydrocracking Technical Services Manager,

Criterion Catalysts & Technologies/Zeolyst International

Operators can be forgiven for thinking that if their hydrocracker was

designed for diesel production, it cannot be optimised to produce

anything else. In fact, with tailored cracking catalyst systems, today’s

hydrocrackers are highly flexible and enable a refiner to swing

between the gasoline mode and the distillate mode to take

advantage of seasonal product demand shifts. This switch may only

require the adjustment of process operating parameters such as

conversion, liquid recycle rate and product cut points.

Such flexibility is especially valuable for US refiners, which have been

beset by enormous fluctuations in the diesel-to-gasoline price

differentials in recent years (Figure 1). Moreover, because the forecast

move to sustained dieselisation has not yet fully materialised, this

volatility is expected to continue in the short term.

Deploying a catalyst with the requisite product selectivity window

during times of volatile product differentials can enhance the value

that can be extracted from the hydrocracker. That is why Criterion

and Zeolyst have expanded their hydrocracking catalyst portfolios to

include a wider range of flexible naphtha/middle distillate selective

catalysts to bridge the naphtha to diesel selectivity gap and expand

the hydrocracker’s operating window.

For truly flexible operations, the two companies work closely with the

refiner to select and design catalyst systems that drive conversion

while supporting the swing between gasoline and distillate modes.

The approach focuses on cycle objectives, technical requirements and

economics in order to improve hydrocracker flexibility.

Price differential, cents per gallon

60

40

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

20

0

-20

-40

Diesel minus gasoline

Source: IEA

Figure 1: The price differential between diesel and gasoline for the summer

and winter driving seasons in the USA used to fl uctuate predictably. In recent

years, however, this differential has become increasingly volatile, which makes

it difficult for refiners to exploit margin opportunities.

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KEY LESSONS

from Successful Hydrocracker Projects

CONFIGURING

A VALUE-ADDING

THERE IS A MULTITUDE OF HYDROCRACKING CONFIGURATION OPTIONS,

AND THE DESIGN SHOULD ALWAYS BE OPTIMISED FOR THE OPERATOR’S OBJECTIVES.

With global diesel demand continuing to rise in most regions while

gasoline demand stagnates or even declines, the economic

imperative for many refineries to maximise their diesel yield has

never been greater.

At the same time, however, many operators are capital constrained,

and all have different strategic objectives, so various technology

solutions are being deployed. “In my experience, every customer’s

situation is unique,” says John Baric, Licensing Technology Manager,

Shell Global Solutions International BV. “There can never be a silver

bullet solution; a solution must always be customised, and that

requires experience and an innovative mindset.”

Baric explains that Shell Global Solutions has developed two

fundamental hydrocracking processes: single-stage and two-stage.

But he is quick to add that these are almost always customised to the

application. Each design is always tailored to the type of feedstock,

the capacity of the unit and the specific processing objectives to

help optimise both capital and operating costs.

Maximising yield with full conversion

The two-stage hydrocracker process configuration is best suited for

large units and for processing difficult, high-nitrogen feedstocks,

says Baric. “Almost all of the unconverted bottoms are

recycled and conversion levels of 95–99% can be

achieved,” he explains. “Doing things in two stages involves

more capital expenditure and consumes more energy, but it

is all paid back by the extra distillate yield. The two-stage

hydrocracker is typically installed as a standalone unit and

does not involve integration with any other units.”

Cost-effective partial conversion

Single-stage designs are a lower cost option and tend to be

better suited to existing refineries where opportunities are

likely to exist for profitable integration with other units.

Here, the bottoms are fed to the FCC unit, to the base oil

plant for production of Group 2 or Group 3 base oils,

or to an ethylene cracker.

“Depending on the customer’s requirements, several process

configurations are available,” says Baric. “The single-stage

hydrocracker can be designed for fl exible operation; high

yield of diesel, kerosene or naphtha in recycle mode; or

partial conversion in once-through mode when integrated

with other downstream units. The single-stage hydrocracker

can easily process a variety of feedstocks, including VGO,

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HYDROCRACKER

HCGO and DAO, to produce a range of high-quality

middle distillates along with unconverted bottoms.”

For each application, Shell Global Solutions matches the

optimum configuration with the given feedstock and the

required processing objectives. Additional product slate

fl exibility can be achieved through the choice of catalyst

system or by adjusting the process conditions.

Margin-enhancing revamps

Revamps can also be extremely cost-effective solutions:

advanced reactor internals technology and leading-edge

catalysts can facilitate higher reactor volume utilisation,

longer catalyst run length, uniform production quality and

less hot-spot formation.

The reactor internals perform several functions, including

increasing the catalyst utilisation (see boxed text on page 11,

Reactor internals technology). They also protect the catalysts

from particulates and foulants, and this, according to Baric, is a

key differentiator of Shell Global Solutions hardware. “In today’s

refining environment, the contribution of the hydrocracker

to the refinery margin and its profitability is significant.

THERE CAN

NEVER BE A SILVER

BULLET SOLUTION;

A SOLUTION

MUST ALWAYS

BE CUSTOMISED,

AND THAT REQUIRES

EXPERIENCE AND AN

INNOVATIVE MINDSET

CONTINUED ON PAGE 10


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KEY LESSONS

from Successful Hydrocracker Projects

Refiners expect – and rightly so – that these units are going to

operate at high levels of utilisation and availability (or on-stream

factor) for the entire planned catalyst cycle. This has become more

challenging with the trend towards processing VGO originating

from heavier, higher sulphur crudes and feedstocks from cokers

and thermal conversion units.”

In any multi-bed hydrocracking reactor, particulates can accumulate

and affect the top-bed catalyst performance, even with sophisticated

automatic backwash feed filters. So, Shell Global Solutions installs

special filters in the top domes of all VGO hydrocrackers.

Says Baric, “This has been shown to be effective at removing the

particulates that can cause pressure drop and maldistribution in the

catalyst bed, which can often lead to a costly unplanned shutdown

of the hydrocracker. A liquid–vapour distribution tray beneath the

filters enables the vapour and the liquid to have full radial dispersion

across the catalyst bed, which can result in nearly 100% utilisation

of the catalyst.”

REFERENCE LIST

Customers that have licensed Shell Global Solutions’

hydrocracking technology include:

■ Valero, North America’s largest refiner, which is

constructing a 50,000-bbl/d, unified-design, two-stage

hydrocracker at each of its refineries in St Charles,

Louisiana, and Port Arthur, Texas, USA;

■ CNOOC, which choose the dual-service hydrocracking

process for its new refinery in Guangzhou Province, China.

At 80,000 bbl/d, this is the highest capacity hydrocracker

operating in the country. It has the fl exibility to operate in

integration mode with the ethylene cracker at Nanhai

Petrochemicals Complex and the refinery’s FCC unit.

■ A major North American refiner, which brought a

70,000-bbl/d unit online in early 2010. It leverages a catalyst

package that enables it to operate in a highly flexible regime

and swing between gasoline and diesel modes while

operating in integration mode with the FCC unit.

■ Grupa LOTOS, Poland’s second largest refiner, which has

started up a new-generation 45,000-bbl/d DAO

hydrocracker at its Gdańsk refinery; and

■ North Atlantic Refining Company, which adopted Shell

Global Solutions reactor internals and Criterion catalysts

when it originally revamped the single-stage, 37,000-bbl/d

hydrocracker at its refinery in Newfoundland, Canada.

PROOF POINT:

PULAU BUKOM REVAMP

A revamp project at Shell Singapore’s Pulau Bukom

refinery is a prime example of the value of tailored

process configurations and catalyst systems.

When Shell Singapore was evaluating the economic

potential of building a petrochemical site alongside

Pulau Bukom refinery and integrating the two

complexes, deploying off-the-shelf solutions would

have missed a valuable opportunity to capture

additional margin.

The existing refinery featured a two-stage hydrocracker

operating at high conversion. The unit focused on high

conversion of VGO feeds into large quantities of

distillates, such as kerosene and diesel.

However, the economics of the refinery and the

petrochemical hub would be greatly enhanced, the

Shell Global Solutions strategic planners calculated,

if the hydrocracker were to be used to produce large

amounts of unconverted oil (hydrowax) instead of the

more commonly used naphtha as the feedstock for the

800,000-t/y ethylene cracker.

And so, working with Bukom management, Shell

Global Solutions revamped the hydrocracker into two

parallel single-stage reactors, thereby almost doubling

the feed rate. This was designed to deliver 70% of its

output as hydrowax, with the remaining 30% being

converted into high-quality distillate products.

Srinivas Iyer, Senior Refining Technologist, Shell India

Markets Pvt. Ltd, comments, “The technical modifications

that were required in the hydrocracker unit were not

particularly complex. What was key here was devising

the initial concept and developing a tailored catalyst

solution to produce a deeply hydrogenated hydrowax:

it demonstrates Shell’s flexibility.”

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REACTOR INTERNALS TECHNOLOGY

The reactor internals that are used in a hydrocracker can play an

important role in determining its capital cost, as they can improve

the volume available for catalyst and therefore can help to reduce

the reactor size. They also have a major influence on its

performance, as they can drive its on-stream factor, utilisation,

cycle length, product yields and even product quality.

Conventional tray

10–15% wetting

Bubble cap tray

20–30% wetting

Shell HD 2 tray

Near-perfect wetting

A key focus of Shell Global Solutions research and development

has been on ensuring that its internals technology distributes gas

and liquid uniformly, minimises thermal instabilities and maximises

reactor catalyst inventory and catalyst utilisation.

The result is a reactor internals system that includes:

■ HD 2 (high-dispersion) trays for highly uniform vapour–liquid

distribution and excellent thermal distribution (Figure 2);

■ filter trays to prevent foulants from entering the catalyst beds;

■ UFQ (ultra fl at quench) interbed internals for uniform process

and quench mixing at the interbeds;

■ catalyst support grids; and

Inert material Dry catalyst Wet catalyst

Figure 2: HD 2 tray technology applies customised nozzles that

use the gas fl ow momentum to disperse the liquid as a mist. This

differentiates Shell Global Solutions technology from conventional

downcomers or bubble caps because the nozzles fully and

uniformly wet the entire catalyst surface and make efficient use of

the top part of the catalyst bed.

■ compact bottom baskets to help maximise the catalyst volume in the bottom domes.

TECHNOLOGY FOCUS

■ Shell ConSep* trays can be applied in the distillation section

of a hydrocracker. These can increase capacity by 30–100%

compared with most other trays.

■ The Schoepentoeter can be applied in the separators of the

reactor section and in the hydrocracker main fractionator,

where separation efficiency is vital. It offers excellent distribution

and phase separation, even at high capacity, and operates with

negligible pressure drop.

■ Shell provides a special option hydrocracker product

work-up section. Featuring a single main fractionator,

this innovative configuration provides a 35–40%

reduction in fractionation furnace energy consumption

when compared with a conventional stripper–

fractionator configuration. Shell’s fractionator-led

configuration has been proven at Shell-designed

hydrocrackers. It has operated for over 25 years at

several facilities, including the Shell Scotford refinery

in Canada (since 1984) and the Saudi Aramco Shell

Refinery Company (SASREF) refinery at Al Jubail (since

1985). Shell’s first hydrocracker design with a single

main fractionator has been operating for over 15 years.

*Shell ConSep is a Shell trademark.

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KEY LESSONS

from Successful Hydrocracker Projects

STRAIGHT TALK

ON HYDROCRACKING

CATALYSIS

Nicolaas van Dijk

Raul Adarme

Senior hydrocracking experts Nicolaas van Dijk, Global Process Technology Manager, Hydroprocessing, Shell Global

Solutions International BV, and Raul Adarme, General Manager, Hydrocracking, Criterion Catalysts & Technologies,

discuss how their respective organisations work together – and what their affiliation means for customers.

Q: SHELL GLOBAL SOLUTIONS WORKS CLOSELY WITH CRITERION

AND ZEOLYST; HOW DOES THIS BRING VALUE TO CUSTOMERS?

Van Dijk: One of the key benefits is that, because we develop the

solution in close co-operation with Criterion and Zeolyst, we can

provide customers with a combined guarantee that covers the

performance of the process hardware and of the catalyst. Most

refiners find that extremely reassuring.

Moreover, it means that we can optimise the solution. We do not

design a hydrocracker in isolation and then simply add catalysts; we

work closely with our counterparts at Criterion and Zeolyst to match

the Shell design with the Criterion catalysts and arrive at a design that

works and delivers what the customer wants in terms of product

quality, yield, capital cost and so on.

Criterion and Shell have global experience of designing catalyst

systems for a variety of feedstocks and in all hydrocracking

configurations, including dual-service, once-through and two-stage,

and their know-how can be extremely beneficial for customers.

Adarme: The hydrocracker at CNOOC’s Huizhou refinery is a good

example of this. The refinery is the first plant in the world designed to

process 100% heavy, high-acid, naphthenic crude oil. Obviously,

processing VGO originating from heavy naphthenic crudes places

special demands on catalysts because these oils contain higher levels of

harmful contaminants and it can be especially challenging to achieve

the desired high distillate quality. To mitigate this, Shell Global Solutions

and Criterion worked closely together to configure a catalyst system and

optimise it for the design feed, the desired product slate and the process

technology. It worked: all the performance guarantees were met.

Q: CATALYST PERFORMANCE HAS IMPROVED SO MUCH IN

RECENT YEARS, IS IT REALISTIC FOR REFINERS TO EXPECT NEXT-

GENERATION CATALYSTS TO CONTINUE DELIVERING

PERFORMANCE ENHANCEMENTS?

Adarme: Yes, I think so. I do not think we are at the end; in fact, I think

we are at the beginning of a new era in terms of catalyst development

because new research and development techniques are

accelerating product development timelines.

The market is frenetic and furious, and new products are

being launched all the time. At Criterion, we have developed

an extremely broad portfolio. We have invested a lot in

research and development to help us design, develop and

commercialise better products, quicker.

For instance, we are using enhanced experimentation

techniques that enable us to test 16 catalysts simultaneously.

We use this for the development of pretreatment and

cracking catalysts. It is a very efficient way to develop new

catalyst technologies.

Q: WHAT IS CRITERION FOCUSING ITS RESEARCH

AND DEVELOPMENT ON TO ADVANCE THE START

OF THE ART OF HYDROCRACKING CATALYSIS?

Adarme: Well I can only say so much because, of course,

much of it is highly confidential. But I can tell you that we are

always looking at ways of improving zeolite systems, metal

sulphide functions and catalyst shapes, all aimed at increasing

product yields and targeting specific product qualities.

Van Dijk: Yes, and there have been some important

developments there recently. For instance, Criterion’s new

Advanced Trilobe Xtreme technology is a trilobal catalyst

extrudate rather than a cylindrical one, which can increase

diesel yield by up to 1.5%. This is because over-cracking

occurs if the reactants remain inside the catalyst too long,

which reduces diesel yield and creates more undesirable

products such as naphtha and gas. So a 50,000-bbl/d

hydrocracker can produce up to 750 bbl/d more diesel

product simply by changing the catalyst shape.

Adarme: We have had successes with zeolite

manufacturing processes as well; we can now manufacture

the zeolite powder such that the zeolites are much more

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selective. Being more selective means that it is not going to

over-crack the feed to gas or liquefied petroleum gas, so you get

better selectivity for cracking heavy naphtha and producing jet fuel

and diesel. It also offers better middle distillate selectivity than our

previous-generation zeolites.

Advances in nanotechnology have helped us to optimise the active

sites, which led to a next-generation CENTERA ® catalyst technology

for hydrocracking pretreat.

Q: HOW DO CENTERA PRODUCTS COMPARE WITH PREVIOUS-

GENERATION PRODUCTS?

Adarme: CENTERA offers the flexibility to help increase run length,

process more difficult feedstocks or increase throughput for refiners.

CENTERA products are providing performance improvements in the

start-of-run, weighted-average bed temperature of up to 14°C lower

than previous-generation products.

As always though, we advocate tailored rather than off-the-shelf

solutions. We offer a range of CENTERA products including the

CENTERA DN-3620 product, which is designed for difficult feeds and

high catalyst stability, and CENTERA DN-3630, which is very well

suited for hydrocracking units processing feeds containing LCO.

CENTERA technology is the culmination of years of in-depth

research. It has a strong legacy built on the innovations of the

CENTINEL GOLD and ASCENT platforms along with eight years

and nearly 300 cycles of commercial operations for customers

around the world.

Q: WHAT STEPS DO YOU TAKE TO ENSURE THAT YOUR

PRODUCTS REMAIN VITALLY RELEVANT TO REFINERS?

Van Dijk: It is worth noting that Criterion’s research and development

is, in part, informed by the operational feedback received from

Shell Global Solutions customers. For instance, we provide a lot of

feedback to the catalyst researchers about what to develop; we tell

them what our clients need.

Adarme: Indeed, Criterion’s research and development programmes

are based on the input we get from our customers through our

technical service personnel. That input helps us to define what we

need to aim for when we are developing next-generation catalysts.

Generally, refiners in the USA are looking for higher heavy naphtha

production and ways to reduce hydrogen consumption. In the rest of

the world, it is more about maximising diesel. These aims and

objectives are reflected in our research and development programmes.

Van Dijk: There is also a distinct trend for new refineries to be

designed for full-conversion hydrocracking to maximise diesel yields.

That trend has ramped up over the last couple of years, so, in

response to market demand, we have been working with the

catalyst development teams to develop a new catalyst

specifically for the second-stage service. We are in the

process of commercialising this catalyst. The early indications

are that it will unlock 6–7% more diesel from a two-stage

hydrocracker compared with previous products.

Q: WHEN SHOULD A REFINER CONSIDER

COMMISSIONING PILOT PLANT TESTS?

Van Dijk: Pilot plant testing is most relevant when a refiner is

in a distinct situation. For instance, we ran a pilot plant test to

verify the catalysts selected for Grupa LOTOS’s hydrocracker

because the company was breaking new ground with a

DAO feed (see page 18).

The pilot plants are extremely well equipped and provide

substantial insights into how a catalyst will perform at a

customer’s facility. Over the years, we have gone to great

lengths to ensure that these tests are representative of

commercial operation. We do not necessarily have to devise

a new pilot plant test for each customer, though. We just

have to be aware of the different types of operations and

feedstocks that they use, and to have data about them.

Adarme: Once we have determined that a pilot plant test

will be constructive, we sit with the customer and discuss the

parameters that are important to ensure that we measure

them. So, we look at yields, activity, selectivity, product

properties and so on.

Q: IN SUMMARY THEN, WHAT DIFFERENTIATES

THE CRITERION AND ZEOLYST PRODUCTS FROM THE

OTHER HYDROCRACKING CATALYSTS THAT ARE ON

THE MARKET?

Adarme: Well, Criterion is a global leader in hydroprocessing

catalysts and Zeolyst is a global leader in commercial and

speciality zeolites. But, as we said, getting the best out of a

unit also requires a deep understanding of the intricacies of

the hardware and the process. That is why it is so important,

so valuable, that Criterion and Zeolyst technologists work with

the Shell Global Solutions process team and the customer.

Van Dijk: The fact we are both affiliated with Shell is hugely

important too. It means we can work together on research

and development, seamlessly share computer models and

pilot plant testing facilities, co-design units and join forces

on unit performance optimisation and troubleshooting.

All of this means that customers can not only adopt

leading-edge catalysts from a highly experienced licensor,

but they also receive a solution that is tailored to meet their

specific challenges.

www.shell.com/globalsolutions


KEY LESSONS

from Successful Hydrocracker Projects

THE ANATOMY OF SUCCESSFUL

HYDROCRACKER PROJECTS:

SIX VALUABLE TRUTHS

www.shell.com/globalsolutions


Special Supplement to

HYDROCARBON

PROCESSING ®

Industry experts reveal some of the latest thinking concerning hydrocracking project

design and technology configuration, and the potential for controlling capital costs.

Across the industry, there are numerous recent examples of large

refinery projects stalling at the front-end engineering and design

phase, as their costs spiralled out of control or financing became

difficult. Nevertheless, several multibillion-dollar hydrocracking

projects have been delivered successfully. Here, hydrocracking

technology and catalyst experts discuss some of the insights gleaned

from recent projects that may help to make projects viable in the

current economic climate.

1. Phase the investment: The pentagon model

While the global economic upturn continues to gain

momentum, many refiners are still finding themselves short

of cash and securing the financing for new projects can be

testing. That is why Süleyman Özmen, Vice President,

Refining and Chemical Licensing, Shell Global Solutions

International BV, proposes a three-pronged strategy for

when refiners are planning an investment – the multiplatform

Shell Global Solutions Pentagon Model.

Short term =

just surviving

Operational

improvements

Short to medium term =

surviving/starting to thrive

Short term

revamp

solutions

Long term =

thriving

Health, safety and environmental

issues are of great importance to

Shell Global Solutions and are therefore

central to all of the pentagon options.

Phased

investments

over the

long term

Figure 3: Because of the substantial return on freed capital, there is an

argument for investing the cash generated by Pentagon I in revamps –

Pentagon II. These can help to further improve margins, thereby helping

to fund a phased investment programme – Pentagon III.

CONTINUED ON PAGE 14


www.shell.com/globalsolutions


KEY LESSONS

from Successful Hydrocracker Projects

“Pentagon I advocates a focus on operational improvements such as

reliability and energy management projects that do not require capital

expenditure,” he says. “These are short-term initiatives and can help to

fund Pentagon II initiatives, which are short-to-medium-term revamp

solutions. In turn, the cash generated from those initiatives can be used

for the larger, more capital-intensive projects of Pentagon III.” Each of

the three pentagons has investment options on all five sides (Figure 3).

Hydrocracker-related projects are fundamental to this model, as is the

Shell Sulphur Technology Platform.

Designed to help refiners process heavier, sourer crudes, while

meeting stringent emissions and product requirements, the Shell

Sulphur Technology Platform is a portfolio of integrated,

comprehensive technology solutions customised to meet a refiner’s

specific needs. It includes technologies from carefully selected key

companies to manage sulphur in various forms, including sulphur in

crude; sulphur in products; hydrogen sulphide; sulphur dioxide;

mercaptans; and solid sulphur.

KEY TRUTH: High-performing companies are enhancing the

viability of major projects by phasing their investment

programmes. They are using the cash generated by low-cost

projects to fund larger, more capital intensive projects.

2. Leverage economies of scale

Maximising the capacity of each train can help to bring capital

expenditure down, says Nicolaas van Dijk, Global Process

Technology Manager, Hydroprocessing, Shell Global Solutions

International BV. But, he says, it is vital for the licensor to be able to

demonstrate that such capacities are achievable.

“To enhance the economics of CNOOC’s new hydrocracker, we

suggested during the development phase that they could achieve the

same capacity from two trains instead of three,” he says. “That

brought the cost down significantly, but an important element of their

decision making was that we were able to show them another site,

the Shell Pernis refinery in the Netherlands, successfully operating a

hydrocracker with similarly sized trains.”

KEY TRUTH: Economies of scale can substantially

enhance project economics – but reference sites should

always be studied.

3. Make maximum use of existing equipment:

Integrate solutions

One of the most effective ways to reduce investment costs is

the intelligent integration of process units, writes Yvonne Lucas,

Licensing Technology Manager, Refining, Shell Global

Solutions International BV.

“One customer in Europe wanted to build a mild

hydrocracker complex to process a mix of medium and

heavy VGO, and also to hydrotreat the gasoil from a crude

distiller,” Lucas explains. “We could have offered two

separate standard designs. Instead, to squeeze down the

capital cost, we designed an integrated reactor section: the

hydrodesulphurisation (HDS) reactor and the hydrocracking

reactor were combined with a common separation,

compression and fractionation section. Because the customer

only needed one unit instead of two, the capital cost was

significantly reduced.”

KEY TRUTH: Designs should make maximum use of

existing equipment. Integration with other process units

can help to keep costs down.

4. Optimise the conversion level

The greater the level of conversion, the greater the capital

expenditure required. Mike Street, Hydroprocessing

Principal Process Engineer, Shell Global Solutions

International BV, says the licensor’s objective should be to

find the conversion sweet spot, which is strongly affected by

the properties of the feed.

He explains: “In recent projects, we have configured the

hydrocracking processes in such a way that the capital cost is

balanced against the potential margin. Along with the future

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Special Supplement to

HYDROCARBON

PROCESSING ®

licensee, we work hard to closely integrate the new hardware

into the rest of the refinery. Designs that are based on partial

conversion of the feedstock manage the capital cost of the

hydrocracker better, integrate more effectively within the

refinery and can produce an excellent return on investment.”

Street continues, “Total conversion, or anything approaching

that, is too expensive for many refiners in today’s market.

There are projects that went after 98% conversion but that

required such huge reactors and catalyst volumes that the

cost became unmanageable.”

KEY TRUTH: Designs should find the conversion

sweet spot. For relatively tough feeds, this is typically

at a 60–80% conversion level, as long as integration

with other units is possible. This can be an effective

way to manage the cost and still provide a reasonable

refining margin.

5. Consider the sulphur balance; manage the bottom

of the barrel

Although there are robust technologies, such as KBR’s

Residuum Oil Supercritical Extraction (ROSE) unit, for

preparing high-quality DAO that can be used as

hydrocracker feedstock (see page 18), they also yield a

high-sulphur asphaltenic residue that can be difficult to

utilise economically.

Some of this residue can be economically converted to

higher-value products such as bitumen, but it is also typically

used as an on-site fuel. This, however, can increase a

refinery’s sulphur dioxide (SO 2

) emissions.

However, Stéphane Charest, Business Development

Manager, Cansolv Technologies Inc., describes an elegant

solution for a scenario in which crude vacuum distillation

products are sent directly to the hydrocracker (VGO) and to

a ROSE unit (vacuum residue). “The DAO produced by the

ROSE unit would be sent to the hydrocracker for further

upgrading, while some of the asphaltenic residue product from the

ROSE unit could be blended in the fuel oil and fuel the boiler that

generates steam and power for the refinery. A Cansolv SO 2

Scrubbing System treats the boiler stack emissions; thus, the use of

the residue as boiler fuel would be unlocked. It is a complete

bottoms-management solution,” he says.

Cansolv Technologies Inc. is wholly owned by Shell Global Solutions International BV.

KEY TRUTH: Applying a regenerable flue gas SO 2

absorption

process to residue-fired utility boilers provides an effective

alternative for refiners when residue volumes are not substantial

enough to justify capital-intensive bottoms conversion units.

6. Be prepared to be adaptable

Hydrocracker projects are long-term initiatives that could potentially

be derailed by external events. But, says Robert Redelmeier,

Hydroprocessing Adviser, Shell Global Solutions (US) Inc., operators

should challenge the licensor to find a new solution that is within

their constraints.

“For instance, if it seems that the costs are skyrocketing owing to

external factors, you might be able to change the process

configuration, phase the implementation or rescale the units. None of

that is easy, and it may mean having to adapt previously designed

equipment, but it could rescue the project.

“As an example, when a customer called to inform me that a project

had been cancelled, we worked with the company and found a way

to reduce the amount of hardware and the quantity of catalyst that

were required – and the capital expenditure – and thereby saved the

project,” he says.

KEY TRUTH: Adaptability is a key attribute of a successful

project. When external factors change, the design can usually

be adjusted, but it requires both flexibility and top-tier

operational expertise.

www.shell.com/globalsolutions


KEY LESSONS

from Successful Hydrocracker Projects

CASE STUDY:

GRUPA LOTOS HITS THE

RESIDUE CONVERSION

SWEET SPOT

Deploying DAO hydrocracking

helps the Gdańsk refinery to

raise refining capacity by 75%

and focus production on

higher-margin diesel fuels.

Courtesy Grupa LOTOS SA

Polish refiner Grupa LOTOS has taken a positive step towards its

goal of becoming the most advanced oil corporation in the Baltic

Sea region by implementing a major capital investment initiative,

the “10+ Programme”. The key element of this was a residueupgrading

project that it undertook with Shell Global Solutions.

As a result, Grupa LOTOS has not only enhanced its refining

capacity from 6 to 10 Mt/y, but it has also enhanced its margin

by $5 a barrel. In addition, the refinery is now better equipped to

meet all the forthcoming environmental standards, such as emissions

limits and product specifications, and has optimised its oil product

streams to meet market conditions.

Grupa LOTOS is feeding DAO, which has traditionally been used in

refineries as an FCC feed owing to its high metals content, to a newly

installed 45,000-bbl/d hydrocracker (see Table 1). Indeed, the

company is the first refiner in the world to make operational a new

generation of DAO hydrocracking technology, although more units have

been designed (see boxed text, Unlocking the potential of DAO

hydrocracking).

Grupa LOTOS’s Gdańsk facility is a highly complex refinery that

now has two hydrocrackers. It is technologically advanced and

Chief Executive Pawel Olechnowicz says it has become one of

the two most modern refineries in Europe and that it deserves the

title: the greenest, most environmentally friendly refinery in the

Baltic Sea region.

The residue upgrading project is the key element of a larger

initiative, the “10+ Programme”, which saw a massive $2

billion upgrade of the Gdańsk refinery. In addition to the

hydrocracker, the refiner installed an integrated crude

distillation–vacuum distillation unit (CDU–VDU), an HDS unit,

a ROSE unit, an amine sulphur recovery unit (ASR), a

hydrogen manufacturing unit (HMU), a refinery–harbour

product pipeline, product tanks and pumping stations, and

revamped its hydrogen recovery unit.

The ROSE unit is licensed by the technology and

engineering firm KBR, which is one of Shell Global

PROPERTY VGO 1 DAO

Specific gravity 0.925 0.9497

Sulphur, wt% 1.9 2.3

Nitrogen, ppmv 1,573 2,664

Total Ni/V, ppmw


Special Supplement to

HYDROCARBON

PROCESSING ®

UNLOCKING THE POTENTIAL OF DAO HYDROCRACKING

The new generation of DAO hydrocracking has become possible

through recent advances in catalyst technology that enable the

catalyst system to remove the metals and manage other contaminants

associated with DAO, writes John Baric, Licensing Technology

Manager, Shell Global Solutions International BV.

“The combination of solvent deasphalting (SDA) and DAO

hydrocracking is one of the lowest capital cost options for residue

conversion, especially compared with other direct residue

hydrocracking options. Traditionally, DAO had to be processed in

an FCC unit because of its high metals content and high Conradson

carbon (CCR) content. VGO has about a 1–2-ppm metals content

and 0.5–1.0%wt CCR content, whereas DAO typically contains

15–30 ppm of metals and 6–10%wt CCR. But that is no longer a

problem, as the state of the art has progressed and a well-designed

catalyst system with demetallisation followed by pretreatment and

cracking catalysts can easily handle this.

“The key is to understand the application of the catalysts specific to

DAO. Metals removal is actually a very fast and easy reaction;

the trick is to design the reactor conditions so that they slow

down the metals removal in order to maximise the metals

uptake on the catalyst. The catalyst selection is also

important, for both pretreatment and cracking, as you need

to strike a balance between selectivity and activity to match

the properties of the DAO.

“Of KBR’s 50 references for ROSE units, 48 of them are

supplying an FCC unit. Only two feed a hydrocracker,

but there is a clear trend towards this technology

becoming more prominent. Indeed, at Shell Global

Solutions we have designed four DAO hydrocracker

units in recent years. One reason for this is market needs;

hydrocracking is increasing in prominence at the expense

of FCC as global demand for distillates rises and that for

gasoline and naphtha diminishes.

“That is why, I believe, we are going to see DAO

hydrocracking becoming an increasingly prominent

technology,” he concludes.

Solutions’ alliance partners. The ROSE unit provides superior

quality DAO that is suitable for hydrocracking because it has

reduced levels of contaminants such as sulphur, nitrogen,

metals and asphaltenes (Figure 4).

Grupa LOTOS’s original project plan also involved the

construction of a Shell gasifier for processing the residue.

However, that project had to be scaled back in 2007, as

project costs for steel, engineering services and labour

increased significantly. The plans were further affected by

the 2008 economic crisis.

In response, Grupa LOTOS carefully reconsidered the project.

The Shell gasifier was put on hold; it may come with a later

investment programme. In the mean time, the residue is being

blended into bitumen (seasonally) and used as fuel oil.

KBR’s ROSE unit and Shell Global Solutions’ DAO

hydrocracker are now fully operational and integrated into the

refinery operation. For the ROSE unit, the key specifications for

DAO quality (asphaltenes, metals, Conradson carbon) have

all been better than guarantee at the design DAO lift.

Breakthrough year

In the final quarter of 2010, Grupa LOTOS processed

2.2 Mt of crude oil, which was 42.7% more than in the

Naphtha

Atmospheric

residue

Vacuum

residue

HMU

HVU

Hydrogen

VGO

ROSE

DAO

HCU

C4 minus

Naphtha

Diesel

FCC/base oil

High-sulphur fuel oil/bitumen/FCC

Figure 4: Grupa LOTOS’s DAO hydrocracker runs on a feed of 50% VGO and

50% DAO, and produces a high-quality product slate that includes ULSD.

corresponding period of 2009. It also reached its planned

processing target of over 8 Mt, which is the highest annual

throughput ever recorded by the refiner.

“What is equally important, apart from expanding the production

capacity, is that we are also increasing our market share; in 2010,

our share in the domestic fuel market grew to 30%,” says

Olechnowicz. “2010 was a breakthrough year for Grupa LOTOS.”

Jet

www.shell.com/globalsolutions


KEY LESSONS

from Successful Hydrocracker Projects

CASE STUDY:

DESIGNING

CHINA’S

BIGGEST

HYDROCRACKER

www.shell.com/globalsolutions


Special Supplement to

HYDROCARBON

PROCESSING ®

CNOOC IS EXTREMELY

SATISFIED WITH THE

OPERATIONAL DATA AND

CATALYST PERFORMANCE

DURING THE FIRST CYCLE

Designing and bringing online China’s largest capacity hydrocracker

was a highly challenging project on an enormous scale. Not only

was the hydrocracker at CNOOC’s grassroots Huizhou refinery

approaching the known technical boundaries, it also had to process

an extremely difficult feedstock.

Nevertheless, Shell Global Solutions licensed hydrocracking

technology and the specially developed Criterion catalysts met all the

performance guarantees when the 80,000-bbl/d hydrocracker in

Guangzhou Province started up in 2009.

The $3 billion refinery uses leading-edge processing and

environmental protection technology, and supplies more than 7 Mt

of premium gasoline, kerosene and diesel, and over 4 Mt of other

petrochemical products to the thriving local markets of Guangdong

Province and South China.

The facility is the largest single-train refinery in China and, to utilise

the Peng Lai crude oil that CNOOC extracts from the Bohai Sea, it is

the first plant in the world specially designed to process 100% heavy,

high-acid, naphthenic crude oil.

Processing such a distinctive crude places special demands on many

aspects of the overall design of the refinery. The high acidity of the

Peng Lai crude could potentially lead to corrosion problems in the

crude unit and also in the downstream hydroprocessing units if not

carefully managed. In addition to the corrosion aspect, highly

naphthenic crudes can be characterised by poor distillate properties

such as low kerosene smoke points, low diesel cetane index and high

diesel density, which places especially high demands on the catalysts

used in all of the hydroprocessing units.

Selecting the optimal combination of catalysts and process

conditions for the hydrocracker was, therefore, a critical factor for

achieving the target distillate properties and managing corrosion in

a cost-effective design.

CONTINUED ON PAGE 22


www.shell.com/globalsolutions


KEY LESSONS

from Successful Hydrocracker Projects

KEROSENE

DIESEL

GUARANTEE ACTUAL GUARANTEE ACTUAL

Density, kg/m 3 830 (max.) 806 840 (max.) 827

Sulphur, ppmw 10 (max.) 1 50 (max.) 2

Flash point, °C 38 (min.) 45 55 (min.) 77

Smoke point, °C 25 (min.) 26 – –

Cetane number – – 55 (min.) 65

Table 2: Performance test run product-quality results.

CNOOC worked closely with Shell Global Solutions and Criterion.

Together, they configured special catalysts for the hydrocracker,

which is currently China’s largest in terms of single-unit capacity.

The catalysts are optimised for the design feed of VGO and

HCGO; the desired product slate; and the process technology.

The hydrocracking unit has two parallel reaction section trains, each

with one reactor. Shell Global Solutions designed the reactors to the

exact specifications supplied by CNOOC, to help ensure

that the reactors could be manufactured in China. Each

reactor has six catalyst beds containing all of the required

grading, demetallisation, pretreating and cracking catalysts.

Because the hydrocracking catalysts are fundamental to the

refinery’s performance and its ability to meet China’s

increasingly stringent fuel specifications, the results of a

36-h test run, which was conducted after five months of

operation and was designed to assess the unit’s

performance, were especially significant. Key product

quality data are shown in Table 2.

Following the test run, Wu Qing, Director of Planning &

Investment Management, CNOOC Oil & Petrochemicals

Co., Ltd, Huizhou refinery said, “The catalyst is

performing excellently and the design indicators have

been achieved. We are benefiting from high yields of

middle distillates with minimal light ends, and hydrowax

production is meeting our target.”

According to Wu, the yield of middle distillates has

exceeded the design value and the main product properties

are meeting or exceeding the design values.

“CNOOC is extremely satisfied with the operational data

and catalyst performance during the first cycle,” added Wu.

“Based on this proven performance, we have requested that

Criterion supply the catalysts for the second cycle.”

Ed Daniels, Executive Vice President, Shell Projects &

Technology, says, “The co-operation among the CNOOC

management, operations and project teams, the local design

institute and Shell Global Solutions formed the basis for a

successful start-up and meeting the guarantees for the largest

hydrocracker unit in China.”

www.shell.com/globalsolutions


Disclaimer

This document contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell plc.

All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements.

Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and

unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.

Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements

expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use

of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘intend’’, ‘‘may’’, ‘‘plan’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘probably’’, ‘‘project’’,

‘‘will’’, ‘‘seek’’, ‘‘target’’, ‘‘risks’’, ‘‘goals’’, ‘‘should’’ and similar terms and phrases.

There are a number of factors that could affect the future operations of Royal Dutch Shell plc and could cause those results to differ materially from those

expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas;

(b) changes in demand for the Shell Group’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserve estimates; (f) loss of market

and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets,

and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international

sanctions; (j) legislative, fiscal and regulatory developments including potential litigation and regulatory effects arising from recategorisation of reserves;

(k) economic and financial market conditions in various countries and regions; (l) political risks, project delay or advancement, approvals and cost estimates;

and (m) changes in trading conditions.

All statements regarding CNOOC and Grupa LOTOS and their products and services are based solely on information provided by CNOOC and Grupa LOTOS

and have not been independently verified by Shell Global Solutions.

746841–CSL–09/2011


CENTERA ® is the latest development in catalyst technology from Criterion. Featuring nanotechnology

in active site assembly, CENTERA builds upon the strong legacy of Centinel, Centinel Gold

and ASCENT technologies. Based on your specific needs, CENTERA can help improve your

refining capabilities. Whether you are facing challenges in cycle length, feedstock type, or process

flexibility, our advanced technology offers a solution. Take a step forward with CENTERA. For more

information, please contact CriterionPublicAffairs@CRI-Criterion.com.

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