L. R. Aalund
Managing Editor-Technology
The first project in a decade-long program to expand and upgrade Saudi Arabia's refining network will go in the field this October at the Saudi Arabian Marketing & Refining Co. (Samarec) Yanbu refinery. It will be the first step in the conversion of this basic hydroskimmer to a classic reformulated fuels refinery.
Projects at other refineries in the kingdom will follow at a pace that could put $3.5-4.5 billion worth of work on site by the end of the first quarter of 1994. Completion of the Samarec projects is planned for 1997, according to the company.
The Saudi Arabian Oil Co. (Saudi Aramco) Ras Tanura refinery is also a major target of the long-term upgrading program, which has been designated the Kingdom Refinery Upgrading Program (KRUP). The new units at Ras Tanura have been sized and the technology selected.
Late last month, managing contractor Brown & Root Braun was finalizing a lump-sum turnkey (LSTK) contract at its Alhambra, Calif., offices covering design, procurement, and construction for approval by the Saudi Aramco executive committee. No official details have been released yet on the specific configuration or timing of this revamp.
The picture emerging is that KRUP will be stretched out more than originally anticipated.
But the initial investment still makes this one of the world's largest single, active programs and will put Saudi Arabia on the road to big-league refining.
This is only the down payment on a master plan that calls for a total outlay of $16 billion over the next 10-12 years.
A large portion is to go to further expansion and upgrading of the Ras Tanura refinery plus investments in three joint venture refineries in the kingdom.
Two of them have relatively good conversion capability, but a third is a large hydroskimmer that is ripe for upgrading.
The master plan is part of a two-pronged strategy that is making the world's premier holder of oil reserves a power in international refining. In addition to domestic upgrading and expansion, the other element is joint refining ventures outside Saudi Arabia, so far in the U. S. and Korea. A Japanese partnership, with new refineries, is also a strong possibility.
The American partnership with Texaco Inc., Star Enterprise, got Saudi Aramco an interest in U.S. service stations and 615,000 b/d of capacity in three refineries.
In South Korea, Saudi Aramco has acquired a 35% interest in Ssangyong Oil Refining Co., which operates a 145,000 b/d topping refinery at Onsan.
FIRST STAGE
The current activity in the kingdom is focused on the three Samarec refineries (Yanbu, Riyadh, and jeddah) and Saudi Aramco's Ras Tanura refinery.
The position of these two state-owned companies in the kingdom's refining structure is shown in Fig. 1. The map (Fig. 2) shows the locations of the refineries.
Samarec does not operate the Ras Tanura refinery but coordinates its output and handles its domestic and export product distribution.
Samarec has also influenced the Ras Tanura upgrading plans. Minister of Petroleum and Mineral Resources Hisham M. Nazer chairs the boards of both Samarec and Saudi Aramco.
Each of the companies, however, is running its own upgrading program. Samarec has selected Foster Wheeler Corp. to be its managing contractor, while Saudi Aramco has chosen Brown & Root Braun, as noted earlier.
SAMAREC
Dr. Mohammad A. Hasanain, director of Samarec's KRUP program, reports that licensors for the new process units at the Yanbu, Riyadh, and Jeddah refineries have been selected. Definitive scoping has been completed and cost estimates prepared on a 25% basis.
The cost estimates are Yanbu, $1.8 billion ($1.35-2.25 billion); Riyadh, $541 million ($406-676 million); and Jeddah, $478 million ($359-598 million).
In addition, front-end engineering and definitive cost estimating at all three refineries are under way. Work on LSTK contract strategy and bid packages began in March. The LSTK contracts will probably include engineering design when offered for bids later this year.
Samarec will kick off the Yanbu upgrading project with a fast-track project to debottleneck the crude unit. It will raise capacity to 300,000 b/d from 170,000 b/d.
Detailed engineering and procurement for this started in February, and construction is expected to begin, as noted, in October.
SAUDI ARAMCO
Saudi Aramco is proceeding cautiously with its upgrading program.
Ali I. Naimi, president and chief executive officer of Saudi Aramco, tells the Journal that the Ras Tanura refinery will be rebuilt to the 530,000 b/d level it had prior to a fire in 1990. The complex long-term replacement project will include a fluid catalytic cracker (FCC) and a hydrocracker.
He notes that Saudi domestic consumption has been running at 850,000 b/d and increasing at rates of 35%/year.
The refinery upgrade and expansion project, he said, is a question of staging.
"We don't want, for example, to go in the direction of diesel and find natural gas more appropriate."
Earlier this year, Saudi Aramco's executive committee evaluated several options including increasing capacity of the Ras Tanura hydroskimmer to 530,000 b/d plus adding, among other things, a 90,000 b/d visbreaker, a 110,000 b/d FCC, a hydrocracker, 75,000 b/d of alkylation capacity, and state-of-the-art control and utility systems.
The committee decided in March that the initial upgrade would not include a new crude unit, thus maintaining capacity at 300,000 b/d. Downstream units, though, would include a UOP/Unocal hydrocracker and UOP continuous catalytic reformer (CCR), but not an FCC.
The decision will not preclude Ras Tanura from later boosting capacity to 530,000 b/d with the matching conversion capacity, which would include the FCC.
"We will start at the 300,000 b/d level and retain the option to go all the way to 'full bloom'," says a manager at Ras Tanura.
Nevertheless, the activity slated for Ras Tanura constitutes a major project likely to be put out for bids this fall.
The work comprises three packages. The first is for the North refinery and includes water treatment, instrument air, power generation, the CCR, and a hydrotreater.
The second package will cover the South refinery and includes the 40,000 b/d hydrocracker, a hydrogen plant, and a visbreaker.
Each package is estimated to cost $500-600 million. The projects will be spread over 5 years, although normally such projects require 4 years, a contractor estimates.
The third package will cover a new distributed control system for the entire refinery, which is estimated to cost $200 million.
RABIGH
Across the kingdom from Ras Tanura on the Red Sea is the 300,000 b/d Petromin Petrola Rabigh Refinery Co. refinery at Rabigh. This refinery was originally supposed to be upgraded with Ras Tanura in Phase 2 of the upgrading program.
The second phase was to begin 3 years after Phase 1, which covers the three Samarec refineries. The Ras Tanura timetable has apparently been moved up, essentially merging Phases 1 and 2.
But the Rabigh refinery appears to have dropped out of the upgrade picture for now.
It is a joint venture of Samarec and Petrola International, a Greek company. It has no catalytic reformer or conversion capacity and therefore offers plenty of opportunity for upgrading.
This refinery started up in 1990 after many delays and then had a fire in 1991 that cut capacity to its current level from 325,000 b/d.
FORMATION OF SAMAREC
There would be no refinery modernization program in Saudi Arabia today without Samarec. And there would be no Samarec without the leadership of Nazer, according to observers of the kingdom's oil industry.
Nazer took on the petroleum post in December 1986. He inherited a refining industry with one project in difficulty (Rabigh) and six relatively autonomous refining companies.
He also inherited a refining industry that was languishing from the opiate of bunker fuels. Heavy tanker traffic in the Arabian Gulf and Red Sea gives high-sulfur, atmospheric bottoms (the ubiquitous "A690") from Arab Light crude an easy outlet.
What doesn't go to tankers goes from Ras Tanura to Corpus Christi, Tex., or elsewhere, for desulfurization and cracking.
The new company was created by the General Petroleum & Minerals Organization (Petromin) at the beginning of 1989 and given stronger management and clear missions. Petromin is now a holding company, as Fig. 1 shows.
Hussein A. Linjawi, who headed the task force to set up Samarec, was named president and chief executive officer of Samarec
Samarec says in a business profile that it is responsible for the kingdom's refining operations in Riyadh, Rabigh, Jeddah, Yanbu, Jubail, and Ras Tanura. Combined, these refineries have a capacity of 1.6 million b/d.
As can be seen in Fig. 1, Samarec's net capacity is less than this because of Ras Tanura and the foreign participation in three refineries.
The effectiveness of this new organization and company was proven in 1990 when the Saudi refining industry supplied all the allied air, land, and sea forces during Desert Storm and Desert Shield.
Samarec, which has about 11,000 employees, is also responsible for domestic transportation and distribution of refined products in the kingdom and for the sales and export of these products plus LPG. Samarec's Petronal sales organization has offices in New York, London, Tokyo, and Singapore.
REFINING STRUCTURE
On the eve of the upgrading program, the three Samarec refineries and Ras Tanura have total crude distillation capacity of 685,000 b/d. Combined cracking (hydrocracking plus FCC) capacity, however, is only 40,000 b/d, which as percent of crude capacity, is about 6%. In the U.S. this ratio runs at some 43%; worldwide, excluding the former Communist bloc, it is about 21%.
Of the kingdom's total refining capacity, the conversion ratio is about 11%.
This will rise after the first wave of construction to a ratio of some 18% on 1.73 million b/d of capacity.
The capacity total includes the 300,000 b/d Petromin-Mobil Yanbu Refinery Co. Ltd. (Pemref) refinery at Yanbu with its 82,000 b/d of FCC capacity and the 250,000 b/d Petromin Shell Refinery Co. (PSRC) refinery at Jubail with a 52,000 b/d hydrocracker. This cracker was shutdown by a fire last month.
As Fig. 3 shows, the kingdom is not devoid of high-performance refineries. Pemref makes unleaded gasoline, which is exported by Mobil.
Saudi Arabia has a sophisticated and thriving lubricating and grease manufacturing industry. This is generally a step not taken until large automotive and industrial markets exist-not the case when Petromin Lubricating Oil Co. (Petrolube) was formed by royal decree in 1968. In 1973 it imported all its lube stocks and blended only 75,000 bbl/year of lubricants for the Saudi market.
Today Petrolube draws all its base oils from its sister company, Saudi Arabia's Petromin Lubricating Oil Refining Co. (Luberef), and blends 2 million bbl/year of products, serving over 40% of the Saudi market with its own brand of 150 lubricants and special greases. It also exports to 30 different countries. With 6 million bbl/year of capacity, Petrolube also blends for other companies marketing in Saudi Arabia.
PRODUCTS
Official statistics for total refined product output, crude runs, and demand for the entire country for 1992 are not available.
But, according to one student of the Saudi refining industry, Saudi Arabia refined product output averaged some 1.69 million b/d in 1992. Of that, 30% was heavy fuel oil and only 14% gasoline. Some 188,000 b/d of gasoline was consumed in the country.
Samarec's output of refined products, excluding one half of the output from the three joint venture refineries and that from Ras Tanura, will rise from 405,000 b/d to 480,000 b/d after the modernization.
Gasoline consumption appears to have jumped almost 9% in 1992 (premium gasoline sales increased 10% that year). Diesel increased 8%. Fuel prices, which are set by royal decree, are now 33cts/gal for gasoline and 10cts/gal for diesel.
Such price levels can promote consumption and eat up refining capacity quickly in times of high economic activity, which is the case now in Saudi Arabia as a result of major projects in petrochemicals and crude oil production. There is also a remarkable wave of residential construction going on. There is no evidence of a recession in Saudi Arabia.
The kingdom now has an estimated 5 million autos, compared with 60,000 autos 20 years ago. The population, variously estimated at 10 million for years, has now been put at 17 million as a result of a recent census.
The kingdom has turned its oil wealth into modern, high-speed highways, new airports, a top-class telephone and communications system, industrial infrastructure, and planned, clean cities.
Refinery planners will have their hands full under these conditions.
But Samarec does not expect the recent 8-9% increases in demand to continue. Refined product demand could grow 4.3%/year during 1993-97. Gasoline demand is expected to grow 4.8%/year during the period, diesel fuel 4.2%/year.
After the upgrades at the Samarec refineries, overall gasoline output from them is expected to rise to 180,000 b/d from 93,000 b/d. This gasoline will be unleaded with substantial quantities being reformulated.
Jet fuel and diesel output will also increase. Diesel production will have a lower sulfur pool average of 0.3 wt % sulfur. Heavy fuel oil production will drop to 77,600 b/d from 126,000 b/d says Samarec.
EXPORTS
After the first stage of the upgrade, Samarec will have an excess of gasoline until 2000. The intention of exporting reformulated gasoline to the U.S. influenced the configuration and size of the upgrade additions.
Linjawi says the upgrades make economic sense, but he also sees them as being in Saudi Arabia's interest for another reason. The reformulated gasoline and low-sulfur diesel they make and export will show the world that, whether made in Saudi Arabia or not, environmentally acceptable fuels are readily available. This in turn will promote the continued use of crude oil, an activity in which Saudi Arabia of course has a vested interest.
However, since the early upgrade design studies were done, the possibility of a U.S. BTU tax has appeared. Samarec now wonders if the U.S. will prove to be as attractive a reformulated fuel market as it once was thought to be. Also, in Europe, the carbon tax refuses to die. That too could crimp demand.
Samarec planners are therefore watching these developments closely, even though the company sees its natural markets as being in the Asia/Pacific region and East Africa. There, however, the emphasis would be on distillate/diesel, not reformulated gasoline.
REFINERY PROJECTS
For this reason, Samarec's Yanbu refinery upgrade will be configured to swing in either the distillate or gasoline direction. Following are details on it and other refineries in the Saudi Arabian circuit.
YANBU
The revamped Samarec Yanbu refinery (Fig. 4) will be the envy of all refiners who must make reformulated fuel. But it can make maximum diesel, if necessary.
Table 1 gives the size of the units that will be added to the refineries. As mentioned earlier, crude distillation capacity will be increased at Yanbu to a total of 300,000 b/d.
The inclusion of both a hydrocracker and FCCU of moderate sizes assures that the refinery can meet almost any gasoline specification or maximize distillate. Relatively, the units are in balance, with the FCC at 18.3% of crude charge and the hydrocracker at 13.3% of crude charge. The total cracking capacity is lower than the typical 37-40% on crude, but reasonable, assuming the refinery will always have Arab Light as feed.
Having both cracking units will allow the refinery to recycle products between the two. A hydrocracker has a bottoms reject stream of very paraffinic oil containing a small amount of asphaltene. This is excellent feed to the FCC.
At the same time, the FCC light cycle oil (LCO) can be routed to the hydrocracker to maximize gasoline yields from the two units. When LCO is not going to the hydrocracker, it can be routed to the diesel hydrodesulfurization unit.
When running maximum gasoline, the refinery can run 1,000-2,000 b/d of hydrocracker reject to the FCC while the FCC feeds 8,000-10,000 b/d of LCO to the hydrocracker.
When running maximum jet/diesel, the hydrocracker can be operated to produce jet fuel while the FCC is run at low severity to make maximum high-cetane LCO for the distillate hydrotreater.
The pending adoption of reformulated gasoline specifications in the U.S. and the likelihood of new requirements such as bromine number limits make it difficult for many refineries to blend gasolines.
The balance between hydrocracked, reformed, cat-cracked, alkylated, and isomerized gasoline, along with methyl tertiary butyl ether (MTBE) practically ensures that this refinery can make any composition of gasoline and meet any specification.
There should be no lack of MTBE at Yanbu. The Samarec Yanbu refinery will have a 2,500 b/d unit. In addition, a 50/50 joint venture of Chemvest/Mobil Oil Corp. is building an 800,000 metric ton/year (18,600 b/d) MTBE plant at Yanbu. Chemvest is a Saudi Arabian company.
Across the country on the east coast at Yanbu's twin Royal Commission city of Jubail, Saudi European Petrochemical Co. (Ibn Zahr) is adding 16,300 b/d of MTBE capacity, to the 11,600 b/d already on line. Also at Jubail, National Methanol Co. is building a 16,300 b/d MTBE plant. Both projects are slated for start-up this year.
Another feature of the Yanbu reconfiguration is the probable integration of a new lube base oil plant with the refinery.
LUBEREF
As Fig. 4 shows, there will be an interchange of streams between the Yanbu refinery and a planned Luberef base oil refinery. The Luberef plant will get 25, 000 b/d of 650 + F. atmospheric resid to make 2 million bbl/year of base stocks.
It will employ the Mobil Lube Dewaxing process and return about 70%, or 17,500 b/d, of the charge in the form of excess vacuum residue, propane deasphalted tar, and extracts to the Yanbu refinery.
Luberef runs a similar operation of about the same size in jeddah, in conjunction with the Samarec refinery there. The unit employs furfural extraction and methyl ethyl ketone dewaxing. Luberef says it still needs board approval for the Yanbu project.
JEDDAH/RIYADH
The existing Riyadh and Jeddah refineries and the units that will be added to these facilities are shown in Fig. 5. The 95,000 b/d Jeddah refinery is the first Petromin refinery built in Saudi Arabia.
It was started up in 1968. It has an 11,000 b/d FCC and converts only 13% of its crude charge to gasoline, making only 95 RON leaded premium with 0.42 g/l. lead.
The city, has grown around the Jeddah refinery, and it is no longer at an ideal site. As Table 1 shows, its desulfurization and octane capability will be increased, but conversion capacity won't be added.
During the great boom of the late 1970s and early 1980s, Jeddah's asphalt plant ran around the clock. Now it is only used once or twice a year.
The only conversion capacity to be added at Riyadh will be that from a 3,000 b/d revamp of the hydrocracker to 34,000 b/d.
PSRC
The PSRC (Petromin Shell) refinery at Jubail runs an unusual operation (Fig. 6). It makes no gasoline but has a 23,000 b/d catalytic reformer basically to make a benzene stream for a nearby styrene operation. Practically all its product is exported to the Far East.
On the upgrading front, Petromin Shell is looking at the feasibility of reducing the sulfur content of its gas oil from 0.3 wt % to 0.05 wt
The design capacity is rated at 317,000 b/d.
Following are the design ratings of some of its key units:
- Vacuum unit-93,000 b/cd.
- Naphtha hydrodesulfurization (HDS)-67,000 b/cd.
- Kerosine HDS - 58, 000 b/cd
- Gas oil HDS-54,000 b/cd
- Hydrocracker - 52, 000 b/cd
- Visbreaker - 36, 000 b/cd
- Hydrogen - 125 MMscfd.
PEMREF
The Petromin Mobil refinery at Yanbu has a nominal design rate of 300,000 b/d but also can run at higher rates-up to 320,000 b/d in one case. Its Arab Light crude comes from Abqaiq on the East Coast via the East-West Petroline, as shown on the map.
The original East-West line has been looped, giving the system a capacity of 5 million b/d. An NGL line from Shedgum to Yanbu parallels this system.
The crude line supplies the entire Saudi Arabian refining network on the west coast. Coastal tankers move the crude from the Yanbu terminal to the Jeddah and Rabigh refineries. Yanbu is also a crude and LPG export terminal for destinations outside Saudi Arabia. The Iraqi Pipeline Trans Saudi Arabia (IPSA) has been shut down since the war.
From a barrel of Arab Light crude, the Pemref refinery makes 38% leaded gasoline. Bunker fuel with 4 wt % sulfur is also a major product.
Last year the refinery added a 2,000 b/d MTBE plant and can make reformulated fuel.
It has no major upgrading project in the wings but is mulling the prospects of making 0.05 wt % sulfur gas oil.
As these major projects unfold in the refining sector, Saudi Basic Industries Corp. (Sabic) continues its surge with new ventures in olefins, their derivatives, methanol, and MTBE.
Anecdotal evidence suggests that a new generation of young Saudi engineers believe their futures lie in the downstream processing sector.
The kingdom's prestigious King Fahd University of Petroleum & Minerals at Dhahran reports that, as of this April, 64 students were enrolled in the Department of Petroleum Engineering, but 650 were enrolled in the Department of Chemical Engineering.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
