OGJ FOCUS: Refining catalyst market begins to recover in 2010

April 26, 2010
The global refining catalyst market 2010-13 shows signs of recovering, based on an analysis of the world's oil refining operations 1999-2009 that established future trends in catalyst spending.

The global refining catalyst market 2010-13 shows signs of recovering, based on an analysis of the world's oil refining operations 1999-2009 that established future trends in catalyst spending.

Refining catalyst demand will continue to increase moderately 2010-13 as the global recession winds out and energy prices remain soft. Global spending on refining catalysts will increase to about $3.13 billion by 2013, a rate of about 2%/year.

Hydrotreating, catalytic cracking, hydrocracking, and naphtha reforming catalyst markets will increase to $1.066 billion (2.36%/year), $907 million (0.71%/year), $251 million (6.22%/year), and $149 million (1%/year), respectively.

World crude distillation capacity will rise to 90.8 million b/d in 2013 from 87.2 million b/d in 2009, a rate of 1.03%/year. Hydrotreating, catalytic cracking, hydrocracking, and naphtha reforming process capacities will increase to 49.24 million b/d, 14.99 million b/d, 6.73 million b/d, and 11.99 million b/d, respectively, in 2013 from 45.0 million b/d, 14.6 million b/d, 5.4 million b/d, and 11.5 million b/d in 2009. This represents an average refining capacity increase of about 1.62 million b/d/year, or 2.12%/year.

Refiners will continue to focus on increasing upgrading capacity to meet product demand for their regions. Requirements for cleaner gasolines and middle distillates will help support hydrotreating and hydrocracking catalyst demand.

Expansion of current refineries and construction of new hydrotreaters, hydrocrackers, FCCUs, and naphtha reformers units will add about 2.084 million b/d, 607,000 b/d, 122,000 b/d, and 240,000 b/d, respectively, to global refining capacity by 2013.

Technology improvement will make new refining catalysts more active on a volume basis and more resistant to deactivation when heavy fractions are used under severe operation conditions, and the catalysts will consume less hydrogen than currently available catalysts.

Refinery shutdowns have occurred every year in all regions. The more significant changes occurred in Asia-Pacific and North America. Although several individual refineries decreased capacities, overall refining capacity increased, which indicates that remaining refineries have improved processing-capacity efficiency.

Average refinery sizes in Asia-Pacific and North America increased to 106,000 b/d from 159,000 b/d and to 110,000 b/d from 139,000 b/d, respectively, during 1999-2009.

Oil production trends

Since 1997, many factors have upset the world oil markets. The consequences of Asia's financial crisis made 1999 a disastrous year for many refiners. In 2000, gasoline exports to the US boosted Europe's refining margins, while 2002 showed the worst margins in the last 10 years.

The terrorist attacks of Sept. 11, 2001, caused a loss of middle distillate demand and high volatility for crude oil prices and profit margins in 2002. World oil production decreased by 3.4 million b/d.

OPEC production capacity decreased to 24.3 million b/d from 28.2 million b/d during 2000-01 (based on Oil & Gas Journal production surveys). OPEC members currently represent the 42% of the world oil production (Fig. 1).

Oil production recovered after 2002, increasing to 72.5 million b/d in 2006, growing at 1.63 million b/d/year. Since 2006, exogenous factors have acted on oil industry operations to cause instability of oil prices in energy markets. This made producing companies curtail production.

In 2009, world oil production decreased to 70.5 million b/d from 73.0 million b/d in 2008 due to the global recession. Oil production shows signs of recovery in 2010.

Refining capacity trends

During 1997-2009, worldwide crude distillation capacity increased by about 8.9 million b/d (0.95%/year), while refining capacity in the main catalyst processes increased by about 13.09 million b/d (1.72%/year, Fig. 2). The biggest average refining capacity growth occurred in Asia-Pacific and North America regions.

Fig. 3 shows refining capacity trends corresponding to the main catalytic processes during 1999-2009. These processes represent about 88% of total crude distillation capacity; about 19.1% is fluid catalytic cracking, 58.8% is hydrotreating, 7.0% is hydrocracking, and 15.1% naphtha reforming. This increased to about 88% in 2009 from 81% in 1999 and suggests refining complexity has increased (Fig. 4). These proportions remained steady during 2007-09.

Since 1999, every global region has experienced yearly refinery shutdowns; therefore, world crude distillation capacity remained flat during 1999-2001. More significant changes have occurred in the mature areas. Refining capacity increased by about 345,000 b/d/year in this period. Two periods of processing capacity growth have been 2001-05 and 2005-09.

In 2001-05, global crude distillation capacity experienced an average increase of about 990,000 b/d/year (1.22%/year) despite the fact that the total number of oil refineries decreased to 662 from 732. Catalytic processing capacity experienced an average increase of about 1.71 million b/d/year (2.58%/year).

The average hydrotreating capacity increased 1.453 million b/d/ year (3.92%/year), fluid catalytic cracking 100,000 b/d/ year (0.72%/year), naphtha reforming 72,000 b/d/year (0.66%/year), and hydrocracking 85,000 b/d/year (1.98%/year).

In 2005-09, worldwide crude distillation grew by about 523,000 b/d/year (0.61%/year) despite that during this period the total number of oil refineries remained constant. World refining capacity experienced average increases of 859,000 b/d/year (1.18%/year), hydrotreating increased 541,000 b/d/year (1.26%/year), fluid catalytic cracking increased 75,000 b/d/year (0.53%/year), hydrocracking 185.000 b/d/year (3.99%/year), and naphtha-reforming increased 58,000 b/d/year 0.51%/year).

There are currently 661 refineries in 116 countries; most are in North America and Asia-Pacific regions (Fig. 5). Refinery shutdowns have occurred every year in all regions.

The more significant changes occurred in North America and Asia-Pacific. Although the number of refineries decreased in these regions, the performance and refining capacity of the remaining refineries have increased. Western Europe and Asia-Pacific refineries have the largest average crude distillation capacity (159,000 b/d; Table 1).

Asia-Pacific and North American regions experienced the largest average refinery capacity growth (50% and 26%, respectively) during 1999-2009. The US, however, has maintained its position as the most sophisticated oil refining region. About 130 of the refineries in the world are in the US and about 20% of the world's crude is processed in these refineries.

New constructions or expansions of current units are under way for about 2.084 million b/d in hydrotreating, 122,000 b/d in fluid catalytic cracking, 240,000 b/d in naphtha reforming, 607,000 b/d in hydrocracking (OGJ, Nov. 16, 2009, p. 20).

Future catalyst demand

Estimates for the refining catalyst market by 2013 take into account:

• Average refining capacity increases for the different catalytic processes in 2005-09 (Table 2).

• Additional refining capacity that will be added in 2009-12 (Table 2).

• Past refining catalyst market behavior (Table 3).

The future catalyst market was estimated by projecting increases in refinery capacities for the different catalytic processes, accounting for 2009-12 added capacity, and using the calculated catalyst factors (barrels of oil refined per dollar of catalyst) reported in previous work (OGJ, Apr. 26, 2004, p. 26).

Catalyst markets for hydrotreating, fluid catalytic cracking, hydrocracking, and naphtha reforming will increase to $1.066 billion (2.36%/year), $907 million (0.71%/year), $251 million (6.22%/year), and $149 million (1.00%/year), respectively by 2013. These four catalytic processes represent about 76% of total refining catalyst market (Fig. 6). If this proportion remains constant in the near term, the future refining catalyst market will increase to about $3.13 billion (2.0%/year) in 2013.

The author

Ricardo Prada Silvy is director of research and development at SouthWest NanoTechnologies, Norman, Okla.; consultant at Petrobras Cenpes in gas-to-liquid technology; and affiliate professor at the University of Oklahoma, Norman. He has previously worked for Nanocyl SA-Belgium, Petroleos de Venezuela SA, and Procter & Gamble. He also served on the graduate school faculty in the chemical engineering department at the Universidad Central de Venezuela. Prada Silvy holds a BSc (1981) in chemistry with major in chemical engineering from UCV, an MSc (1984) and PhD (1987) in catalysis and material science from the Universite Catholique de Louvain (Belgium).

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