Times have changed for catalyst suppliers to the worldwide refining business. Chronic over-capacity and a customer base that was not making much money pushed the catalyst market into a quasi-commodity business. This was the picture until about 2004 when refining margins significantly improved and new environmental regulations forced the refiners to choose processing schemes to meet low sulfur specifications for gasoline and ultra-low sulfur levels in diesel fuels (ULSD).
Process technology and catalyst technologies have been employed to meet these stringent standards.
During the past 20 years, the refining catalyst business has been transformed from a regional business to a global undertaking. Economies of scale are important; and, just as in refining, the size of the smallest manufacturing facility has grown. For fluid catalytic cracking catalysts, the smallest plant should be about 135 metric tons per day, and a hydrotreating facility should produce at least 15 million lb a year. If other products are made in the same catalyst plant, it may prove to be synergistic in terms of overall costs since some equipment can be reused and some utilities may be shared. A somewhat smaller facility might be justified in that instance.
The most recent compilation of refining catalysts shows about 800 products. Catalyst suppliers are customizing their products to the individual application regardless of the process. The most important thing a refiner can do is use the right catalyst correctly for the application. In this aspect, the catalyst supplier plays a significant role since he or she frequently knows more about the products than the refiner using them.
The refinery catalysts used can be categorized according to the size of their markets. Table 1 separates most of the refinery catalysts as to usage rates.
Table 1. Refining Catalysts
|High Usage||Low Usage|
This discussion will focus on the high consumption products.
Sulfuric acid alkylation
Alkylation incorporates a liquid catalyst, sulfuric acid, to react isobutane with light olefins to produce gasoline. HF alkylation is not included here since the acid consumption is low in this process. All of the other refinery processes use heterogeneous catalysis, i.e. a solid catalyst contacting a gas, liquid, or both phases in a reactor. The total global alkylation capacity is nearly 2 million b/d of which about half is sulfuric acid. Typical consumption rates of acid ranges from 22 lb to 26 lb of sulfuric acid per barrel of charge. The total sulfuric acid catalyst market today ranges from 7.5 million to 8.8 million short tons per year. This market has grown during the past eight years because of higher utilization, new capacity coming on line and expansions of existing units. Sulfuric acid prices for this market are typically higher than those quoted for one-time acid use. The spent catalyst must typically be sent back to a regeneration facility where the impurities are removed so the acid can be recycled. Sulfur prices have recently spiked from $100 per metric ton to $250 per metric ton because of high demand in China, which may translate into higher sulfuric acid prices worldwide.
There is a new movement toward on-site refinery production and regeneration of sulfuric acid for alkylation. The process takes advantage of refinery sulfur recovery operations to produce sulfuric acid.
Fluid catalytic cracking
Fluid catalytic cracking (FCC) has undergone significant changes during the past 20 years. In 1987, the catalytic cracker was primarily a gas oil cracker designed to make gasoline. Today, data from W.R. Grace’s September 2007 Singapore Refining Conference shows residual processing has become the largest segment of the feed (46%) going to worldwide FCC units (see pie charts). In Asia, about 67% of the catalytic cracking units are processing resid, and many have been specifically designed for that purpose. The paraffinic crudes in the Pacific basin are particularly suited for processing in residual fluid catalytic cracking units. A rapidly growing segment in the FCC market is hydrotreated feeds. These pretreating units are being constructed to reduce the sulfur in all FCC products and reduce regenerator stack emissions. High severity hydrotreaters produce feeds low in coke precursors and that require catalysts designed specifically for that operation. Regular vacuum gas oil (VGO) cracking represents 35% of today’s market.
The surveys cited indicate Chinese FCC capacity decreased from 892,000 b/d in 2001 to 588,000 b/d in 2008 while crude capacity increased from about 4.3 million b/d to 6.2 million b/d. It is more likely the FCC capacity in China ranges from 1.5 million b/d to 2.5 million b/d today since the conversion capacity listed for China is not congruent with the crude oil barrels processed. According to Hart’s World Refining and Fuels Service, China had about 2.25 million b/d of FCC capacity in 2006. For the purposes of this compilation, 2 million b/d of FCC capacity for China is assumed, and with other adjustments, brings the world FCC total to about 16 million b/d. Catalyst usage for resid, VGO and hydrotreating feeds can be estimated at 0.4 lb/bbl 0.17 lb/bbl and 0.14 lb/bbl resulting in a worldwide demand for cracking catalysts of about 1,960 metric tons per day.
Total capacity for manufacturing catalysts is confidential, but worldwide supply is estimated at about 2,300 metric tons per day ± 15%. Overall, FCC catalyst supply is fairly tight, according to catalyst suppliers.
W.R. Grace, Albemarle and BASF are the primary worldwide FCC catalyst suppliers. CCIC in Japan as well as China’s Sinopec and Petrochina, which also supply catalysts through the latter three suppliers, primarily serve their local regions.
Worldwide market shares tend to vary as large catalyst users shift their sales from one company to another. Grace leads with 30% to 40% of the market, while BASF, Albemarle and the Chinese companies have about 15% to 22% each. CCIC generally supplies less than 10% of the worldwide FCC catalyst market.
FCC catalyst prices have risen significantly because of the increased costs of manufacturing the products. Joe McLean at BASF and Joanne Deady at W.R. Grace have cited energy increases and the cost of raw materials as prime factors the catalyst supplier cannot absorb.
The tighter market has also contributed to higher prices. While catalyst prices vary depending on the application and formulation, numbers from US$2,000 to $3,500 per metric ton are quoted with the latter being for products designed to produce large amounts of petrochemical feedstocks. One supplier has quoted $2,700 per metric ton as an average price. An average catalyst price of $2,500 per metric ton would translate to about a $1.7 billion FCC catalyst market. Future supply is likely to tighten since more than 13 new licensed catalytic cracking units have yet to come on stream. This could add another 150 metric tons per day or more to demand if they are all built. Further price increases should be expected in the next three to five years barring a worldwide recession.
These prices, according to the major FCC catalyst suppliers, are necessary. They cite the need to meet rising costs, support major research and development (R&D) efforts, provide capital for plant expansions and yield a reasonable return on their assets.
The BASF R&D efforts have increased since the company acquired Engelhard, McLean said. An increase in spending of 60% during a three-year period is being implemented. The company has new developments in resid processing and is looking to increase the yield and quality of diesel coming from the catalytic cracker for markets such as Europe, which are shifting from gasoline to diesel engines. Some new manufacturing schemes may be employed in the future to further expand its catalysts’ capabilities.
W.R. Grace measures its product line with a vitality index, which is a measure of the new products introduced to the market during the past five years. Company representatives feel this program has made Grace the industry leader in clean fuels. In addition, it introduced what is touted as the most selective bottoms cracking catalyst, the Midas line, and will mix it with the other application specific catalysts in the Genesis catalyst system to give the best features of both catalysts.
Future thrusts include better metals tolerance for resid units, selective bottoms cracking and better capturing of the synergy between cat feed hydrotreating and cat cracker itself.
Albemarle is looking at catalysts to increase middle distillate and products that achieve high propylene yields in the FCC unit. With about 60% of the world’s catalysts designed for resid operations, this area is getting a lot of attention. The company introduced the concept of an accessibility index to account for diffusion problems when processing heavier feeds.
FCC additives are used with catalysts to meet specific unit objectives such as higher gasoline octane, lower gasoline sulfur, lower sulfur oxides (SOx) and nitrogen oxides emissions, lower carbon monoxide levels, improve fluidization, make more propylene and/or liquefied petroleum gas (LPG) and improve bottoms cracking. The main additives used today are for propylene or LPG production (ZSM-5), removing SOx from the regenerator stack and gasoline desulfurization. This is about a $200-million market worldwide with W.R. Grace and Intercat as the leaders, though all the catalyst suppliers have a line of products they can offer separately or with their catalysts.
These catalysts are used to treat everything in the refinery from gasoline to resid. Their purposes may be to remove sulfur and nitrogen; increase the hydrogen content of the product; remove metals such as nickel, vanadium and iron as well as arsenic and silica and/or improve other properties such as storage stability and color. With recent regulation requiring 15 ppm sulfur or less in diesel (ULSD), refiners in the United States and Europe installed numerous new middle distillate hydrotreaters or revamped existing facilities. This as well as increased resid and tar sand-derived feedstocks have increased the demand for hydrotreating catalysts. During the past 10 years, the demand for hydroprocessing catalysts, including hydrocracking, has increased from about 200 million lb to about 300 million lb per year in 2007.
The hydroprocessing market will continue to show sustained growth for the foreseeable future. A breakdown of refining hydroprocessing catalyst demand indicates 40% to 50% of the products are consumed in resid treaters. The resid market is comprised of about 40% ebullating bed application (H-oil and LC fining), and the remaining 60% are fixed bed designs.
The Chevron/Grace venture, ART, claims to have more than 50% of the fixed bed resid hydrotreating catalyst business. These catalysts can hold 50% to 80% of their weight in metals such as nickel and vanadium, said Woody Shiflett, director of marketing for ART. More stringent sulfur specifications for resid will make resid hydroprocessing a necessity. This will be in the form of direct resid hydrotreating or the treating of the gas oils once the resid has gone through a coker. UOP recently acquired the CANMET technology and is looking at this type of technology as a first resid processing step to be followed by hydrocracking.
Criterion, Albemarle and ART currently supply the ebullating bed market. There are 13 units worldwide with more planned.
Fifteen major refinery projects totaling about 3 million b/d are being studied. There are 66 hydrotreaters and 23 hydrocrackers planned along with 24 cokers. With only nine FCC projects listed, it is apparent the refining industry is spending money to meet sulfur regulations, process heavier crudes and preferentially produce diesel fuels.
The distillate hydrotreating business has many players, but the principle suppliers are Criterion, Albemarle, Haldor Topsøe, ART, Axens and UOP. The ULSD regulations pushed demand for these catalysts to meet the 2006 U.S. deadline, and many European refiners have installed catalysts to meet the 2009 regulations ahead of time to receive credits. Haldor Topsøe manufactures catalysts in Denmark and the United States, and the company is “running flat out,” said Henrik Rasmussen, vice president for catalysts.
Representatives stress technological innovation, and the company’s latest products have “BRIM sites” designed to handle the hardest-to-treat molecules blocked from normal active sites by steric
hindrance. Haldor Topsøe claims to be the leader in ULSD hydrotreating catalysts and is looking at further plant expansions. Future growth areas include the remaining ULSD market area and FCC pretreatment catalysts.
Albemarle supplies hydrotreating catalysts to all segments of the market. While the on-road diesel boom is over in the United States, the off-road diesel and reduced sulfur levels in marine fuels are two future growth markets. The company’s Nebula catalyst line was designed to address the ULSD market. Albemarle recently bought the Akzo catalyst business and says the catalyst business is more or less recession proof because of refiners’ needs to produce high-quality transportation fuels.
Criterion is the worldwide leader in hydrotreating catalysts for the refining industry, said Gary Yepsen, vice president for catalysts and technology. The company sees continued growth. It has a new catalyst plant coming on stream in Louisiana at the end of 2008 or the first quarter of 2009 and has recently expanded its two California plants.
Hydroprocessing is a technology-driven market, Yepsen said. Company development efforts are focused on better ULSD products, improved hydrocracking catalysts and new catalysts for the resid market. Some work is also being done on naphtha treating because of the inclusion of more cracked stocks going to reformers. These products from cokers and synthetic crudes contain more arsenic and other impurities such as silica.
UOP is working on the conventional solutions and also conducting R&D centered on producing biodiesels and green diesel. The former involve processing fatty acid methyl esters and the latter is hydrotreating various fats with distillates from oil to produce a synthetic or green diesel. These types of programs are a result of various laws passed, and the industry has yet to determine which are the best solutions.
Hydrotreating catalysts have increased in price during the past few years because of increases in the cost of metals used in their manufacture (see charts throughout).
Molybdenum has gone up by a factor of 10 because of the large usage in steel production with China’s consumption a major factor. The price remains volatile. Hydrotreating catalysts contain 15wt% to 20wt% molybdenum. Cobalt and nickel also have seen significant increases. The higher volume catalysts reportedly sell for US$5 to $9 per lb while the very high performance distillate hydrotreating catalysts range from $9 to $12 per lb. This would put the total hydrotreating catalyst market at about $2.3 billion. Future catalyst prices are done by formula for all the suppliers since the prices for energy, raw materials, and metals are so variable. The large number of hydroprocessing units listed in the construction survey would suggest demand for these catalysts will continue to increase from 5% to 10% for the next three to five years. If the announced hydroprocessing units in Kuwait come on line, they will consume more than 20 million lb.
UOP, Criterion, Chevron Lummus Global (CLG) and Axens are the major hydrocracking catalyst suppliers and directly license hydrocracking technology or, in the case of Criterion, indirectly through their parent company, Shell Global Solutions. The size of the hydrocracking market is thought to be between 13 million lb and 18 million lb annually. With all the new units coming on line and the high global interest in hydrocracking, the catalyst demand is expected to grow by another 5 million to 6 million lb during the next five years.
The cost of these catalysts varies because of composition differences. The catalysts can be alumina with base metals or contain added crystalline zeolites. High quality ultra-stable type Y molecular sieve zeolites are used in this service. Nickel-moly or nickel-tungsten are the active metals frequently used. At prices from $8 to $20 per pound, the market is about $180 million annually, ± 20%, and will expand to more than $225 million during the next three to five years.
Dan Torchia, CLG’s manger of catalyst sales and service, said the newer hydrocracking catalysts do wonders but must be applied properly. Every unit is different in terms of design, feeds charged, and desired product yields and properties. The easy things were done years ago. Today, R&D efforts are more intense and difficult. Getting better yields with a new catalyst is no longer enough; refiners want better yields, lower hydrogen consumption and longer catalyst life. Future catalyst prices need to recover these R&D costs as well as any increases in energy and raw material costs.
Full hydrocrackers, those that achieve close to 100% conversion, are being installed to meet the growing demand for diesel and jet fuels. These units operate at 2,000 psig or higher and process vacuum gas oils but will also have to handle cracked stocks from FCC units, delayed cokers and visbreakers derived from a variety of crude oils.
Catalytic reforming is found in every refinery, since the straight run gasoline from the crude unit must have its octane raised to levels necessary to meet product specifications. Semi-regenerative and cyclic designs were originally used, but virtually all the new reformers in at least the past 20 years have been continuous (regeneration) catalytic reformers (CCRs).
The market for reforming catalysts is estimated between 12 million lb and 14 million lb annually, which is split about 50/50 between fixed bed reformers and CCRs. UOP, Criterion and Axens are the major reforming catalyst suppliers. The value of the market is about $200 million annually.
Mike Millard, UOP’s global director of refining and petrochemical catalysts, said designs are more challenging today because of inclusion of cracked stocks from cokers and synthetic crudes; more arsenic must be removed. Refiners are trying to maximize the use of their current assets and minimize capital. The latest catalysts offer higher throughputs, increased activity, more octane barrels and more hydrogen production. Many refiners run their reformers to make hydrogen since hydrogen from the reformer is usually more economic than hydrogen from the hydrogen plant.
With the high price of platinum, catalyst suppliers have been working to minimize its usage. Most catalysts are at the low end of the 0.2wt% to 0.7wt% range used for reforming catalysts, yet still contain $70 to $100 worth of platinum per pound of catalyst.
The isomerization of C5 and C6 hydrocarbons is practiced to increase their octanes without producing benzene. These units saturate the benzene included in the feed. Heavier hydrocarbons are usually avoided since they may crack rather than isomerize.
The catalyst market is about 4 million lb to 5 million lb annually and ex-metals may be between $40 million and $70 million annually. A growth rate of about 2% a year is expected. UOP, Criterion, and Axens are the principal suppliers.
Millard said there has been increased focus on benzene management in some markets, particularly in the United States with the recent MSAT2 regulations. By 2011, benzene in gasoline will drop from a 1wt% maximum to 0.62wt%. With rapidly rising platinum costs, UOP has made new developments for lower fill cost solutions. The catalysts have acid (isomerization activity) and metal (hydrogenation) functions. Even if the acid activity is lost, the unit will still saturate aromatics; therefore, some isomerization units may be run chiefly for benzene saturation when the refinery is long on octane.
These numbers suggest the worldwide heterogeneous catalyst refining business is $4.2 billion to $4.7 billion annually. Growth prospects in FCC and hydroprocessing technologies will push this number above $5 billion in the next three to five years. Capacity of FCC catalysts will be relatively tight, and hydroprocessing catalysts will continue to lengthen their lead as the largest segment of the business.
China’s rapid growth has been a significant factor in raw material price increases. With auto production in China scheduled to hit 10 million units per year by the end of the decade, the demand for oil and transportation fuels will show continued growth.
The worldwide refining catalyst business stands ready to meet the challenges in a world where energy costs fluctuate significantly, raw materials may spike (and then collapse) in price, governments enact legislation to encourage certain technologies or products and the demand for products is constantly changing.
Warren Letzsch has more than 40 years of business experience with catalyst companies, oil refiners and engineering companies where he has held jobs in research and development, technical service, sales and marketing. He is a chemical engineer with BS and MS degrees from the Illinois Institute of Technology.