Petroleum Refining Technology, Economics, and Markets, Sixth Edition

For four decades, Petroleum Refining has guided thousands of readers toward a reliable understanding of the field, and through the years has become the standard text in many schools and universities around the world offering petroleum refining classes, for self-study, training, and as a reference for industry professionals. The sixth edition of this perennial bestseller continues in the tradition set by Jim Gary as the most modern and authoritative guide in the field. Updated and expanded to reflect new technologies, methods, and topics, the book includes new discussion on the business and economics of refining, cost estimation and complexity, crude origins and properties, fuel specifications, and updates on technology, process units, and catalysts. The first half of the book is written for a general audience to introduce the primary economic and market characteristics of the industry and to describe the inputs and outputs of refining. Most of this material is new to this edition and can be read independently or in parallel with the rest of the text. In the second half of the book, a technical review of the main process units of a refinery is provided, beginning with distillation and covering each of the primary conversion and treatment processes. Much of this material was reorganized, updated, and rewritten with greater emphasis on reaction chemistry and the role of catalysis in applications. Petroleum Refining: Technology, Economics, and Markets is a book written for users, the practitioners of refining, and all those who want to learn more about the field.

Part 1. Markets and Economics Section 1: Industry Structure and Characteristics 1. Performance 1.1 Refinery Supply Chains 1.1.1 Input-Output Model 1.1.2 Infrastructure 1.1.3 Location 1.1.4 Commercial Requirements 1.2 Performance 1.3 Refinery Economics 1.4 Refining Yields 1.5 Refining Margins 1.5.1 Gross Margin 1.5.2 Net Margin and Netback 1.5.3 Application 1.6 Margin Comparisons 1.6.1 Sweet vs. Sour Crude 1.6.2 Cracker vs. Coker Refinery 1.7 Factors That Impact Margins 1.8 Crack Spreads 1.9 Market Data References 2. Products 2.1 Overview 2.2 Petroleum Gases 2.2.1 Methane 2.2.2 Ethane 2.2.3 Propane 2.2.4 Butane 2.2.5 Natural Gas Liquids 2.3 Light Distillates 2.3.1 Naphthas 2.3.2 Gasolines 2.4 Middle Distillates 2.4.1 Jet Fuel 2.4.2 Kerosene 2.4.3 Automotive Diesel 2.4.4 Marine Diesel 2.4.5 Light Fuel Oil 2.5 Heavy Fuel Oils 2.6 Specialty Products 2.6.1 Base Oils and Lubricants 2.6.2 Engine Oils 2.6.3 Greases 2.6.4 Waxes 2.6.5 Bitumen 2.6.6 Petroleum Coke 2.6.7 Carbon Black References 3. Processes 3.1 Overview 3.2 Separation 3.2.1 Perfect Batch Distillation 3.2.2 Distillation Curves 3.2.3 Fractions 3.2.4 Atmospheric Distillation 3.2.5 Vacuum Distillation 3.3 Conversion 3.3.1 Thermal Cracking 3.3.2 Catalytic Cracking 3.3.3 Hydrocracking 3.3.4 Coking 3.4 Finishing 3.4.1 Hydrotreating 3.4.2 Catalytic Reforming 3.4.3 Alkylation 3.4.4 Isomerization References 4. Prices 4.1 Introduction 4.2 Price Formation 4.3 Global Oil and Product Markets 4.4 Price Characteristics 4.4.1 Prices are Volatile 4.4.2 Prices are Unpredictable 4.4.3 Business Cycle Impacts are Periodic 4.4.4 Price Shocks 4.4.5 Market Factors Dominate Price Signals 4.4.6 Private Factors are Secondary in Price Formation 4.5 Supply and Demand 4.5.1 Supply Curves 4.5.2 Demand Curves 4.5.3 Equilibrium 4.6 Market Factors 4.6.1 Demand 4.6.2 Supply 4.6.3 Production Cost 4.6.4 OPEC 4.6.5 Spare Production Capacity 4.6.6 Supply Disruptions 4.6.7 Technology Impacts 4.7 Private Factors 4.7.1 Quality 4.7.2 Yield 4.8 World Production circa 2017 4.9 Refined Product Prices References 5. Potpourri 5.1 Business Model 5.1.1 Required Spending 5.1.2 Discretionary Spending 5.1.3 Capital Investments 5.2 Company Classification 5.2.1 Firm Type 5.2.2 Ownership 5.2.3 Level of Integration 5.2.4 Business Objectives 5.3. U.S. and World Capacity Trends 5.3.1 Distillation 5.3.2 Coking 5.3.3 Catalytic Cracking 5.3.4 Hydrocracking 5.3.5 Hydrotreating 5.3.6 Reforming, Alkylation, Isomerization 5.3.7 Aromatics and Lubricants 5.3.8 Hydrogen 5.3.9 Sulfur 5.3.10 Asphalt 5.4. U.S. Capacity Correlations 5.5 Market Valuation 5.6 Capital Investment References Section 2: Cost Estimation and Complexity 6. Cost Estimation 6.1 Construction Cost Factors 6.1.1 ISBL 6.1.2 USGC Reference 6.1.3 Project Type 6.1.4 Unit Addition vs. Grassroots Refinery 6.1.5 Process Technology 6.1.6 Process Severity 6.1.7 Unit Requirements 6.1.8 Contract Type 6.1.9 Actual vs. Estimated Cost 6.1.10 Time 6.1.11 Location 6.2 Unit Cost 6.2.1 Source Data 6.2.2 Sample Size 6.2.3 Normalization 6.3 Cost Functions 6.3.1 Specification 6.3.2 Dependent Variable 6.3.3 Parameter Estimation 6.3.4 Data Processing 6.3.5 Data Exclusion 6.3.6 Cost Envelopes 6.4 USGC Grassroots Construction Cost 6.5 Operating Cost Factors 6.5.1 Common vs. Unique Factors 6.5.2 Utility Prices 6.5.3 Capacity, Complexity, Age 6.5.4 Time 6.5.5 Location 6.5.6 Exceptional Events 6.6 Operating Expenses 6.6.1 Data Sources 6.6.2 Consolidation Levels 6.7 U.S. Operating Cost Statistics, 2010-2014 References 7. Refinery Complexity 7.1 Ideal Refinery 7.2 Nelson Complexity Index 7.2.1 Motivation 7.2.2 Complexity Factor 7.2.3 Refinery Complexity 7.3 Complexity Factors 7.3.1 Definition 7.3.2 Measurement 7.3.3 Complexity Cross Factor 7.3.4 Uncertainty 7.3.5 Traditional Approach 7.4 Refinery Complexity 7.5 U.S. and World Statistics circa 2018 7.5.1 Regional Capacity 7.5.2 U.S. Refining Complexity 7.5.3 Largest World Refineries 7.5.4 Conversion Capacity 7.5.5 FCC-Equivalent Capacity 7.6 Complexity Equation 7.7 Cost Estimation 7.8 Complexity Factor at Reference Capacity 7.8.1 Specification 7.8.2 U.S. CFRC Statistics References 8. Classification 8.1 Refinery Categories 8.2 Very Simple Refinery 8.3 Simple Refinery 8.4 Complex Refinery 8.5 Krotz Springs, Louisiana 8.6 St. Paul Park, Minnesota 9. Complexity Applications 9.1 Introduction 9.2 Complexity Functional 9.2.1 Reference Capacity Approach Extension 9.2.2 Factor Functional Average 9.2.3 Evaluation 9.2.4 Closed-Form Expressions 9.2.5 Comparison 9.2.6 U.S. Refinery Complexity 9.3 Complexity Moments 9.4 Spatial Complexity 9.5 Replacement Cost 9.6 Sales Price Models 9.6.1 Asset Transactions 9.6.2 Formulation 9.6.3 Constraints 9.7 Complexity Barrels 9.8 Inverse Problem 9.8.1 Three Refinery Example 9.8.2 Matrix Formulation References 10. Modern Refineries 10.1 Hydrocracker 10.2 Lubes 10.3 Integrated/Petrochemical Section 3: Crude Oil and Properties 11. Origin and Composition 11.1 Geologic Time 11.2 Generation, Migration and Accumulation 11.2.1 Source Rock 11.2.2 Generation 11.2.3 Migration 11.2.4 Accumulation 11.2.5 Sedimentary Basins 11.3 The Hydrocarbon Source 11.3.1 Origin 11.3.2 Kerogen Type 11.3.3 Oil Window 11.3.4 Transformation Sequence 11.4 Molecular Composition 11.4.1 Naming Organic Chemicals 11.4.2 Early Classifications 11.4.3 Hydrocarbons 11.4.4 Paraffin (Alkane) Series 11.4.5 Naphthene (Cycloparaffin) Series 11.4.6 Aromatic (Benzene) Series 11.5 Crude Oil Classification 11.5.1 Component Groups 11.5.2 Ternary Diagram 11.5.3 Tissot-Welte Classification 11.5.4 Crude Oil Classes 11.5.6 Marine vs. Nonmarine Organic Matter 11.5.7 High Sulfur vs. Low Sulfur Oils 11.6 Alteration and Thermal Maturity Pathways 11.6.1 Thermal Alteration 11.6.2 Deasphalting 11.6.3 Biodegradation 11.6.4 Water Washing Reference 12. Crude Quality 12.1 Indicators 12.1.1 Color 12.1.2 Density 12.1.3 Heteroatoms 12.1.4 Chemical Structure 12.1.5 Viscosity 12.2 Classification 12.3 Blends of Crude Oils 12.3.1 Additive Properties 12.3.2 Nonadditive Properties References 13. Distillation Profile 13.1 Distillation Curves 13.2 Laboratory Methods 13.2.1 Standards 13.2.2 ASTM D86 13.2.3 ASTM D1160 13.2.4 ASTM D2892 13.2.5 ASTM D2887 13.2.6 ASTM D6352, D7169 13.3 Hempel Method 13.3.1 Procedure 13.3.2 40 mmHg Pressure Correction 13.3.3 Temperatures Beyond 790°F 13.3.4 Gravity Midpercent 13.3.5 Heavy Hydrocarbons 13.4 Distillation Profile Summary 13.5 Hasting Field, Texas 13.6 North Slope Crude, Alaska References 14. Crude Properties 14.1 Bayon Choctaw and West Hackberry Blends 14.2 Crude Oil Assay 14.3 Chemical Properties 14.3.1 Elemental Analysis 14.2.2 PNA Composition 14.3.3 Carbon Residue 14.4 Composition 14.4.1 Carbon Hydrogen Ratio 14.4.2 Sulfur 14.4.3 Nitrogen 14.4.4 Metals 14.4.5 Asphaltenes 14.4.6 Resins 14.4.7 Waxes 14.4.8 Salt Content 14.4.9 Acid Number 14.5 Physical Properties 14.5.1 Molecular Weight 14.5.2 API Gravity 14.5.3 UOP Characterization Factor 14.5.4 Viscosity 14.5.5 Pour Point 14.5.6 Reid Vapor Pressure References 15. Fraction Characterization 15.1 Correlation Relations 15.2 Carbon Hydrogen Weight Ratio 15.3 Carbon Residue 15.4 Asphaltene Content 15.5 Molecular Weight 15.6 Aniline Point 15.7 Smoke Point 15.8 Viscosity 15.9 Refractive Index 15.10 Cloud Point 15.11 Pour Point 15.12 Freezing Point 15.13 Cetane Index 15.14 Molecular Type Composition References Section 4: Fuel Specifications 16. Standards, Specifications and Fuel Quality 16.1 Types of Specifications 16.2 Consensus Specifications Definitions 16.3 Test Methods 16.4 Transportation Fuel Specifications 16.4.1 Gasoline – ASTM D4814 16.4.2 Jet Fuel – ASTM D1653 16.4.3 Diesel – ASTM D975 16.4.4 European Automotive Fuels 16.5 Mandatory and Suggested Specifications 16.6 Enforcement 16.7 Fuel Quality 16.8 Properties Not in Specifications References 17. Gasoline 17.1 Introduction 17.2 Octane Number 17.3 Volatility 17.3.1 Vapor Pressure 17.3.2 Distillation Profile 17.3.3 Vapor-Liquid Ratio 17.3.4 Vapor Lock Index 17.3.5 Drivability Index 17

Mark J. Kaiser is Marathon Professor and Director of the Research and Development Division at the Center for Energy Studies at Louisiana State University, Baton Rouge, where he has worked since 2001. His research interests cover the oil, gas, and refining industry, cost estimation, economic evaluation, fiscal analysis, infrastructure modeling, and regulatory policy. Dr Kaiser has authored over 200 academic publications and has secured grants of several million dollars over his career. He is the author of four research monographs: Offshore Wind Installation and Decommissioning Cost Modeling (Springer-Verlag 2012), The Offshore Drilling Industry and Rig Construction in the United States (Springer-Verlag 2013), Offshore Service Industry and Logistics Modeling in the Gulf of Mexico (Springer-Verlag 2015), and Decommissioning Forecasting and Operating Cost Estimation (Elsevier 2019). He has also developed several commercial reports on offshore decommissioning, and serves on the editorial boards of over two dozen academic journals, his favorites being Energy, Journal of Petroleum Science and Engineering, and Petroleum Science and Technology. Dr. Kaiser occasionally consults and serves as technical expert to government agencies and private firms, and in the first part of his career worked in the fields of convex geometry, geometric optimization, and computational metrology. Dr. Kaiser received a Ph.D. degree in industrial engineering in 1991 from Purdue University. Arno de Klerk is the Nexen Professor of Catalytic Reaction Engineering, and the NSERC/Nexen-CNOOC Ltd Industrial Research Chair in Field Upgrading and Asphaltenes Processing at the University of Alberta, Canada. He grew up in South Africa, where he spent part of his early career as a forensic analyst, and from 1995 to 2008 worked as a process engineer in the Research and Development Center of Sasol in refinery conversion processes and catalysis. His refining work focused mainly on transportation fuel and petrochemical production starting from synthetic oil from Fischer–Tropsch synthesis and oil from coal pyrolysis. It led to the monographs Catalysis in the Refining of Fischer–Tropsch Syncrude (Royal Society of Chemistry 2010) with Edward Furimsky, and Fischer–Tropsch Refining (Wiley-VCH 2011). In 2009, he took up a position in the Department of Chemical and Materials Engineering at the University of Alberta working on the conversion of heavy oils and oil sands bitumen, and remaining active in the fields of synthetic fuel production and refining. He is editor-in-chief of the journal Applied Petrochemical Research (Springer). He holds degrees in analytical chemistry and in chemical engineering from the University of Pretoria, and is a registered professional engineer in Alberta. James H. Gary was born in 1918 and lived 93 years. He graduated from Virginia Polytechnic Institute in 1942, served in the army in New Guinea during World War II, married in 1945 upon his return to the states, and obtained a Master of Science degree from Virginia Polytechnic Institute, where he learned to like teaching as a teaching assistant. He took a job with Standard Oil of Ohio in Cleveland so he could study for his doctorate at night, and completed his PhD at University of Florida before returning to Standard Oil of Ohio for two years. Jim was an Assistant Professor at University of Virginia from 1952-1956, and an Associate Professor at University of Alabama from 1956-1960. In 1960, Dr. Gary came to the Colorado School of Mines as Professor and Department Head of Chemical Engineering and Petroleum Refining, a position he held until 1972. In 1972, Dr. Gary served as Vice President for Academic Affairs, and in 1979 returned to the department and taught until his retirement in 1986. Jim was principal investigator for research projects on nitrogen and sulfur removal from liquid hydrocarbons and processing of heavy oils, and also organized the Colorado School of Mines Annual Oil Shale Symposium. Gary wrote several dozen publications in technical journals and held many patents in fuels and fuels processing. Jim consulted for refining companies and regularly taught a popular short course on petroleum refining. Jim was an inspiration to his many students and colleagues over the years. Glenn E. Handwerk graduated from Lehigh University in 1948 with a degree in Chemical Engineering. His first job was with Gulf Oil working in gas processing plants in Tulsa, Oklahoma, and Hobbs, New Mexico. After four years he went on to a position with Blawknox in Pittsburgh, Pennsylvania, and then to Stearns–Rogers in Denver, Colorado, working in process design. He worked on numerous gas plants and refineries in both Canada and the U.S., and became Chief Process Engineer for Stearns by the mid-1960s. In 1967, Glenn left Stearns-Rogers to become a consultant in gas processing and refining, and became widely known and respected in the industry. He had many clients over the years, including Dome Petroleu