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How Crude Oil-To-Chemicals Technologies are transforming the global oil industry

How Crude Oil-To-Chemicals Technologies are transforming the global oil industry
  • To create more petrochemicals and optimize the value obtained from each barrel of oil, COTC has shown great promise.
  • Modular refineries and petrochemical plants in the Asia Pacific, the Mid East, China, & Eastern Europe have taken notice of COTC.
  • COTC is expected to affect the oil marketplace by increasing the amount of crude oil used in the chemical industry.

In the coming years, the need for chemicals is expected to expand by 3-3.5 percent, as opposed to a 1-1.5 percent increase in crude oil consumption, reflecting the rapid expansion of the global chemicals sector.

Global refiners are speeding the integration of their refining and petrochemical divisions to meet the increasing demands for olefins and aromatics and the long-term projected flattening of the gasoline market. They have to increase their focus on improving margins and boosting profitability per barrel because of changing oil prices.

Given how they transform low-value oil into high-value chemicals in current refineries, (COTC) crude oil to chemicals technologies is becoming more and more relevant.

The technique claims to increase intermediate petrochemical production from a barrel of crude oil to a 60–80% yield range. That is significantly greater than the 10% yield from typical refineries that are not linked and the 15 to 25% yield range for petrochemical plants that are linked together.

The following tactics are often used in COTC plants.

  • Crude oil is directly processed in steam cracking.
  • Hydro-processing/de-asphalting combined with steam cracking
  • Hydrocracking is used to process middle distillates and residues.

Strategic changes were established to boost profits while significantly increasing output volumes, connectivity, and complexity. According to estimates, two massive 200,000 barrels per day of COTC complexes can increase ethylene and propylene yearly capacity to 6.4 MMT & 4.4 MMT, respectively. Additionally, this can minimize carbon footprint.

The main actors in COTC technology

Integrated refinery and chemical manufacturers continue to pay attention to COTC. Yet, with this technology rising in popularity, only a few well-equipped integrated oil firms worldwide are attempting to use it to gain ground in the petrochemical sector. Large businesses from the United States, the Mideast, & China are among them.

The Middle East is an attractive location for COTC investments due to its proximity to demand hubs in China, India, and Africa.

  • Saudi Aramco: The leading oil giant is developing thermocracking & catalytic conversion technology, two catalytic processes that offer yields of over 70% of chemicals from the barrels. It is actively collaborating with Beijing’s Tsinghua University to generate a unique catalytic conversion process that will be used as a pilot.
  • Hengli Petrochemical: One of the first projects using COTC technologies to go online was the industry’s facility in Dalian, China, in 2019.
  • Sinopec: The single-step crude-to-chemicals method recently saw a breakthrough by a Chinese business.
  • ExxonMobil: With significant operations in the United States and Singapore, the oil and gas company has devised a technology to generate very lightweight crude & send it straight to a steam cracker to create lighter and smaller hydrocarbons.
  • Shell: Shell Catalysts & Technologies is utilizing refinery petrochemical integration while concentrating more on implementing COTC technologies.
  • Reliance Industries: At COTC’s Jamnagar site in India, a $9.3 billion investment on a worldwide scale has proposed that Saudi Aramco owns 20% of the projects owned by Reliance.
  • Total: The French oil giant is an international competitor for COTC.

The main contractors for refiners who have implemented COTC technology

  • Axens and Honeywell UOP have been pioneers in advancing technologies in this field.
  • Siluria Technologies has joined forces with Saudi Aramco to co-develop COTC & oxidative couplings of methane (OCM) technology to produce polyolefins.
  • The commercialization of Saudi Aramco’s patented thermal oil to chemical technologies has accelerated because of Chevron Lummus Global, a significant technical collaborator for both McDermott and Saudi Aramco.
  • Throughout its partnership with Chevron Lummus, McDermott, a significant EPC contractor, has executed over 100 hydroprocessing plant concepts globally.

The risks of deploying COTC technology

Saudi Aramco and SABIC have had to save cash flow & budgets and re-evaluate preparations for $20 billion COTC development in Yanbu because of the industry-wide disruption brought on by COVID-19. The combination of their current facilities with a large-scale mixed feed steaming cracker & downstream olefin derivatives units is now being reviewed.

With two large projects, Hengli Petrochemicals (COTC Phase 1, C42% transformation per barrel of crude oil) & Zhejiang Petroleum and Chemical (COTC stage 1, accomplished 45% conversion per barrel of crude oil), as well as increased adoption, China sees significant demand for COTC. However, the danger of oversupply with additional investments could additionally pressure the boundaries of para-xylene inside the aromatics industry of the Asia Pacific. One of the first significant projects using COTC technologies to go online was the industry’s facility in Dalian, China, in 2019.

The outlook

By increasing the amount of crude oil used in the chemical sector, COTC is expected to alter and perhaps even disrupt the market environment by 2025–2030. As COTC acceptance rises, national & independent oil corporations will likely increase their investments in this market. Current petrochemical businesses can pursue COTC on their own by engaging with regional nations or cooperating with technology providers, even if they might not be able to compete with COTC units on scale and breadth.

Thus, we can see that the implementation of COTC could act as a crucial lifeline for future survival if there have been issues with overcapacity and the prospect of peak oil demand.