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Upgrading Unconventional Oil Resources with the EST Process Alberto Delbianco and Salvatore Meli, Eni E&P Division Nicoletta Panariti and Giacomo Rispoli, Eni R&M Division

Abstract

We strongly believe that unconventional oils will play a much larger role in the growth of supply than is currently recognized. As a matter of fact, whereas the earth’s conventional proven world oil reserves are 1.3 trillion barrels (bbl), extra-heavy plus bitumen resources amount to about 4 trillion bbl. The unconventional oils are characterized by an API gravity lower than 10, high viscosity and an unusual high concentration of poisons such as sulphur, nitrogen, metals, and asphaltenes. For this reason, a key role for the full exploitation of these hydrocarbon resources is played by the downstream processes that are required to upgrade and convert them into valuable products. In this scenario, Eni has developed a novel hydrocracking process (EST: Eni Slurry Technology) which is particularly well-suited for the conversion and upgrading of a variety of “black oil materials”, from conventional vacuum residues up to extra-heavy oils and bitumen. EST employs nano-sized hydrogenation catalysts and an original process scheme that allow complete feedstock conversion to an upgraded synthetic crude oil (SCO) with an API gravity gain greater than 20 and avoid the production of residual by-products, such as pet-coke or heavy fuel oil. Moreover, this leading-edge technology assures both product slate and feedstock flexibility. A Commercial Demonstration Unit (CDP) of 1200 bbl/d capacity is successfully operating in the Eni’s Taranto refinery since November 2005.

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1. Introduction Bitumen and extra heavy oils constitute the largest component of non conventional oil resources that we can expect to add to the so called conventional ones in the coming decades. The estimated oil in place for these fossil fuels amount to around 4 trillion barrels (bbl). Considering also that the technically recoverable fraction is in the range 15-20%, it is evident that we are talking about enormous quantities if one considers that the whole of the Middle East has resources of about 2,000 billion bbl, of which 743 are considered to be recoverable /1-2/. The greater part of these reserves is concentrated in Canada, in the province of Alberta (tar sands), and in Venezuela in the so called Orinoco Belt. A third country which is rich in non-conventional oil is Russia, even though in this case the deposits are scattered so that the recoverable portions are not quantitatively as large as in the other two countries (Figure 1).

Figure 1 - Heavy and non-conventional Oil Recoverable Reserves (billion bbl).

Although based on today’s technology, only 10 to 15% of these resources can be considered “recoverable”, this is a huge amount, close to 600 billion bbl. Because the current world oil consumption is about 30 billion bbl per year, this means a potential supply of about 20 years. These numbers highlight the importance of the unconventional oils in the future energy scenario and for these reasons the International Energy Agency (IEA) foresees a growing role for both heavy oil and bitumen in the medium-long term /3/. Nevertheless, we should remember that heavy hydrocarbons are making a robust contribution to the world’s oil supply with a production that is today close to 2 billion bbl per year. This is because new and more efficient technologies have brought down the costs of recovery of Canada’s and Venezuela’s heavy hydrocarbons to within striking range of conventional oil production, so that in 3 the last two decades the synthetic crude oil production cost has been reduced by more than 50% /4- 5/. Looking downstream, there are a variety of processes designed to upgrade these feedstock even if their peculiar physical and chemical properties make this step costly and environmentally unfriendly because of the high energy required and the huge amounts of by-products usually generated. As a matter of fact, extra-heavy oils and natural bitumen represent crude oils which have been severely degraded by microbial action as evidenced by their paucity of low molecular weight saturated hydrocarbons. As a results, there are more heavy hydrocarbons in these materials than in the conventional crude and sometimes, asphaltene and resins may represent the great part of the oil. Generally speaking, heavy oils and bitumens are characterized by having an API gravity lower than 10 as well as a high viscosity (thousands cPoise). The yield and the quality of these oils are usually significantly different if compared to a traditional light crude such as the Arabian Light, as shown in Table 1.

Arabian Cold Athabasca Zuata Boscan Maya Light Lake Bitumen Origin S.A. Venezuela Venezuela Mexico Canada Canada API Gravity 33.6 8.5 10.5 21.5 10.2 8.1 Dist. Distribution (wt.%.) Naphtha 20.6 n.a. 4.0 12.9 1.5 n.a. Atm. Gasoil 36.0 14.1 11.6 21.7 14.9 16.1 Vacuum Gasoil 23.2 31.0 20.2 22.2 38.8 31.7 Vacuum Residue (VR) 20.2 54.9 64.2 42.2 44.8 52.2

Table 1 – Comparison of the characteristics of Arabian Light crude vs. typical extra-heavy oils and bitumen.

In some cases the total amount of vacuum residue (VR) can be higher than 50%. Moreover, these materials are generally rich in sulphur, nitrogen, heavy metals and asphaltenes. Poisons are concentrated in the distillation residues so that the sulphur and nitrogen level is generally higher than 4 wt.% and 0.5 wt.% respectively, the metal concentration (Ni + V) is in the range of several hundreds ppm while the asphaltene content is normally higher than 20-25% if referred to the VR (Table 2). Because of the huge concentration of high density naphthenes, aromatics and polar compounds, the H/C ratio is very low if compared to the transportation fuels in which they must be converted, i.e. gasoline and diesel oil. 4

Arabian Cold Athabasca Zuata Boscan Maya Light Lake Bitumen TBP cut 530°C+ 500°C+ 350°C+ 500°C+ 340°C+ 300°C+ API Gravity 8.3 2.5 7.2 1.5 7.2 7.8 H/C 1.45 1.41 1.47 1.33 1.40 1.43 Sulphur (wt.%) 4.0 4.2 6.0 5.2 4.9 4.6 Nitrogen (wt.%) 0.25 0.97 0.96 0.81 0.70 0.48 Nickel (ppm) 30 154 119 132 107 70 Vanadium (ppm) 110 697 1473 866 210 186 Asphaltene (wt.%) 5.3 19.7 18.2 30.3 12.0 12.4 CCR (wt.%) 18.0 22.1 18.3 29.3 20.8 13.6

Table 2 – Chemical composition of selected residues from extra-heavy oils and bitumen.

As a consequence, the main scope of a conversion/upgrading technologies is to: convert the atmospheric & vacuum residues into distillates minimizing the by-products remove poisons such as heteroatoms (i.e. sulphur, nitrogen and oxygen), asphaltenes and metals increase the hydrogen content of the upgraded materials /6/. The increase of the H/C ratio can be made either rejecting carbon or adding hydrogen. The C- rejection processes (such as visbreaking and coking) show very high feedstock flexibility but generate low quality distillates and huge amount of by-products, such as fuel oil and pet-coke, whose market demand is shrinking /7/. On the contrary, the hydrocracking technologies assure good product upgrading but the well known fixed bed or ebullating bed technologies present severe limitations in terms of feedstock flexibility. As a matter of fact, the supported catalysts can be plugged by metals and coke deposits on the porous supports, so that when processing highly polluted feedstock, the state-of-the-art hydroconversion processes must operate at relatively low severity, therefore producing huge amounts of heavy fuel oil /8/. This drawback is less significant in the case of slurry phase hydrocracking processes because of the use of non-supported micro-sized particles of highly active hydrogenation catalysts. The slurry hydrocrackers employ finely dispersed hydrogenation catalysts, such as iron-based additives or micro-sized transition metal sulphides that are usually generated in-situ during reaction, via thermal decomposition of oil-soluble precursors. The use of the dispersed catalysts is very effective in 5 preventing the coke formation while assuring a good control of the sediments precipitation and fouling, even at relatively high conversions /9/. In spite of these advantages, the slurry phase hydrocracking processes have not yet made the necessary hurdle to large-scale commercial demonstration because of the difficulties in matching high conversion with excellent products quality as well as due to the technological problems connected with the catalyst handling. In this scenario, Eni has developed a new process: EST (Eni Slurry Technology), which overcomes these limits and allows almost total feedstock conversion with excellent contaminants removal.

2. Eni Slurry Technology Development Phase The Eni’s R&D activity, aimed at developing a new slurry process to convert the heavy feedstock, was started in the early nineties. The first phase of this work was addressed to investigate the fundamental chemistry aspects of the reactions. Furthermore, catalyst screening evaluation was performed to identify the most suitable one. The results which have been obtained were extremely useful to deepen the knowledge about the problem and to develop an innovative process scheme which allows to overcome the constraints which have prevented the industrial application of the slurry processes /10-11/. The key feature of this new technology may be identified in the arrangement adopted for the recovery and recycling of the catalyst: the solution is extremely simple and relatively cheap (a simplified flow scheme is shown in Figure 2).

Distillates DAO

Feedstock & Catalyst make-up

Hydrogen Recycling asphaltenes & Catalyst Purge

Reactor Fractionator SDA

Figure 2. EST Simplified Process Flow Diagram.

The “heart” of the process is a slurry phase hydrocracking reactor operating at temperature higher than 410°C and 16 MPa pressure, where the heavy feedstock is upgraded and partly converted into 6 distillates. Depending on the feedstock, the conversion level is properly controlled to assure the “stability” of the unconverted material, i.e. avoid the asphaltenes precipitation. This reaction is carried out in the presence of few thousands ppm of a molybdenum based catalyst (molybdenite,

MoS2) that is very finely dispersed in the liquid phase (nano-sized) so as to enhance the upgrading reactions: metals precipitation (HDM), desulphurization (HDS), denitrogenation (HDN), Conradson Carbon Residue reduction (HDCCR). The reactor effluents are fractionated into C1-C2 gas, LPG, atmospheric and vacuum distillates, while the bottom product from the fractionation column can be fed to the Solvent DeAsphalting unit (SDA) to further recover the DeAsphalted Oil (DAO). In any case, the unconverted residue (vacuum bottom or SDA-asphaltenes) is mixed with fresh feedstock and reprocessed to obtain maximum conversion. Because this solution allows the complete catalyst recycle, high concentrations can be used to assure a proper feedstock upgrading. After a certain number of recycles the system reaches a “steady state situation”, that is to say a constant recycle/feed ratio so that total conversion of the feedstock is met. The experimental activity has demonstrated that the recycled molybdenum disulphide maintains unchanged its morphological and structural characteristics, so that the catalytic activity is retained at high level even after prolonged recycling. Even if the catalyst is not deactivated, it is necessary to remove a small purge stream from the recycling current to eliminate the solids which are formed during the reactions as a consequence of the hydrodematallation reactions. The percentage of the purge stream is a function of the feedstock characteristics, and it is mainly related to the metal concentration: however, it is worth noting that the purge stream is less than 2%, and consequently the catalyst make-up, which is needed to compensate the molybdenum disulphide lost in the purge stream, is very low. The technical viability of the technology was firstly demonstrated through experimental activities at laboratory level (microreactor and bench tests). The results obtained in this phase have confirmed the flexibility of the technology to process different types of heavy feedstock /12-13/. In addition, the data collected during this step were used to carry out preliminary technical-economic evaluations of the technology which confirmed the attractiveness of the process, so to justify the construction of a continuous 2.5 kg/h Pilot Plant. Various types of feedstock have been successfully processed for many months: vacuum residues from Ural, Arabian Heavy, Gorgoglione (Tempa Rossa fields in Basilicata), Cerro Negro (Heavy Crude from Orinoco Belt) and Athabasca bitumen. In all cases, the technical viability of the technology has been confirmed, particularly as far as: i) the possibility to recycle and fully convert the asphaltenes, ii) the catalyst life and, iii) the low purge stream flowrate. The results of the experimental activity demonstrated that the Eni Slurry Technology is suitable to totally convert extra-heavy feedstock having very high content of contaminants. The synthetic crude oils (SCO) obtained by blending the various fractions which are produced, show a specific gravity much lower than the original feedstock (> 20 °API), they are completely free from metals and 7 asphaltenes and the other pollutants (sulfur, nitrogen, etc.) are present at much lower concentrations with respect to the figures of the feedstock /14/. Since the tests on the Pilot Plant have been successfully completed, Eni has approved to implement the next step to bring the EST to the industrial application. A Commercial Demonstration Plant (CDP) of 1200 bpd capacity was built by Snamprogetti inside the Eni’s Taranto refinery. The construction of this unit was started in 2003 and completed in the third quarter of 2005.

3. The Commercial Demonstration Plant (CDP) The reaction section of the CDP plant consists of slurry-phase reactors developed in-house whose geometry, together with the liquid and gas velocities, assures high degree of back mixing in the slurry phase. This has been demonstrated during the various test runs by monitoring the axial and radial temperatures profiles which resulted almost isothermal. The products fractionation section comprises an atmospheric and vacuum distillation columns for the recovery of the light, middle and heavy distillates, followed by a solvent deasphalting section (SDA) using liquid propane as solvent. This last section allows the final separation of the heaviest upgraded stream (the De-Asphalted Oil, DAO), from the unconverted products containing the hydrogenation catalyst. This stream is mixed with fresh feedstock and recycled to the reactors. The first test run has been successfully completed on April 2006 after more than 2500 hours of continuous operation with a vacuum residue from Ural crude (8 °API; 3 wt.% sulphur). The plant performance, that is to say the products yield as well as the main properties of the different streams obtained during this test, were even better than expected. A second and more important test run was carried out processing a residue from an Athabasca bitumen whose chemical composition is shown in Table 3, together with the overall material balance and the characteristics of the different effluents obtained at the optimized conditions. For this test, the plant was operated for more than four months continuously exploring different operating conditions to optimize product yield and quality. In all cases, we have reached the steady- state situation with an asphaltene purge lower than 2 wt.% on fresh feedstock, that is to say with a residue conversion to distillates and DAO higher than 98 wt.%, and with a good control of the coke formation. The overall synthetic crude presents very good characteristics: compared to the processed feedstock (4.3 °API; 5.3 wt.% sulphur), the produced SCO shows an API gravity gain of about 23 and much lower level of poisons (HDM > 99 %; HDS: 80-85 %; HDCCR: > 95 %; HDN: 30-40 %). Moreover, the SCO quality can be further increased via conventional distillates hydrotreating.

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Feed HC Gas Naphtha Atm. GO VGO C3 DAO SCO Yield (wt.%) 10.3 7.8 33.5 35.6 12.8

API gravity 4.3 60.0 31.7 18.0 15.2 27.0 S (wt.%) 5.3 0.14 0.75 1.38 1.44 0.94 N (ppm) 3800 728 3133 2935 2250 2440 CCR (wt.%) 17.4 < 0.1 3.48 0.45 Ni-V (ppm) 90-240 < 1 < 1 < 1

Table 3 – Product yields and quality from the CDP test on Athabasca residue.

4. Economics - Comparison The results obtained at CDP level have been utilized to provide an updated economical evaluation of the EST technology for the upgrading of an Athabasca bitumen. The EST process has been compared with the most used state-of-the-art technology utilized for the heavy oils upgrading, that is to say the Delayed Coking (DC). The merit of implementing a grass- roots upgrading complex of 200,000 BPSD capacity to upgrade bitumen into synthetic crude oil in the area of Edmonton (Alberta, Canada) has been investigated by conducting a Cash Flow Analysis and by calculating the inherent profitability indexes. Cash Flow projections have been carried out in current US$ (inflation 2.5%/y) and unlevered terms (100% Equity Funding) considering an oil price scenario with Brent crude oil at 40 US$/bbl at year 2010. The Athabasca crude oil (8.1 °API, 4.52 wt.% sulphur) has been valued, on the basis of the API gravity and sulphur content, at 19 US$/bbl at year 2010, while the natural gas price has been valued at 4.6 US$/MBtu. The Figure 3 shows the product yields and qualities which may be obtained using the two different upgrading processes.

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Figure 3. Comparative performance in terms of products yield and SCO quality.

The economic comparison is shown in Table 4. The higher EST investment and operating cost (due to the higher amount of required natural gas for hydrogen production), are notably rewarded by the incremental production (+ 21%) of premium quality products due to EST intrinsic conversion capabilities.

EST Case DC Case

Upgraded feed value 49.0 37.5 less: Opex 15.0 8.6 Capex (@ 8%) 9.7 7.5

Netback crude price 24.3 21.4 less: Base crude price 19.0 19.0

UPGRADING MARGIN 5.3 2.4

Table 4 – EST vs. Delayed Coking: Economic Comparison. All figures in US$/bbl.

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5. Conclusions EST (Eni Slurry Technology) is a cost effective technology to fully convert heavy oils, tar sands bitumen and petroleum residues into distillates. The EST advantages include: Total feedstock conversion to high quality products, that is to say, no production of either heavy fuel oil or coke High product slate and feedstock flexibility High products upgrading, with total metals removal and excellent HDS, HDN and CCR reduction Lower environmental impact compared to thermal cracking technologies. These peculiar characteristics of EST determine its superior economic and environmental attractiveness. EST can offer additional margins in the range of 3 US$ per bbl of feedstock over the current conversion technologies and may represent the solution for the profitable exploitation of the huge reserves of heavy crude oils and bitumen, ensuring the availability of additional strategic reserves. The positive results collected at CDP level have encouraged the decision for the first industrial application. The Eni Sannazzaro refinery has been chosen to host the first full scale industrial plant based on this new technology. Reactors of the maximum industrial size will be installed in this plant, which will represent a strong reference in view of further industrial initiatives also in the upstream sector.

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6. References

1. Perrodon, A., Laherrère, J.H., Campbell, C.J. The World’s Non-conventional Oil & Gas. Petroleum Economist, 1998 2. Proved Reserves as of January 1, 2006: Oil & Gas Journal, Vol. 103, No. 47, December 19, 2005 3. IEA, International Energy Agency. World Energy Outlook 2004. OECD 4. Williams, B. Heavy Hydrocarbons Playing Key Role in Peak-oil Debate, Future Energy Supply. Oil & Gas J., July 28, 2003, 20 5. Batycky, J. An Assessment of In-situ Oil Sands Recovery Processes, J. of Can. Petr. Techn., October 1997 6. Fujita, K., Abe, S., Inoue, Y., Plantenga, P.L. and Leliveld, B., New Development in Residue Hydroprocessing, Petroleum Tech. Quarterly, Winter 2001-02, 51 7. Ellis, J. Paul, Tutorial: Delayed Coking Fundamentals, AIChE 1998 Spring National Meeting, New Orleans 8. Colyar, J. J., Kressmann, S., Boyer, C:, Schweitzer, J.M., Viguie, J.C., Improvement of Ebullated-Bed Technology for Upgrading Heavy Oils, Revue de l’Institut Francais du Pétrole, 2000, Vol. 44, 397-406 9. Delbianco A., Panariti N., Marchionna M., Upgrading Heavy Oil Using Slurry Processing, Chemtech, November 1995, 35-43 10. N. Panariti, A. Delbianco, G. Del Piero, M. Marchionna, P. Carniti, Petroleum Residue Upgrading with Dispersed Catalysts. Part 2: Effect of Operating Conditions, Applied Catalysis, 204 (2000) 215- 222 11. N. Panariti, F. Bazzano, A. Delbianco, M. Marchionna, R. Montanari, S. Rosi, Optimization of Process Conditions in Slurry-Phase Upgrading of Resids, Preprints, ACS Div. of Petr. Chem., Vol. 46, No. 1, 78, February 2001 12. Montanari, R., Marchionna, M., Panariti, N., Delbianco, A., Collia, D., A Challenge to Sweep-out Contaminants from Heavy Residues, 16th World Petroleum Congress, Calgary, Canada, June 12-16, 2000 13. Montanari, R., Marchionna, M., Rosi, S., Delbianco, A., Panariti, N., Upgrading Petroleum Residues with EST Technology, 17th World Petroleum Congress, Rio de Janeiro, Brazil, September 1-5, 2002 14. A. Delbianco, N. Panariti, R. Montanari, R. Sartori, S. Rosi, The Eni Slurry Technology Process: Development and Potential Application, ERTC 2005, Vienna, November 14-16, 2005