November 13, 2001

TO:

Dave A. Jacober

FROM:

Norco LSG Process Engineer

SUBJECT:

Phillips vs. CDTech LSG Technology Economic Analysis

Attached is the Phillips S Zorb vs. CDTech Hydro/HDS LSG Technology Economic Analysis
for Motiva Norco. In this report is a brief summary of the results, a case study analysis, and
a detailed economic analysis of both technologies. Attached is the spreadsheet developed
to perform the analysis.
Please contact me if there are any comments or questions.
Steve Haik
ATTACHMENT
CC: With Attachment (by email)
Motiva Norco Refinery
S. K. Auld
N. J. Brignac
C. J. Lloyd
D. L. McNeill
D. M. Moss
R. J. Poulos

Norco Refining

P. O. Box 10

15536 River Road

Norco, LA 70079

Phillips S Zorb Vs CDTech CDHydro / CDHDS R00

SUMMARY:
The Phillips S Zorb and CDTech's Hydro/HDS low sulfur gasoline technologies are
comparable from a NPV basis of the costs (total cost of ownership) within the accuracy of
this study, i.e. relying on published Phillips data. Norco should continue with the current
LSG technology choice, CDTech Hydro/HDS, and not pursue the Phillips S-Zorb technology
for the following reasons:

The total cost of ownership is comparable for both Phillips S Zorb and CDTech LSG
technologies when using an engineering contractor's S Zorb capital cost estimate.
Phillips published an optimistic capital cost that results in a 16% benefit to the total
cost of ownership for the S Zorb LSG solution.
Changing technology choices at this time could jeopardize Norco's ability to produce
LSG by the 2004 EPA requirement.
The Phillips S Zorb Technology is a higher risk technology choice. The Alliance has
implemented both CDTech Hydro and HDS technologies, however there is very
limited industry experience with the Phillips S Zorb technology.
Norco has (1) completed front end loading, FEL, (2) received approval for the
application for expenditure, AFE, and (3) submitted the LSG environmental permit all
consistent with a CDTech LSG technology solution.
The Phillips technology is not proven on high sulfur feeds thus this technology
potentially limits Norco's future RCCU feed sulfur selection.
The Phillips technology is more complex, thus higher operations and maintenance
costs are likely with lower unit reliability.
Use of a common Alliance LSG Technology, CDTech, allows for improved unit
optimization and reliability across the Alliance while reducing installed costs.

The Phillips unit uses a fluidized bed technology, similar to that of a Fluidized Catalytic
Cracker. The Phillips fluidized bed technology is generally more complex and historically
less reliable than CDTech's reactive distillation technology. Also, the Phillips technology is
not proven in industry, whereas the Alliance has implemented both CDTech CDHydro and
CDHDS technologies successfully.
BACKGROUND:
In 1999, Westhollow Technology Center performed the Motiva Low Sulfur Fuels Study to
determine the most cost effective compliance options for the Motiva Refineries to produce
30 ppm sulfur gasoline. The study determined that CDTech's Hydro/HDS Technology was
the clear winner over all other technologies available at that time. However in the past year,
another LSG technology, Phillips S-Zorb, has become commercially available and appears
to be competitive with the CDTech Hydro/HDS LSG Solution.
The Alliance is using a common contract engineering firm, Bechtel, for all five CDTech
Hydro/HDS LSG units. This is intended to reduce the total installed cost while improving the
new unit's optimization and reliability. Norco has now completed front end loading (FEL)
and the Board of Directors has approved the application for expenditure (AFE).

Phillips S Zorb Vs CDTech CDHydro / CDHDS R00

TECHNOLOGY:
LSG TECHNOLOGY COMPARISON
Phillips S Zorb Vs CDTech Hydro/HDS
CD Hydro/HDS
Product Sulfur
Feed Sulfur
Octane Loss
Yield Loss
Hydrogen Consumption
Utilities Costs
Capital Costs
Unit Reliability
Technology Risk
Catalyst Poison Resistance

Produces a 40 ppm S naphtha.

Requires a polishing reactor to
produce a 10 ppm S naphtha
Ability to process high sulfur
naphtha, >5000 ppm S
1.2 Octane Loss

S Zorb
Produces a 10 ppm S naphtha
without any additional equipment
Limited ability to process high sulfur
naphtha.
0.6 Octane Loss

0.05% C5+ Yield Loss

0.01% C5+ Yield Loss

112 SCF/bbl of Hydrogen

60 SCF/bbl of Hydrogen

$0.18/bbl Utility Cost

$0.33/bbl Utility Cost

$820/bbl Installed ISBL Costs

$1200/bbl Installed ISBL Costs

More Reliable ~ 98% Stream

Less Reliable ~ 97% Stream Factor
Factor
Low Risk - The Alliance Owns and Higher Risk - Only one 6 MBPD S
Operates a CDHydro and CDHDS
Zorb unit in service.
More Sensitive to Catalyst Poisons Less Sensitive to Catalyst Poisons

Phillips S-Zorb
S Zorb Sulfur Removal Technology uses a proprietary sorbent that attracts sulfur-containing
molecules and removes the sulfur atom from the molecule. The sulfur atom is retained on
the sorbent while the hydrocarbon portion of the molecule is released back into the process
stream. This allows the Philips technology to reduce sulfur down to 10 ppm with a less yield
loss and higher octane retention vs. CDTech's technology. The only Phillips unit in
operation is a small pilot plant at Phillips Borger whereas the Alliance currently owns and
operates CDTech units very similar to those proposed in the CDTech LSG technology
solution.

Phillips S Zorb LSG Technology

Phillips S Zorb Vs CDTech CDHydro / CDHDS R00

Gasoline from the Fluid Catalytic Cracker unit is combined with a small hydrogen stream
and heated. The vaporized gasoline is injected into a fluid bed reactor where the proprietary
sorbent removes sulfur from the feed. A disengaging zone in the reactor removes
suspended sorbent from the vapor, which exits the reactor to be cooled.
The sorbent (catalyst) is continuously withdrawn from the reactor and transferred to the
regenerator section where the sulfur is removed as SO2 and sent to an existing sulfur
recovery unit. The cleansed sorbent is reconditioned and returned to the reactor. The rate of
sorbent circulation is controlled to help maintain the desired sulfur concentration in the
product.
CDTech CDHydro / CDHDS
CDHydro and CDHDS are catalytic distillation processes, which basically combine
distillation and hydrotreatment in a single step. The catalyst is loaded into a distillation
column using proprietary structures developed by CD Tech. Among other advantages, the
concept reduces capital costs and improves octane retention; however, catalyst costs are
higher due to the proprietary devices.
CDHydro removes mercaptan sulfur from the light cat cracked naphtha without the loss of
octane, and at removal rates greater than is possible with extractive caustic treatment
options. The mercaptans simply react with di-olefins, present in the FCCU gasoline, to form
sulfides in the catalyst bed. The sulfides are fractionated out the bottoms of the CDHydro
column with the heavy gasoline, and are readily removed by the subsequent CDHDS step.
Conventional bulk nickel catalyst is used for this reaction called thioetherification.
The optional hydroisomerization feature increases the octane number of the light gasoline
by upwards of one number. This palladium catalyst bed, which promotes the shift of the
double bonds from the alpha position to the beta position, will be added within the CDHydro
column on top of the nickel mercaptan removal bed.

CD Tech Hydro / HDS Technology

CDHydro

Hydrogen

FCC C5+
Gasoline

AmineTreat
and Recycle

CDHDS

LCN

POLISHING
REACTOR to
achieve Ultra Low S levels

Mercaptans + di-olefins
form sulfides, which
distill down to the
bottom of column.
(Thioetherification)

Hydrogen
MCN

MCN + HCN

HCN from Main

Fractionator Sidedraw

Hydrodesulfurization

Hydrogen

HCN
MCN + HCN

Phillips S Zorb Vs CDTech CDHydro / CDHDS R00

CDHDS is a hydrodesulfurization process, employing conventional cobalt-molybdenum

catalyst and requiring hydrogen, which converts sulfur-containing compounds to H 2S and
other hydrocarbons. While conventional HDS processes saturate olefins as an unwanted
side-reaction, thus causing severe loss of octane, CDHDS preserves a greater amount of
the contained olefins, thereby minimizing octane loss. CDHDS accomplishes this by
combining fractionation and the hydrotreatment function which basically exposes the lighter
portion of the mid cat cracked gasoline stream, taken overhead from the CDHDS column,
to lower temperatures and less severe conditions, compared to the heavier bottoms which is
exposed to much higher temperatures. It is the heavy portion of the gasoline that contains
more sulfur as well as the hard-to-remove sulfur compounds. The temperature in the
CDHDS column ranges from 450 to 650 Deg F.
The polishing reactor employs a low severity fixed bed reactor to hydrodesulfurize the
residual sulfur remaining after the prior CDHDS step. This stage also employs conventional
cobalt-moly hydrotreating catalyst; typical operating conditions are as follows: 510 Deg F,
320 psig, 5-10 liquid hourly space velocity (LHSV). The polishing reactor reduces octane
loss even further (compared to CDHDS alone) by balancing severity between the CDHDS
and the polishing reactor. The polishing reactor is also needed to achieve sulfur levels of
30 ppm or less in the Cat Cracked mid plus heavy naphtha and is capable down to less
than 10 ppm S. For Norco, the polishing reactor is not recommended from both a
performance perspective, since the design sulfur level of the treated Cat Cracked naphtha
product is above 30 ppm S, and an octane recovery standpoint due to lower severity
operation required (lower feed sulfur). However, a polishing reactor can be easily added to
Norco's CDTech technology.

LSG TECHNOLOGY COSTS & USAGE

Phillips S Zorb Vs CDTech Hydro/HDS
Octane Loss, (R+M/2)
Yield Loss, Vol%
Hydrogen Consumption, Scf/bbl
Fuel Gas Consumed, BTU/bbl
Fuel Gas Produced, BTU/bbl
Electricity Consumed, kW/bbl
Cooling Water, Gal/bbl
Steam Consumption, Lb/bbl
Nitrogen Consumption, SCF/bbl
Capital Cost, $/bbl
Unit Reliability

CD Hydro/HDS
0.5
0.05%
116
37,500
55,200
0.7
34
8
0
$820
98%

S Zorb
1.2
0.01%
38
33,000
0
0.9
115
12
7.5
$1,200
97%

Phillips S Zorb Vs CDTech CDHydro / CDHDS R00

LSG Technology Economic Comparison

Phillips S Zorb vs. CD Hydro/HDS
S Zorb

CD Hydro/HDS

Norco Equivalent

Norco Case

Estimate From Published Data

Project Economics
ISBL Capital Cost, $MM
NPV of Annual Costs, $MM
NPV of -1% Reliably for S-Zorb, $MM
Total NPV Without Reliability $MM
Total NPV of LSG Technology (Cost), $MM

60.5

59.9

137.5

184.0

11.0

198.0

243.8

$ 209.0

$ 243.8

CASE 1: $1200/BBL Phillips S Zorb ISBL Capital Cost

ISBL Capital Cost, $MM

87.6

59.9

NPV of CPG Cost, $MM

137.5

184.0

NPV of -1% Reliably for S-Zorb, $MM

Total NPV Without Reliability $MM
Total NPV of LSG Technology (Cost), $MM

11.0

225.1

243.8

$ 236.1

$ 243.8

CASE 2: $2.50/MMBTU Fuel Cost Applied to CDTech

ISBL Capital Cost, $MM

60.5

59.9

NPV of CPG Cost, $MM

137.5

173.7

11.1

NPV of -1% Reliably for S-Zorb, $MM

Total NPV Without Reliability $MM
Total NPV of LSG Technology (Cost), $MM

198.0

233.6

$ 209.0

$ 233.6

NOTES:
1 - Base Case S Zorb Capital Cost is $840/BBL
2 - Base Case CDTech Fuel Cost is $3.80/MMBTU. The Fuel Cost Basis for Phillips S Zorb is unknown

ANALYSIS ASSUMTIONS:
Feed Properties The Norco Phillips S Zorb Technology is based on a linear estimate from the two
published case studies. The cases are 300 ppm and 1500 ppm sulfur, while Norco's
design feed sulfur for the CDTech unit is 645 ppm S.
Both Phillips cases are for a 35,000 bpd unit, while the CDTech technology is based
on the 73,000 bpd design basis. The cost (or benefit) of scaling up the Phillips
design is unknown, therefore no adjustment was made.
Product Properties The Phillips technology is advertised to reduce sulfur levels down to 10 ppm,
however Norco only requires 40 ppm. It is not known if there is a benefit from
operating the Phillips unit at higher product sulfur, therefore no adjustment was
made.
The treated FCC naphtha value estimate is $24/bbl.
The octane value estimate is 0.8 cents/octane gallon.
Utilities -

Phillips S Zorb Vs CDTech CDHydro / CDHDS R00

The value of hydrogen is based on the price of fuel gas, $3.80/MMBTU, and is
linked in the spreadsheet. The cost of hydrogen BTU multiplier used is 1.4 (SMR
Hydrogen) basis information from Norco's planning organization.
The fuel gas consumed is only that fired in the furnace.
The fuel gas produced includes the vent streams to fuel and the hydrogen purge
from the CDTech unit.
The $3.80/MMBTU fuel gas value is the burner tip value from Norco's planning and
business development.
The electricity cost of $49.85/MWh is from Norco's planning and business
development.
The cooling water estimate is very rough, however Norco Refinery has limited
cooling water availability, therefore a large cooling water load increase (Phillips) may
require a new cooling water tower.
The steam cost is based on the price of fuel gas, $3.80/ MMBTU, and is linked to the
fuel gas price. A 89.5% efficient boiler is assumed.
The nitrogen costs are based on 4 year historical Norco data.

Costs The capital cost for the Phillips unit is from published data, however it is believed
that this cost could be much greater than advertised. The CDTech capital cost is
from the AFE estimate of $60MM, +/-10%.
The operating cost for Phillips is from an advertisement and is not based upon a
known fuel price. The Phillips sorbent cost is back calculated from the utility costs
calculated in this analysis from a total operating cost, plus 0.1 cent per gallon.
The CDTech catalyst cost is based on the lease cost for the catalyst and packing.
The CDTech maintenance cost is based on a rough estimate of $0.5MM for years
without a turnaround and $2.25MM for years with a turnaround. A 5 year
turnaround cycle assumed.
Project Economics The annual cost is the total cost of processing plus the cost (loss) of product yield
and/or quality.
The incremental S-Zorb reliability cost is an estimated 97% stream factor, vs. 98%
for CDTech. The value is estimated to be 3.65 days of lost opportunity at $5/bbl.
The installed ISBL cost is the $/BBL capital cost for a 73,000 bpd unit.
The interest rate is assumed to be 10.5% - the assumed interest rate for the PAM
runs developed for the Norco AFE.
The Multiplier is the ratio of NPV of an annual cost for 20 years divided by the
annual cost.
ATTACHMENT:

CDTech-SZorb.xls