November 2017

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Refining: Alkylation—What’s a refiner to do?

Within the refining industry, gasoline production and alkylation capacity are running at near all-time highs.

Pawloski, J., Veolia Water Americas

Within the refining industry, gasoline production and alkylation capacity are running at near all-time highs. Similarly, spent sulfuric acid regeneration (SAR) is running at, or very near, capacity for most suppliers. With higher-octane gasoline required to meet Corporate Average Fuel Economy (CAFE) standards, there will be an increasing demand for alkylate and, in turn, for spent SAR for refiners that utilize sulfuric acid alkylation.

Although it is not the only way to increase octane in gasoline, alkylate is the component of choice for gasoline blenders. It has very favorable environmental characteristics: low sulfur, lower vapor pressure and high octane value, among others. Many consider it the environmentally preferred octane additive when stacked up against other alternatives.

Steady macro drivers can be associated with the growing long-term demand for alkylate, such as the need for higher-compression engines in vehicles and lower vapor pressure requirements. Additionally, the economics for alkylate manufacturers have improved significantly: margins are high, and producers of alkylate are receiving a good return on investment. Historically, situational drivers have also helped expand the alkylate market, such as when tetraethyl lead (TEL) was phased out, when methyl tert-butyl ether (MTBE) was deselected as a fuel additive in the US, or when ethanol made its way into the fuel pool and alkylate was added to keep the vapor pressure within specification. Over the next 2 yr–7yr, we will see another phase of growth that will be associated not only with the demand side, but with the supply side, as well. The raw materials needed to manufacture alkylate are plentiful and available at reasonable costs. This business environment adds up to a large, profitable and growing alkylate market.

Essentially, refiners have two options for managing spent sulfuric acid generated from alkylation production: an onsite facility or a merchant facility.

In the merchant facility model, a refiner ships its spent sulfuric acid to an offsite, third-party facility for processing. The spent acid is processed and sent back to the refinery as fresh acid. This process is a good model, particularly for refineries that have moderate to low alkylation capacity, and the benefits are primarily reliability and an economically viable solution for SAR that helps reduce environmental footprint.

In addition to servicing the refinery’s needs, a merchant facility may also handle chemical spent acid from an electronics plant or other manufacturers. The plant may also produce high-value sulfur derivative products for other applications, such as detergents or shampoos. Ultimately, a merchant plant has scale advantages when given the right market demand for the products.

With the onsite model, a refiner can either build its own facility, or engage a third party to design, build, own and operate the facility for them. In this case, the third party can provide key sulfur management services for the refinery by processing all of its spent acid, along with all or some of its sulfur-bearing gases. The benefits of the onsite model are multi-faceted, and include onsite regeneration of spent sulfuric acid at a viable cost, with guaranteed availability and a reduced environmental footprint. An onsite plant can treat the refinery’s acid gases, using them as feedstock to produce sulfur-based products, and deliver high-pressure steam back to the refinery for its use in production. The refiner benefits from reduced transportation and load/unload infrastructure costs.

The onsite option is ideal for refiners with significant alkylation capacity, or those that are adding units to expand alkylation capacity. This is particularly true if acid gas requirements are increasing, and/or the existing gas handling infrastructure is challenged or outdated. The economics are ideal, allowing the refiner to eliminate non-value-added logistics, have greater reliability and manage both spent acid and acid gases at the same facility.

While the US is leading the world in terms of alkylate production, the international market is beginning to increase alkylate production, as well. In particular, China is considering alkylation production as a way to promote cleaner air. India and several Latin American markets are also looking at potential growth in alkylation production.

Sulfuric acid is one of the most used—and reused—commodities in the world, and an excellent example of the industrial circular economy in action. Resource Conservation and Recovery Act (RCRA) regulations allow spent sulfuric acid catalyst to be regenerated into fresh acid for reuse. As such, every refinery producing alkylate by using sulfuric acid as the catalyst requires a regeneration solution for its spent acid. The good news is that viable options exist to support capacity expansion. As alkylation capacity continues to grow in the US and globally, solutions for expanded regeneration capacity—primarily the onsite and merchant models—must be carefully considered by each refinery, based on its specific requirements and market conditions. HP

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