Heavy oil cracking: the other leg of the ethylene industry
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Ethylene production has become a key indicator of the development of a country's petrochemical industry. In China, the limited availability of light hydrocarbons has long been a major challenge for the ethylene sector. To address this issue, several domestic technologies for heavy oil cracking have emerged in recent years. Many companies in regions with limited ethylene supply are optimistic about these processes and are eager to invest in heavy oil cracking projects. However, according to experts from the China Petroleum and Chemical Industry Planning Institute, two critical challenges remain: the industrialization of the technology and the stable supply of heavy oil feedstock.
China’s crude oil typically contains only about 30% light fractions such as straight-run naphtha and light diesel. By 2010, ethylene demand was expected to reach around 25.5 million tons, while output would be approximately 15 million tons. This would require roughly 60 million tons of feedstock for chemical use, necessitating refining capacity of about 600 million tons. Meeting this demand is a significant challenge given current resource and processing constraints.
To explore alternative feedstock routes, research institutions in China have focused on heavy oil cracking technology. In 2000, the Beijing Petrochemical Research Institute developed Catalytic Pyrolysis (CPP), a process that uses heavy oil as feedstock and employs a specialized acidic molecular sieve catalyst. Operating under milder conditions than traditional steam cracking, CPP is suitable for processing atmospheric residue, especially paraffinic oils, and can also handle vacuum residue. The technology was tested at Daqing Refining & Chemical Branch from October 2000 to January 2001, using a modified deep catalytic cracking unit. Experts deemed the process mature and reliable. Once scaled up, CPP could offer lower production costs compared to conventional methods.
In late 2005, Shenyang Chemical Industry Co., Ltd. began constructing the first domestic 500,000-ton-per-year CPP plant for ethylene and propylene, expected to be completed by 2008.
Another similar technology, HCC (Heavy Cracking Contact), was developed by Luoyang Petrochemical Engineering Company. It utilizes high-temperature, short-contact-time reactors and has been successfully tested in Qiqihar. The HCC unit, based on a catalytic cracking system, is the world’s first industrial-scale unit for direct cracking of heavy oil into ethylene, with a capacity of 60,000 tons/year using 100% Daqing atmospheric residue. After over two years of testing, the results were promising, with olefin yields matching pilot data and good catalyst performance.
Despite these advancements, experts warn that heavy oil cracking still faces hurdles. The first commercial installation, Shenhua’s 500,000-ton CPP project, is still under construction and will not be operational until 2008. Scaling up before the initial unit is fully functional is risky. Additionally, the technology is primarily tailored for Daqing’s paraffinic heavy oil, limiting its versatility. With the two major oil companies controlling most heavy oil resources, projects like Lubei Group’s 700 million yuan investment in a heavy oil cracker faced delays and financial losses due to feedstock shortages.
Given China’s limited crude oil resources, heavy oil cracking offers a viable way to expand ethylene production and reduce reliance on high-quality feedstocks. However, for this "second leg" of the industry to truly take off, it must progress steadily and sustainably. The path ahead is clear, but the journey requires careful planning and execution.