November 02, 2018

From Crude Oil to Chemicals: Back to the Fundamentals


An announcement by ExxonMobil in 2013 confirmed that its new steam cracker at its refining and petrochemical complex in Singapore could process an unprecedented range of feedstocks – including crude oil.  Two years later, the creation of a joint agreement between Saudi Aramco, CB&I and Chevron Lummus (CLG) added to the interest, with the purpose of the agreement to demonstrate and commercialise the so-called Thermal Crude to Chemicals, TC2C™ technology.  The parties believe the technology is “groundbreaking” and the potential “immense”.  These two announcements were widely publicised and came with the aspiration to produce ethylene directly from crude oil, reducing refining costs.

So what might this mean for the petrochemical industry?

Since the price of crude oil fell sharply in 2014, and with the opportunity to diversify the economy in a country, there has been an increasing emphasis on the benefits of integrating refinery and petrochemical operations. The objective is to reduce costs, maximise value through effective use of the available streams and smooth the overall product revenue cycles, shielding the company from sharp fluctuations in revenues due to the price of crude oil. We see the TC2C™ technology as a further effort in this direction.

Companies have been manufacturing petrochemicals from crude oil for decades, so what has been happening? 

The term thermal crude to chemicals could perhaps imply that crude oil is used directly as a feedstock in steam crackers to yield olefins and aromatics eliminating the need for refining.  But has this not been tried before? The answer is it has!  The rising price of conventional feedstocks (e.g., naphtha), drove some companies in the past to consider the direct steam cracking of crude oil, without any pre-fractionation of the crude oil. The challenge is that heavier products are difficult to vaporise and have high coking rates, resulting in higher frequency of de-coking cycles, increased maintenance costs and lower olefin yields for the steam crackers.  The technology promoted by ExxonMobil is thought to be based on furnaces with the flexibility to crack  light and sweet crude oils, for periods.

Meanwhile, the announcement by Saudi Aramco and SABIC earlier in 2018, unveils what we believe is their chosen approach to crude-to-chemicals. From the involvement of CB&I and CLG, our expectation is  the technology fractionates the barrel of crude oil into its traditional cuts, and feeds them to dedicated steam cracker furnaces, after suitable treatment (e.g. hydrocracking). The traditional refinery is therefore converted into a plant that produces a much higher proportion of steam cracker friendly feedstocks, such as LPG and naphtha, than normal.

To maximise the conversion of crude oil into petrochemicals, we have to utilise streams that would otherwise go on to be used for the production of fuels such as kerosene and diesel, to produce naphtha.  However, the main challenge is to upgrade effectively the bottom of the barrel (i.e. heavy products) into steam cracker friendly feedstocks.

(See, accessed October 2018)

What do we understand Crude-to-chemicals to be?

  • A plant of the size of around 200 000 BPSD crude oil feed, would yield approximately two million tons of ethylene and 1.5 million tons of propylene.  This would be world-scale in terms of olefins production but is only about half the size of a new world-scale refinery!
  • The inclusion of a hydrocracker is required to upgrade the middle distillates, and heavier cuts, and is central to the refinery. CB&I reports that the ethylene yield almost doubles when using hydrocracked vacuum gas oil (VGO) compared to raw VGO (18 to 32 percent).
  • Depending on the crude oil, desulphurisation units should be considered to treat the crude oil feed noting also that metallic salts are poisonous to hydrocracking catalysts.

In a further development to maximise olefin production per ton of crude oil, Saudi Aramco has signed a multi-plant technology license agreement with Siluria for its Oxidative Coupling of Methane (OCM) technology. OCM is a process used for the direct conversion of natural gas (mostly C1s) into higher value C2 products such as ethylene.  The overhead gaseous stream from the steam cracker is rich in methane and it could be used to increase the overall chemicals yield.

Siluria claims to have developed a commercially viable route to ethylene via OCM through combining biomaterial templating, nanowire catalyst design, and high-throughput screening. In May 2016, Siluria reported one year of successful operation of its demonstration plant at La Porte, Texas. The plant is co-located with a polymer plant operated by Braskem.

Note1: CBI has presented multiple configurations. Nexant has chosen the option that illustrates better the concept of uplifting the bottom-of-barrel products and maximisation of chemicals production.

One critical configuration decision is how to process the fractions heavier than middle distillates.  In the illustration above we have assumed that the no refined products would be marketed, and hence, similarly to kerosene and diesel, fuel oil would also be converted to naphtha.

The configuration of the Hengli Petrochemical project in China is the closest to the crude-to-chemicals concept (Crude-to-Chemicals Option 1). However, it adopts a more realistic target of petrochemicals yields of about 40 percent, mostly through production of aromatics (e.g. PX for polyester production).  It will also produce and sell refined products. Meanwhile, Saudi Aramco’s proposition is to increase this percentage to about 80 to 85 percent (Crude-to-Chemicals Option 2).

How competitive could a crude-to-chemicals facility be?

The first steam cracker based only on naphtha feedstock appears halfway in the cost curve

Ethane-based steam crackers dominate the first half of the world’s ethylene production cost curve. The lower cost of feedstock, relatively lower capital investment and higher yields towards ethylene render ethane crackers champions of ethylene cost competitiveness.

The competitiveness of a steam cracker depends on numerous cost factors, such as construction cost, utilities, manpower, but it will depend crucially on the price of its feedstock (e.g., ethane, LPG, naphtha).  The competitiveness of operating a crude-to-chemicals configuration is targeted to be comparable or better than existing naphtha crackers. However, the investment costs are significantly higher due to the additional units required to convert and upgrade all crude oil fractions into naphtha.

  • The additional capex required upstream of the steam cracker is dependent on the size of its units and the different volumes of middle distillates and heavy products.
  • Higher gas and light products fractions result in lower volumes of heavier and more complex products to upgrade to naphtha. The operator is expected to favour more paraffinic crudes such as the Arab Light, to reduce the total investment.
  • The higher investment costs and average competitiveness of naphtha-based crackers lead to the conclusion that the crude-to-chemicals must rely on a discounted price of a barrel of crude, or on a pricing mechanism based on its extraction costs .

What might be the adoption of this?

The economics of crude-to-chemicals seem to be dependent on the composition and extraction costs of the barrel of crude oil. Its attractiveness appears to be limited to countries with low extraction costs, such as Saudi Arabia, Iran and Iraq. Alternatively, countries with a political incentive to increase crude oil output and reduce the dependency on production of refined products may also seek opportunities to utilise this approach.

We consider that one major challenge is the expected high capital investment required to construct a complex to produce approximately 3.5 million tons of olefins (i.e., more than two new world-scale naphtha crackers). The appetite to invest in such large complex, might be further hindered by the current crude oil price at about $80 per barrel.


In summary, a crude-to-chemicals complex based on a world-scale refinery has the potential to bring to the market about four million tons of ethylene and three million tons of propylene. Such a complex has the potential to  provide short to medium term disruption of petrochemical markets.  The economic attractiveness of such an investment would be dependent on the price  of the crude oil feedstock relative to market value.


Dr. Nuno Faisca, Technical Services Lead,, +44 (0)20 7950 1565