North American Petroleum Refiners Plan Record Number of Delayed Coker Projects

---

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The confluence of three trends is leading to the development of an unprecedented number of delayed coker unit expansions, upgrades, and additions in North America. Bottom-of-the-barrel upgrading, safety issues associated with hazardous coke drum deheading and switching procedures, and end-of-campaign-life coke drum replacements, are the main trends driving delayed coker unit project work. Right now, Industrialinfo.com is monitoring 43 Delayed Coker Unit Projects, representing more than $5 billion in total investment value at petroleum refineries in the U.S., Canada, and Mexico. These projects, many in the early study stage, are scheduled to begin construction, starting in July 2005, extending out two to three years.

Delayed Coker Project Spending By Market Region - $5.03 Billion in active Delayed Coker projects are present throughout North America. The 43 major capital projects represent many opportunities for equipment and service providers. Click image right to view active project breakdown by market region.

According to Chris Paschall, Vice President of the Petroleum Refining Industry for Industrialinfo.com, “The majority of future delayed coker project spending will be geared toward bottom-of-the-barrel upgrading expansions and upgrades.” Bottom-of-the-barrel upgrading refers to the refining of heavy residual stream coming from the vacuum unit. Mr. Paschall goes on to state, “It is increasingly important for refiners to be able to process additional sour, less expensive crude oil imported from Canada, Mexico, South America, and Saudi Arabia.” This requires bottom-of-the-barrel upgrading. As domestic sources of sweet crude dwindle, imported sour crude oil becomes more viable, as it is currently trading for $15-20 less, barrel for barrel, than sweet crude, even though it requires large capital outlays to process, including delayed coker unit expansions. Some companies, such as Motiva and Premcor, are looking at $1 billion expansions incorporating delayed cokers, in order to process more sour crude oil. For example, Motiva Enterprises LLC (Houston, Texas), a petroleum refining and retail marketing joint venture operation between Shell Oil Company and Saudi Refining Incorporated, has announced plans for a billion-dollar expansion at its Port Arthur, Texas, refinery. The project would allow Motiva to refine more crude oil imported from Saudi Arabia.

Delayed Coker Projects by Type of Activity - The 43 Delayed Coker projects can be classified into (3) major categories. New Unit Additions; Unit Upgrades; Unit Expansion/Debottlenecks. Click pie chart right to view category breakdown.

A second factor causing the surge in delayed coker projects includes the necessity to implement safety systems, such as automatic deheading devices, enabling operators to safely perform routine, but historically hazardous, coke drum switching and cleaning operations. As widely recognized by the industry, the batch process portion of delayed coker unit operation requires periodic drum switching and coke cutting, creating hazardous working conditions for employees, frequently resulting in serious or fatal accidents. Refiners are installing new, evolving technology, such as automated deheading equipment, to alleviate this situation.

The third trend affecting the industry relates to the need to periodically change out coke drums, due to end-of-life cycle replacements. All of these trends are leading to increased project spending on delayed coker units. For details on these projects, check out Industrialinfo.com’s Petroleum Refining Database or contact Member Center at 1-800-762-3361.

Industrial Information Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 years. IIR is respected as a leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.