cracking

Vacuum gas oil or VGO is one of those mystery products talked about by refiners but barely understood by those of us that are not engineers. However it is an important intermediate feedstock that can increase the output of valuable diesel and gasoline from refineries. Lighter shale crudes such as Eagle Ford can produce VGO material direct from primary distillation. Today we shed some light on this semi-finished refinery product.

European refiners have shut down 1.7 MMb/d of capacity since 2008 in response to recession plagued economic conditions at home and competitive pressures in their traditional export markets. Refinery utilization in Europe is down to 75 percent (IEA Q1 2013). That contrasts sharply with high utilization, record exports and respectable product margins at US refineries - even as crude prices increase. Today we examine why Europe’s refineries are suffering.

US Complex refining capacity leads the world and US Gulf Coast refineries are enjoying an export led boom. As lower cost crude starts to become available to these refineries they should be in a strong position to compete even more efficiently in global markets. What makes these complex refineries competitive?  Today we conclude our two part refining tutorial by explaining refinery upgrading processes.

If you haven’t already read the first part of this tutorial then you can review it here. In Part 1 we provided an overview of the refining process described the fractions that make up crude oil and ran through the refined product outputs of a complex refinery. We looked at the first refinery process – atmospheric distillation that breaks crude down into its component fractions. Today we turn to the processes refiners use to upgrade the heavier residual fuel oil outputs from atmospheric distillation.