The Sonhoe Development Company is set to make history by building the first new refinery in the UK for 20 years. The project will involve the construction of a new heavy oil upgrader on the old ICI site at Wilton in Teesside in the north-east of England (site is between Grangetown and Dormanstown).
With the price of a barrel of oil set to break the $100 mark there are heavy oil resources from the North Sea and other areas of the world such as Venezuela, Middle East and Africa that are now becoming economically feasible to process and this is why the new upgrader is being planned.
"The Sonhoe heavy crude upgrader will be the first new refinery in the UK for 20 years."
This will be the first facility of its kind in Northern Europe and will create about 450 technical jobs for the Teesside area and hopefully promote a knock-on regeneration of the area with other industries locating close to the refinery to make use of its products.
Teesside was chosen for the project from five other sites in Europe because of its proximity to one of the major sources of crude oil – the North Sea.
Teesport is a deep water port that has much experience in handling hydrocarbons and the Wilton site is a brownfield site which because of the old ICI plant has much of the required infrastructure already in place (roads, services, communications).
Wood Mackenzie have been appointed by Sonhoe as consultants for the project to advise investors and lenders contributing to the project. The Front-End Engineering and Design (FEED) began in December 2007.
The heavy oil upgrader will be able to process 200,000bpd of heavy, sour and/or acidic crude oils and residues at full production and will produce diesel, naphtha and kerosene. Around 100,000bpd of the crude oil will be supplied from the North Sea and the other 100,000 barrels from other heavy oil sources.
At the centre of the facility there will be an 110,000bpd hydrocracker unit that will use approximately 500t of hydrogen a day (surplus hydrogen and over 240,000 therms a day of synthetic gas will be marketed for other applications). The hydrogen will be produced by the gasification of asphaltenes processed via a syngas plant from a 100,000bpd Solvent De-Asphalting (SDA) unit.
The other processing units at the refinery will include vacuum, crude and thermal units and also a distillate hydrotreater. The production of the plant will come to 3mtpa to 5mtpa of ultra-low sulphur diesel (EU IV) and also significant quantities of jet fuel (kerosene). There will also be five grades of naphtha produced suitable for petrochemical processing in steam crackers or aromatics complexes.
In addition approximately 1.5mtpa of naphtha and light ends will be produced. The diesel and jet fuel will be stored at the tank farm and then exported by ship to European markets.
"Teesport is a deep water port that has much experience in handling hydrocarbons."
SONHOE AND THE ENVIRONMENT
The project requires an investment of £2bn and construction work on the 90-acre Wilton site is expected to begin in 2009 and is scheduled to come on-stream in 2012–2014. The engineering design work is already underway and planning applications have been made to the Teesside local authority.
The upgrader / refinery will be configured to handle the heavier crude oils available but will also be constructed to the latest environmental standards and will be 'carbon capture ready', which means that carbon dioxide produced at the site can be stored and then piped back for storage in North Sea rock formations so it does not contribute to greenhouse gas build up.
Mike True, managing director of Sonhoe has said that the technology due to be used is tried and tested, and will be designed to the highest standards, also that the highest environmental standards will be incorporated.
The project will require construction on three sites including an upgrade of the Teesside port area near Bran Sands to handle an additional 400 ship movements a year, a storage facility near Steel House and the refinery itself on the Wilton site.
In January 2008 Sonhoe Development selected GE Oil & Gas to provide reactors, centrifugal and reciprocating compressors, centrifugal pumps and air coolers for the new facility under a $200m contract.
Claudi Santiago, GE senior vice president, and president and CEO of GE Oil & Gas commented: "This is a major and important energy infrastructure project in the UK and we have been working with Sonhoe for some time to understand their needs and validate the development.
"We have a good understanding of its critical success factors and, by entering into a supplier of choice agreement with Sonhoe, we can work together to mitigate risk, support the technical design and achieve schedule advantage in terms of lead-time length and predictability."
Sonhoe has also signed an agreement for a license with Chevron Lummus Global LLC (CLG) for a new grassroots hydroprocessing complex including three isocracking units and one new gasoil Isotreating unit to be built on the upgrader site at Teesside.
The heavy oil upgrader will be able to process 200,000bpd of heavy, sour and/or acidic crude oils and residues at full production.
Howard Simons, Sonhoe technical director commented: "CLG's hydroprocessing technology will be embedded at the heart of the facility and will ensure high levels of performance and operational and financial stability for all stakeholders associated with the development."
The three isocracking units will be designed for a greater than 85% conversion of straight run vacuum gasoils, to deliver a high yield of quality diesel and kerosene. The gasoil isotreating unit will be designed for 99% conversion of straight-run and cracked atmospheric gasoils and light vacuum gasoils to premium quality diesel and kerosene.
The reaction products from these units will be fractionated in a combined fractionation section also designed by CLG (basic engineering design will be completed by the end of 2008).