How to Effectively Manage FCC LCO | RefinerLink

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How to Effectively Manage FCC LCO

By Optimization Specialist Robert

Jun 24, 2019

Considerations for managing the most difficult molecule in the refinery.


If you work in a refinery, you’ll agree that finding the optimal routing for Light Cycle Oil (LCO) is one of the most difficult tasks.


Some of you will wonder why I made the statement above because your refinery does not routinely discuss the disposition of LCO.

If that is the case, you either work in a very simple refinery with limited handles, or you are just not putting LCO into the right outlet.


LCO disposition is tough to optimize because it depends on a number of variables, ranging from changes in market conditions to changes in refinery configuration. Let’s cover some of the basics of LCO to create understanding. 


  • LCO is created in the FCC as a distillate product
  • It is often produced below the Heavy Cat Naphtha (HCN) draw
  • It is often the stream above Heavy Cycle Oil (HCO), or FCC bottoms
  • LCO is very hydrogen deficient like all other FCC products
    • LCO consumes a great amount of hydrogen when processed
    • LCO has a very low cetane number
    • It has a low smoke point
    • LCO has high aromatics content (duh, the name suggests!)


Since LCO has such poor qualities as compared to other refinery stocks, managing LCO often becomes a decision of choosing the lesser evil. Either sell it as an unfinished stock at a discount, consume a lot of hydrogen to further process, or blend it into the diesel pool and sink your diesel specifications.


Many refinery LPs are not configured well to optimize LCO disposition since planning analysts often constrain LCO routings to minimize LP fluctuation. To help combat this practice, we will discuss the principles of LCO processing.



LCO Sales


The most straight forward outlet for LCO is to sell it directly into the market. This assumes that your refinery sits in a region where bunker blending is prevalent and there are off-takers for cutter stock. The sales price will depend on the quality of LCO as a cutter stock, specifically the sulfur content and viscosity.


Refineries with a FCC pre-treater can attain low sulfur LCO, and managing the distillation to reduce viscosity can add value to the LCO stream. However, downgrading LCO to HCO is rarely economic, so only consider viscosity optimization if your FCC main fractionator has a MCO/Intermediate Cycle Oil draw.


In most regions, LCO can be sold at 80 - 90% of finished diesel prices.



LCO Blending into Fuel Oil


If your refinery produces fuel oil product, you can capture value in LCO by using it as cutter. LCO does not cut as efficiently as jet/kero, but it sure does a better job than diesel.


The benefit of using LCO as fuel oil cutter is reducing the amount of LCO processed further in the refinery. All the nasty qualities of LCO become buried in fuel oil, so it’s almost a win-win for refineries that produce fuel oil.



LCO Direct Blending into Jet or Diesel Product


Depending on the availability of pre-treating FCC feed, LCO can sometimes be blended directly into Jet or Diesel product. For jet fuel, thermal stability and smoke point is often the primary consideration for LCO blending.


For diesel fuel, refiners need to consider aromatics and cetane specifications. LCO cetane is quite poor in the 10 -20 range and aromatics are very high in the 60 – 80% range. Finished diesel cetane specs ranging from 40 – 55 are challenged to blend much unprocessed LCO. Regions with aromatics specs < 30% also will be challenged to blend LCO.



LCO Treatment in a Diesel Hydrotreater


Some refineries have the ability to upgrade LCO into the diesel pool if hydrogen is available and specifications allow. As LCO is very aromatic, it can consume 2 – 3 times more hydrogen than straight run diesel, putting this at roughly 500 scf/bbl feed.


Hydrotreating LCO will saturate a portion of the aromatics, however, so there is a benefit of hydroprocessing for refiners limited by diesel aromatics specs. A refinery must first determine whether the value of hydrogen is worth the upgrade.


All things considered, upgrading LCO into finished diesel can be quite lucrative for refineries that can manage. The alternative of selling LCO as cutter can be a downgrade of $10 - $20 /bbl, so very much worth the effort.



LCO Upgrading in a Hydrocracker


The ultimate upgrade of LCO occurs in a hydrocracker. Depending on the relationship of gasoline vs diesel prices among other factors, LCO can be converted to good quality distillate fuel or even gasoline molecules in a hydrocracker.


The greatest consideration for hydrocracking LCO is the cost of hydrogen. Since LCO can consume between 2000 – 3000 scf/bbl of hydrogen, hydrocracking LCO is no minor feat.


Two-stage hydrocrackers have the additional complexity of determining the fractionator bottoms distillation to increase conversion of distillate material to gasoline. This comes at a cost of additional hydrogen consumption, but can be economic depending on the incremental cost of hydrogen and the price of gasoline.


Since hydrocrackers operate at very high pressures and utilize highly sophisticated catalyst, the gasoline and distillates produced have high qualities. Hydrocracker products are good reformer feedstocks, or have good blend properties for finished jet or diesel products.


Volume expansion is also another good driver for upgrading LCO in a hydrocracker, often yielding 15 – 20% increased volumetric yields. You are basically upgrading hydrogen to liquid product, even if it is LPG!

Upgrading LCO in a hydrocracker can add an additional $5 - 10 /bbl margin above hydrotreating alone, so essentially a $15 - 30 /bbl incentive vs direct sales.



Given the various outlets for managing LCO production, one can see how finding the right home can be challenging. The economics are dependent on nearly every price of oil commodities, as well as refinery configuration.


Since these factors change frequently, the moment you think you have a handle on optimal LCO disposition, it will shift again. I won’t even get into the questions related to optimizing the production of LCO, as that was previously discussed.


In the end, process engineers and optimization analysts need to carefully work together, and communicate frequently. There are big bucks tied to this operation that refineries can capture, or easily lose.

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  • A.S. Stephanakis :   The article is isolating LCO and has a planning target audience. If there is a coker then there are more difficult products. Then a substitution of coker gasoils with LCO is worth exploiting. Also, there is an incomplete view (due to insufficient information) of the fuel oil cutting with LCO. It is not the blender which makes money here (only at last). If there is a visbreaker then the ONLY cutter available to increase the stability of the residue is LCO. Actually in the blender, since the mixture of LCO and visbreaker residue is stable enough (not as the virgin cuts) one might add kerosene and make more money. On the other hand if there is not a visbreaker this is not the case. It would though set the price, because the client with a visbreaker would be willing to buy at a higher price than others. LCO availability in the marker would not be expected to be high because of so many uses inside refineries. Stability blending makes sense.

    Sep 18, 2015

  • Optimization Specialist Robert :   Mr Stephanakis, regarding your Fuel Oil cutting comment regarding insufficient information, i recommend to see our view of fuel oil optimization in a separate article: You are correct in that the article isolates LCO in the discussion, but it is meant to provide consideration for all of the potential routings. The end disposition of LCO for a refinery will depend on various factors, which will primarily be determined by Planners. True that introduction of a Coker into the refinery configuration will change LCO disposition economics. However, there are some mutually exclusive routings worth noting. Specifically, most refineries do not route Coker gasoils into the fuel oil pool due to poor cutting properties of CGOs (i.e. viscosity). Also, LCO is rarely routed back to FCC feed since marginal yields are very poor, when often times coker gasoils are routed to the FCC. Thank you for your thoughts - as you point out, there are many items to consider for LCO optimization.

    Oct 11, 2015

  • A.S. Stephanakis :   Thank you too, for the mutually exclusive part. I realize that you are absoutely right about viscosity. In our plant we have the so called heavy-heavy coker gasoil and it is impossible to cut fuel oil. Then there is the heavy coker gasoil which has a high density but low CCR and CCR cutting is sometimes required. It would be VGO with fuel oil density. A great pain is routing heavy coker gasoil to a hydrocracker as it destroys catalysts and needs pretreatment. But you get less VGO import. Great pain. Finally recirculating LCO was always avoided. There was some thinking to recirculate through an dedicated FCC feed pretreater but it would reduce the capacity of the system. So, as it can be used elsewhere with some (low) price the system may be maximized and recover the LCO low price by FCC margin. Most of the planners prefer that. Thanks again for the response.

    Oct 11, 2015

  • :   This post are very useful one.It is great to see this blog.Thank you for sharing this. Game Lover -

    Aug 20, 2019

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