Different varieties of crude oil are extracted around the globe. Broadly they are classified as sweet crude and sour crude depending on the sulfur content. Interestingly they fetch different prices depending on their quality. Apart from the commercial factor of pricing, various crudes require different technologies and processing capabilities to facilitate gainful refining operations. Let us see the processing requirements for different types of crude oil and the cost benefit of processing the same.

How Crude Oil is Classified

According to Energy Information Administration (EIA), crude oil is classified mainly based on two important parameters, namely the density and sulfur content. Crude oil is rated using a gravity scale developed by the American Petroleum Institute (API). On the basis of their API gravity, they are classified as heavy, medium and light.

  • Heavy: 10–20° API gravity
  • Medium: 20–25° API gravity
  • Light: above 25° API gravity

The term sweet is used due to its low sulfur content that provides sweet crude with a mild sweet taste and a pleasant odor. Early prospectors in the 19th century would taste and smell small quantities of oil to determine its quality and value. Sweet crude contains small amounts of hydrogen sulfide and carbon dioxide. If the sulfur content in the crude is greater than 0.5%, it is categorized as sour in nature. EIA has classified different types of crude oil available in the market based on the above factors.

Refiners prefer light sweet crude for processing because it requires less advanced and energy intensive infrastructure for refining. This means lower capital outlay and better margins in terms of product value and output. So, the complexity in processing crude oil is directly related to whether it is sweet or sour crude. Sour crude is usually processed into heavy oil such as diesel and fuel oil rather than gasoline (petrol) to reduce processing costs.

Presence of Sweet and Sour Crude

If exploration and production (E&P) companies are given an option whether to produce sweet or sour crude, without any hesitation they will all opt for sweet crude. However, that does not exist in reality and Mother Nature determines the sort of crude available depending on the geology. For example, WTI crude, which is light and sweet premium crude, has unique rock formations when compared to heavy crude such as Saudi heavy or Mexico Maya. Usually the Texas regional crude basins offer lighter and sweeter crude as compared to other regions.

Processing Requirements of Sweet and Sour Crudes

Heavy and sour crude requires complex refining procedure as compared to sweet and light crude. The sulfur compounds in heavy and sour crude present major challenges in the refining process. This is due to the fact that sulfur compounds are substances with various chemical natures, from the elemental sulfur to hydrogen sulfide and mercaptan compounds, sulfides, open-chain and cyclic disulfides, heterocyclic derivatives of thiophene, thiophane and other more complex compounds.

Sweet and light crude requires simple basic processing with possible value-added technology for blending while heavy crude requires extensive complex refinery infrastructure such as desulfurization and hydrodesulfurization plants in order to roll out value-added products to the marketplace. (Learn more in the article Refinery Configurations: Changing Dynamics.)

Desulfurization Process

Using this process, refineries that process heavy sour crude separate the sulfur from products such as gasoline, gasoil and kerosene.

It is worthwhile to note that the levels of sulfur in the environment have steadily increased in the past two decades due to the use of heavier crude and cheaper high sulfur crude. This has forced the refining industry to install additional facilities like ultra-desulfurization for gasoline and diesel to meet the requirement of the stringent sulfur emission standards. Sulfur is not only detrimental to the environment and health, but it also negatively impacts the refiners economically by fetching lower prices. Also, products that do not meet the international sulfur specifications are downgraded to lower grade products and this again puts the refining companies at a loss.

Hydrotreating Process

The hydrotreating process is extensively used by refineries with the main objective of removing sulfur and other compounds that are undesirable such as unsaturated hydrocarbons, nitrogen from refinery process streams, etc. Hydrodesulfurization has been used commercially for treating naphtha as feedstock for catalytic reformers to meet the stringent sulfur specification of less than 1 ppm wt. This process has also been widely used to remove sulfur compounds from kerosene and gasoil so as to make them suitable blending components. In cases where products are from catalytic or thermal crackers, hydrogen treatment is used to improve the product quality specifications such as color, smoke point, cetane index, etc.

During a typical hydrotreating process, the feedstock is mixed with hydrogen-rich make up gas and recycled gas from the reactor. The mixture exchanges heat with the reactor effluent and is heated in a furnace as it enters the reactor loaded with catalyst. In the reactor, the sulfur and the nitrogen compounds present in the feedstock are converted into hydrogen sulfide and ammonia respectively. The olefins present are saturated with hydrogen to become di-olefins. There are many technologies available in the hydrotreating process with variance; however, all the technologies aim to strip the sulfur from the feedstock and maximize the output of value-added products. During the hydrotreating process, the catalysts play a vital role in the removal the sulfur.

Economics of Sweet and Sour Crudes

It is clear from the analysis so far that sweet and sour crude provides different baskets of product mix, called the crude slate. Since sweet and light crude provide a better product slate, particularly the middle distillates that have a ready market, they are priced higher compared to heavy and sour crude. (Related reading: Macros of Oil & Gas Trading.)

Heavy crude also requires additional refining facilities to remove the sulfur contents; however, they are capital intensive and the payback period is understandably long. Hence, refiners make a tradeoff between high priced crude versus high capital outlay while sourcing and deciding their refinery configuration.

The proximity of crude source also plays an important role when setting up refinery infrastructure. Modern refineries are equipped with flexible processing facilities to handle different types of crude so as to achieve better economics in refinery operations.