Swedish refiner Preem Petroleum AB, a wholly owned subsidiary of Corral Petroleum Holdings AB, Stockholm, and US-based project developer Beowulf Energy LLC, New York, have signed a cooperation framework agreement to examine the possibility of installing a residue hydrocracking plant that will be equipped with process technology from Chevron Lummus Global LLC (CLG) at Preem’s 220,000-b/d refinery in Lysekil, Sweden.
Intended to enable the refinery the upgrade as much heavy oil as possible into sulfur-free gasoline and diesel fuels to help meet rising demand, the proposed hydrocracker would be based on CLG’s proprietary LC-SLURRY technology, which would equip the refinery to produce 100% ultralow-sulfur products from its vacuum residue, CLG said.
Alongside technology licensing, CLG—a 50-50 joint venture of Chevron USA Inc. and CB&I Technology Ventures Inc.—will partner with Preem and Beowulf on design and permitting support for the project, the licensor said.
Preem’s decision to explore adding a residue hydrocracking plant at Lysekil comes amid potential impacts from new rules that require lower sulfur-content specifications for bunker fuels in 2020-25, which will reduce overall market demand for heavy oil, according to Preem and Corral 2015 annual reports.
