Eliminate Hazardous Alkylation Catalysts with Ionikylation

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Good afternoon and thank you for  joining us today as we host this   special information session on Ionikylation. My name is Beverly Chung and I am the Director of  Marketing and Communications at Well Resources.   I will be the moderator for the session  and it is my pleasure to be joined by Ms.   Bell McGregor, Product Analyst, who will  be taking you through the content today.  

This presentation is intended for informational  purposes and will be recorded and uploaded into   the public domain for future reference. As  society becomes increasingly carbon conscious,   the reliance on clean fuels is becoming more  and more pronounced. However, the traditional   methods in which clean fuels and clean fuel  additives are produced may pose serious health,   safety, and environmental risks. The focus  of today's discussion will be on alkylate   and alkylate production and how a safe  and sustainable alkylation technology,   licensed by Well Resources, can eliminate  the use of hazardous alkylation catalysts.  

At this point, please turn your attention to  our disclaimer for this presentation. As the   materials are intended for informational purposes  only, it may not contain all of the information   necessary for an in-depth analysis. However,  for those of you in our audience who wish to   learn more about our Ionikylation technology,  I strongly encourage you to visit our website   at wellresources.ca or contact a member  of our team at info@wellresources.ca.   With that, I will now turn things over to Bell.  Thank you Beverly for that wonderful introduction. We'll start this presentation with a brief  introduction to Well Resources. We are a   Canadian clean tech company that is focused on  green, clean, and safe technology development   and process licensing for the petroleum sector.  Our company's mission is what we call "effective  

resource utilization" where we aim to provide our  clients with innovative, adaptive, and disruptive   process solutions that build a sustainable future.  Over the years, we've established our market   niche in focusing on what many would consider  traditional refinery waste or by-product streams,   which encompasses both light off-gas streams and  the so-called bottom of the barrel. Our view is   that reducing waste and where possible turning  waste into value-added streams will be beneficial   for both the environment and society if this can  be done in a responsible and sustainable manner.   Well Resources currently offers two unique  and commercially proven technologies to the   downstream sector. One of these technologies  shown at the bottom is the selective extraction   of asphaltenes, or SELEX process, and this  is a carbon granulation and removal process   for upgrading and decarbonizing the bottom  of the barrel. The other technology is our  

safe and sustainable alkylation process called  Ionikylation. which makes use of a proprietary   composite ionic liquid catalyst, and this  technology is the focus of today's discussion.   The objective today is to provide you with an  overview of the Ionikylation technology and give   you some insight into our numerous commercial  successes within the last decade. We're going   to start the discussion today with an overview of  alkylation, seeking to answer the questions: What   is alkylate? How is alkylate produced? And why  are traditional alkylation processes inadequate?   We'll then go on to describe the Ionikylation  process, including: What makes it unique? What   are the advantages? And what is the commercial  status of the technology? Alkylation Overview The alkylate market is lucrative  and has seen good historic growth.   It is expected to grow even further over the next  decade. In 2021, the global alkylate market was  

estimated at $1.15 billion dollars, and it is  expected to exceed $1.5 billion dollars by 2029.   This represents a compound annual growth  rate of about 3.8% for that period.   This growth is underpinned by a variety of factors  in the developing world, robust population growth   and increasing standards of living are driving  gains in overall gasoline consumption and by   extension, alkylate consumption. In developed  economies, overall gasoline demand is expected  

to drop throughout the years 2025 to 2050,  but nonetheless, we see a shift towards   higher-performance fuels for higher-efficiency  engines, which supports the alkylate demand. From a process chemistry standpoint, alkylation is   simply a chemical process where an alkyl  group is attached to an organic substrate.   But in a refinery setting, alkylation refers  to a particular process that reacts light,   mixed olefin feedstocks into predominantly C8  compounds for blending into the gasoline pool.  

Alkylate is known for its inherently high octane  number typically in the range of 92 to 96,   and as high as 98 to 100. it increases the  knock resistance of fuel, is clean burning,   is free from olefins and aromatics, and has  low sulfur content. When we look at the various   alkylation processes on the market, an important  question to ask is: how do we get from point A to   point B most effectively, contextualized by the  technical, economic, and environmental factors?   Traditional alkylation processes have been  used for roughly 80 years and they make use   of strong acids to break chemical bonds  and facilitate that alkylation reaction.   The main catalyst currently in use include  hydrogen fluoride or concentrated sulfuric acid.   With these catalysts being strong and highly  corrosive acids, the physical processing   infrastructure is typically constructed  using expensive and exotic metallurgy,   and operators require the use of  robust safety and containment systems.

This is especially true for hydrogen  fluoride, as it has a propensity to vaporize   into a dense toxic cloud that can threaten the  livelihoods of plant personnel and the public.   With sulfuric acid, large volumes of catalyst are  required, and this poses an environmental risk   when considering the high emissions intensity  associated with its regeneration. Well's   Ionikylation technology leverages new sciences to  address both the safety and environmental problems   commonly associated with acid-base technologies,  without sacrificing performance or cost.

And this is important because refinery  infrastructure all around the world is aging.   In North America, we see a trend of  cost-cutting through maintenance and capital   deferment to get longer run lengths and a general  cautiousness towards newer process investments.   And every couple of years, near-miss  incidents like these not only threaten   the livelihood of businesses, but also the  safety of workers and the community at large.   More frequently, the old and unreliable  refinery processing equipment may not   necessarily lead to a mere miss incident,  but unplanned shutdowns may lead to market   disruptions and other business interruptions.  Acid alkylation processes can be especially  

problematic as corrosion risk combined with aging  infrastructure can form a recipe for disaster.   On the left is an instance from 2019 where  a U.S. refiner's HF alkylation unit suffered   a catastrophic disaster, and the operator  subsequently filed for bankruptcy protection.   Earlier this year, another explosion in an  alkylation unit in South Korea tragically   claimed the life of one and injured nine others.  Nobody ever wishes for this to happen. Events like   this have become topics of heated debate as to  whether the use of toxic and dangerous chemicals   in refineries should even be permitted, especially  if these operations are close to urban centers.  

As stakeholders including investors,  governments, and the public at large start   demanding that companies focus on improving the  environmental, social, and governance components   of their operations, we expect refinery process  safety will only become more heavily scrutinized.   As more and more incidents like these occur, it  becomes almost impossible for regulators to sit   back. They will demand action. Case in point:  United States Chemical Safety Board October 11,   2022. The Chemical Safety Board published  its more than 100-page final report on the  

2019 Philadelphia Energy Solutions fire  and explosion, where they highlighted   the inherently unsafe nature of HF and  what went wrong during that operation.   As part of its recommendations to the EPA, the  Chemical Safety Board said that "Technologies are   being developed that could be safer alternatives  to HF alkylation and refiners should periodically   evaluate these available alkylation technologies.  the CSB is recommending that EPA require petroleum   refineries to conduct a safer technology and  alternatives analysis as part of their Process   Hazard Analysis under EPA's RMP rule and evaluate  the practicability of any inherently safer   technology". To put it this way: in North America,  regulatory authorities are stopping just short of   a call to action forcing the implementation  of safer alkylation alternatives. But,   as new technologies become more widely adopted,  it will be increasingly difficult for refiners to   justify continuing the operation of these unsafe  acid-based alkylation processes. In engineering  

and occupational health and safety, there's this  principle called the hierarchy of hazard controls.   At the top are the most effective ways to control  your hazards, starting with outright elimination.   As we move down this inverted pyramid, we  observe a decrease in effectiveness while costs   are additive with each layer. With traditional  alkylation processes, the hazard is the catalyst  

itself. Being reliant on acid catalyst to run a  process, refiners are then left with engineering,   administrative, and physical protective controls  to mitigate that risk. For an HF alkylation   unit for example, this will include safety  measures such as water cannons, water curtains,   secondary containment, advanced air quality  monitoring systems, specialized additives,   containment suits, and specialized training and  evacuation procedures. With our Ionikylation   process, the intent is to outright eliminate  that hazardous catalyst, enabling a refiner   to simplify their operations, lower their costs,  reduce the risks, and in some cases, save lives.   Regardless of the safety measures put into place,  there are other real costs associated with the use   of inherently unsafe processes in refining  operations, which will affect a company's   bottom line. Here is a sample from a Reuters  article from January 2020 discussing the rising   cost of insurance for refiners. In some cases,  insurance rates have increased by 25 to 100%,  

and some refiners have subsequently reduced  their coverage as a result. This means that   in the unfortunate event of a failure, the  financial implications could be much greater.   We'll now move on to the discussion of the  Ionikylation process itself, which derives   its name from "composite ionic liquid catalyzed  alkylation". Ionikylation is a commercially proven   process backed by over 20 years of research  and development in the ionic liquid space.   The process is characterized by five subprocesses:  feed pre-treatment, reaction, product separation,   product treatment, and catalyst regeneration.  The first step in any alkylation process is  

to pre-treat the feed so that it becomes  compatible with the reaction system. Here,   we will be looking to remove key contaminants  such as sulfur, water, and oxygenates. Once treated, the feed is sent  to the reactor, where it makes   contact with a dense circulating catalyst  that facilitates the alkylation reaction.   Afterward a series of settlers and separators  are used to differentiate the reaction products,   unconverted reagents, and catalyst, recycling  as needed. The alkylate product may be further   subjected to a product treatment method,  depending on the end user's requirements.   At the bottom of this flow diagram, an extraction  process is used to remove a small quantity of   spent catalyst from the system in the form of a  benign solid while the vast majority of recovered   catalyst is routed to the catalyst regeneration  unit. At the catalyst regeneration unit,  

makeup active reagents are introduced  to offset the spent catalyst removals.   Regenerated catalyst is then routed back to  the reactor, and an organic chloride compound   is injected to supplement the catalyst activity.  Here, the key process highlights for Ionikylation   are summarized, which we will cover in more  detail. They include the inherently safe catalyst,   enhanced performance measures, non-corrosive  system, and integrated catalyst regeneration.

The key to the Ionikylation process is  our proprietary composite ionic liquid,   or CIL catalyst, which is a specially formulated,  non-volatile, liquid salt material. This replaces   traditional acid catalysts, increasing the  safety for refinery personnel and the public.   Broadly speaking, the use of ionic liquids  are based on relatively newer material   sciences and innovations. Ionic liquids tend  to have melting points below 100°C and many   parameters are available for fine-tuning  their characteristics and applications.  

The chemical composition will affect key  properties such as melting point, viscosity,   density, solubility, and reactivity. And while  acidity of ionic liquids can also be manipulated   simply by controlling the concentration of  certain species, many still tend to be corrosive.   If you now move to the next layer of complexity  in ionic liquids material sciences and introduce   additional metallic species in the formulation,  you get what is known as a composite ionic liquid,   where the chemical, physical, and reactive  properties can be manipulated even further.  

Some notable characteristics about the  Ionikylation catalyst is that it is both   non-corrosive and exhibits zero or near zero vapor  pressure. This means that in a spill scenario,   the catalyst remains as a liquid, which enables  safe and easy containment. plant operators working   in the vicinity of an Ionikylation unit do  not require any special PPE beyond what is   customarily deployed in refining operations where  personnel may be exposed to light hydrocarbons.   Our proprietary catalyst uses a conventional  chloroaluminate ionic liquid platform,   modified with a transition metal  to enhance the reaction mechanics.   This enables the catalyst to overcome poor product  selectivity issues that are commonly associated   with simple ionic liquids, without the need  for acidic additives such as hydrochloric acid.  

Here, it should be noted that when we refer  to the term "chloroaluminate ionic liquid"   this means any ionic liquid that contains the  tetrachloroaluminate anion. The CIL catalyst   is fine-tuned to have high selectivity towards  producing the most valuable high-octane gasoline   constituents while minimizing the production of  undesirable by-products such as acid-soluble oil.   As you can see on the table, simple ionic liquid  is not capable of achieving a selective reaction,   unlike its composite counterpart. The facilitated  alkylation is very much stoichiometric,   and we can reasonably predict the performance  of the process based on feedstock analysis.  

n-paraffins are non-reactive in our process,  and we recommend excess isobutane in the feed   to ensure complete conversion of the olefins. C4  olefins will be alkylated with isobutane up to C8,   C5 olefins will be alkylated up to C9, and so on.   The CIL catalyst was developed over many years,  spanning numerous iterations and formulations.   The red iterations in this diagram represent  the first trial stages in the late 1990s, where   the starting point was a simple chloroaluminate  ionic liquid platform, and where the research team   sought to modify the product yield and selectivity  to acceptable tolerances. It was found that this   could be achieved by modifying the aluminum  chloride mole fraction, and also doping the ionic   liquid with acidic additives, such as hydrochloric  acid. Unfortunately, these systems were still   corrosive, and the logic was that if corrosion  still persisted, any new technology based on   ionic liquids would not represent a step-wise  change from the existing acid-based systems.  

Next, in the yellow are what we call the second  trial stages, where the aim was to remove that   corrosion factor while preserving the performance  of the catalyst. In these trials, those goals were   achieved but it was found that the formulations  tended to produce suspensions with the alkylate,   which made it difficult to separate in commercial  operations, therefore making it non-viable.   Lastly, with a little bit of luck, the research  team was able to finally develop an optimal CIL   catalyst that could overcome all of the issues  mentioned previously, in that It produced the   desired alkylate, was non-corrosive, and could  be easily separated from alkylate product. Due to the non-corrosive nature of the catalyst,   all of the Ionikylation process equipment  is manufactured with low-cost carbon steel.   The process is also run under mild operating  conditions, which lower both the capital and   operating costs in relation to the reference  technologies. The materials of construction will  

undoubtedly have a significant impact on project  budgeting. But beyond that, in today's day and age   where supply chains are in disarray, the sourcing  of readily-available carbon steel equipment,   as opposed to specialty equipment can also benefit  the project execution timeline. The images on this   slide showcase key pieces of process equipment  from an Ionikylation unit constructed in 2013.  

This unit operated continuously for three  years until it was temporarily shut down   for a government mandated safety inspection.  The inspection was quite rigorous, there were   no signs of corrosion within the equipment,  no mechanical or maintenance issues noted,   no safety incidents, and no problems shutting down  or restarting the unit. Ionikylation includes a   mild on-site catalyst regeneration unit which  significantly reduces emissions as compared to   energy-intensive acid treatment processes. When  using sulfuric acid, for example, the regeneration   process entails a thermal decomposition near  1000°C into gaseous sulfur dioxide, water,   and oxygen. This gas mixture is then scrubbed  clean, cooled, condensed, and reformed into acid.   In our process, a relatively small amount  of spent catalyst is ongoingly removed as a   chemically benign material. You could consider  Ionikylation a self-cleaning process since   ongoing ejection of this material prevents any  clogging or plugging issues. Here, you can see  

the various stages of by-product handling, moving  from a benign paste discharged from the process,   all the way to a dry mineral-like solid.  This material is accumulated and removed   every few days up to two weeks, depending on  the operator's needs of preference. Existing   users of the technology have been approved to  dispose of the material by landfill. The spent   catalyst removals are offset with what we call  catalyst active reagents, which are lower cost   raw materials that reconstitute into CIL catalyst  at the regeneration unit. From our experience,  

our client's decision to opt for a self-cleaning  process with a nominal makeup requirement versus   an option to completely regenerate catalyst all  comes down to a matter of cost and emissions. As mentioned earlier, Ionikylation is a  technology that has been decades in the making.   Catalyst and early process development  commenced in 1998 and the first lab skill   pilot was developed in 2003, capable  of processing 20 metric tons per year.   In 2005, our research group was invited to conduct  a commercial catalyst retrofit test for a 65,000   tonnes-per-year sulfuric acid alkylation unit at  a Petro China refinery. This test yielded some   promising results and it also allowed the team to  gather important information to improve the design   for future iterations. Notably, the retrofit  increased the process unit's capacity by 40%   while increasing the light alkylate yield by  5% and the overall alkylate yield by 2.3%.  

The alkylate research octane number was  also increased by 3.8 points to 98.8. Over the last five years, Ionikylation has become  the alkylation technology of choice amongst   refiners looking to modernize their operations and  improve their safety profile. The first commercial   unit was commissioned in 2013 by the Chinese  independent operator Deyan Chemical Company.   This was a 100,000 tonnes per year, greenfield,  and standalone alkylation operation that purchased   feedstocks from the local market, and sold the  alkylate back into that market as a value-added   product. In 2018, PetroChina commissioned its  first Ionikylation unit at its Harbin refinery,   with a processing capacity of 150,000 tonnes  per year. The operator has disclosed that the   total turnkey capital cost for the  project was a mere $46 million USD.  

The next year, PetroChina followed up  this unit with another one sized at   50,000 tonnes per year at its Goldmud refinery.  And that same year, Sinopec commissioned its first   of three units each sized at 300,000 tonnes per  year. Here is the unit at the Jiujiang refinery.   As reported by the operator, the total turnkey  cost of this project was $78 million USD.   The second Sinopec unit was at its Wuhan refinery  in 2020. This unit set a milestone as the worlds  

first commercial revamp from an existing  HF alkylation unit using ionic liquids.This   revamped unit was one of two remaining HF  alkylation processes in operation in China. The   Sinopec Anqing unit's construction was completed  in 2020, but due to the coronavirus pandemic,   the commissioning was put on hold until Q1  earlier this year. Lastly, PetroChina constructed   another 150,000 tonnes per year unit at its Dagang  Refinery and this unit was commissioned in August   2022. In total, Ionikylation has been commercially  proven for almost a decade, across seven units  

with a total alkylation capacity of just over  33,000 barrels per day. Plant data from the Deyan,   Harbin, and Jiujiang refineries have been  published in 2018, 2020, and 2022, respectively.   Lastly, I want to briefly discuss options  for converting existing acid-based alkylation   processes to Ionikylation. Regardless of which  process you are converting from, the minimum   equipment required will include the Ionikylation  reactor and catalyst regeneration system,   as they're unique to our process. In addition,  depending on the mechanical Integrity of the  

existing equipment, a new product fractionator may  or may not be required. For revamping a sulfuric   acid system, much of the existing cooling  system may be reused. But for revamping an   HF alkylation system, which typically doesn't have  additional cooling, refrigeration might only be a   consideration if an end user intends to produce  even higher quality alkylate. But by all means,   the inclusion of a dedicated cooling system is not  required. In any case, each conversion scenario is  

considered on a case-by-case basis and the goal is  to reuse as much of the existing infrastructure as   possible, having minimal impact on operations  while occupying the least amount of space. To summarize.. Ionikylation is a safe,  sustainable, and viable alkylation   technology that provides an alternative to  traditional acid-based processes. We make use   of a non-corrosive composite ionic liquid catalyst  that facilitates the production of high-quality   products, and all of the process equipment  is manufactured using low-cost materials.  

This is also a commercially proven process where  the scale-up considerations have been de-risked.   In total, seven units have been commissioned  including one for the elimination of HF,   and nearly one decade of operational  demonstration has been generated.   I'll now turn things back over to  Beverly for some final remarks. Thank you, Bell for that insightful presentation. Well Resources strongly believes that there  will be a place for safe and sustainable clean   fuel production in the energy mix of the future.  However, in light of recent incidents that have  

highlighted the inherent dangers of acid-based  alkylation processes, the refining industry is   now facing increased pressure to look for  safer alternatives. Ionikylation has the   potential to transform the landscape by providing  refiners with a commercially proven alternative   that doesn't have to break the bank. Our company  remains committed to providing the industry with   leading edge and common-sense solutions to build  a sustainable future. On behalf of Well Resources,   we would like to thank all of our audience  members for joining us in this presentation today.   To learn more about our full range of service and  technology offerings, please visit our website at   wellresources.ca. If you have any questions or  comments on the subject matter presented today,   please feel free to reach out to one of our  experts at info@wellresources.ca. Thank you.

2023-01-10

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