No. 4, 2012
AMERICAN CRACKING FOR SOVIET REFINING
In the 1930s, cracking production was established on the basis of the latest US technologies
In 1923, a quite big delegation of businessmen and politicians connected with the oil industry from the USA visited the USSR. One of the issues that interested them was Russia's 1891 patent for an apparatus for decomposition of crude oil. After the meeting with the visitors, the author of the invention, engineer Vladimir Shukhov, compared his and the American patents and concluded that "the Russian oil industry can easily build a cracking apparatus according to any of the described systems without being accused by the Americans of ‘borrowing for free'." These words of the great Russian engineer fostered and still foster patriotic feelings in the Russian populace ("Russia - the birthplace of cracking!"), but cracking did not exist in Russia as an industrial technology.
In the homeland of cracking
The prophet was found in his homeland, but only 30 years later. On September 10, 1923, Shukhov noted in his diary about his talks with the Americans and by September 11, he was approached by his own people, to test the ground. "Katsaurov, an order for a pilot refining apparatus," he wrote briefly. "They are going back to my proposal 32 years ago, to replace the cubes with water-pipe chambers." On September 19-20 - "Workshop session with the Americans," and on September 21 - "Ivan Elin about refining. Cracking." So, following the visit, the USSR took an interest in cracking.
Ivan Elin, head of the refining sector of the Oil Directorate of the Supreme Council of the National Economy, was the person who inspired the idea and headed up this work, while Sergey Katsaurov, former manager of the S.M. Shibaev plant in Baku, was in charge of the future installation. The organization that undertook this project was the Council of the Oil Industry. It concluded an agreement with the bureau of engineer A.V. Bari, where Shukhov worked, for "manufacture of devices for the cracking process" according to the latter's patent and filed a request for 275 chervonets for this purpose from Grozneft. A year later, on December 5, 1924, the first oil was refined through the unit made in Moscow at the former Kuskovo refinery. Out of its six-month budget of 92 thousand rubles, the Council of the Oil Industry proposed to spend the quite impressive sum of about fourteen thousand rubles on testing cracking.
At the end of 1924, the first steps in the cracking research development were taken by Azneft. The head of the chemical laboratory of the trust, Viktor Gerr, and engineer Anany Tregubov launched construction of a periodical cube cracking unit according to the 1912 patent privilege of the already deceased engineer Semyon Kvitka. Ten months later, on July 17, 1925, this unit produced its first gasoline.
Alexander Sakhanov, head of the Grozneft chemical laboratory, also took up the problem of cracking. In contrast to other Soviet researchers, he did not begin by designing units but by studying the chemistry of cracking process and published a special monograph under the title Cracking in the Liquid Phase, describing for Soviet specialists the chemical fundamentals of the technology. And it was he who managed to sense the trends in the development of cracking apparatus.
The apparatuses of Shukhov and Kvitka made of local materials (which was of fundamental importance), provided positive experience and opportunity to obtain petrol from them, but they remained of cube design and operated on a periodical cycle, had the design shortcomings common for innovations not tested in practice and required reworking. The heating of the crude in cubes, although still used, was already considered outdated in refining. In the mid-1920s, leading companies built pipe stills for cracking, fitted with reaction chambers where the crude decomposed. Professor Sakhanov proposed, however, rejecting the huge, expensive and dangerous chambers in favor of the entire reaction taking place in pipes at a specific crude flow rate. This was the future of cracking. Ideas such as this had not yet been implemented in the USA, leader of the cracking industry.
Meanwhile, this industrial technology was at that time entering its most dynamic stage of development. From the beginning of the 1920s, hundreds of patents were registered (not only in the USA but also in European countries), but only a few of them proved to be technically and economically justified. Cracking methods and equipment, even if they did not produce really successful results, were constantly being improved.
Things were different in the USSR: only a few experiments were made but the experimental process was not a success. The Soviet engineers were, indeed, innovative. All the groups of researchers complained either about the lack of funds or the shortage of experienced personnel. Within the central planning system, disputes were always breaking out as to whether parallel work on cracking should be conducted if there was an acute shortage of everything.
The Winkler-Koch invention
In late 1924-early 1925, after several trips abroad, a search began for foreign partners. Three cracking systems were considered - Vickers (Britain), Cross, and Dubbs (USA). But royalties had to be paid to the last two for every ton of gasoline produced on the unit. Vickers was already considered to be a copy of Cross in technological terms, but the British had hardly got beyond the experimental stage in producing the equipment, besides the British concern was undergoing an order crisis. For this reason, it granted a major discount and a beneficial payment scheme, promising to cover the costs if something went wrong. In addition, its installation was tuned to refining high paraffin content fuel oil, which the USSR had in large quantities, whereas sales were limited. As a result, in March-April 1925, the Soviet trusts Azneft and Grozneft ordered one unit each from the British company; at the beginning of 1926, Azneft ordered another. The three Vickers units were built in 1927-1928. They turned out, it is true, not to be designed to the last detail and initially kept breaking down. It was not possible to fulfill the ambitious gasoline production plans using them.
And time was short. The Soviet Union had an acute need for gasoline, not so much for the domestic market (in the second half of the 1920s, the degree of motorization of the economy was still quite low) as for export, in order to receive foreign currency for industrialization purposes. There was a special government commission, headed by Vice Chairman of USSR Gosplan and one of the chief ideologists of the New Economic Policy Grigory Sokolnikov, to work on increasing currency revenues from oil exports. The Commission managed to get the top authorities to allocate funds for a large-scale cracking program. On the basis of a submission by the Commission, on May 5, 1928, the Council for Labor and Defense approved a special resolution allocating additional funds from the state budget for ordering 7 to 9 more cracking units from abroad.
In November 1928, Prof. Sakhanov was sent to the USA to study the refining industry. Having studied the situation, on April 29, 1929, he advised that "at the current time, the following cracking systems are of practical significance: Jenkins, Dubbs, Holmes-Manley, Tube&Tank, Cross, and to a certain extent Winkler-Koch."
The Winkler-Koch system was an innovation, not yet known in the USSR, and Sakhanov described it briefly as follows. "Its merit," he wrote, "consists in extreme simplicity and, as a consequence, cheapness. The principle of cracking in pipes should be recognized as completely feasible, since the high speed of flow through the pipes prevents any coke residue or the cycle taking too long. The furnace of the Winkler-Koch system is an excellent design. The design of the columns does not arouse any doubts either, since the firm has considerable experience specifically in this area."
Prof. Sakhanov came to the following conclusion: "Ultimately, I believe it advisable, at this time, to consider the Cross system, as the most reliable and technically most fully developed."
True, there was one factor that perturbed the Soviet specialists. The firm Winkler-Koch Eng. Co. had not patented its unit and, in the USA, a number of litigations began in which major patent holders, united in a sort of club, accused it of "piracy". In particular, Prof. H.S. Bell, the American consultant, warned of this. "The firm is currently involved in many litigations," he wrote, adding immediately, "which, by the way, is not of any special significance for Azneft, except for the fact that, in view of your measures to protect Russian patents in the USA and in the event of restoration of diplomatic relations, court cases are a possibility in the future." The absence of a "brand," the litigations and, most important, the Great Depression, resulted in the Winkler-Koch cracking unit costing far less than the major cracking units available on the market. In terms of unit capacity, the cost of the outdated Jenkins cube unit was $102.5 per barrel, the better Cross unit - $160 and the Winkler-Koch unit - only $90.6.
General cracking partner
Back at the beginning of 1929, however, no one knew that the Winkler-Koch would become the USSR's main cracking option for the coming decade. At the end of 1928, three Jenkins cube units were ordered from the USA and talks were in full swing with the firm Kellog & Co., which held the Cross patent.
But then something unexpected happened. "After some bargaining," wrote one of the participants in the negotiations, "Kellog agreed to reduce these prices by 15-20%, but Amtorg, instead of taking advantage of this and ordering several units, diverted the issue on to another plane, i.e. conclusion with Kellog of a general agreement worth $15-20 million for supply of oil equipment (cracking and pipe stills) for the USSR, with acquisition of patents. This approach broke off entirely the deal with Kellog. During his business trip, however, Prof. Sakhanov got to know another new cracking system not at all widespread in America that was developed by the firm Winkler-Koch and in operation no more than a year. To order these units was essentially the only way out of the situation. As a result of negotiations, eight units with a capacity of 2000 barrels each were ordered on satisfactory terms and, considering another 3 cracking units ordered by Azneft from Vickers, the 1928/29 plan for ordering cracking units had been fulfilled."
The Soviet side tried not only to purchase the units. Fred Koch, the firm's CEO, was proposed to conclude a separate agreement with the central design institute Giproneft for assistance in design, this being the weakest link in the Soviet oil industry. Initially, however, Koch rejected this proposal and the first two agreements were concluded with the head of Azneft, Mikhail Barinov, and the deputy head of Grozneft, Fyodor Chamrov, for manufacture, supply and support for construction of eight units.
Fred Koch "gave in" when another agreement was proposed for another batch of units. On February 21, 1930, head of the Technical Bureau of Soyuzneft in the USA Vladimir Korobovkin informed Moscow of conclusion of a third agreement. "The agreement with Winkler-Koch for seven cracking units has been concluded by Amtorg," he wrote "(4 for Tuapse, 2 for Azneft, without indication of Baku or Batum, and 1 for the Embaneft Konstantinov plant)."
The changes to the new agreement related to guarantees of petrol output: 36% for fuel oil and 55% for gasoil; penalties applying to each unit rather than to the agreement as a whole; an increased payment for substandard residues. Most important was introduction of a technical assistance section. The firm undertook to provide not only complete sets of detailed drawings of the cracking units purchased but also all the calculations relating thereto and all the information at its disposal on the materials used in manufacturing them.
Koch and Winkler-Koch in the Soviet Union
Meanwhile, construction of the first cracking units was in full swing in the USSR and their start-up was planned for the early autumn. F. Koch was to make a trip to the demanding customer. On August 27, 1930, accompanied by engineer John Giles, he arrived in Moscow. Having agreed to leave all important talks to the end of the trip, the next day he left and spent a month and a half between Grozny, Tuapse, and Batumi. In the middle of October, full of the most contradictory impressions, Koch and Giles returned to Moscow.
The units in Grozny and two units in Batumi were started up for testing purposes and another two Batumi units were 75% ready. In Tuapse, two units were ready but in an effort to economize, the builders had combined two out-pipes, which they should not have; as a result the pipes had to be redone. In his memorandum of October 15, 1930, F. Koch appraised the work. The results were not bad, considering the difficulties: the inexperienced personnel and lack of attention to control instruments; absence of an engineer on the staff responsible for cracking, resulting in the cracking unit having no one in charge; excessive attention to fire precautions when the operators simply need to be attentive, and "attempts to save" leading to the possibility of explosions and fires; and, of course, the shortage of materials and tools. In conclusion, he "drew attention to organizational questions of the need to establish more precise organization and proper discipline of both Russian workers and the Americans."
On October 18-20, 1930, the main talks were held about continued cooperation. The day before, the Soyuzneft Board, chaired by Vice Chairman Academician Ivan Gubkin, confirmed the "feasibility of continuing relations with the firm Winkler-Koch." All subsequent discussions were about the details of technical assistance, which was to result in a General Agreement on Technical Assistance. The core of the technical assistance was, however, aid in setting up a plant to make cracking apparatus and this became the main problem. The "metallists", for instance, demanded: "We need to obtain from Mr. Koch a recipe concerning metals, i.e., an analysis of metals, the physical properties of metals and general data, i.e., should they be hardened or tempered and so on, in a word, general details of thermal treatment."
"Then, with respect to the entire unit: he needs to elucidate the overall allowances, the methods for making the equipment on the basis of which it is produced, and detailed factory working drawings." In addition, F. Koch was to accept twenty Soviet engineers for a six-month internship at plants using his units and ten metal engineers at his metals plants. He undertook to advise the Soviet design bureau and assist in designing, building and starting up 50-60 cracking units, which were to be built in the USSR over the next 2-3 years. F. Koch promised to send the final conditions and the compensation payment after discussing with his partners, two weeks after his departure.
The American legacy: grain and soil
F. Koch left the USSR as an implacable opponent of Communism, as he wrote in his memoirs, recalling with absolute abhorrence his translator-cum-spy and the fear of the engineers working with him. Yet it must be admitted that the company Winkler-Koch Eng. Co. made a significant contribution to refitting the refining industry of the USSR.
In 1931, the "original" Winkler-Kochs were completed in Baku (2 units), along with those in Grozny (4) and Yaroslavl (1), and they were started up about a year after the first batch. The firm's representatives left the USSR in October 1931.
The ideas applied by F. Koch and his engineers helped the Soviet engineers in designing their own cracking systems. As one of the technical heads of Neftestroy stated, "the sets of drawings received from Winkler-Koch played a major role in the designing of a Russian cracking unit by NIImash in conjunction with Giproneft, even though not all the drawings were in full detail. In any case, these drawings were beneficial for designing not only cracking units but also pipe stills."
Yet the significance of this firm should not be overestimated, it being a matter not so much of the firm itself as the conditions of Soviet scientific and technical and production practice. By recognizing the Winkler-Koch cracking unit as the model, Soviet refining doomed itself to conservation.
The technologic development was not at a standstill either and a new level had to be reached. Just a few years later, Soviet engineers realized both the advantages and the shortcomings of this design and worked successfully on modernizing it. Yet Soviet industry was dogged by the same problems as at the dawn of cracking development: new spheres - vapor-phase cracking, industrial integration of polymerization and isomerization processes and so on - were left to "starve." The points of technological growth in the USSR were limited, even though the raising of the problems spoke of the high standard of Soviet scientific and engineering thought. Not by chance did Academician Ipatyev and Prof. Sakhanov (Sachanen), who emigrated from the USSR, provide a new impetus to downstream technology in the USA subsequently throughout the world. And when the Soviet Union needed to take the next step, it again bought the latest plants in the USA, just as in the case with Shukhov, missing its priority and remaining an outsider in refining plant manufacturing.