Light Cycle Oil (LCO) Overview

Definition:
Light Cycle Oil is a middle distillate product in the diesel boiling range produced from the Fluid Catalytic Cracking Unit (FCCU) of a refinery.

Key Points:

• Production Source:
  • LCO is generated in FCCUs, which are primarily designed to convert heavier hydrocarbons into lighter, more valuable products like petrol, LPG, and LCO.
• Physical Range:
  • Falls within the diesel boiling range, but without post-processing, it is unsuitable as a direct diesel blend due to high sulfur content, low cetane number, and aromatics.
• Usage Limitation:
  • On its own, LCO is a poor-quality diesel blending component.
• Further Processing:
  • To make it usable as a clean diesel fuel, LCO is upgraded in Diesel Hydrotreaters (DHT).
  • DHT removes sulfur and nitrogen compounds, resulting in a low-sulfur, more environmentally friendly diesel.

Industry Implication:

• Diesel Demand Rising: Global trends show higher demand for diesel over petrol.
• Refinery Challenge: Many older refineries are still optimized for petrol production, creating a supply-demand gap for diesel.
• LCO Role: As demand increases, upgrading LCO becomes critical for refineries to meet diesel demand and emissions standards.