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The changing dynamics of refinery-petrochemical integration - Global and Asian trends in the drive for ever increasing barrel-fraction of petrochemicals production
Noor JivrajGroup Manager, Refining & Petrochemicals
Jacobs Consultancy Ltd., [email protected]
Petrochemicals Asia 201220-21 June 2012
Agenda• Changing Business Drivers and competitive advantage of
Refinery-Petrochemical Integration• Advantages and Challenges of refinery-petrochemical integration• Technology/Process/Catalyst developments and possibilities
helping for increasing petrochemical feed stocks from the refinery• Towards maximization of Refinery-Petrochemical Integration
Configuration with full downstream petrochemical integration• Level of Integration - Comparative of some recently
completed/ongoing/planned refinery-petrochemical integrated projects
• Conclusions
Changing Business Drivers and competitive advantage of
Refinery-Petrochemical Integration
Refinery-Petrochemical Integration has been an ever evolving business model• In the 1970s-80s, major oil refining companies had petrochemical
units that were largely a naphtha outlet: o the refining business drove the decision makingo Integration was minimalo the refining and petrochemical businesses operated as
independent “over-the-fence” style transactory entitieso Refineries lacked enabling complexity for world scale
petrochemical feed stock availability• The 1990s saw more integration as Asia responded to the
contrasting and evolving demand growths of the refining cuts• The availability of large capital in the Middle East and the need to
integrate downstream has elevated the level of integration • Technology – process and catalyst developments allowed greater
extraction of petrochemical feed stocks from heavy distillates
Extraction of Value downstream• Project Investment Returns on refinery cuts increase with
downstream integration – cracker yields greater value and downstream petrochemicals increase IRR/NPV returns further– Indicative IRR for 350 kbpd refinery would be 7-10%– Indicative IRR for 350 kbpd refinery, 1400 kta naphtha cracker and
downstream petrochemicals would be 11-17%• Truly integrated complexes can extract around 35% of
petrochemicals from refinery crude (mass basis) – this is excluding gasification opportunities for residues and petcoke
• Refinery-Petrochemical complexes can evolve both by evolution as well as revolution thus staging investment, engineering and logistics complexity
Contrasting Refinery Cut Demand Drivers propelling the changing face of refinery schemes• Demand for heavy fuel oil with high sulphur contents has slowed
markedly• Demand away from gasoline and towards diesel and aviation fuels• “Cleaner” Fuels drivers – reduced aromatics, olefins, better
combustion characteristics, lower sulphur etc. • Light olefins, ethylene, propylene and butylenes demand rising
faster than for aromatics due to damp demand for benzene and toluene
• Crackers have been unable to meet the increasing propylene demand. Propylene and Aromatics demand from refinery sources has been growing
Advantages and Challenges of refinery-petrochemical integration
Integration – Advantages from complexity
• Reliability of feedstock supply with less transport cost• Supply chain optimization resulting in faster delivery of products and
optimum distribution• Significant reduction in shared utilities system, less variable cost• Synergies from joint infrastructures and logistics• Working capital savings• Size effect on support services: maintenance, HR, etc• Higher cash margin• Less recourse to trading market• Independence and supply security• Long-term exchanges
Integration – Challenges posed by complexity
• Integration gives rise to enormous complexity (>15 process plants)
• Extremely high capital requirements (>$20 Billion)• Technology access and licensing limitations may mean a number
of partnership ventures• Construction labour force mobilization and coordination a major
challenge – tens of thousands of workers on site• Availability of experience skilled plant operators• Integration and Optimization can lead to limited operational
flexibility, and complex plant start ups
Technology/Process/Catalyst developments and possibilities
helping for increasing petrochemical feed stocks from the
refinery
Enabling technology example - The “Petrochemical” R-FCC• Asia and the Middle East are getting long of heavy fuel oil
• RFCCs/FCCs represent the lowest capital cost conversion option
• Traditional FCC operation yields large volumes of gasoline
• Maximizing propylene by over-cracking/high ZSM-5 addition minimizes gasoline but yields a gasoline of low blend value
• This high SG gasoline is an attractive aromatics feedstock with high ultimate PX yield
• Recent Examples:o Reliance Jamnagar used “Petrochemical FCC” to couple high propylene
production and FCC gasoline for aromatics production
o Oman Sohar project further extends these concepts to heavier feeds and higher Propylene + PX yields
The “Petrochemical FCC” reduces heavy gasoline and maximizes propylene and aromatics
Coupling aromatics production with a high olefin yield FCC maximizes the petrochemicals value added from the FCC
unit
Diverting the highly aromatic gasoline to aromatics production gets around the difficult problem of blending this
stream to gasoline
High Olefins & Aromatics Yield Feedstock Enablers
Gas Plant
Frac
tiona
tor
Vacuum Gas Oil (VGO or AR)
Propylene
Slurry Oil To Fuel Oil Blending
Fuel Gas
FCC
C4s to Alkylation
Light FCC Gasoline to Blending
Heavy FCC Gasoline to Aromatics
LCO to Diesel
Towards the idealized refinery-petrochemical cracker integrated
configuration
“Integration” Example: No integration between refinery and petrochemical cracker complexes
The refinery may/may not have a naphtha reformer. It operates independently from the cracker. It may
have a modern FCC unit to enhance propylene production
Stand Alone Refinery & Cracker
Atmospheric And
Vacuum Distillation
Reformer
Fluid Catalytic Cracker
Refinery Hydrotreating
BTX Extraction
Distillate Processing & Blending Pool
Benzene
Toulene
Xylene
Jet/Kerosene
Fuel Oil
Gasoline
Ref. Propylene
Ethylene
Propylene
Butadiene
Benzene
Toulene
Heavy Feed Steam
Cracker
Fuel/Flare
Fuel/Flame
MoGas Processing & Blending Pool
Hydrogen
C8 + Fraction
Pyrolysis F.O.
C4 Raffinate
Crude Oil
Naphtha
Secondary Products
Primary Products
By-Products
AGOVGO
Hydrogen
Reformate
FCC Gas
Straight Naphtha
Steam Cracker designed in tandem with the refinery enhances petrochemical synergies and value maximization• Adding a steam cracker to this scheme exploits further
synergies with the refinery:o Ethane and ethylene in FCC dry gas can be upgradedo Ethane rich streams from the aromatics complex (CCR,
transalkylation and xylenes isomerisation) can be upgradedo Raffinate and light naphtha streams can be cracked to produce
ethylene and propyleneo A single unsaturated gas plant can be shared by FCC and steam
crackero Pyrolysis gasoline from the steam cracker can be processed in the
aromatics complex
Integration Example: Significant integration between refinery and petrochemical cracker complexes
A heavily integrated refinery-petrochemicals complex could in theory convert around 35%
of the crude oil to petrochemicals maximizing value. Additional Naphtha than what the
refinery would be capable of producing could be required depending on cracker capacity
Integrated Refinery & Cracker
Atmospheric And
Vacuum Distillation
Reformer
Benzene
Ethylene
Propylene
Butadiene
Benzene
Toulene
Heavy-Feed Steam Cracker
with Olefins Conversion
Unit
Pyrolysis F.O.
C4 Raffinate
Crude Oil
NaphthaHy
drog
en
Jet
Fuel
Dies
el F
uel
Fluid Catalytic Cracker
Refinery Hydrotreating
BTX Extraction
Distillate Processing & Blending Pool
Toulene
Xylene
Jet/Kerosene
Fuel Oil
Gasoline
Ref. Propylene
MoGas Processing & Blending Pool
Hydrogen
C8 + Fraction
Reformate
Pyro
lysis
F.O
C 8+ F
racti
on
C 4 Raffi
nate
Arom
atic
Nap
htha
Paraffinic Naphtha
FCC Gas
Condensate Splitter
Condensate
Paraffinic Naphtha
Gas O
il
A Common Integrated Complex - Simplified
The Cracker, RFCC and Aromatics Units become the core design units for level of integration
FLEXIBLE FEED ETHYLENE PLANT
AROMATICS COMPLEX
POLYETHYLENE UNIT
DISTILLATE HYDROTREATER
OPTIONAL PRETREATMENT
PolyethyleneLight Ends
Crud
e Di
stilla
tion
Uni
t ( C
DU )Medium
Sore Crude
POLYPROPYLENE UNIT
EO/MEG
EB/SM
Polypropylene
MEG
Styrene
Diesel
Paraxylene
RFCC
(RES
IDUA
L FL
UID
CATA
LYTI
C CR
ACKI
NG)
Slurry Oil
AR
Light Ends
Ethylene
Propylene
Benzene
PX
NAP
HTHA
SPL
ITTE
R
KERO
GO
FRN
Diesel
Oxygen
LVNC4-
HVN
HCO
LCO
LCO
Heav
y Ar
omati
c Pu
rge
Pyro
lysis
Gas
olin
e
Raffi
nate
Ligh
t End
s
Level of Integration - Comparative of some recently completed
and ongoing/planned refinery-petrochemical integrated projects
Middle Eastern Refinery-Petrochemical Complexes show very varying degrees of integration
• PetroRabigh 1 - KSAo 20 Mt/yr Crude Refinery with 2.15 Mt/yr petrochemicals (1.25Mt/yr petchems
is based on “imported” ethane) = 0.9Mt/yr crude based ~ less than 5% crude to petrochemicals conversion
• Takreer – Abu Dhabi – (Ruwais Expansion – start up 1Q2014?)o 20 Mt/yr Crude with est. 1.3 Mt/yr petrochemicals - ~ 7% crude to chemicals
• Sohar – Oman o 116 kbpd = 5.8Mt/yr Crude with 350kt/yr PP, 800kt/yr PX, 210 kt/yr Benzene
~23% of the crude to petrochemicals
• Duqm – Oman – (Proposed, delayed and now under discussion as a JV)o 300 kbpd ~ 15Mt/yr Crude, with 1.5 Mt/yr PP, 2.8 Mt/yr Aromatics, 0.75 Mt/yr
styrene. ~ 4.6 Mt/yr ~ 30% of the crude to petrochemicals
Asian Refinery-Petrochemical Complexes also show varying levels of integration • Formosa Mailiao: 3 refineries in total, 3 crackers
o 450 kbpd ~ 22Mt/yr Crude – 3.0 Mt/yr Aromatics (incl. 1.2 Mt/yr Benzene, 490 KTA Toluene, 880 KTA PX) 1.6 Mt/yr Ethylene (2 crackers), 800 KTA propylene, ~ 25% Petrochemicals
o Twin RFCCs now produce 12% propylene
• Reliance Jamnagar 1: (as per original nameplate configuration)o 560 kbpd - 28Mt/yr Crude with 1.4Mt/yr PX, 0.2Mt/yr OX, 0.5Mt/yr Bz and 1.5Mt/yr PP =
3.25Mt/yr petrochemicals ~ 12% of the crude
• ExxonMobil Jurong Island: 2 Refineries (evolved since 1966)o 605 kbpd ~ 30 MT/yr Crude, 1.35Mt/yr Aromatics (2 units), 400 KT solvents, 900 KTA
ethylene cracker, 435 KTA propylene, 270 KTA n-butylene, 80 KTA MTBE: ~ 12% of the crude
• Petronas RAPID: Mega Grassroots project in Johor on-stream 2016/2017 – will require 10-12 JV partners – estimated in excess of $20 Billion total investmento 300 kbpd refinery, 1 Million tons naphtha/mixed feed cracker (LPG??) ~ 3 Million Tons
petrochemicals - estimated 30% plus petrochemicals
Conclusions
Conclusions• Recent and in-progress/planned refinery-petrochemical complexes are
showing an increasing trend in greater petrochemicals fraction from every barrel of crude oil.
• Technological developments allow much greater conversions to petrochemicals/petrochemical feed stocks
• The addition of a steam cracker, RFCC and an optimized Aromatics “BTX” complex are the core of the current integration efforts
• Future efforts will see bringing in of other fuels such as natural gas, coal and biofuels to develop further synergies for the next level of integration
• Integration also poses major design, construction and operational challenges to be able to harvest the promised returns
• Integration can be staged – it can be evolution and just by revolution
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