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Enhancing Refinery Profitability
- 1. David Baldock Platts Refining Conference, Singapore March 26th and 27th 2015 david.baldock@pipllp.com www.pipllp.com Enhancing Refinery Profitability
- 2. │ Agenda 2 1 2 3 Who we are Background 4 Examples The Role of Technology 5 6 Surviving the Competition Close-out
- 3. │ Who we are 3 • An Engineering Consulting Firm headquartered in London since 2000 • Highly Experienced consultants (most > 30 years) • Specialized in developing performance improvement in refining and petrochemicals Zero/Minor capital (improving practices and equipment) High return capital investments From concept to operation London
- 4. │ Background 4 Energy cost over half A difficult business environment for refining: What can a refiner do to survive? • Global over-capacity • Low margins for refineries in “mature” markets • Capacity reductions/ shutdowns in Western Europe, Japan, Australia • Product yield mismatch with demand
- 5. │ Japan Refinery Closure 5 Source: EIA Net capacity reduction (2009 – 2015) = 968 kbd 70% 75% 80% 85% 90% 95% 100% Refiningcapacity comparedto2009 Year beginning
- 6. │ Australian Refinery Closures 6 Energy cost over half Source: EIA Net capacity reduction (2009 – 2014) = 518 kbd 0% 20% 40% 60% 80% 100% Refiningcapacitycompared to2009 Year begining
- 7. │ Western Europe Refinery Closures 7 15 Refineries shut down 2009 - 2014 Source: EIA 80% 85% 90% 95% 100% Refiningcapacitycompared to2009 Year beginning Net capacity reduction (2009 – 2014) = 1,870 kbd
- 8. │ What makes a refinery Competitive? 8 High performers have: Good energy efficiency High operation availability High process utilization Low maintenance cost They may not be the best at anything… ...but they are very good at many things
- 9. │ Enhancing Competitiveness 9 Energy cost over half Keep an open mind … …take a holistic view
- 10. │ Compare Energy Trend in Automotive 10 *Automotive Specific Fuel Consumption in the US has fallen by about 50% during the last 20 years *EPA Light Duty Automotive Technology Fuel Economy Trends, EPA-470-S-13-002 Dec 2013 ** data for EU: source HSB-Solomon Associates LLC ‘our’ number?.... About 10% **
- 11. │ Role of Technology 11 Energy cost over half What do we mean by ‘Technology’? • technology from Greek τέχνη, techne, "art, skill, cunning of hand"; and -λογία, -logia • the application of scientific knowledge for practical purposes. How do we apply technology (knowledge) to address refinery performance?
- 12. │ Role of Technology 12 Energy cost over half “Bottom up” approach Walkabout Highwaymen Equipment constraints Turn up smart projects
- 13. │ Go Walkabout 13 Energy cost over half Go Walkabout 1. Look at what you’ve got (out there) 2. Fix what needs fixing 3. Make sure it stays fixed
- 14. │ Go Walkabout 14 Energy cost over half Go Walkabout:
- 16. │ 16 Energy cost over half Find the inefficient wasteful systems and correct them Example: Conventional flow control around an API 610 pump M LC Pump sized for design x 110% Pump selected: next frame size up Impeller size at max x 90% CV sized for 30% of system ∆P with system max flow + fouling Motor sized 1 frame up Look for the highwaymen
- 17. │ Look for the highwaymen 17 Closing this valve usually saves over US$ 50,000 / year for each t/h of excess steam saved No investment needed Good Housekeeping of small steam turbines SteamFlow Output Power Max Power with Auxiliary Valves Closed Max Power with Auxiliary Valves Open Additional Steam Consumption if Load Less than Normal Max. The auxiliary hand valve is frequently left open and it is not normally necessary. This consumes more steam for no benefits Auxiliary hand valve
- 18. │ Role of Technology: Push Equipment Constraints 18 Energy cost over half You may know the equipment that is constraining throughput, yields or efficiency If not: Design and run regular test runs Inefficient Air Coolers Efficient Air Coolers Example: Inefficient Air Coolers
- 19. │ Role of Technology: Turn Up Smart Projects 19 Energy cost over half What are ‘Smart Projects’? Connect the dots to address specific plant weakness and exploit specific plant capabilities … … the dots may be in a number of different places
- 20. │ Smart Project Example #1 20 Conversion Upgrade Project Mediterranean Refinery Upgrade Reduce Fuel Oil yield and Sulphur External study proposed: • New Vacuum Residue Desulphurisation processing Q3 of 2008 economic projections: • Brent $125 per bbl, (FO crack - $10, Gasoline +$10) Is it the right approach Can it be built at lower cost Are there any better alternatives External estimated economics: Capex : US$ 750 million Revenue : US$ 180 million /yr Return : > 4 years
- 21. │ Smart Project Example #1 21 Conversion Upgrade Project Optimization Alternative approach: FCCU expansion Enhanced CDU pre-heat train New vacuum flasher to facilitate increased VGO cut- point and VGO processing capacity PIPLLP estimated economics: Capex : US$ 150 million Revenue : US$ 60 million /yr Return : US$ 2.5 years
- 22. │ Smart Project Example #1 22 Alternative proposition: CDU Existing DHT Light ends VDU FCCU New VRHDS RevampVDU Revamp CDU CDU Light ends Existing DHT VDU Revamp FCCU Original proposition:
- 23. │ Smart Project Example #1 23 Conversion Upgrade Project Optimization PIPLLP estimated economics: Capex : US$ 150 million Revenue : US$ 60 million /yr Return : US$ 2.5 years Project built fast track On time Within budget External estimated economics: Capex : US$ 750 million Revenue : US$ 180 million /yr Return : > 4 years
- 24. │ Smart Project Example #2 24 LPG and H2 recovery from Fuel Gas Refinery is H2 constrained Good market for LPG Cheap Natural Gas We reviewed options available to recover LPG and H2 and suggested a the cryogenic LPG recovery plant. Plant recovers 53.7 KTA of LPG, worth 35.5 M $ /A Investment required ≈ 35 - 40 1 year simple return M$ H2 FCC FG 3 bar 12 bar Feed gas compression PSA Coldplant T = – 35oC FG C3s to FCC LPG Merox De-ethanizer De-propanizer C4s to NHT AreaA + B FG NHT KHT DHT CRU GHT VIS
- 25. │ Summary 25 All refineries and petrochemical plants have potential for further profit improvement Being among the best means being good at many things WHET – sharpen the tools! With knowledge, experience and creativity, smart projects can be developed
- 26. Thank you 26