Reliance Industries Limited. Techno-Commercial Aspects in Opportunity Crude Processing - A Refiner s Perspective

Transcription

1 Reliance Industries Limited Techno-Commercial Aspects in Opportunity Crude Processing - A Refiner s Perspective International Conference on Refining Challenges & Way Forward April 2012, New Delhi RAJARAMAN J. RIL s Existing Refinery At Jamnagar, Gujarat

2 Reliance Industries Limited A Quick Introduction RIL s Existing Refinery At Jamnagar, Gujarat

3 Reliance Industries (RIL) Today India s largest private sector enterprise with strong financials (FY April 2010-March 2011): Revenue of $58.0 billion EBDIT of over $ 9.2 billion Industry leading position across businesses Integrated energy chain in Upstream, Refining and Petrochemicals Successfully completed transformational initiatives and created world-scale facilities Revenues Oil & Gas 5.8% Petchem 21.3% Others 0.2% Oil & Gas 26.6% EBIT Refining 36.4% Others 0.1% Sights set on growth initiatives that are unparalleled in scope, scale and value Refining 72.7% Petchem 36.9% Gaining momentum to achieve the next phase of significant growth 3

4 Techno-Commercial Aspects in Opportunity Crude Processing : A Refiner s Perspective RIL s Existing Refinery At Jamnagar, Gujarat

5 What are Opportunity crude oils? Grades of crude that have characteristics that make them more challenging to process Quite dependent on capability of a refinery in terms its design basis By definition, such grades can not access all the refineries in the Globe : so, a smaller customer base For a refiner equipped to handle, these grades may present an ability to lower cost of acquisition and hence scope to add more value 5

6 How could one categorise opportunity crude oil? Grades that are acidic say, Total Acid Number >0.5 Grades that are high Pour Point say, >6 Deg C Grades that are extra heavy say, API < 15 and very viscous say, Kinematic Viscosity > Deg C Secondary units feed quality e.g. VGO Nitrogen, VGO metal contents for refineries with FCC 6

7 Challenges in processing High Acid Crudes Processing Issues: Higher level of acid in crude overhead systems (and other circuits where acid is concentrated) Risk of corrosion Product quality issues: acid distribution in Kerosene/AGO/VGO cuts; Would it pose concerns on meeting specs for products? 7

8 Refiners approach to process High Acid Crude oil Systematic unit-wise impact analysis of high TAN crude on existing metallurgy. Dilution by blending (large CDU capacity is helpful) Chemical Inhibition method in a limited way (in respective circuits) On-line corrosion monitoring systems at specific sensitive points. 8

9 Commercial Impact of processing High Acid Crude oil Continuous use of high acid crude in a refinery without metallurgy protection needs to consider: Operating cost towards Chemical Inhibitors Investment for installing corrosion monitoring systems Stepped up inspection of critical equipment/points for integrity Investment decisions dependent on cost-benefit of processing such grades 9

10 High Pour Point (HPP) Crudes Challenges Refiners Approach Commercial Impact Transportation & handling Wax precipitation Heated vessels, heated receipt/storage facilities Blending with compatible grades Generally smaller cargo size results in higher freight. Handling cost at receiving port Investment towards creating Infrastructure for long term intake. Additional cost towards procuring complimentary grades Products quality : Cold properties of diesel viz. Cold filter plugging point, Cloud point Addition of Pour Point Depressant in diesel; Limit % in blend Cost towards additives Parrafinicity may lead to higher yield of LPG/Gasoline in FCC Monitor VGO properties FCC t 'put could be limiting resulting in potential loss (if processing large % of HPP crude) 10

11 Extra Heavy/High Viscosity Crudes Challenges Refiners Approach Commercial Impact Transportation & pumping Slower release of water in storage tanks - Tendency to form stable emulsions Blending: Stratification resulting in layering Dehydration constraints Higher VGO & Vacuum residue Dilute and transport Heat and Transport Segregated tanks for Heavy grades Controlled blending and tankage segregation Desalter modifications in terms of size and current capacity (amperage) Choose appropriate complementary crude to blend Higher % processing would require investment decision Price differential gets adjusted to the extent of cost of diluents and freight costs High retention time and hence, higher inventory carrying cost Inventory carrying cost and possibly demurrage penalties Investment on desalter modification Higher basket price due to higher cost of complementary grades 11

12 High Nitrogen Crudes Challenges Refiners Approach Commercial Impact Reduction in Hydrotreater / FCC catalyst life cycle VGO Nitrogen limit; High severity operation of Hydrotreators Operating cost to improve denitrification of feedstock. Cost of catalyst replacement / smaller turnaround cycle Inferior FCC yield - increased heavy ends i.e. slurry Corrosion in VGO hydrotreater. - Yield penalty Nitrogen in VGO to be limited. Adverse affect on health of the reactor. Stepped up inspection for Hydrotreater internals 12

13 Crude Oils with High Metal Contents Types of Metals Effect Arsenic & Mercury a) Mercury (organic type) In naphtha, poisons Petro-Chemical cracker catalyst b) Mercury (inorganic type) & Arsenic Environmental hazard (kills biomass in ETP) Nickel & Vanadium in VGO a) Hydrotreater, Hydro Cracker, FCC catalyst poisoning; Severely impact catalyst life cycle. b) Gas make in FCC increases, disturbing the yield c) Improper cracking in Hydro-cracker inferior yield Presence of metals in crude oil leads to improper separation of salts in the desalter. In absence of specific treatment, need to be managed thru blending. 13

14 Commercial impact of processing Crude oils with High metal contents Cost-Benefit analysis to be done for lower crude cost vis-à-vis: Desalter modifications Catalyst replacement cost/turnaround impact. Impact of inferior yields & increased operating cost 14

15 Current Market conditions for Opportunity Crudes RIL s Existing Refinery At Jamnagar, Gujarat

16 Factors affecting differentials of Opportunity Crude oils How widely is that grade accepted? Larger the number of refineries capable to process opportunity grades, wider is the customer base; Supplier net-back improves Grades requiring diluents/heating Cost of diluents/ higher freight adversely affects supplier net back as well landed cost to refiner Sanctions affecting market access Only part of market available for marketing such grades; Buyers able to access may benefit 16

17 Market Direction Increasing complexity of refineries and tougher refining margin environment Refiners pushing to widen technical processing envelopes Increased emphasis by National Oil companies to process opportunity grades within the producing country Higher demand from Emerging markets for opportunity grades from West-of-Suez sources Result? Suppliers targeting higher net-back on opportunity grades and hence scope of refiners value-addition shrinking 17

18 Thank You