and J. It"tl'O'lIl"tIi.::l! Chemie, Frankfurt, Germany; S. India Co., Ltd., New Delhi; P. J. Cadchem (Pty) Ltd.

, Somerset West, South Africa; and D. J. Honeywell Hi-Spec Solutions, Wiesbaden, Germany. uilding a grassroots refinery is venture. Many factors critically investment, such plant J.'J'.al,'9'.t, feedstocks, mix, crude oil pricing, E"lvironmental national and global), licensed etc So what precautions can project risks? In this case history, an refiner contemplates these mentioned issues would a grassroots refinery southern state of Tamilnadu, As part of the investigators used a linear programming (LP) model to construct a holistic view of the new fac\h£y. f'ro~ the model results, the designers could make critical decisions

s. N.

u~,"".u,.c, on the optimal refinery tion using conventional simulation techniques is practically impossible, The consumption of petroleum products a developing country-i-like India=-depende on population and economic People in the developing countries strive to improve their standard of living, which necessarily involves increasing the per capita energy consumption. with this demanding great economic challenge to the Indian industry in the market scenario. The new with high quality products and increasingly restrictive onvironmental legislation places the refining in a difficult economic situation. Meeting the market demand without comprothe quality can be these ways:

mums allif11censed technologies to processing routes

or: P19~~ ~~~.

processes with new technology, partly COUll' terbalances the increased energy demand through better energy ,'c,
L,A',cv" ....


making decision on options. Pollution of local, al environment has become a primary concern. The massive increase of heatair at

on cess for dean fuels.

,JUNE 200J

an Indian refiner evaluates the local and Asia-Pacific oil supply/demand outlook. 5. the petroleum industry cannot escape from the economic logic that any investment must result in acceptable profitability. respectively.. bahJllI'u:e. about 2%. The LP algorithm can also provide clear indication on which combination of supply. and the relative plant/equipment cost where it will be used.6% in 1998 em The total nameplate refinery capacity in India was around 64 MMtpy in 1998 with southern India accounting for 22 MMtpy (34%). Estimated total Indian demand for petroleum products. The current demand for all of India is around 101 Ml\ltpy and will increase to 121 MMtpy by 2005 and 160 MMtpy by 2010. Thus. coal. A market survey was done to the supply/demand characteristics for the immediate area surroundinz the new India as a whole and the Asia-Pacific region over to 2010. Accordingly. In the following example.fig. availability.1 The base year for this study date for the new o+ o v. This would result in total India as well as in southern India petroleum products supply as shown in 4 and 5. With several refinery expansions already approved and the startup of the Esser refinery. The sup for India as a whole and 6 and 7. many possible combinations of technology options can be considered. The refiner must meet fuel-quality constraints and supply growing product demands while maximizing profit. The southern region is expected to see a much slower rate of population growth. The extent to which substitution occurs depends on relative prices. and will proceed come will be 167 MMtpy supply in India is 107% in 1997 decline. .. government policy with respect to taxation and environment. 2. which helps in configuration selection and in justifying investment decisions.5% through 2010. It is predicted that the GDP will sustain annual growth of approximately 5. They are very amenable to case studies and comparative statements.~ . Oil does compete with other energy sources---natural gas. The present. and it will remain constant in the projected period. respec- REf:n~ERY The tentative location of the new refinery is considered in the southern part of India. etc.h is at. demand of southern India is about 24% of total Indian demand. the national nameplate capacity would be 143 MMtpy by 2005.. Linear programming (LP) algorithms are great mathematical tools to efficiently handle this complex problem. Figs. The Indian GDP growth averaged is estimated at 5. respectively. 2 and 3 show the projected demand of petroleum products in India and in southern India. blending and selling activities to be followed when achieving highest level of financial success. it is that demand coupled with debottlenecking of existing would restore utilization rates to dose to lOO%. processing.2% for 2000. considers constructing a new refinery and LP modeling techniques to configure this new presented are the cost and ses for YW'YrlT'~ outlook. The UN statistics show that annual Indian population growt. The competitive market drives the refiner to select the optimum refinery configuration that satisfies multiple objectives. Assuming that other potential refineries at Bina. The expected refining margin will thus govern the adaptation of refining facilities to meet the market demand. because the percentage of literate people is higher in this region.

long-range operations planning. product-blending control. A small in one factor may result in a different solution. Fig. 3. Further. tl-rough 2010 unless very poor margins force decline of utilization rate.I J 3. d of rent plans India should remain a net AVn{). However.• XII as 1"::::. The net products deficit in L398 was 79 MMtpy and is now projected to fall to 61 MMtpy by 2000 and 193 MMtpy by 2010. supply/distribution planning.the J. V by 'a is and cistlose sin Any set of variables. particularly for hydrocracking capability. PI Xl + P2 X2 + . The disposal of fuel oil could be a serious long-term problem. dieseJ imports could reach 15 MMtpy. X2. s at ee a the<C lactel' rter .'1"c. .sia~lPacific trade. the Middle East is forecast to be able to meet most of Asia-Pacific's deficits that will place additional competitive pressures this region.. Fig. o. middle distillates will be in short supply. etc. 19(~d It is th of sties Fig~4~ Forecast total Indian supply of petroleum products. ural curs pol. Pn are cost coefficients of the variables. . Estimated Southern Indian demand for petroleum products.a is y rd of where PI> Pz. The objective function (or the profit function) F is a linear combination of n variables Xl. Such conditions reaffirm the need to upgrade existing refineries... throughout the outlook period. For this example.ur- available mum allocation of resources L1' when many resources. The benefit from India's point of view . 2-4 is called a feasible solution. i. + Pn XI! = PX (1) . i'::lIllnf·v in data. ill HHH". India will produce a surplus of naphtha.. For India as a whole.. These variables satisfy a set of linear equations called constraints: AX::::. capital investment analysis. It could be applied to a and configuration selection.. gasoline and fuel oil that could be problematic. BXs:N X~O . 'I'he potential destination for these would be the parand objective. to set up a sophisticated refining infrastructure that may meet Asian product specifications more readily than product from the Middle East. data accuracy a realistic results. the LP application requires the following input: <!I> Source of crude and market demand of finished product iwn up- md JeC- export MODr~lJ!I>HJi on and Economic data on The accuracy of LP results the input data. It while achieving a HYDROCAHBON PROCESSING! . The process property data are accurate data on cost of crude. This forecast deficit may not occur since additional capacity is most probably to come onstream and reduce export potential. }d.. market are forecast numbers. for a new The estimated scenario of supply/deficit product balance shows that the new would have to compete with refiners outside India as a whole has a I'asoline and fuel oil...JUNE 21)1) I 45 . 8 shows the Asiaicific products balance.M equality inequality non-negativity (2) (3) (4) md.'U·"". and the maximum rmmmum) of all feasible solutions is the optimal solution. lP formulation.. . . .iery vith Vith the late Ina. which satisfies Eqs.

ilities=-steam. ISBL investment.Process units _CD_U _VD U __ VGO recycle ~ 'YUIUL""''-'''''' 2345678 +V_-+-V_+!--+ V_ V V V. product yield. ate with the LP modeling. The consideration is used to compare the merits of The five most refinvvere selected from t. i. A base case LG'-Il-'lC"AC_Y results indicate the maximum Con- HYDROCARBON PROCESSING I . capital expenditure. of various intermediates are taken from crude assays.inw are conSlw.lUNE 2001 . these are nh"v. v' V. v' V I V V v' V. cost.---- VV --+----'I--!----'I-+-j----- _--l-~':'-l---+-=-_./ c--. v' v' V tV' v' I . The screening was carried out mode]. function (profit) and miscella- a smaller.1 ~ V v' V V v' V V v' V V I v' II' v' V. electric power and hydrogen for refinery use.-t- -~.~ V tV' V tV' V v' V V V V V v' V' V v' V v' V v' V V V v' V' v' v' v' V v' V IV' '.I V.11' Catalytic reformer V III' IV" V v' V' ~.:-----------------------'---------4----~---'---_:__----------- Y y? --- V v' ----.:n"Q volume.·Lwni shown in Table 2. licensor data and the LP model software library. The crude cost and product prices on exportparity basis are taken from market survey report for the base year 2005. utility requirement. polymerization I---. are based on licensor information as well as the engiin-house data Other associlife considered as 15 years. different were considered for the _.he LP ts...--1/.'. To achieve a "zero residue" refinery a gasification unit is considered in all configurations that provide ut. Technical data for various processes.~=~~• • ~~---------------------~~~~~~~~-~_+~~-+~~-+-~~~~-4--+--+---r-4-~-+-~--FCCl! -----------------Alkylation Catalytic -.------Ii" 1----1--1----- V --I----- I~' --+---!--- --- f- ---- III' V V VYV - I~.__ V +_v' j_V __~ (1. V_V +.V _ ---t-+---f-----+----t--l -:-----~--~--------------------+~-~-_r-4~Gas oil hYUIU""'dl<11 --------~-----~-------------------~~ YUIUlI"''''''...-- VVV l- _ -------------_._---------- facility's processing objective is to maximize and LPG output and minimize heavy ends generation.__ +____i +__ V _-+ VV v' ~ _~ --v'-t-V ". etc. V V. 2 Product specifications used are very at...---f---- -- ----- --. -1/ V v' y v' IV" V V v' V V' V Y \ ~~. The effort many different r •• put is taken.-+_---1_-1--_ __ --f~-+-+-_i --I----.e.!: +_-1_-'--+_+. V ~ Vv'lI'vlI' -I l-__ VGO once-through Naphtha hydrocmcke. shown in Table 3 for and diesel._----_.

which provides additional high-octane blending with lower aromatics content. This above are more 12 some process units are considerations..015 1. 14 and 18 contain an F'CC unit.$/d) Investment (billion U.303 0. 9 and 10.n . capacity is selected as 12 The sensitivity with to crude mix shows 50-50 vol% mixture maximum profit.635 1. .569 o 0. Accordingly. AEl the capacity increases.BON Plwcr~SSING! JUNE 2001 . The sensitivity analysis for configuration 13 is done with respect to crude throughput and crude mix slates. analysis.e. vol% Aromatics. at capacities.354 . 90 (min) 1 (max) Benzene.i<h.1 Fuel oil 1--~fi:l!"-'----'--'--'-'lC1I---'-i t. The results are shown ill Figs.745 3.516 0 1. The.444 2. the study is extended to include a lube unit.35 2. wt% 32 (min) Flash point. specifications I Octane no.gasoline pool is made up almost entirely from high aromatics CCR reformate with a small quantity of available isornerate.042 0. 1.. Overall product Configuration design summary ~~~!__ 14 0. Thus. the profit increases to investment.354 4. vol% 35 (max) 15 (max) Olefins. % 1. Configurations 13.the i. wt% 0.~----_-~-------------------. Continued HYDlWCAH.532 1:811 10. soci- conall : life te r- lata lea·· : for Selection The distribution of crude in various in Table 5. Therefore.'107 Gasoline Kerosine Diesel Naphtha 18 0.660 1. 13 415 14 298 1.. Forecast products. the modeled can meet the minimum" and "aromatics maximum" """"i+i.. vol% Sulfur.440 f. respectively.614 2.flEJia Diesel [_.fiMtPlf Fueloi! Total Distillates. Southern Indian surplus supply of petroleum Fig.227 00405 LPG 13 0.S.000 76. "C Distillation. All tial amount of diesel and fuel to distillates products is subs tan18 the of with respect supIndian market is the market forecast indiply demand. the LP model increases the severity of the reformer to meet octane snec.$) 3 Inf. more investment. 5. the market in the year 2005 that existing units do not increase capacity. Total Indian projected surplus/deficit balance of products.fication. 0. will grow because of rapid increases cates that fleets.302 1.59 i~157 3.565 10.766 1.S. 95 vol% 340 (max) 11 (max) Polyaromatics. cost. Without an FCC unit. both profit and investment grow.005 (max) Sulfur.57 0.627 iort- ~-~--'-----'---------------figurations 3 and 19 are not feasible since the LP model reached the gasoline "maximum aromatics" specifications before it can achieve the required octane level. However at the reformer iJrowhich drives the "aromatics" out of bounds before the octane specification..Table 5.a Lubes Fig.303 1.910 3.801 18 44 Inf.000 84. these may more parallel trains.257 0 1 82.999 1.625 1.404 0.005 (max) 51 (min) Cetane no. 6. vol% function U.

"0 . Refining capacity sensitivity. 10).3. 3 6 "'" "" '5 ::> ~ u (. B. > . The owner's costs include provisions for process unit licensor's fees royalties. Asia-Pacific estimated surplus/deficit of products. 10.5% and an ROE of to 66% of 2001 . startup initial and spare parts investment for the on Novem- a cost estimation with the accuracy level of :l:10%wall done.i----~ ------ . the configuration with lube unit was and the detailed co~ estimation for IHH all disbribution fication unit.j e. Southern products. 80-20 mix (AL-AH) 50·50 fig. and offsites for the final been a combination of an ROr of 18.J C/l Fig.. Cost estimates for the process units. 9. 1. Indian projected surplus/deficit balance of Fig. 70 0 60 ~ <J) oH i Profit '.12 10 » :2 +' 0..S (5 0) jJ) V l~~ ---~------------ 5 30 01----0 0 ~ V i------~--. Crude mix ratio sensitivity.v"'j I <C 500 400 E ... The profit function increases to 695 compared to 621 for the nonlube case (Fig.--------- 6 Fig.

1~)9D. Frankfurt am Main . )999. The final case has been analyzed for its sensitivity to vanbles and assumptions. utilization rates and the level of equity investment Less sensitive to variations in costs.vern as $ plant to convert power and hydrogen.6 over the period ofloan financing and 2. Financial Analysiu. Major processing facilities are: e Catalytic reformer and isomerization units to upgrade naphtha to high-octane gasoline to de sulfurize gas oil with residual deasphalting Ii) nent proprotorso . tnany. 11 shows the effect of variation key factors on the IRH. . The is tpable of processing 12Ml\1tpy of a 50/50 mixture of irabian Light and Arabian heavy oils. Fig. Sensitivity analyses measure the impact on profitability of a project-s-and hence on key inputs and assumptions take on different values to those used in the base case financial analysis.3 on average.pare r the verl1- otal' project cost at an financing interest rate of 15% (local) and 8% (foreign) per annum. col- I.rtup . The DSCR is generally greater than l. etc. The project is: * Highly sensitive to product and feedstock pricing Moderately sensitive to capital cost. The study shows that the most attractive refinery configuration is a lube-based refinery. lBO.I i ] I __ J nons . interest rates and salvage values. Ger. ACKNOWLEDGMENT The authoi-a are of Process aL30 grateful and to management Departments.JTERATURE CIT}i~Ij and South Indian Oil Rupply/ Demand OutLondun.