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Editor's Comment: Making refining business commercially viable

by Martin Menachery on Feb 7, 2018

Martin Menachery, editor, Refining & Petrochemicals Middle East.
Martin Menachery, editor, Refining & Petrochemicals Middle East.

World over, refineries are facing stringent air and water quality regulations as well as stricter product quality specifications, for example, reducing sulphur content in transportation fuels, controlling air emissions, and minimising toxicity levels in effluents discharged. Operators need to make major capital investments in order to comply with these regulations and specifications because these necessitate key alterations to the processes involved in the refineries.

The economic viability of a refinery is dependent on the dynamics of crude slates, refinery configurations, finished product range, utilisation rate of the refinery, and environmental regulations prevailing in the region. An important consideration that refiners should make in this context is evaluating the costs involved and the payback periods against anticipated crude oil costs and the estimated differential between light and heavy crude oil prices. The refiners should also consider the kind of finished products needed in the marketplace because the quality specifications of these products are also becoming more stringent globally.

For example, the new global standards for transportation fuel demand lower sulphur concentrations. This necessitates huge investments from refiners for new systems and process modifications. Making finished products from the crude oil is becoming more and more challenging for the refiners because these investments are threatening the economic viability of the refining business.

The roadmap for refiners to make the refining business economically viable would be to implement procedures to deal with stricter environmental and product quality regulations and specifications, cost effectively. These procedures include minimising equipment shutdowns, reducing risks, enhancing removal of contaminants, curtailing equipment fouling, augmenting energy efficiency, regulating operating costs, and curbing emissions. By implementing these procedures, operators can make refining business commercially viable and offer finished products with the right quality specifications in the marketplace.


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