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Opinion: Improving performance in downstream industry: The challenges and opportunities

by Guest on Feb 19, 2018

Colin Chapman is president of Euro Petroleum Consultants (EPC).
Colin Chapman is president of Euro Petroleum Consultants (EPC).
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We are already witnessing interesting trends in the refining and petrochemical sectors of the energy industry in 2018, observe RPME's regular columnists Colin Chapman and Ekaterina Kalinenko.

Globally and in the GCC region, the main areas of focus for 2018 will include refinery-petrochemicals integration; oil-to-chemicals; gas-to-chemicals; alternate feedstock for crackers; production of olefins and in particular on-purpose propylene production; residue upgrading and fuel oil reduction to comply with IMO (International Maritime Organisation) 2020 specifications for bunker fuels; methanol as a fuel and MTO (methanol-to-olefins); operational excellence and digitalisation; leveraging the cloud to drive operational excellence; cyber security; and improving safety.

Creating the maximum value uplift from crude oil drives greater integration between refining and petrochemical assets. In order to determine the highest value, integration strategy requires intimate domain knowledge not only about the process technology requirements but also on the control and management systems necessary to optimise the operations of integrated facilities.

The trend to improve integration between refining and petrochemicals is driven by the expected growth in petrochemicals globally and also the increased potential margins from such integration. Such opportunities may include maximising propylene production in the FCC (fluid catalytic cracking) units. These may be revamps of existing units or new builds of high severity FCC units – equipped with very specific design features to achieve >20% yields of propylene which can then be used for polypropylene production.


In many regions, there is a strong interest in gas-to-chemicals with ongoing technology improvements: gas purification, separation and conversion of the components; syngas generation; ammonia, urea and other fertiliser technologies; methanol, DME, and formaldehyde; synthetic fuels – GTL (gas-to-liquids) and MTG (methanol-to-gasoline) technologies; and olefins technologies [MTO, MTP (methanol-to-propylene) etc.]. Another interesting technology is the single-step gas-to-chemicals, using oxidative coupling of methane.

Alternate feedstocks for crackers

What is the future of naphtha cracking? With low-cost NGLs (natural gas liquids), are new naphtha crackers really needed? What is needed to make naphtha cracking competitive and provide attractive returns?  These are some of the key questions that many producers are asking themselves and evaluating.

MTO & OCC (olefins catalytic cracking) – alternative feedstock to produce olefins: MTO is an effective way to produce olefins with low cost and high ethylene recovery rate. OCC technology is a solution to convert low value C4/C5 olefin streams into propylene and ethylene. The integration of MTO and OCC technologies can improve the selectivity of C2-C3 olefins.

On-purpose production of olefins & MTO

This technology is not new, but we are seeing a growing trend of on-purpose propylene production units [PDH (propane dehydrogenation)] in different regions. MTO and MTP technologies were first introduced in China. This is a cost-effective route to help balance the requirement for propylene and hence help meet the growing demand for polypropylene.

Methanol as a fuel

Methanol can be a part of the solution for the 2020 maritime emissions challenge and help meet regional ECA (emission control area) and global IMO marine emission targets in the coming years. Methanol is already being used as a marine fuel in certain regions, for example Scandinavia. And, this trend is expected to grow in the near future.

Petrochemicals: Polyolefins & aromatics

Polyolefin licensors are continuously looking for ways to improve the production efficiency of specialty plastics and films. One example is the development of new metallocene catalyst systems to produce polyethylene as the primary ingredient for a wide range of products and allows for converters easier and more efficient extrusion and conversion with less blocking, less waste and less downtime.

There are also some interesting developments in aromatics production through the use of new feedstocks from refineries and advances in technologies to increase para-xylene production and overcoming methyl group deficiency to produce more xylenes.

Residue upgrading: Increasing conversion

With the 2020 IMO bunker fuel specification changes looming, it will be a major challenge for refiners and shipping companies. It will be interesting to see how refiners approach such changes and how the transition will be managed by both the shipping and the refining industries. How can each industry plan for the risks and uncertainties around bunker fuel changes in 2020 and what will be the likely pricing implications?

For refiners, there are many technology options for converting residue and the selected option will depend on many factors – existing refinery configuration, location, potential future market conditions and logistics.

Historically, the most popular is delayed coking. However, there has been significant recent developments in slurry hydrocracking – a technology that obtains higher conversion and better quality products. One remaining concern is the use of the unconverted materials, which can be in the range of 5-10%. These processes are very capital intensive and would need at least four years to implement.

Operational excellence & digitalisation

Leveraging the cloud to drive operational excellence: This is an area that can lead to considerable savings in operating costs and also increased margins through optimisation solutions related to improved product slate. Data management and digitalisation using a new cloud-based service from technology suppliers can be a solution that enables producers to detect and solve potential unplanned outages before they occur. This trend, we are sure, will increase in the next few years.

Cyber security is now a major concern for many refiners and petrochemical producers as we have seen from some recent experiences in the GCC region at the facilities of Saudi Aramco.

Improving safety

Last but not least is the challenge to improve safety in refineries and petrochemical plants. This remains the number one priority and should be an ongoing activity. It is widely recognised that organisations must develop their technical safety journey, focusing on their plant, safety, reliability and human interfaces in order to achieve the target of no surprises and zero accidents. Focus on safety has to be the number one priority for the refining and petrochemical companies, with operators, manufacturers, suppliers and consultants developing innovative and effective solutions for protection.

In conclusion, there are many challenges refiners and petrochemical producers are facing in 2018 and beyond. Hence, there is a need for end-users to work closely with licensors, and catalyst and equipment suppliers to be aware of all possible technology solutions to help them select the most suitable options to meet their future strategies.

Many of these topics will be addressed at the upcoming ME-TECH 2018 – 8th Middle East Technology Forum for Refining and Petrochemicals – which will take place in Dubai during 19-21 February.

Colin Chapman is president and Ekaterina Kalinenko is project director at Euro Petroleum Consultants (EPC), which is an independent consulting company in the oil, gas and petrochemical sectors, as well as a producer of specialised annual international conferences and training seminars, focusing on market trends, technological advances and business strategies for the petroleum industry. EPC has offices in Dubai, London, Moscow, Sofia and Kuala Lumpur. For more information, please visit www.europetro.com.


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