Reliance Industries Limited Techno-Commercial Aspects in - - PowerPoint PPT Presentation

RIL’s Existing Refinery At Jamnagar, Gujarat

International Conference on Refining Challenges & Way Forward 16-17 April 2012, New Delhi

Reliance Industries Limited

RAJARAMAN J.

Techno-Commercial Aspects in Opportunity Crude Processing - A Refiner’s Perspective

Reliance Industries Limited – A Quick Introduction

RIL’s Existing Refinery At Jamnagar, Gujarat

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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  Sights set on growth initiatives that are unparalleled in scope, scale and value

Revenues Gaining momentum to achieve the next phase of significant growth

Oil & Gas 5.8% Others 0.2% Refining 72.7% Petchem 21.3% Oil & Gas 26.6% Others 0.1% Refining 36.4% Petchem 36.9%

EBIT

Techno-Commercial Aspects in Opportunity Crude Processing : A Refiner’s Perspective

RIL’s Existing Refinery At Jamnagar, Gujarat

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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

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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 >350 cst @ 40 Deg C Secondary units feed quality e.g. VGO Nitrogen, VGO metal contents for refineries with FCC

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Challenges in processing High Acid Crudes

Processing Issues:

• Higher level of acid in crude overhead systems (and
• ther circuits where acid is concentrated)– Risk of

corrosion

• Product

quality issues: acid distribution in Kerosene/AGO/VGO cuts; Would it pose concerns

• n meeting specs for products?

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Refiners’ approach to process High Acid Crude oil

• Systematic unit-wise impact analysis of high TAN crude
• n 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.

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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

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High Pour Point (HPP) Crudes

Challenges Refiners’ Approach Commercial Impact

Transportation & handling Heated vessels, heated receipt/storage facilities

• Generally smaller cargo size results in

higher freight.

• Handling cost at receiving port
• Investment towards creating

Infrastructure for long term intake. Wax precipitation Blending with compatible grades 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)

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Extra Heavy/High Viscosity Crudes

Challenges Refiners’ Approach Commercial Impact

Transportation & pumping Dilute and transport Heat and Transport Price differential gets adjusted to the extent of cost

• f diluents and freight costs

Slower release of water in storage tanks - Tendency to form stable emulsions Segregated tanks for Heavy grades High retention time and hence, higher inventory carrying cost Blending: Stratification resulting in layering Controlled blending and tankage segregation Inventory carrying cost and possibly demurrage penalties Dehydration constraints Desalter modifications in terms of size and current capacity (amperage) Investment on desalter modification Higher VGO & Vacuum residue Choose appropriate complementary crude to blend Higher basket price due to higher cost of complementary grades Higher % processing would require investment decision

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High Nitrogen Crudes

Challenges Refiners’ Approach Commercial Impact

Reduction in Hydrotreater / FCC catalyst life cycle VGO Nitrogen limit; High severity operation

• f Hydrotreators
• Operating cost to improve de-

nitrification of feedstock.

• Cost of catalyst replacement / smaller

turnaround cycle Inferior FCC yield - increased heavy ends i.e. slurry

• Yield penalty

Corrosion in VGO hydrotreater. Nitrogen in VGO to be limited. Stepped up inspection for Hydrotreater internals Adverse affect on health of the reactor.

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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.

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Commercial impact of processing Crude

• ils 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

Current Market conditions for Opportunity Crudes

RIL’s Existing Refinery At Jamnagar, Gujarat

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• 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

Factors affecting differentials of Opportunity Crude oils

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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

Thank You