Maximising Refinery Margin with Minimal CAPEX: An Introduction

to Foster Wheelers Best Practice Energy Management Solution

Michael Whitling, Manager Asset Operations and Consultancy, Foster Wheeler

1.0

ABSTRACT

In the past, energy management strategies have typically been driven by the need to reduce
operating costs in times of high energy prices. Therefore, focus on these strategies has
traditionally fluctuated along with the energy price. However, best practice energy
efficiency and management should always increase refining margins.
In the modern world of ever increasing energy prices and crude oil at $100 a barrel, applying
best practice energy management techniques has more significance for refinery and
downstream operators now than ever before.
This paper will focus on Foster Wheelers enhanced holistic methodology for maximising
energy efficiency and will include case study results that surprised our clients and even our
own experts energy savings of 10% or more on assets that were already operated and
maintained to very high (top quartile) standards. Our methodology not only considers
potential capital improvements to improve energy efficiency, it also comprehensively
addresses the refinery management systems and operator interfaces which have a
significant impact on a day-to-day basis.
Ultimately this paper is about using Foster Wheelers expertise to help our clients improve
their competitive position and release cash from refinery operations for further investment.

2.0

INTRODUCTION

This paper will look at the various aspects of energy management on the refinery, looking
not just at capital intensive investments but also low or no capex options such as reviewing
operations and ensuring the right performance indicators are in place. The paper will
address a recent energy study undertaken by Foster Wheeler and AspenTech working
together and show how this delivered real low-cost solutions to a European refiner, despite
that fact they were already achieving close to first quartile Solomon performance.

3.0

WHAT IS ENERGY MANAGEMENT?

Energy management can cover a number of areas and can mean slightly different things to
different people. Typically it could cover areas such as:
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Increasing insulation and repairing steam leaks

Ensuring best practice energy performance every day
Optimising the utilities
Buying cheaper (feedstocks and spares by improved planning)
Adding a new heat exchanger to improve energy performance
Build/increase cogeneration

Operating companies typically wish to evaluate the following:

How am I performing relative to my peers?

Which energy improvement opportunities are available for my plant?
How do I effectively evaluate and prioritise these opportunities? This includes cost,
ease of implementation and scheduling (for example, are opportunities shutdowndependent?).
What target for improvement makes sense for me? Setting smart, realistic
achievable programmes ensures that the momentum and desire to improve are not
tempered by trying to achieve the impossible!
How do I collate all the opportunities into a coherent strategy with appropriate plan
and timeline?
What resources will I need? This includes possible establishment of a site energy
management group comprising several disciplines such as process, operations,
maintenance and training.
Where are the important quick wins? Quick wins can yield immediate savings and
also act as a catalyst to gather buy-in and willingness for all to drive energy
performance to new levels of excellence.

There are numerous energy studies and improvement opportunities that Foster Wheeler
can offer to operators, namely:

Study

4.0

IMPLEMENTING

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ENERGY

MANAGEMENT
4.1

Overview

When considering how energy management is most effectively implemented, it is important

to consider not only capital investment options but also operations and maintenance
practices to ensure all potential routes to reducing overall energy consumption have been
identified. Figure 1 illustrates a methodology Foster Wheeler has employed on recent
energy management projects for refineries globally.

Figure 1 Foster Wheelers Holistic Energy Management Methodology

First of all, it is important to understand the current picture using energy consumption data
and potentially company/national and /or international (Solomon) benchmarking reports if
they are available. The next step is to set a realistic achievable objective for the energy
management study, by how much do we want to reduce energy costs, or by how much do
we wish to reduce the headline energy indicators such as Specific Energy Consumption or
Solomon EIITM (Energy Intensity Index)?
Pinch technology can be used as a means to identify potential for improvement in heat
recovery and heat integration (including recovery of low-grade heat streams), via projects
which would normally require capital investment in new equipment, for example, increasing
crude distillation unit pre-heat exchanger surface area. The use of pinch tools can also
identify the potential for non-capital projects including inter-unit heat integration (hot rundowns). Simulation and pinch tools can be applied both to process units and the refinery
utilities systems in order to identify all potential energy-saving opportunities.
When evaluating which opportunities to implement, it is also important not only to consider
the economic indicators such as payback period or NPV (Net Present Value) of each project
but also to consider the practicalities of constructability and the long-term effects on the
operability of the refinery. While extensive heat integration is beneficial for reducing

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operating costs, too much inter-dependency between process units can affect refinery
operation particularly during unplanned shutdowns.
Foster Wheeler can also identify opportunities to reduce energy consumption that do not
have a capital cost impact. Like any machine (albeit a complex one) the refinery is only as
good as the person who runs it, therefore we also need to consider the man/machine
interface.
Is it clear to the operators the impact that their actions in making day-to-day decisions have
on energy consumption within the refinery? The operator interface should consider realtime monitoring of energy performance and identifying energy consumption via monetary
values rather than the traditional units of energy (e.g. MMBtu), or the use of traffic light
indicators to ensure that units are operated within defined margins. Do all shifts operate
the unit in the same way? Can we identify what is best practice in terms of energy efficiency
and ensure that this is cascaded to all operating shifts?
Often the use of league tables to compare energy performance between operating shifts (or
between refineries) can instil a competitive culture beneficial to overall operating cost
savings.

4.2

Methodology

Foster Wheeler adopts a three-phase programme to address energy management and

performance improvement.
1) Development of energy management options:

Data collection, energy workshop

Modelling of key process units

Benchmarking, energy targeting and pinch analysis

Development of a range of options

2) Screening of options and engineering development:

Equipment sizing and costing

Economic evaluation and ranking of opportunities

Energy improvement road map

3) Operations impacts:

Operational review, key performance indicators and their effectiveness

Organisation competencies, methodologies, effectiveness

Functional specialist operations group, performance assurance

Performance and plant management, strategic plans

Maintenance, turnarounds, equipment, reliability

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Figure 2 below presents an overview of the methodology and this is followed

with a brief description of the process.

Figure 2 Overview of the Methodology

4.2.1

Data Collection

The Foster Wheeler team typically kicks off the study with a site visit and workshop to
collect information on the process operation and the management of the refinery. The
process data is used in the modelling step to represent the operation. A parallel activity
assesses the operations and maintenance groups and how their activities and practices
impacts on achieving and sustaining energy targets. There is an interaction between the
modelling and operational review stages of the work with both elements feeding into an
analysis stage.

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4.2.2

The Energy Management Workshop

There are many ways to improve refinery energy performance from investing in improved
plant design to better planning and scheduling and down to improved hourly operation and
minute by minute control.
The Energy Management Workshop is typically a two-day intense yet interactive session
that uses a combination of Foster Wheeler product information and case studies to identify
gaps in current energy performance, be they the fundamental design or how the owners
facility is operated today, and the potential value of closing the gap by reference to
published case studies by peer companies. Attendees are encouraged to bring along to the
meeting refinery information and data which will be used to score the current refinery
performance against best-in-class benchmarks based around the examples discussed and to
highlight areas where they feel improvements could be made. At the end of each session
the responses from each attendee are reviewed by the group and key areas for further
investigation are agreed. The workshop provides a number of key benefits:
1. A good opportunity for the Foster Wheeler team to get up to speed on the
energy performance of the refinery and the tools and systems used for
energy management.
2. A learning experience for operator personnel as they hear how other peer
companies have improved energy performance and therefore potential areas
for improvement at their facility.
3. Team-building that will help with subsequent communications.
4. An opportunity to brainstorm possible areas for improvement, involving
the full team. This identifies key areas for improvements and checks that no
good ideas are overlooked during the study.
As the content of the workshop will cover all aspects from management, operations,
maintenance and improved design through to advanced control for energy efficiency,
representatives from the various refinery disciplines attend the sessions (management,
engineering, planning/scheduling, operations and maintenance).
The energy improvement products and expert services may be categorised according to the
plant time horizon in which they are used to deliver energy cost reduction improvements
as shown in Figure 3. These plant time horizons cover the range from years (when a plant or
revamp is being designed) through the months and weeks time horizons when planning and
scheduling of energy use is important through to the hourly operations and finally to
minute-by-minute control of the process operations. These time horizons are used as the
basis for the analysis to define the current gaps in energy performance, providing both a
systematic and comprehensive approach to defining the optimal energy strategy.
As part of the Energy Management Workshop with the owner, at kick-off these time
horizons will be explained as they form an integral part of the proposed study.

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Figure 3 - Energy time horizons

4.2.3

Modelling

To obtain clear and detailed information of energy flows within each individual process unit
a process simulation is usually prepared using either Aspen Plus or Aspen HYSYS. These
models are reconciled with test runs or typical operating data to ensure a close match
between the model and the actual plant operation.
On any refinery the LP planning model is the standard tool to define the operating plan for
the refinery. It defines throughput and modes of operation for all the units. However, while
the LP model provides a consistent overall view of the refinery material balance, the LP
model is generally of insufficient accuracy to allow detailed energy analysis of the individual
process units. Process units within the refinery LP are usually represented by simple models
and correlations (vectors). Such models typically do not include much detail on the energy
consuming operations such as the preheat trains and individual column operations. Hence,
in defining the overall refinery mass and energy balance, the following methodology is used.

Define operating case(s), for example winter and summer operations, high sulphur
crude etc;
Select a corresponding LP model that defines the material balance for this case;
Develop and tune individual process simulation models of each unit (in Aspen HYSYS)
typically at 100% throughput;
Define an overall refinery mass and energy balance by scaling the individual
process unit models to the overall refinery operating case as defined by the LP
model.

By the above means a consistent mass and energy balance is developed and used as the
basis for the study and this also provides the basis by which individual opportunities to
improve energy performance may be evaluated across the refinery. An additional benefit of
developing individual unit models is that these may subsequently be used to provide more
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detailed representations within the refinery LP model of the energy flows (and emissions)
from each unit.
A model is also developed for the site utility system and the refinery hydrogen system. In
this case it is also important not only to model the energy streams from a thermodynamic
perspective but also from a cost perspective as subsequently the same site-wide model will
be used to calculate the precise value of any energy saving opportunity and to ensure
projects are mutually compatible; for example a project to save LP steam on one unit does
not simply result in LP steam being vented elsewhere.
Once the overall models of the site have been developed and verified, various techniques
are used to identify gaps in performance and to propose potential energy improvements
from both a design perspective and from an operational perspective.
Each potential energy saving opportunity is then tested with the site-wide utilities model to
define the financial benefit either standalone or in combination with other potential
projects.

4.2.4

Operations Reviews

Energy performance and management reviews are conducted to develop a structured,

systematic and achievable set of performance targets and measures to support managers,
supervisors and technicians at all levels to control and guide their operation to meet
required levels of energy management and performance. The study reviews existing energy
management and performance measures and management control systems in place at
corporate and refinery level. The Foster Wheeler approach addresses completeness and
checks against industry best practices. Specifically, the study checks that there is alignment
from top to bottom in the energy management key performance indicator (KPI) reporting
hierarchy and that specific control points are identified with defined responsibility for
control of each KPI. The frequency of reporting, together with the review and control
processes to ensure that the energy management control loop is being closed are assessed.
Typical deliverables from this study stream are:

A gap analysis identifying gap vs. industry best practices

Proposed enhancements to the performance management system
Proposed KPI hierarchy structure for the site
Proposed KPI hierarchy for each department
Justification for proposed enhancements
Baseline performance against which progress of performance enhancement
programme can be measured

Energy management organisational review - Foster Wheeler undertakes a general review

of plant operations management activities to establish the effectiveness of management
control in optimising the plant energy usage and conservation.

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The review looks at energy management control, reporting functions and overview the split
of departmental manpower responsible for energy usage and control. Foster Wheeler
comments on which reporting functions are consistent with good management practice and
whether manning levels are consistent with efficient plant energy management
requirements. For key energy management responsibilities within each department Foster
Wheeler comments on manpower competencies, knowledge and skills levels.
Each of the following key plant issues are typically addressed:

Process and utility furnace performance

Waste heat recovery
Steam generation from waste heat
Overall energy consumption (feed and fuel) for process plants
Efficiency of installed turbines
Power generation and other utility plants
Plant material and heat balance, losses and remedial measures management
Review any plan of action to rectify known identified energy management
deficiencies
Steam trap and leak management

Operations Practices and Procedures Foster Wheeler reviews the key practices and
procedures in place to control process plant energy management and optimisation. This
covers:

Operating practices and supporting operating manuals (process, utilities and offsites)
Plant energy performance reporting (key performance indicators)
Staff competence, training and development
General management and administration

The procedural review covers procedure existence, applicability, quality and usage with a
view to establishing whether operators are actually practising the energy management tasks
laid down by management.
Operations software systems - To aid in achieving optimal energy performance on an hourby-hour timeframe within the process operations, two sets of systems are investigated:

4.2.5

Engineering use (rigorous) models within an operations environment

Real-time performance management

Project Evaluation

Potential projects from the study are ranked according to:

No capital cost (operational improvements)

Low capital cost (e.g. piping modifications)
Strategic projects (projects requiring capital investment)

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Projects falling into category (c) also undergo definition and capital cost estimation by
Foster Wheeler in order to estimate a return on investment or project payback. For each
project the requirements are defined in terms of:

Equipment
Plot plan
Constructability
Implementation schedule

The modifications to the refinery will require the design of new equipment, identification of
the plot space, tie-in points, and a workable execution methodology, bringing equipment to
site and construction, and identifying how to minimise any disruption to existing operations.
Foster Wheeler brings its expertise in FEED and EPC work and revamp/turnaround planning
to identify which of the above work elements impacts the cost estimate. The requirements
are decided on a project-by-project basis.
Working with, or using information supplied by, the owner, the Foster Wheeler layout
engineer, constructability group and process engineers determine a suitable location for any
new equipment. The layout work provides line shoots which feed into the cost estimating
process, outlined in Figure 4. Constructability also considers disinvestment scope and
equipment lifts and movement to bring and erect the new equipment items on-site. Finally
an implementation schedule is considered to minimise interruption to refinery operations.
The above work items then feed into a cost estimating exercise to provide the most
accurate derivation capital cost for the different projects.
The models described above are used to direct where energy savings or improvement can
be made, for example, using pinch techniques. We now understand the quick hits
where energy improvements are possible that involve no or low investment and they can be
implemented quickly. For the energy improvements that require investment the next aims
to identify those that will provide real benefits. This stage of the work is a team effort
performed by Foster Wheeler and the operator employing a degree of past experience and
operator view to discard projects. The successful projects move forward to the screening
stage where Foster Wheelers expertise in project evaluation, project execution and cost
estimation is used to rank the projects.

Figure 4 - Cost Estimating Elements

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4.2.6

Project Screening

The cost estimates are collated with operational energy improvement in a Foster Wheeler
economic analysis spreadsheet. This economic analysis technique is based on Foster
Wheelers experience in conceptual and feasibility study work and helps to rank project
options.
Finally those projects which satisfy the criteria for operability and return on investment
(ROI) are ranked to provide an overall strategy for energy improvement on the site.
For energy management and optimisation systems that require no changes in plant
hardware (no capital investment), the return on investment is, in most cases, less than one
year. Operational improvements that can be identified and sustained are usually in the
range of 5 to 10% of site energy costs. When considering strategic investments to improve
energy efficiency (necessitating capital investment), larger energy savings are usually
possible and benefits in the range 5 to 20% are typical. In such cases the return on capital
investment is usually between 1 and 3 years.

5.0

CASE STUDY: PREEMRAFF LYSEKIL REFINERY, SWEDEN

Preemraff Lysekil is located approximately 100 km north of Gothenburg and refines around
10 million tons of crude oil per year, producing various grades of gasoline, diesel, heatingand bunker- oil. The refinery was commissioned in 1975 and has been upgraded with the
addition of a number of new process units for conversion of light and heavy fuel oil to lowsulphur transportation fuels. The refinerys energy performance compared to European
competitors has declined to some extent during the last decade and the long-term target
set for the refinery is to be better than the pacesetter average compared with Solomons
Energy Intensity Index (EII).
In 2010 an Energy Improvement Study (EIS) was conducted with a Foster Wheeler and
AspenTech team with the aim of improving the EII to less than 80 and to identify projects
which would deliver at least a two-point improvement in EII.
The study proposed investment opportunities as a result of detailed HYSYS modelling of
the process units and pinch analysis which, when implemented, will deliver both energy
saving and yield improvements. The operational opportunities consider planning,
advanced process control and energy management initiatives.
The cost of the operational projects was in general much lower than the process design
changes and implementation was not restricted by refinery shut-downs. Most operational
improvements were expected to pay back in less than one year.
The process opportunities were ranked based on their expected payback and EII
improvement. The reduced set of successful process and operational opportunities were

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collated into a roadmap that showed the optimum path to implement the projects to gain
the best synergy and EII improvement.

Figure 5 Process and Operational Opportunities Roadmap

Foster Wheeler has now progressed Preemraffs projects beyond the study phase:

6.0

CDU heat exchanger reconfiguration

Offgas redirections to hydrogen production unit
Packinox replacing shell and tube on CCR
Hydroteater preheat feed to furnaces

CONCLUSIONS

Energy cost reduction can have a significant positive impact on business performance. The
benefits of reducing energy cost go straight to the bottom line and so directly impact
company profitability and EII. Saving energy has none of the negative impact of many other
cost saving measures such as reductions in staffing or rationalisation of products and
markets. Improving energy efficiency also has a direct impact on emissions, in particular
greenhouse gases. but also particulates, NOx and SOx.

7.0

AUTHOR

Mike Whitling is the Manager of Asset Operations and Consultancy, Foster Wheeler, based
in Reading, UK. Mike has conducted many studies ranging from due diligence,
baseline/benchmarking to greenfield site assessments and management integrity and
energy/profit improvement projects. Mike graduated at Newcastle-upon-Tyne University
and is a Fellow of the IChemE. For further information, please contact Foster Wheeler at
refining@fwc.com.
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