Refining - Petrochemical Integration

Presented at the Egypt Downstream Summit & Exhibition 2016

By Claus-Peter Hlsig & Fred Baars
Agenda

Introduction

Refinery and petrochemical industries

Refinery and petrochemical integration
Case study
Conclusions

2
 Fluor - Executive Overview

One of the worlds leading publicly

traded engineering, procurement,
fabrication, construction, maintenance,
& project management companies

#136 on the FORTUNE 500 list

in 2015

Over 1,000 projects annually, serving

more than 600 clients in 81 different
countries

40,000+ employees executing projects

globally Fluor Corporate Headquarters
Dallas, Texas

Offices in 33 countries on 6 continents

103-year company legacy

3
Energy & Chemicals
The Energy & Chemicals business
line serves the global oil and gas
production/processing, chemicals,
and petrochemicals industries.

Ranks No. 1 on ENR (Engineering

News-Record) magazines list of Top
Design Firms in the Petroleum sector
Full range of services including
design, engineering, fabrication,
procurement, construction, and
project management
Consulting services for feasibility
studies and project financing
Global office platform optimizes
execution of all sized projects
including mega-projects in remote
locations with challenging
environments 4
Energy & Chemicals
Worldwide Projects

Deep Conversion Refinery Shell Quest Carbon Capture & Storage TAQA Gas Storage Bergermeer
Port Arthur, Texas Alberta, Canada Alkmaar, the Netherlands

Shah Gas Development BASF Integrated Petrochemical Site II

Shah, United Arab Emirates Nanjing, China

5
Fluor Offices in Europe
Antwerp
Established in 2008
Industrial Services, Oil & Gas,
Chemicals, Power,
Manufacturing
Farnborough
Established in 1957
Energy & Chemicals, Life
Sciences, Power, Infrastructure,
Transportation,
Telecommunications
Asturias
Established in 1989
Energy & Chemicals, Power,
Life Sciences, Mining
Madrid
Established in 2002
Energy & Chemicals, Power,
Life Sciences, Mining
Tarragona
Established in 2009
Industrial Services
Amsterdam
Established in 1959
Energy & Chemicals &
Infrastructure
EPC Execution Center for
Europe, Africa and the Middle
East
Moscow
Established in 1995
Energy & Chemicals
Industrial Services
Gliwice
Established 1945
Energy & Chemicals,
Power,
Mining, Metals, Life
Sciences, and Industrial
Services
Rotterdam
Established in 2007
Industrial Services,
Small Capital and Plant
Engineering
Bergen op Zoom
Established in 1988
Industrial Services
Small Capital and Plant Engineering,
Long Term Service Agreements,
Operations & Maintenance
Fluor Office in Amsterdam

Average Years of Experience

22
Industries
Oil & Gas, Petroleum, Refining, Chemicals and
Petrochemicals, Gas Processing & Underground Gas
Storage
Year of establishment: Major Clients
1959 Shell, Tasnee, Ruhr Oel/BP, SABIC, KNPC, BASF
SOCAR, TAQA, DOW, Lukoil, Exxon
Staff
630
Strengths
Studies, FEED, EPCm, PMC capabilities, multi-office
Market Focus
execution, and new project execution strategies
Europe, Middle East, Russia

7
Selected EAME Projects

BASF SE ExxonMobil
TAQA Shell Esso Sibur, Russia
BASF TDI Complex DCU & Flare
Gas Storage REN RAHC Project Multiple Projects
Ludwigshafen, Antwerp,
Alkmaar, NL Moerdijk, NL Rotterdam, NL PMC services
Germany Belgium
FEED, EPCM EPCm FEED, EPCm
EPCM EPC
SOCAR
SAPCO Multiple projects
Super Absorbent Azerbaijan
Polymer Plant (SAP) PMC/Early Works Grupa Lotos
Al-Jubail, Kingdom of EFRA U&O EPCM
Saudi Arabia EPC Gdansk, Poland
KNPC
Clean Fuels Project
Repsol Petroleo SA Kuwait
C-10 Expansion EPC
Cartagena, Spain
FEED, E, P, CM, PMC Abu Dhabi Gas Development
Company
Shah Gas Development (SGD)
SABIC Program
Confidential Abu Dhabi, UAE PMC services
FEL
Kuwait Oil Company
Multiple projects
Sasol Technology Kuwait
Multiple projects PMC services
South Africa
EPCM QP / Shell Al Karaana
Petrochemical Project
NATREF Ras Laffan Industrial City,
Natref Clean Fuels II Qatar FEED
Project, Sasolburg,
South Africa, FEED /
EPCM Sadara Chemical Company
Sapref Sadara, Location: Jubail,
Clean Fuels Phase II, Kingdom of Saudi Arabia
Durban, Kwazulu Natal, EPCM
South Africa,
FEED / EPCM 8
 SACYRFLUOR
Spain Offices

HEADQUARTERS 9
 SACYRFLUOR
International Experience

10
Downstream Upstream - Gas Chemicals Power LNG
Refining versus Petrochemical industry

Refinery Base Petrochemical site

Producing motor fuels from crude oil Steam Cracker based
base petrochemicals from NGL and/or
Large feedstock (crude) flexibility naphtha
Produce a multitude of products Aromatics based
base petrochemicals from naphtha
High capacities
World scale
Stand alone in power/steam
High electricity consumption
Shortage of hydrogen
Excess hydrogen & gas
Gas streams (C2) not monetized
Some streams not monetized
Unsaturated gases & LPG not
C4=s
monetized Py-gas
High CO2 emissions Py-oil
C9 aromatics
Tightening product specs (gasoline
benzene & aromatics)
Different industries but great synergy
Declining gasoline demand opportunities
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Integrated refinery/petrochemical sites, operating
margin
Higher operating margin
Depressed products from one are valuable feedstock to the other
Refinery gases and LPG as feedstock to petrochemicals
Benzene rich stream from refinery to petrochemicals
Petrochemical C4s, py-gas/py-oil, hydrogen as feedstock to refinery
Reduced transportation costs
Energy savings
Hot feeding
More potential for combined cycle operation
Bigger size -> higher efficiency
Lower staffing levels
Centralized control room etc
Synergy in support functions (maintenance, HR, security, admin.)

12
Integrated refinery/petrochemical sites, investment
cost
Lower investment cost
Synergistic effects due to integration
Less equipment due to hot feeding and/or allowing reduced recovery
Less redundancy
in steam/power generation
In hydrogen production
Reduced storage volume of feed & products
Reduced design margins
Single site benefits

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Integrated refinery/petrochemical sites, other issues

Lower emissions
Only excess methane/import natural gas as fuel
Increased flexibility
Choice of feed streams to the petrochemicals section to adjust to demand
Possibility to optimize crude cocktail to meet refinery & petrochemical needs
Back-up hydrogen supply to the refinery

There are multiple benefits in integrating refineries with

petrochemical sites; how do we determine what makes sense?

Lets develop a case study to shed some light on operating

margin versus investment cost

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 Case study - I

Gas Processing Plant

12 BCMA capacity (9.1 million ton per year)
Petrochemicals
Steam cracker
Poly olefins
Poly ethylene (LLDPE & HDPE)
Poly propylene
Butene 1 as co-monomer
Butadiene

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 Gas Processing Plant and Petrochemical Complex
Export Treated Gas

C2 HDPE
Natural Gas
C3
Gas Plant LLDPE

C4s
Poly Propylene

Petrochemical Complex Butadiene

C5+

Py-Gas

Py-Oil

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 Case study - II

Gas Processing Plant

12 BCMA capacity (9.1 million ton per year)
Petrochemicals
Steam cracker
Poly olefins
Poly ethylene (LLDPE & HDPE)
Poly propylene
Butene 1 as co-monomer
Butadiene Stream Minimum
Production
Refinery (kta)
10 Million ton per year (200.000 bpd) LPG 100
Producing Jet, Gasoline (Euro5) and Diesel (Euro 5)
Gasoline 2400
FCC (incl. Alkylation & MTBE), Hydrocracker,
Delayed Coking unit Jet Fuel 1300
Diesel 3000
Lubes 100
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 Stand alone case
Export Treated Gas

C2 HDPE
Natural Gas
Gas C3
LLDPE
Plant Poly Propylene
Petrochemical Butadiene
C4s Complex
C5+

Py-Gas
Py-Oil

Methanol REFINERY
LPG
Crudes Gasoline R95

Gasoline R98
Jet Fuel
Diesel

Blown Bitumen

Asphalt
Sulphur
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Anode Coke
Case study - III

Stand-alone versus integrated cases

Integration with respect to exchanging non-monetized streams
LP model required
multiple routings
product property constraints (motor fuel pools)
Evaluate operating margin
Gross margin minus Utility cost minus Cost of catalyst & chemicals
Expand with investment cost
AACE Class 5 basis
Consider maximum / optimized train sizes
Other synergy benefits (scaled down U&O systems, operating cost saving
etc.) have not yet been considered

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 Cases 1-9: increasing level of integration
Export Treated Gas

Natural Gas C2 HDPE

Gas C3
LLDPE
Plant
Operating Petrochemical
Poly Propylene
Butadiene
margin C4s Complex
increases
Refinery Fuel GasC5+
with level
of LPG
FCC
MTBE Py-Gas
FCC HT Raffinate +
Dry Py-Oil
integration Gas Unsat Alkylate nC4
LPG

Light Naphtha
Heavy Naphtha

SC H2
C4 RAFFINATE

Methanol REFINERY
LPG
Crudes
Gasoline R95 12000

Operation Margin (k$/day)

Gasoline R98 10000
8000
Jet Fuel
6000
Gasoline
Diesel 4000 FCC

Blown Bitumen 2000

0
Asphalt 1+2 3 4 5 6 7 8 9

Sulphur Case #
20
Anode Coke
 Operation Margin
Operation Margin = Gross Margin Utility Cost Catalyst & Chemical Cost
Price set 1 Price set 2

12000 12,000 Case Case Index

Stand alone GPP and PETR 1
10000 10,000 Stand alone refinery 2
Operation Margin (k$/day)

Operation Margin (k$/day)

+ FCC LPGs to SC 3
8000 8,000 + Heavy HT SR Naphtha to SC 4
+ Light HT SR Naphtha to SC 5
6000 6,000
+ Saturated LPG to SC 6

4000 4,000 + FCC dry gas to SC 7

+ Refinery off-gas to SC 8
2000 2,000 + Hydrogen from SC to refinery 9

0 -
1+2 3 4 5 6 7 8 9 1+2 3 4 5 6 7 8 9
Case # Case #
Gasoline FCC

Price set 1 Propylene FCC Price set 2

2500 2500

2000 2000
Polyolefin (kta)

Polyolefin (kta)

1500 1500

1000 1000

500
500

0
1+2 3 4 5 6 7 8 9 0
1+2 3 4 5 6 7 8 9
Case #
Case #

Propylene FCC further increases operating margin

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Operating margin increases for either price set
Simple payback
Price Set 1 Price Set 2

7.0 7.0

6.0 6.0

Simple Payback (years)

Simple Payback (Years)

5.0 5.0

4.0 4.0
Gasoline FCC
3.0 3.0
Propylene FCC
2.0 2.0

1.0 1.0

0.0 0.0
1+2 3 4 5 6 7 8 9 1+2 3 4 5 6 7 8 9
Case # Case #

Case Case Index

Stand alone GPP and PETR
Stand alone refinery
1
2
Simple payback varies with options chosen: but some
+ FCC LPGs to SC 3 integrations make more sense than others
+ Heavy HT SR Naphtha to SC 4
+ Light HT SR Naphtha to SC 5
+ Saturated LPG to SC 6
+ FCC dry gas to SC 7
+ Refinery off-gas to SC 8
+ Hydrogen from SC to refinery 9

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Conclusions I

Integrating refineries with petrochemical complexes offers attractive

benefits
Based on this case study
monetizing stranded streams can increase operating margin by
between 45 and 70%
However the net effect s (after investment cost changes) are much
lower; however simple payback can still improve by between 10 and
25%
LP model results alone are insufficient; need to consider investment
cost changes
A full study needs to consider
miscellaneous synergy benefits
project execution effects
risk profiles
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Conclusions II

A proper study needs

Marketing studies (feed and product pricing, demand patterns)
Engineering contractors (LP work, financial modeling, investment cost,
project execution strategy, risk profile)
Customer (local and company specific criteria, operating cost,
financing schemes)
And above all: TEAMWORK between all parties involved!
For more information
Claus-Peter Hlsig or Fred Baars
claus-peter.haelsig@fluor.com or frederik.baars@fluor.com
+31235432202 or +31235432764

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