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Nov-2023

Increasing chemicals by integrating refinery with petrochemicals (RI 2023)

This article explores the integration of refineries with petrochemicals to increase chemical production.

Narendra Verma
HMEL HPCL – Mittal Energy Ltd

Viewed : 203


Article Summary

With the increasing shift towards hybrid and energy-efficient vehicles, the switch from fossil fuels to renewables, and the need to minimise our carbon footprint, there will be a decrease in demand for oil products. However, the energy transition also presents opportunities to capture the growing demand for petrochemicals. Forward-thinking refiners are already looking for opportunities to modify their production modes to capture this growing demand. This may involve increasing the output of naphtha, propylene, and reformate, which are the building blocks of other petrochemicals.

This article includes a case study of HMEL’s Refinery and Petrochemical Integrated Complex in Bathinda, India. The complex includes a base refinery with a capacity of 9.0 million metric tons per annum (MMTPA),  having 5% of the chemicals as wrt crude oil processing. It is integrated with a new petrochemical complex that includes a steam cracker unit and downstream polymer block to increase chemicals to 20%. There are further plans to increase chemicals to 25%, which includes diesel cracking along with other feed options, such as fuel gas, naphtha, LPG, and kerosene, for the cracker.

Existing Refinery Challenges
It is challenging for companies to increase their gross refinery margin (GRM) due to internal competition and uncertainty in product cracks, fluctuating crude oil prices, and geo-political situations. Also, refinery processes are subject to stricter emission regulations, which today are the primary driver of most brownfield projects. While a cost is associated with projects improving fuel quality, only a small fraction can be recovered from fuel product price hikes.

Integrating Refineries with Petrochemicals
Maximising more value from new products rather than simply augmenting the existing product slate is the way to go for such revamps. Figure 1 illustrates the prices of various products relative to naphtha, which is a key driver for integrating refinery and petrochemical units. This improves the GRM by adding more value-added products produced by petrochemical units.

Some of the other key drivers for refineries to integrate with petrochemicals include:
• A paradigm shift towards integrated refinery petrochemical complexes to manage risks and hedge against downturns
• The demand for petrochemical products in India is projected to increase vs installed capacity
   • By 2025/2030, the shortfall in demand is expected to be 18/31.8 MMTPA compared to installed capacity2
   • Per capita consumption of petrochemicals in India is lower than the global average (10 kg vs 34 kg)3
• There may be a  drop in future fuel oil demand due to energy-efficient and hybrid vehicles, the switch from fossil fuels to renewables, and carbon footprint minimisation
• An existing refinery has advantages in terms of feed security and reliability for petrochemical units
• Leveraging refinery intermediate streams (such as naphtha, kerosene, LPG, and refinery fuel gas) as advantageous feeds to the petrochemical complex
• Blending petrochemical by-products into refinery fuel products can lower the cost of conversion
• India has a demographic advantage as a low-cost manufacturing hub
• There are energy savings in a well-integrated hydrocarbon process
• Integrating shared utilities, infrastructure, and services can lead to reduced Opex.

Integration of a refinery and petrochemical complex involves identifying synergies and optimising them for operational and economic gains. The integrated complex maximises value and, hence, provides a better return on investment. Refinery and petrochemical complexes can typically be integrated as:
• Refinery with a steam cracker to produce ethylene, propylene, and other derivatives
• Refinery with an aromatics complex to produce benzene, toluene, and xylene
• Refinery with an aromatics complex and a steam cracker.

The extent of the integration between any of these depends on technical feasibility and the resulting economic benefits. This is a complex topic and requires further detailed study on a case-by-case basis.

HMEL’s Refinery and Petrochemical Integrated Complex
HMEL started with a base refinery of 9.0 MMTPA, having 5% of the chemical as polypropylene wrt crude oil processing. Later, this refinery was expanded to 11.3 MMTPA and integrated with a new petrochemical complex to increase chemicals to 20%. This was achieved by adding more polypropylene and new LLDPE, HDPE and benzene (see Figure 2).

For this integration, an LP model was developed and validated for a new base case of 11.3 MMTPA with BS-VI fuels production. The product slate generated from this model was used as the basis for economic analysis. The capacities of the existing process units were utilised. Various configuration options for petrochemical integration were studied before arriving at the final configuration. The chosen configuration included a dual feed cracker unit (DFCU) with a capacity of 1,200 KTPA, and downstream units such as LLDPE/HDPE swing units (2 x 400 KTPA), HDPE unit (450 KTPA), PP unit (500 KTPA), Butene-1 unit (55 KTPA), as well as matching utilities and offsites. This integration increased chemical production, meeting the domestic consumption needs and thereby maximising value and profitability.

Now, HMEL further plans to increase chemicals to 25% by primarily increasing polypropylene, various polyethylene, and benzene. This will include the use of diesel cracking as a preferred option in an integrated complex instead of using refinery fuel gas, naphtha, LPG, and kerosene as feed to a cracker.

This short article originally appeared in the 2023Refining India Newspaper, which you can VIEW HERE


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