Sep-2024

Mastering mega-scale refinery and petrochemical projects (RI 2024)

India’s economy is experiencing impressive growth. As its gross domestic product (GDP) is projected to reach $8.6 trillion by 2040, India’s energy use is expected to surge,1 nearly doubling to 1,123 million tonnes of oil equivalent by the same year, according to the India Energy Outlook 2021.

Jagadesh Donepudi and Michelle Wicmandy
KBC (A Yokogawa Company)

Article Summary

Meeting this increasing demand for petroleum products and petrochemicals requires new energy sources. Indian refineries are not only expanding but also diversifying in the petrochemicals sector. Plans are in place to double oil refining capacity to 450-500 million tonnes by 2030, with an additional 56 million tonnes per annum (MTPA) by 2028 to increase domestic capacity to 310 MTPA.

Refiners are increasingly integrating refining with petrochemicals, moving from stand-alone refineries to integrated refining and petrochemical facilities. This strategic move facilitates the transformation of crude oil into a broad range of high-value chemicals. Globally, refiners have embraced this practice and taken integration to a new level.

However, executing these mega projects requires deep domain knowledge and a full understanding of the challenges involved to close the knowledge gap. In India, refineries are moving rapidly to establish new petrochemicals units and polymers. The production of petrochemicals via steam crackers, which uses feedstocks like naphtha, liquid petroleum gas (LPG), and ethane and propylene-based petrochemicals from the FCC units is being contemplated.

Mega Project Landscape
Mega-scale refinery projects are characterised by their large scale, significant capital investment, and involvement from multiple stakeholders. They often involve constructing new refineries, expanding existing facilities, and integrating petrochemical units. Successfully executing these projects requires that a wide range of technical, operational, and financial aspects be considered.
One of the key challenges of executing a mega project lies in the inherent complexity of integrating various systems and co-ordinating diverse stakeholders. Successful implementation of a mega project involves seamless coordination of various entities like licensors, project management consultants, front-end engineering and design (FEED) contractors, equipment suppliers, and engineering, procurement and construction (EPC)/lump sum turnkey (LSTK) contractors. As shown in Table 1, each of these entities has its own focus, which makes it challenging to effectively integrate the inside battery limit (ISBL) and outside battery limit (OSBL) facilities. Owner Technical Advisor To drive the success of mega-sale refinery projects, oil and gas companies are appointing Owner Technical Advisors (OTA) to oversee and manage the entire project. The OTA serves as the interface among the owner project team, licensors, PMC and EPC contractors, as shown in Figure 1, to facilitate decision-making and ensure the various components of the project are aligned to reduce the risk of delays, cost overruns, and operational challenges.

These consultants of international repute provide valuable guidance to the owner throughout the project lifecycle, such as technology selection, engineering standards, employee safety, operational improvements, and more, to function as an extended arm of the client.

At KBC, the OTA’s role extends beyond just providing technical advice. They oversee the entire project, from pre-feasibility and feasibility studies to the final commissioning and start-up. This oversight includes monitoring the progress of ISBL and OSBL activities, identifying potential bottlenecks, optimising configurations, and ensuring alignment with the project’s objectives and budget.
From KBC best practices, rigorous simulations should be carried out to supplement linear programming (LP) vectors. These assessments are critical to understanding feedstock availability, optimisation, and product slate to determine economic unit capacities. While LP methods evaluate configurations, they should accurately represent sensitivities toward feedstock characteristics and product quality. Once feasibility studies are complete, the next steps involve setting objectives, executing the project, and improving performance.

Setting Mega Project Objectives
Mega projects in the oil and gas industry are often at the forefront of technological advancements. The OTA’s expertise in the latest industry trends and best practices can help the client adopt advanced technologies. In addition to enhancing energy efficiency, reliability, safety, and digital capabilities, the OTA can also contribute to the project’s sustainability and profitability.

KBC’s refinery and petrochemical configurations incorporate best-in-class technology with first-quartile performance targets by implementing the objectives shown in Table 2.
To achieve these objectives, KBC adopts robust design and engineering best practices in various systems. The OTA ensures a smooth transition from construction to operation with minimal disruptions, shifting focus from ‘right now’ analysis to ‘what if’ scenarios using advanced technologies to discover ‘what’s best’.

Executing Mega Project
With the feasibility studies and design in place, the OTA implements the mega project. During this stage, the OTA ensures that objectives are met, and stakeholders collaborate to reach desired outcomes.
• Ensuring quality and compliance: The OTA leverages real-time data, equipment ratings, and engineering limits to assess performance against critical specifications. Using Petro-SIM® simulation software, results are visualised, and alerts for overloads and noncompliance are sent. This ensures quality and compliance with industry standards, safety regulations, and environmental requirements are met.
• Operational readiness: The OTA prepares the facility for reliable operations, which includes ensuring data quality for decision-making purposes and optimising waste management strategies. The project team assesses proposed practices against best-in-class standards, assesses the operability of new units, and optimises plot plans to maximise space utilisation, ensuring efficient operations.
• Emissions reduction and decarbonisation strategies: The OTA specialises in estimating baseline emissions, reviewing scenarios, and crafting plans for net-zero targets. Using Petro-SIM digital twins and Visual MESA® Greenhouse Gas Emissions Management software, KBC ensures operational excellence, energy efficiency, safety, digital integration, and progress toward net-zero emissions.

Improving Performance
After the project’s completion, the OTA continues advising the client to maximise the facility’s performance by improving understanding of current operations through a digital twin, real-time analytics, and visualisation accessible to all stakeholders.

Conclusion
The growth in India’s energy demand, coupled with its economic growth, has spurred the development of mega-scale refinery projects. These complex projects require a holistic approach for successful execution. In this context, the OTA plays a vital role as the owner’s essential partner in managing these complexities and achieving the project’s objectives.
Through comprehensive oversight, rigorous analysis, stakeholder alignment, and technological expertise, the OTA can help owners in the refinery and petrochemical sectors deliver energy-efficient, reliable, safe, and financially viable facilities. With a focus on sustainability, the OTA is leading the way for Bringing Decarbonisation to Life™.

This short article originally appeared in the 2024 Refining India Newspaper, which you can VIEW HERE