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Restructure plants
to boost margins
With increasing supplies of gas-based petrochemical feedstocks coming
on stream in the Middle East, now is a good time to consider reconfiguring
refineries to boost production of chemicals for export to Asia
Paolo Scafetta ICIS CONSULTING

n the Middle East gas field development is

continuing at a rapid pace, recording an
average annual growth rate of about 9%
between 2000 and 2011, according to the
International Energy Agency. Qatar and Iran
represent almost 60% of the total regional
supply. As ethane and liquefied petroleum
gas (LPG) are good feedstocks for petrochemical plants as well as condensates for refineries, the recovery of liquids from natural gas
is an added value.
It is worth noting that a typical regional
condensate such as North Field Condensate
(NFC) being light (API 57.95), sweet
(0.23% sulfur content), and low in metals
content is an excellent raw material for a
hydroskimming refinery. In addition, growing availability of feedstocks and low-priced
natural gas provide competitive advantages
for additional capacities in the Middle East.
Strong growth of petrochemical and oil

demand in Asia, driven mainly by increasing

population and high economic performance,
is making this area an attractive market for
major players. According to the latest release
of the ICIS database (2013), oil consumption
is expected to increase at a higher rate than
supply, resulting in a growing deficit over
the next few years.
In the South Asia and Pacific (SAP) region a
shortage of road diesel is expected to reach
over 50m tonnes by 2025 while gasoline
should achieve almost 20m tonnes as well as
LPG. Finally, kerosene demand should have a
minor impact on the regional deficit if it is
compared with the other oil products (see SAP
balance chart on page 29).
Based on 2012 statistical trade data, northeast Asia shows a deficit of about 950,000
tonnes of mixed xylenes while maintaining a
surplus of benzene (577,000 tonnes) and toluene (almost 260,000 tonnes). The SAP region
records a shortage of 165,000 tonnes of toluene, a surplus of benzene (753,000 tonnes) and

NFC Assay1 and Products Properties

NFC assay

Cuts C

Yields
wt%

Whole crude

SPG N* vol% A* vol% SUL wt%

0.747

LPG

3.7

RON

0.226

RVI VIS (40C)

psi
cSt

10.9

CTI

0.775

0.572

Light Naphtha

15-80

19.5

0.665

11.4

4.0

0.058

Heavy Naphtha

80-175

38.5

0.752

31.1

14.8

0.218

67

11.6

Kerosene

175-230

15.8

0.794

0.234

1.46

47.8

Gas Oil

230-375

20.1

0.822

0.308

3.03

63.5

>375

2.4

0.880

0.413

17.46

54.1

3.66

62

Residue
Products supply

LPG

0.521

Unleaded Premium

0.743

0.025

Jet Kerosene

0.794

0.234

Road Diesel

0.820

0.050

Benzene

0.884

Toluene

0.872

105

1.0

Mixed Xylenes

0.873

108

0.3

SOURCE: Total.com *N=Naphthenes, A=Aromatics N.B. Totals may not add due to rounding

26 | ICIS Chemical Business | 18-24 November 2013

95

8.7

mixed xylenes (almost 70,000 tonnes). In addition, the spread between benzene, toluene,
xylene (BTX) demand and supply should
grow over the next few years unless additional investments are made in petrochemical capacity.
Therefore, in this context, it is interesting
to analyse a hypothetical hydroskimming refinery located in the Middle East and exportoriented towards the Asian market. For this
type of plant, reformate represents the key
interface between the refinery and petrochemical plant, as it is the most important
component for gasoline blending as well as a
precious feedstock for BTX production.

TWO CASE STUDIES

Therefore, two cases have been taken into
consideration. The first (a non-integrated
plant) is a simple refinery equipped with a
condensate splitter (110,000 bbl/day of capacity), a naphtha splitter (66,000 bbl/day),
an isomerisation unit (26,000 bbl/day), a
continuous catalytic reforming unit (40,000
bbl/day) plus the necessary hydro-desulfurisation processes.
The second (an integrated plant) includes
a simple petrochemical complex (32,000
bbl/day) that produces benzene, toluene and
mixed xylenes (see chart on page 27).
Process integration, in terms of main
streams, is based on recovery of aromatics
from reformate through the BTX complex
and backflows (raffinate and C9+) blending,
after extraction, into the gasoline pool.
The main drivers are, on one side, feedstocks costs and, on the other, product prices
as well as the quality of the products required from the reference market.
Condensate average prices have been indexed to Dubai crude oil while oil products
are referenced mainly on the Singapore market (see table on page 27). Price quotations
for gas oil (0.05% sulfur content) are not
available therefore it has been evaluated
starting from gas oil (0.5%) FOB Singapore
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ICIs Consulting Refining

integrated refinery configuration

Only main streams have
been included

LTN

Naph

Raffinate

ISR

LPG

BEN

Mogas

FRN

N
S
P

NHT

CDS

C9+

HVN
CCR

C
S
P

Kerosene

Reformate

BTX
Extr/Fract

TOL

Jet
Kero
MXY

Gas Oil

DHT

Heavy Gas Oil

adding the differential price taking

into account the sulphur content difference
into gas oil products available on the international market. What are the fundamental differences between an integrated and non-integrated site? What is the gross refining margin
for each plant? What are the benefits and disadvantages of integration?
Typically, a linear programming (LP)
model is used for solving the issues above in
order to maximise refinery profit. Through
this optimiser tool, it is possible to select the
optimal refinery operations in terms of output and, consequently, revenues.
Running an LP model, the answer is
that the refinery handles about 11,980
tonnes/day of condensate providing globally
about 11,900 tonnes/day of products with a
recovery of 99.4%. The properties of feedstock and products are summarised in the
table on page 26.
As percentage yields to weight of condensate are about 58% of the total for light distillates and 36% for middle distillates, NFC results in a suitable feedstock in transportation
fuel products.
In the table on page 29 we have reported
daily feedstock processing and its cost, plus
the product slate that optimises the refinery
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Diesel
Glossary:
CDS = Condensate
CSP = Condensate Splitter
FRN = Full Range Naphtha
DHT = Distillate Hydro-treating
NHT = Naphtha Hydro-treating
NSP = Naphtha Splitter

operation and the value of each product. In

terms of the full range of naphtha processing,
about 36 wt% of light naphtha goes to isomerisation or to market while 64 wt% of heavy
naphtha is for reforming capacity.
According to the simulation, the isomerisation process required to increase low octane of C5/C6 normal paraffins, produces
almost 2,400 tonnes/day of isomerate for
the non-integrated configuration and less
than 250 tonnes/day for the integrated
model. A 3,100 tonne/day surplus of naphtha is available.
Total available volumes of distillates remain unchanged for both schemes while the
amount of gasoline shows a decrease from
about 6,200 tonnes/day to 700 tonnes/day
between non-integrated and integrated
plants because 94% of total reformate availability is addressed to BTX manufacturing.
In addition, analysing NFC assay, N+2A of
heavy naphtha (called feed index) results are
high (60.7), making it a good feedstock for reformer unit.
Reformate production in the two cases is
another interesting issue. The LP model suggests two different types of reformate for the
non-integrated plant: RON 102 and RON 90.
There are two opposite drivers. In the non-

LTN
HVN
ISR
CCR

= Light Naphtha
= Heavy Naphtha
= Isomerization unit
= Continuous Catalytic
Reforming
Mogas = Motor Gasoline

Average Annual Prices

Feedstock cost

North Field
Condensate

$/tonnes price quotations 2012

Assessed Dubai
109.1* crude oil

Product sales

Naphtha
LPG+
Unleaded
Premium
Jet Kerosene
Road Diesel

103.6* Spot FOB Singapore

Large cargo Far East
954.2 Index
Gasoline 95 RON
123.6* FOB Singapore
1,006.1 Spot FOB Singapore
133.3* Estimated

SUL

197.8 Spot CFR China

NH3

573.9 Spot CFR India

Benzene

1,208.1 Spot FOB SE Asia

Toluene

1,215.3 Spot CFR SE Asia

Mixed Xylenes

1,197.5 Spot CFR SE Asia

Prices in US$/bbl +30% Propane, 70% Butane

Source: ICIS Pricing
*

integrated site the reformer needs to operate

more intensively for octane boosting, therefore losing some volumes of reformate (total
production: 3,720 tonnes/day). By contrast,
in an integrated plant it is necessary to decrease the operations of reformer severity by
maximizing the availability of reformate for

18-24 November 2013 | ICIS Chemical Business | 27

ICIs Consulting Refining

the BTX plant. This operating condition

causes a slight increase of total reformate
volumes (3,894 tonnes/day) compared with
the first case.
Again LPG (30% propane and 70% butanes) production is, by and large, lower for a
plant that incorporates a BTX complex because the lower reformer intensity causes a
minor production of gaseous streams.
The share of road diesel corresponds to
about 23% by weight of the total product
supply and is constituted mainly by hydrotreated gas oil and hydro-treated heavy gas
oil streams that account for almost 83% and
10% of total blending volume, respectively.
To meet the required specification of sulfur content (0.05% maximum), the desulfurisation of heavy gas oil (0.413% sulfur) is
necessary before the blending process.
Therefore, the refinery sees zero fuel oil
production. The increasing demand for high
-value cleaner transportation fuels and the decline of low-value heavy residue market represent a competitive advantage for the product slate released by this type of refinery.
Standard sulfur specification for jet kerosene requires a maximum content of 0.3 wt%.
As the kerosene cut has 0.23 wt% of sulfur,
the refinery configuration is not equipped
with a kerosene hydro treating unit.
Hydrogen sulfide coming from different
refinery gas streams, after an amine treatment unit, is converted in elemental sulfur

SOUTH ASIA AND PACIFIC

M tonnes
10
0
-10
-20
-30
-40
-50
LPG
-60

2005

Gasoline

Kerosenes
2012

2020

by a conventional Claus process. The small

quantity of sulfur recovered, about 20
tonnes/day, can be shipped to Asia as feedstock for fertilizer manufacturing.

production figures
The petrochemical complex produces about
2,600 tonnes/day of BTX, 822 tonnes/day of
raffinate and 229 tonnes/day of C9+, and accounts for about 22% by weight of total product
supply. The LP model evalutates a higher gross
refining margin for the integrated site compared
with the non-integrated model.
Indeed, according to price scenarios for 2012,

Feedstock

Configuration

Tonnes/day

$000/day

NFC

CDS splitter

11,982

10,910

3,107
858
737
6,226
713

2,895
819
704
6,466
722

Supply

UPR
Jet Kerosene

Integrated plant
Non-integrated plant
Integrated plant
Non-integrated plant
Integrated plant

1,859

1,871

Road Diesel

2,708

2,774

Total Distillates

4,567

4,644

SUL

For both plants

For both plants

NH3
TotAL Miscellaneous

20

0.389

0.046

21

0.435

1,350

1,631

Toluene

730

887

Mixed Xylenes

532

637

2,612
240
182
11,913
11,940

3,155

Benzene

Total Petrochemicals
Refinery Fuel
Total Products
Total Sales
GROSS MARGIN
N.B. Totals may not add due to rounding

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2025

SOURCE: ICIS Global Supply and Demand Expert View (formerly ATEC)

Feedstock and Supply

Naphtha
LPG

Gas Oils

Integrated plant

Non-integrated plant
Integrated plant
Non-integrated plant
Integrated plant
Non-integrated plant
Integrated plant
Non-integrated plant
Integrated plant

11,933
12,124
1,023
1,214

as the weighted average of BTXs premium to

gasoline is slightly over $160/tonne, the model
calculates, in the first case, a gross margin of
$1.214m/day while in the second case
$1.023m/day, providing almost 19% of incremental profitability. Finally, gross refining margin, in terms of US$/bbl, is $15.8/bbl for the favourable case while it is $13.3/bbl for the
unfavourable. Integration could be deeper if the
plant produces only benzene and paraxylenes.
Synergies are evident not only in terms of incremental profitability but also as security of
feedstock supply to the petrochemical industry,
logistics optimisation, saving on transport costs,
reduction in utilities system costs (heat, steam,
water, hydrogen and power) and re-processing
of by-products (raffinate) to add more valuable
products. Again, refining and petrochemical integration increases the level of flexibility and
mitigates risks of market volatility.
Indeed, with increasing gasoline demand, the
refiner can optimise operations to maximise
production of fuels (toluene and mixed xylenes
can be also blended into gasoline pool). Conversely, if fuel requirement is decreasing, the
value of specific refinery streams can be higher
in chemicals production.
Among the main disadvantages of integration,
it is interesting to highlight the higher initial investment, increased complexity of the plant, more
technical problems, and more complex planning.
However, environmental challenges based on
more and more strict constraints in the transportation fuels, low refining margins and growing
competitiveness provide excellent reasons for
assigning to refinery streams valuable assets for
manufacturing products other than conventional transportation fuels. It is apparent that the integration process adds mutual value to operations of refining and petrochemical industry.
Italo Righi contributed to this article
Paolo Scafetta is a chemical engineer and joined
Parpinelli TECNON (now ICIS Consulting) in 2001. He is
engaged in annual multi-client reports, as well as singleclient studies. Contact: paolo.scafetta@icis.com

18-24 November 2013 | ICIS Chemical Business | 29