Development of a refinery

petrochemical master plan

A master plan for a refinery/petrochemical complex justifies comprehensive
study of all the variables, from market forecast to operating costs
W J Hillier, Maureen F Gilbert and W C Petterson Kellogg Brown & Root

rior to the recent economic developments in

the Far East, the economies of most countries in the region grew at phenomenal rates
in the 199096 period, ie 510 per cent/year.
However, Japans lingering recession during this
period held the overall economic growth rate in
the Far East to about 4 per cent. The economic
crisis there has significantly impacted on the
current and short-term growth rates. It is anticipated that the economies will rebound in the
new millennium and strong economic growth
will return.
This market forecast is drawn from a recent
study prepared by Purvin & Gertz, which
reviewed the worldwide energy and petrochemical markets.
The forecast product demand growth rates for
the 19952015 period are in the 4-5 per cent/
year range. Crude consumption in the Far East
market area increases from 700 million tonnes/
year in 1995 to about 1200 million tonnes/year
in 2015, a growth rate of 2.9 per cent/year.
Asias rapid move to industrialise is stimulating energy demand. Obviously, the need for
petroleum products has been reduced in the
short term due to the economic crisis in the
region. If the forecast long-term economic
growth rates do not materialise, the demand for
petroleum products will also be reduced. The
fuels product consumption forecast is shown in
Figure 1.
Gasoline and distillate continue to grow at the
expense of heavy fuel oil. The naphtha consumption for petrochemicals more than doubles from
1995 to 2015. The compounded annual growth
rates for the various products are shown in

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Naphtha
Other

Gasoline
Mid distillate
Resid fuel oil

Figure 1 Asian product consumption

Figure 2. Wealth created by the economic growth

has allowed the upward movement from bicycles
to motor bikes and automobiles. Gasoline
consumption, which is growing at 3.3 per cent/
year, is driven by this trend. Demand for middle
distillate is forecast to increase by 3.1 per cent.

Figure 2 Asian petroleum consumption growth rate

(%/year) 19962015

PTQ Q1 1999 1

Figure 3 Olefin feedstock requirements (% olefin

production)

The Far East is a net importer of middle distillates; consumption of these products has grown
rapidly. Consumption of jet fuel and kerosene
has increased rapidly and is expected to continue
to increase at a more moderate rate in the next
20 years. The consumption of residual fuel oil is
expected to increase at only 1.1 per cent/year.
The Far East is a net importer of residual fuel
oil, primarily from the Middle East.
In terms of petrochemicals, ethylene growth
into the future is projected to be 4.5 per cent/
year, while propylene growth is projected to be
at a rate of 4.9 per cent/year. Hence, there is a
need to evaluate various technologies that generate a higher yield of propylene in order to
remain in olefin balance. In order to meet the
growth in ethylene, naphtha is forecast to grow
at a very high rate. The compounded growth rate
is projected to be 4.8 per cent/year.
The strong growth in petrochemical demand
will place considerable pressure on feedstock
supplies and prices. Refineries will be required
to process crude and condensate for both fuels
and olefin feedstock markets. The production of
ethylene from the various feedstocks is shown in
Figure 3. Olefins producers are expected to build
ethylene plants with crackers that handle gas oil
and naphtha for increased feedstock flexibility.

Goals of a master plan

The overall goals of developing a master plan are
project specific. For instance, in a grassroots
facility, there is an opportunity to match the
processing scheme to the market forecast using
various crude mixes. There are considerable
amounts of freedom and options available to the
planner to meet the clients goals. In the case of

2 PTQ Q1 1999

a major revamp, the client may wish to lower the

feedstock costs and/or upgrade the bottom of
the barrel.
The optimum processing scheme will be determined to meet the clients objectives. In many
cases, the refiner is improving the quality of the
products produced to meet both environmental
and market requirements. In some cases, the
objective of the master plan can be focused on
reducing operating costs and reducing energy
usage.
In the past year, the company has received a
number of requests to develop master plans to
upgrade fuel products to petrochemicals and
integrate refinery and petrochemical complexes.
The driving force behind this trend is the desire
of owners to improve the overall margins of the
complexes and take advantage of the synergies
between refineries and petrochemical complexes.
In addition to supplying fuels to the transportation market, the refinery will supply a secure
feedstock to the petrochemical complex and
potentially, a feedstock for the utility sector.
Clients have significant interest in integrating
a power generation system into the overall
complex and generating power, steam, hydrogen
etc by gasifying a low-valued byproduct stream.
For all these project specific master plans, there
is tremendous pressure to satisfy the goals and
capital constraints of the client. Often, this will
lead to a phased approach for the project.

Planning methodology
The scope of a study can range from pre-feasibility to a more complete detailed feasibility report.
The pre-feasibility study is characterised by an
evaluation of a market-based process configuration, a limited analysis of feedstock options, an
overall material balance and conceptual stage
economics. These economics include a preliminary estimate of capital and operating costs and
an estimate of cash flows and payout.
In general, the results of the pre-feasibility
study will establish the incentive to proceed to a
more detailed analysis. A more detailed feasibility study includes a full market study that
addresses crude supply, product supply/demand
and product quality, as well as feedstock and
product pricing. At this point, the configuration
can be optimised, and the specific technologies
can be identified.
It is important at this stage to establish a basis

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for the onsite and offsite

scopes
so
that a more detailed capital
cost
estimate can be generated.
Typically,
capital estimates are generated from a
FINAL
AUTHORISATION
database that has been
developed
from previous studies or are
available
INFLUENCE
from a recent engineering/
procureEXPENDITURES
ment/construction
(EPC)
project. The
generation of a credible
capital estiFRONT
END LOADING
mate is critical to providing
input to
the
MECHANICAL
economic analysis phase.
COMPLETION
Finally,
the
feasibility
report will
provide more definition and
justification
to proceed to basic engineering. During
a project life cycle, there is
a significant
opportunity to influence the
final cost of
the project. This concept is
Figure 4 Window of opportunity to influence costs
shown in Figure 4.
The window of opportunity for cost influence is greatest in the business Alternative B, could be identified in the early
planning and facilities planning/studies phases. planning stages, which could reduce the capital
The opportunity to reduce the final cost of the cost from the first alternative, Alternative A.
Feasibility studies are generally executed using
project rapidly decreases once the basic design is
initiated. During the EPC phases, there is little the approach shown in Figure 5. It is very
opportunity to influence the final cost of a important to establish the basis of the study in
project, other than the normal value engineering conjunction with the client. It is critical that the
study is based on a current market forecast. For
and constructability improvements.
The expenditure associated with these early some studies, Kellogg contracts the services of
phases is very low relative to the total cost of the Purvin and Gertz, which maintains a worldwide
project. The payout associated with the study database on the markets related to the petrocan be very high, hence the need for credible leum/petrochemical industry.
As discussed previously, the cost estimate
feasibility studies. As shown in Figure 4, there is
a potential that an alternative, such as database is another cornerstone for the study.

Figure 5 Feasibility study: execution approach

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PTQ Q1 1999 3

of case studies with the results

feeding an economic and financial model. With the tools
available, feasibility studies can
be done very efficiently.

Feasibility deliverables

Figure 6 Energy centre complex

The cost database is supported with data from

actual EPC jobs that the company has executed.
During the execution of the study, inhouse client
representation is extremely beneficial. The client
representative is aware of the details of the
study, participates in the critical decisions and
provides a communication channel back to the
client offices.

Modelling approach
The overall evaluation of alternatives is accomplished with the use of a mathematical model of
the configuration. This model can be a spreadsheet model or a linear programming (LP)
model. For large complexes, it is desirable to
develop an LP model to represent the yield
vectors and the constraints associated with feedstocks and product.
By applying a set of pricing, the objective function can be optimised. Kellogg utilises the PIMS
(Process Industries Modelling System) LP
model. The LP model is very flexible and can
accurately represent the refinery, the petrochemical complex, and the power generation system.
One needs to input data such as yields and operating costs that accurately represent the various
technologies. The flowscheme is configured to
allow intermediate streams to be processed in
alternative units. For example, naphtha may be
allowed to go directly to gasoline blending, to a
reformer for octane improvement, or to a naphtha olefin cracker.
The common approach is to perform a series

4 PTQ Q1 1999

The deliverables for each study

depend on the needs of the
client. However, the following
list is typical of many studies:
Study basis
Refinery configuration optimisation/decision matrix
Product/feedstock volumes and
quantity
Block flow diagrams
Utility and offsites requirements
Overall project schedule
Refinery plot plan
Capital and operating cost estimates
Project execution strategy.
Financial analysis
Conclusions and recommendations

Feasibility study case

In this study case, a refinery producing primarily
gasoline, distillate, petrochemical feedstocks and
fuel to a power generation complex is included
in the base case.
The refinery, olefins plant and power generation complex are integrated to take advantage of
the synergies among the major processing
complexes. An energy centre concept is shown in
Figure 6. The objectives of the study are as
follows:
Provide essentially all the feedstocks from a
50:50 blend of Light and Heavy Arabian crude
Produce greater than 0.8 million tonnes/year
of ethylene and investigate technology to
increase the production of propylene
Produce gasoline and distillate to meet the
market forecast in the Far East
Provide utilities (power, steam and H2 to the
processing units)
Export electric power to the local grid
Develop alternative material balances for various configurations
The processing flowscheme for the base case is
shown in Figure 7. The crude unit feeds naphtha
to a reformer unit with the option for the product to be fed to the olefins complex. The diesel is

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Figure 7 Refinery/petrochemical complex base case

hydrotreated to meet product specifications.

The gas oils are fed to the once through
MAKFining hydrocracker along deasphalted oil
(DAO) from the ROSE unit. The bottoms from
the ROSE unit are sold as heavy fuel oil (HFO)
and/or fed to the gasifier/power generation
complex. In this case we have included a gasifier
to produce H2, power and steam. The MAKFiner
produces hydrocrackate for the ethylene
complex, gasoline and high quality diesel.
The unconverted bottoms flow to an Orthoflow
Catalytic Cracker. The C4 olefins are alkylated in
an Exxon H2SO4 stirred autorefrigerated alkylation unit. The FCCU cat gasoline is blended into
gasoline.
The naphtha and hydrocrackate are fed to the
millisecond pyrolysis furnaces in the olefins
plant. Polymer grade ethylene and propylene are
produced from the olefins plant for sale to derivative product plants. Mixed C4s can be sold for
chemical use, hydrotreated and used as alkylation feed or recycled to the pyrolysis unit.
Pyrolysis gasoline is hydrotreated to convert
diolefins and acetylenes to olefins and then sent
to motor gasoline blending. Fuels produced in
the olefins plant are utilised in the olefins unit

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itself and in the utility system of the refinery

petrochemical complex.
The base cases were modelled on the PIMS LP
system and a set of pricing used to generate a
net revenue from the complex. Also, an alternative base case was completed and used to review
the impact of producing less fuels products and
the same amount of ethylene from less crude oil.

Maximise propylene cases

Two alternative cases were run to add processing
to increase the propylene to ethylene ratio and
sacrifice fuels products. In these cases, the
Superflex and Maxofin technologies were added
to the refinery/petrochemical configuration.
Superflex technology for maximising propylene
production
In the Far East, the demand for propylene is
expected to grow at a faster rate than that for
ethylene. To meet that market, the Superflex
technology is focused on providing maximum
propylene production. This process converts to
propylene, low-value light hydrocarbons available in both the olefin plant and refinery.
The propylene is produced in a fluidised catalytic reactor, using a proprietary catalyst.

PTQ Q1 1999 5

stream. In a fixed fresh feed case, the

pyrolysis furnace throughput is reduced.

High crude rate
L ow crude rate
The base case presented here is for an

Base Case Max
Alternative Max
olefin plant operating at high severity

propylene base case propylene
(0.43 P/E) to produce 800000 tonnes/
Crude (000bpd)
200
200
160
160
year ethylene. The propylene, and also
LPG feedstock (000bpd)


3

Fuels products (000bpd)

the C4 and C5 streams, are byproducts
Gasoline
51
43
35
25
whose yield is a function of steam crackDistillate
95
87
76
70
ing. The application of the technology to
Petrochemicals (tonnes/day)
the C4 and C5 byproduct streams allow
Ethylene from cracker
2286
2286
2286
2286
Superflex/Maxofin ethylene
560

476
the producer to uncouple the propylene
Sub total
2286
2846
2286
2762
production of the complex from the
Propylene from cracker
987
887
986
929
ethylene furnaces.
Superflex/Maxofin C3=

1760

1487
In the alternative case, Superflex has
Sub total
987
2647
986
2416
Propylene:ethylene ratio 0.43
0.93
0.43
0.87
been inserted into the ethylene unit.
Power produced (MW)
298
248
247
203
Physically, a Superflex reactor is located
Export power (MW)
210
152
175
127
in the pyrolysis furnace plot area.
Reactor effluent is then processed in the
Table 1
standard product recovery section. In
addition to the olefin plant C4 and C5
streams, opportunities for increased
Overall economics
propylene production are found in the
refinery. Potential feeds are similar light

US$ million/day
olefin containing hydrocarbon streams.

High crude rate
Low crude rate

Base Case
Max
Alternative Max
Upgrading of thermal or cracked naph
propylene base case propylene
thas, unsaturated C4s or raffinate streams
Products
provide good returns. Reformulated
Fuels
3.6
3.2
2.7
2.5
gasoline specifications are requiring
Ethylene/propylene
1.3
2.2
1.3
2.1
Power
0.3
0.2
0.2
0.1
reduced C5 content; Superflex can
Feedstocks
convert this problem into a valuable
Crude/LPG
3.1
3.1
2.5
2.5
product. The technology provides the
Net utility costs
0.3
0.3
0.2
0.2
benefit of feed flexibility in processing
Net revenue
1.8
2.2
1.5
2.0
these potential feedstocks, so that high
Table 2
margins are maintained as market value
or availability vary. Refinery sourced
Feedstocks range generally from C4 to C8 light streams can be transported to the olefin plant
hydrocarbons and are olefin rich.
for processing in the reactor, or the technology
In the olefin complex, inclusion of the can be installed locally in the refinery.
Superflex reactor in the process scheme allows
The Superflex reactor is a typical fluidised
for a shift in the overall propylene to ethylene catalytic system, and includes auxiliary equip(P/E) ratio. A low severity naphtha steam ment such as the air blower. Product recovery
cracker typically results in a P/E of 0.6 to 0.65. can be supplied by existing equipment, provided
In a high severity naphtha steam cracker opera- capacity is available. The product recovery units
tion, the P/E ratio is in the 0.4 to 0.5 range.
can be easily evaluated. Where existing capacity
With the integration of Superflex, it is possible is not available, a standard product recovery
to increase the P/E ratio to as much as 0.85. section is included in the scope. In the case that
This shift is accomplished by processing the C4 the installation accompanies a grassroots olefin
and C5 byproduct streams from the pyrolysis unit, the product recovery is incorporated in the
furnaces in the reactor to produce propylene. If design capacity of the ethylene section.
it is a concurrent requirement to maintain a
target ethylene rate, fresh naphtha feed to the Maxofin
furnaces is increased, replacing the C4/C5 recycle The Maxofin FCC process is designed to
Overall material balances

6 PTQ Q1 1999

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maximise the production of propylene from

traditional FCC feedstock and selected surplus
naphthas. The process increases the FCC propylene yield by combining the effects of the
proprietary Maxofin-3 additive, and a conventional FCC catalyst, with a second high severity
riser to upgrade light FCC gasoline or other
olefinic naphtha streams.1 These streams are fed
directly to the second riser. The process is available as a revamp to existing FCC units or as an
integral part of grassroots FCC units.
The Maxofin FCC unit can convert both the gas
oils and surplus naphthas in a single unit.
Typically, if a petrochemical/refining complex
requires an FCC to upgrade atmospheric and
vacuum gas oils with the added objective of
increased propylene production, economics would
lead to the application of this FCC process.

Results
The material balances for the various cases are as
shown in Table 1. In terms of high crude rate
cases (200000bpd), the propylene to ethylene
ratio increased from 0.43 in the base case to 0.93
in the maximum propylene case. Fuels products
reduced from 146000bpd to 130000bpd.
In the low-crude cases (160000bpd), the ethylene from the ethylene cracker remained at 2286
tonnes/day. The ratio of propylene to ethylene
decreased slightly to 0.87. The fuels products
were reduced from 111000 to 95000bpd. In this
case, the feed to the ethylene cracker actually
increased slightly. It also included a higher
percentage of naphtha in the feed to the ethylene
cracker.
The overall economics are shown in Table 2.
These economics were developed using a crude
price based on a 50:50 blend of Arabian light/
heavy at $15.60/barrel. Gasoline and distillate
were priced at $23.30 and $25.20/barrel,
respectively. Ethylene and propylene were both
priced at $400/tonne. Based on these assumptions, there is a significant incentive to maximise
propylene and process the lower volume of
crude. Obviously, the LP model would be run to
generate a number of feasible cases. The capital
cost of the on-site and off-site facilities would be
generated for the above cases. Facility operating
costs are then estimated. Given all this information, economics can be generated which allow
the client to meet both the business and strategic objectives of the project.

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Summary
The following general observations of the case
study are as follows:
Concept fits with market energy forecasts
Refinery produces high quality fuels
Technology selection can significantly increase
the ratio of propylene to ethylene from the
complex to better match demand forecasts
Ethylene plant synergies among the refinery
and gasification complexes
All heavy fuel oils and wastes are converted
Utilities generated to meet H2, steam, and
power requirements
Excess power produced for regional customers
Facility is environmentally friendly
Significant challenge to reduce capital costs of
gasification/power complex.
In conclusion, the development of a master
plan for an overall complex described in this article generally justifies a comprehensive study of all
the variables. The key variables are: the market
forecast and pricing, technology selection, product yields and facility capital and operating costs.
It is necessary to perform a comprehensive
sensitivity analysis on the key variables to determine the upside and downside risks of the
project. A comprehensive master plan can be
efficiently developed to optimise the economics
of the project.
Reference
1 Maxofin; A Novel FCC Process for Maximising Light Olefins Using
a New Generation of ZSM-5 Additive; Niccum P et al, 1998 NPRA
Annual Meeting.
W J Hillier is product director, refinery planning, with Kellogg
Brown & Root, Houston, Texas, USA. He directs the marketing and
development of refinery planning studies and has over 35 years
experience in the refining and engineering business.
Maureen F Gilbert is principal process engineer, with more
than 20 years in the petrochemical, refining and other process
industries. Currently, she provides marketing support for the
Superflex process.
W C Petterson is product manager, olefins technology, and
has over 24 years experience in olefins and gas processing
technologies. He holds several patents and has written
extensively.

LINKS
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Petrochemicals
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PTQ Q1 1999 7