Refinery

Group 2
Anand
Ankit
Anuj
Ashutosh
Dilip
Gaurav Tomar
Tanuj
Yash

Apetroleum refinery is an
industrial process plant where
crude oil is processed and
refined into more useful
petroleum products.
CATEGORIES:
Petroleum products are usually
grouped into three categories:
light distillates (LPG, gasoline,
naphtha)
middle distillates (kerosene,
diesel)
heavy distillates and residuum
(heavy fuel oil, lubricating oils,
wax, asphalt)
I/P => Crude Oil
 Crude Oil : mixture of Hydrocarbon
in liquid form
In terms of API Gravity: high API;
lighter the crude and low
specific gravity. Yield greater
portion of gasoline
In terms of Hydrogen Sulphide
content
less sulphur: sweet
high sulphur :sour
 Classification of Crude Oil
Classification Range
°API
Light >= 33
Medium >=24 and <33
Heavy < 24
Sulphur
Low (Sweet) Up to 0.5%
Medium 0.5% to 1.5%
High (Sour) Above 1.5%
 Quality Comparative

Properties Dubai Napo Duri North Gujarat Bonny Light

°API 30.4 18.8 21 26.3 34.5

Sulphur, % wt 2.13 2.18 0.21 0.13 0.14

Pour Point, °C -30 -15 +21 +30 -6

TAN, mg KOH/gm 0.05 0.33 1.25 2.06 0.21

Viscosity, cSt

@ 50°C 7.54# 175.44 164 49.01 3.07

@ 60°C - 107.6 98.9 - -

Heavy End( 350°C+), % wt 50.03 71.51 78.37 67.65 34.0

CRUDE OIL BENCHMARK
West Texas Intermediate(WTI)
Light
Sweet
 Light Sweet crude oil is sells at
higher prices than heavy sour
which is difficult to refine and yield
less valuable oil products
TYPES OF REFINERY
Topping refinery :-separates the
crude into its constituent
petroleum products by
distillation, known as
Atmospheric Distillation;
produces naphtha but no
gasoline.
Hydro skimming refinery:- defined
as a refinery equipped with
Atmospheric Distillation ;
produces naphtha along with
Cracking:- equipped with vacuum
distillation and catalytic cracking;
adds one more level of complexity
to the hydro skimming refinery by
reducing fuel oil by conversion to
light distillates and middle
distillates.
Coking:-refers to the one which is
equipped to process the vacuum
residue into high value products
using the Delayed Coking
Process ;adds further complexity to
PETROLEUM DEMAND BY
PRODUCT
Complexity
Inthe Refining Industry, a common
index termed as "EDC" -
Equivalent Distillation Capacity is
defined to calculate the
benchmark of manpower
requirement.
Calculation of EDC is a two-step
process. The first step is the
multiplication of the capacity of
each unit in the refinery with the
Nelson's complexity factor and the
second is the sum of these
Crude production Sweet vs.
Sour
Crude trends toward heavy
and sour
GRM
Gross Refinery Margin
Higher the GRMs, higher the profit
yields. GRM is the difference
between total value of petroleum
products and price of crude. So if
crude is at USD 50 per barrel and
basket of petroleum products sold
at USD 55 per barrel, GRM is at
USD 5 per barrel.
The Singapore crude is considered a
benchmark for complex refineries.
If GRM for Singapore crude is
GRM Calculation

Yield
(% wt)
INDIA AS AN INTERNATIONAL
REFINING DESTINATION
Ø Investment requirements lesser by 25% - 50%
Ø
Ø India enjoys 3% of the international capacity share
Ø
Ø D o m e stic d e m a n d g ro w th a n d tra d e p a rity p ricin g fo r
d o m e stic sa le s ( H ig h m a rg in s)
‡ E xp o rt p o te n tia l
Ø
Ø West cost refineries close to eastern markets

Ø High refining margins(eg RPL) will allow for
competitive exports from America
‡
Ø Most Asian/ SEA countries are expected to have deficit
of Petroleum products ->export opportunity
Demand for Petroleum
Products in India
(In KT) FY 2009-10 FY 2008-09 Growth (%)

Diesel 56,148 51,649 8.7%

Gasoline 12,818 11,258 13.9%

ATF 4,627 4,454 3.9%

LPG 12,728 11,935 6.6%

Kerosene 9,304 9,303 0.0%

Total 130,542 124,171 5.1%

(incl. others)
Refinery in India
 Jamnagar Refinery (Reliance Industries), 650,000 bbl/d (103,000 m3/d)
 Reliance Petroleum (Reliance Industries), 580,000 bbl/d (92,000 m3/d)
 Mangalore Refinery (MRPL), 199,000 bbl/d (31,600 m3/d)
 Digboi Refinery, Assam (IOC), 13,000 bbl/d (2,100 m3/d)
 Guwahati Refinery Assam (IOC), 20,000 bbl/d (3,200 m3/d)
 Bongaigaon Refinery Assam (IOC), 48,000 bbl/d (7,600 m3/d)
 Numaligarh Refinery Limited Assam (NRL), 58,000 bbl/d (9,200 m3/d)
 Haldia Refinery (IOC), 116,000 bbl/d (18,400 m3/d)
 Panipat Refinery (IOC), 240,000 bbl/d (38,000 m3/d)
 Gujarat Refinery (IOC), 170,000 bbl/d (27,000 m3/d)
 Barauni Refinery (IOC), 116,000 bbl/d (18,400 m3/d)
 Mathura Refinery (IOC), 156,000 bbl/d (24,800 m3/d)
 Chennai Refinery (IOC), 185,000 bbl/d (29,400 m3/d)
 Mumbai Refinery (HPCL), 107,000 bbl/d (17,000 m3/d)
 Visakhapatnam Refinery (HPCL), 150,000 bbl/d (24,000 m3/d)
 Mumbai Refinery Mahaul (BPCL), 135,000 bbl/d (21,500 m3/d)
 Nagapattnam Refinery (CPCL), 20,000 bbl/d (3,200 m3/d)
 Kochi Refinery (BPCL), 172,000 bbl/d (27,300 m3/d)
 Tatipaka Refinery (ONGC), 1,600 bbl/d (250 m3/d)
 Essar Refinery (Essar), 289,256 barrels per day (45,988.0 m3/d)

No New Oil Refineries Since
1976 in US
REASONS
30-year construction drought
Environmental activists
Arizona Clean Fuels
Global Issues
 Economic Growth concerns
 – Oil Demand slowdown
 – Short term supply avails – spare capacity
 – Project Finance for new projects
 • Delays due to Economic justification
 • Constrained opportunities
 • Energy Security
 – Vulnerable supply growth
 – Lower the Oil prices now may lead to a higher rise in future
 • Climate Change – Global warming
 – Greenhouse gas emissions
 – Food vs. Fuel debate, Deforestation
 – Socio economic impacts due to increased Air pollution
 • Transport sector - one of the key contributor to Air
pollution
 • Impact of new IMO bunker fuel specification
EXXON Mobil Case
 Japan’slaw to shut refineries may see ex
Sunday, 29 August 2010 04:50

 TOKYO: Japan’s new rule to boost capacity

to process heavy oil represents a subtle
policy change that industry sources say
may shake up its overcrowded refining
industry and prompt the exit of top
foreign investor ExxonMobil.
 The nation’s shrinking domestic market
offers refiners little incentive to invest in
costly new units to meet the trade
ministry’s directive. Energy demand in the
world’s third-largest oil consumer is
Risk Involved
Five major types of risks


Ø market risk(unexpected changes in interest

rates, exchange rates, stock prices, or
commodity prices)
Ø credit/default risk
Ø operational risk(equipment failure, major
outage)
Ø liquidity risk(inability to pay bills, inability to
buy or sell commodities at quoted prices)
Ø political risk(new regulations, specifications,
restrictions)



Oil and Gas industries are particularly
susceptible to market risk or more
Risk Mitigation
Crude price:
Hedging Domestic crude purchases and sale

Ø ‡In Annual statement for the year-9 RBI has

permitted hedging of domestic crude purchases
and sale of products to reduce the price risk.‡
Ø Hedging on the basis of international prices based
on physical underlying contracts linked to
international prices.


Hedging of anticipated imports of crude oil



Ø ‡ Hedging allowed based on the basis of past

performance up to% vol of actual imports
during last year or% of average volume of
imports during last financial years
Latest-INDIA
Ø In 2010 the state-owned oil firms are expected to splurge
US$ 11.34 billion on developing supplies and constructing
new shipping networks for petroleum and natural gas.
Ø Indian Oil Corporation is looking forward to establish a
petroleum plant in the state of West Bengal by bringing in
investments worth US$ 596.63 million
Ø ONGC will bring in US$ 694 million for raising services at its
oil fields in Assam and adjoining states to enhance the
petroleum output. In addition it will also splurge US$ 5.65
billion on capital expenses in the next two years.
Ø GAIL (India) Limited and OVL, the international associate of
leading oil and gas player ONGC, are expected to bring in
investments worth US$ 250 million.
Ø The energy industry of India will help tin the expansion of
the petroleum sector by bringing in investments worth
US$ 120 billion-US$ 150 billion in the next 3-5 years. By
2012, the prospects in India Petroleum Industry are
estimated to accomplish US$ 35 billion to US$ 40.
Thanks