PTQ Q2 2025 Issue

C apex : -$0.6B IRR: +0.3% Marine/pipeline BOOM

C apex : -$1.7B IRR: +0.5% HMU BOOM

C apex : -$0.9B IRR: -0.1% COGEN BOOM

C apex -$0.6B IRR: + 0.0% Polymer/solids handling to 3rd party

C apex : +$0.5B IRR: +0.2% Base oil production

Improving IRR

+ Advantage feedstock C apex : -$2.0B IRR: +0.5%

C apex: BASE $ IRR: BASE % Base conguration

Figure 5 Improving IRR through BOOM analysis

Market limitations for gasoline production and the unde- sirability of petroleum coke due to large existing regional production strongly influenced the optimal configuration, particularly for the bottoms upgrading unit. A residue fluid - ised catalytic cracker (RFCC) or delayed coker did not meet the investment-grade requirements. The project ultimately chose an ebullated bed hydrocracker for techno-economic and technology risk reasons. A key decision for meeting the hurdle ROI was crude selection. The project location has access to light, medium, and heavy crudes. The team needed to determine how each type of crude impacts optimal refinery configuration and ultimately optimise profitability and ROI. Determining the most economic target petrochemical yield was crucial. Due to the owner’s internal limits of considering only a single world-scale MFSC, the petrochemical yield was limited to about 25-30%. Options to valorise butanes and pygas produced by the MFSC, as well as lube base oil pro - duction, were considered. Despite these additional prod - ucts, the petrochemical yield remained around 30%. Linear programming (LP) and economic models confirmed that heavy crude was the best fit. However, selecting the optimal design crude and asso - ciated refinery configuration did not achieve the necessary hurdle ROI rate. To further improve economics, previously discussed strategies were used to enhance IRR, primarily through an analysis of the BOOM options. Figure 5 pre- sents a step analysis used to reach an IRR above the hurdle rate:  The first step level is the base configuration. This con - figuration considered all facilities owned by the project, excluding those under a BOOM model.  The next step adds the advantage feedstock to the MFSC, which improves the project IRR by 0.5%.  The next step adds base oils production, which improved the project IRR by another 0.2%. This economic improve- ment was dependent on targeting higher-value base oils.  The next step moves the hydrogen manufacturing unit (HMU) to a third-party owner under a BOOM model. The Capex saving more than makes up for the additional

operating cost of purchasing hydrogen from a third party, so it achieves a significant IRR improvement of another 0.5%.  The next BOOM analysis performed was on the cogen- eration plant. Ultimately, it was found that moving the cogeneration plant to a BOOM model would slightly nega- tively impact IRR, even with the Capex savings. This result is very much dependent on the local price for fuel, power, and steam.  The next BOOM analysis was on polymer solids han- dling. Moving this to a third party did not generate signifi - cant Capex savings and, ultimately, no IRR improvement.  Lastly, moving the marine and pipeline facilities to a third party showed modest improvement in the IRR with a gain of 0.3%. This BOOM analysis provided the data the owner needed to determine their path forwards. To conclude Case Study 1, the following points summa - rise some challenges the project faced, requiring solutions in further FEL project stages: • Due to the completion timeline of the new land devel - opment project, the completion of the case study project would need to be pushed beyond what the owner desired. A new location for the project would need to be investi- gated in the next phase. • Even when locating the project within the new land development, the allocated plot area posed challenges in accommodating all the necessary facilities. This is a com- mon problem many projects face. There may never be a perfect plot of land available. The project team must find ways to engineer within the given plot space for any par- ticular project. • Any project that requires a substantial investment will have challenges around funding and achieving FID. Allocating large sums of capital with or without financing for years before a return is seen is an important decision for a company of any size. Large crude-to-chemicals pro - jects may be one of the most significant single investments a company ever makes. In this case study, even after the BOOM analysis, the investment was still quite significant and would be challenged at every step towards FID.

PTQ Q2 2025