PTQ Q2 2025 Issue

in the market since the early 1970s, large advancements in the technology have driven step-change lower coefficient of performance (COP) and economy of scale since 2014 to date. Latest designs, catalysts, and adsorbents have reduced the energy footprint by more than 30%, and equip - ment tonnage and cost by 25% per tonne of PX. UOP’s Light Desorbent PX (LDPX) technology was launched in 2015 and now accounts for about 35% of the world’s total PX production. Older tech can be revamped but often faces the challenges of limited feedstock to take advantage of scale. • High-yield reforming catalysts: Catalyst technologies have advanced over the past five years, improving aromat - ics selectivity and hydrogen production. These are easy to change out ‘on the fly’ and provide significant PX produc - tion improvements. Q How can smaller refineries compete in an industry dominated by mega-refinery/petrochemical facilities? A Jeremy Mayol, Regional Sales Manager Additives, Catalyst Technologies, Jeremy.mayol1@matthey.com, and Marie Goret-Rana, Market Manager Additives, Catalyst Technologies, marie.goret-rana@matthey.com, Johnson Matthey Smaller refineries are already facing and will continue to face considerable challenges and fierce competition from mega-refineries that benefit from economies of scale, lower production costs, and preferential access to feedstocks. However, smaller refineries can adopt several strategies to survive and thrive, as follows: • Specialisation and diversification: Focus on high-value fuels and niche markets like biofuels and specialised pet- rochemicals, where competition is lower and margins are less volatile. Diversification can help stabilise earnings, especially during periods of weak gasoline or diesel cracks. • Leverage of geographic advantage and integration into local chains: Strategically position themselves to serve local markets, minimising competition in global refined product markets and avoiding high logistical export costs. • Operational flexibility: Leverage their size to be more agile and responsive to market fluctuations. They can leverage opportunities in both feedstocks and products. On the feed- stocks side, they can capitalise on their flexibility to process cheaper, discounted crudes. This can be especially relevant for refineries with a fluid catalytic cracking (FCC) unit, which can convert heavy, high-metal feedstocks into high-value products. These refineries can leverage specialty additives to flexibly process high metal-content feeds while maintain - ing similar FCC catalyst addition rates and product yields. On the products side, small refineries can take advantage of their size to rapidly adjust production to market demand and economic conditions. Specialty FCC additives associated with addition systems support this strategy. For example, FCC olefins additives enable FCC margins maximisation by responding swiftly to market shifts. • Operational efficiency and technological innovation: Investing in advanced technologies like digital tools to be more efficient, less energy-intensive, and reduce production

costs can help smaller refineries stay competitive. Digital tools provide real-time data insights to optimise operations and boost profitability. • Energy transition: Transition to processing alternative raw materials such as used oils or plastic waste, enhanc- ing their environmental competitiveness in regions where low carbon regulations are being implemented. Alternative feedstocks are especially well-suited for processing in smaller refineries, as they are often available regionally in limited quantities, and transporting low-energy-density feedstocks is not cost-effective. Johnson Matthey licenses multiple technologies that can support operators pivoting towards alternative feedstocks such as biomass, municipal solid waste, captured carbon dioxide, and green hydrogen. • Regulations and subsidies: Taking advantage of regu - lations that favour local players over imports, and gov - ernment subsidies for the energy transition and energy independence, can provide another competitive advantage to smaller refineries. By adopting these strategies, smaller refineries can - not only survive but thrive in a market dominated by mega-refineries. A Mike McBride, Solutions Development Lead, Honeywell UOP, mike.mcbride@honeywell.com It can be challenging for smaller refineries to compete in today’s environment. Developing threats in some regions include new global mega-complexes, declining demand for conventional refinery products largely driven by a societal desire for more sustainable transportation fuels, and contin- ued industry consolidation as many seek to achieve econo- mies of scale and adapt to changing market conditions. Smaller refiners can indeed compete in today’s environ - ment. Start by understanding the facility’s competitive position within the markets in which the refinery com - petes. Then develop a view on what the markets might look like over the next five, 10, and 15 years. Refresh SWOT (strengths, weaknesses, opportunities, and threats) analy - sis coupled with a good, innovative focus on competitive strengths and opportunities with a realistic focus on today and tomorrow. Then, develop an approach to improve com- petitive positioning to ensure a robust business for the long haul. Some opportunities for smaller refineries to improve competitive positioning may include: • Access to local fats, oils, greases, biomass, or munici - pal wastes available through local farms, timber industry or municipalities may enable the addition of biorefinery capability. • Access to the premium gasoline market. Premium demand and spreads have been quietly increasing to the point where many sites are constrained on premium pro- duction capability. Many automotive firms are respond - ing to Corporate Average Fuel Economy (CAFE) standard improvements through the proliferation of turbo-driven engines. This will increase if, as projected, the EV adoption rate slows. The demand for premium gasoline is likely to increase in many markets, which provides opportunities through the addition of incremental octane production (for example, expand alkylate and reformate production).

PTQ Q2 2025