PTQ Q1 2023 Issue

France United Kingdom Japan Germany Mexico United States Canada Korea Islamic Republic of Iran Australia Russian Federation Saudi Arabia Brazil United Arab Emirates Indonesia Thailand Malaysia Nigeria India People’s Republic of China

OECD Non OECD

-3

-2

-1

Figure 2 Growth of gasoline demand to 2026 (courtesy of IEA, 2020)

Refining and petrochemical industry characteristics

Petrochemical industry Raw material from naphtha/NGL Higher operation margins

High electricity consumption High availability of hydrogen Streams with low added value (heavy aromatics, pyrolysis gasoline, C4s) Strict specifications (hard separation processes) High demand products

Table 1

synergies existing between both downstream sectors to generate value for the whole crude oil production chain. Table 1 presents the main characteristics of the refining and petrochemical industry and potential synergies. As aforementioned, the petrochemical industry has been growing at considerably higher rates when compared with the transportation fuels market in the last years, represent- ing the lesser environmentally aggressive route for crude oil derivatives. The technological basis for refining and pet - rochemical industries are similar, which leads to potential synergies capable of reducing operational costs and adding value to derivatives produced in refineries. Figure 4 presents a block diagram showing integration

possibilities between refining processes and the petro - chemical industry. Process streams considered low added value to refiners, such as fuel gas (C₂), are attractive raw materials for the petrochemical industry. Also, streams considered residual to petrochemical industries (such as butanes, pyrolysis gasoline, and heavy aromatics) can be applied to refineries

Xylenes Benzene Styrene Toluene

Aromatic production complex

Pyrolysis gasoline

Ranate

Reformate

Top gasoline pod

Ethane/ natural gas liquids

Ethylene Propylene Butanes

Light ends recovery

Steam cracking unit

Red Ocean Strategy

Blue Ocean Strategy

Competing in existent markets Beat competitors Enjoy existing demand Create the Value x Cost dilemma Align the company’s entire system of activities with your strategic choice of dierentiation or low cost

Create unexplored market spaces Make the competition irrelevant Create and capture the new demand Breaking the Value x Cost dilemma Align the entire system of activities of the company in search of dierentiation and low cost

FCC gases

Naphtha

Recycle

Residual gases

Gasoline

Crude oil

Renery processes

Jet fuel Diesel

Fuel Power generation Chemicals Fuel oil

Residue conversion

Figure 3 Differences between blue and red ocean strate- gies (based on Kim & Mauborgne, 2019)

Figure 4 Synergies between refining and petrochemical processes

PTQ Q1 2023