A refinery’s strategic journey towards sustainability
A refinery’s strategic journey represents a delicate balance between profitability, environmental commitments, and technological advancements
Aleix Carrillo, Duncan Manuel and Michelle Wicmandy KBC (A Yokogawa Company)
E nergy consumption is a key cost factor in refinery economics. About half of the refiner’s operating costs are dedicated to meeting the demands of energy consumption. 1 Adding to this complexity, a Reuters report revealed that 43% of surveyed global workers plan to leave the energy sector by 2025. 2 Amidst this financial and labour landscape, a mid-sized refinery confronts rising energy costs, workforce shortages, and the pressing need to meet net zero global commit- ments by 2050. In addition, this journey unfolds in a setting of diverse perspectives and agendas among the leadership team and board of directors. Despite these obstacles, the refinery committed to cutting Scope 1 and 2 emissions by 30%, benchmarked against a 2019 baseline, as depicted in Figure 1. Operating in a rapidly changing business environment, the board sought to balance profitability by understanding how the precise product mix, customer base, feedstocks, and technologies interact. To reinforce this initiative, the refinery’s Chief Operating Officer (COO) emphasised, “We need to strategically invest for the long term, but we must also remain profitable in the here and now. If we cannot generate a positive cashflow today, how can we possibly raise the funds for the investment we need to make?” Achieving a balance between present performance and long-term strategic investments required alignment, commitment, and a clear and executable plan. Optimising current performance while ensuring long-term success required the refiner to keep one foot firmly planted in the present and the other in the future. The present – Project Catalyst The refinery’s leadership team conducted a comprehensive ‘wall-to-wall’ operations assessment. This evaluation uncov- ered several key focus areas, including soaring energy costs, reliability issues, and team demographic challenges. Over a six-week period, the following challenges were addressed: • Asset reliability to overcome underinvestment • Energy efficiency for quick wins • Yield optimisation with digital twin software • Turnaround optimisation for decarbonisation planning • Recruitment and organisation to mitigate challenges • Technology for digital transformation.
Rotating equipment issues significantly impacted asset availability and throughput. This issue led to decreased profit margins and hindered the site’s ability to capitalise on a high-margin environment. The emphasis was on iden- tifying reasons for underperforming asset reliability and building consensus on corrective actions. While historical underinvestment played a role in current performance levels, the primary issue stemmed from a lack of root cause analysis and follow-up actions, combined with a lack of start-up readiness. In Europe, rising energy costs have heightened the focus on energy optimisation for many assets. 3 A strategic energy and maturity review identified that the refinery overlooked the latest technology, monitoring tools, and efficient prac- tices for energy management. Relying primarily on the operators’ tacit knowledge, the asset fell short of industry benchmarks, including KBC’s proprietary Best Technology Index. However, through comparative analysis, the team identified quick-win opportunities that required minimal or no capital expenditures to swiftly improve the asset’s per- formance. These opportunities not only delivered immedi - ate value but also contributed to the programme’s overall funding. Additionally, long-term, mid-to-high Capex improve- ments were identified and fed into the decarbonisation workstream. Addressing no or low Capex opportunities was integral to the refinery’s success in optimising energy usage and achieving its goals.
120%
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95%
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Scope 1 & 2 Scope 3
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2025
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Figure 1 Scope 1, 2, and 3 emissions reduction targets
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PTQ Q2 2024
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