PTQ Q2 2024 Issue

• Leveraging refinery intermediate streams (naphtha, kero - sene, LPG, and refinery fuel gas) as advantage feeds to the petrochemical complex. • Blending of petrochemical byproducts into refinery fuel products, leading to lower cost of conversion. • Demographic advantage for India as a low-cost manufac- turing hub. • Energy savings in well-integrated hydrocarbon processing. • Reduced Opex due to shared utilities, infrastructure, and shared services, such as engineering, maintenance, pro- curement, laboratory, HSE, security, HR, and admin. Integration of a refinery and petrochemical complex implies identifying synergies and optimising them for oper- ational and economic gains. Figure 3 shows a typical inte- grated petrochemical complex flow scheme. The integrated complex provides optimum and better return on investment (ROI) by capturing more value. Refinery and petrochemical complexes can typically be integrated as: • Refinery integrated with a steam cracker to produce eth - ylene, propylene, and other derivatives. • Refinery integrated with an aromatics complex to pro - duce benzene, toluene, and xylene. • Refinery integrated with an aromatic complex and a steam cracker. The extent of integration between any of these depends on technical feasibility and the resulting economic benefits. This is a complex discussion and requires detailed study on a case-by-case basis. Many refiners are considering shifting away from primar - ily refining crude into fuels and are instead looking to refine crude into chemicals, though few have begun the transi- tion in earnest. Part of the challenge is that there is a wide array of approaches, and they all require significant capital investment. We see three ways for players to increase the petrochemical yield of refinery operations: change individual process units, change the mix of process units, or build more direct crude-to-chemicals plants.

Butadiene

Styrene

Toluene

Ethylene Gasoline Benzene Propylene

Crude oil Ref. Naphtha

0.5

1.5

2.5

Figure 2 Prices relative to naphtha: Key driver for integration

Integrating refineries with petrochemicals Capturing more value from new products, rather than just augmenting the existing product slate, is the way to go for future revamps. Figure 2 depicts the prices of various products relative to naphtha as a key driver for refinery and petrochemical integration. This improves the GRM by add- ing more value-added products produced by petrochemical units. Some of the other key drivers for refineries to integrate with petrochemicals include: • Paradigm shift with respect to integrated refinery/petro - chemical complexes to hedge cyclic downturns and risks. • Projected strong demand arising in petrochemical prod- ucts in India vs installed capacity.  By 2025/2030, shortfall in demand by 18/31.8 MMTPA vs installed capacity.³  Per capita consumption of petrochemicals in India is lower (10 kg compared to global average of 34 kg).4 • Probable drop in future fuel oil demand due to energy- efficient vehicles, hybrid vehicles, switch from fossil fuels to renewables, and carbon footprint minimisation. • Existing operating refineries have advantages for feed security and reliability for petrochemical units.

Butene-1

LLDPE/HDPE

Ethylene

Alpha alcohol

Alpha olens

HDPE

Ethylene oxide

Ethylene glycol

Off-gas es

Cracker

Poly- propylene

Propylene

1, 3 Butadiene

Mixed C

Cumene/ bisphenol/ epoxy resins

PBR

BdEU

LPG

C raffinate

MTBE

MMA/PMMA

C+

Naphtha

Renery

Styrene recovery unit

PBR

C fraction

Kero/diesel

Benzene

BzEU

PGHU

C/C

C raffinate

C+

Diesel pool

CBFS

Figure 3 Typical integrated petrochemical complex flow scheme

PTQ Q2 2024