>> Less than expected productivity and efficiency improvements in hydro-carbon processing facilities may not be an indication of a failure to compete. It seems more of an indication that pro-ductivity is closely influenced by fluc-tuations in market demand.

There is a steady long-term positive trend in productivity efficiency (i.e., operational excellence) in the industry.

However, low mar-gins seem to lower the productivity growth engine, which accelerates again when the mar-ket becomes more robust...

ANALYSIS

>> Current projections by many indus-try experts are that global refining over-capacity, amid reduced demand, will

exert downward pressure on the refining industry for the next three to five years. Against this backdrop, advances in new refining technology will primarily focus on improving current process assets.

Most capital investment in the energy business will be dedicated to upstream oil and gas exploration and production projects. Budgets for new downstream capital projects related to refining, pet-rochemicals, gasification and gas-to-liquids will be significantly less relative to upstream projects.

Rather, improvements to existing technology combined with “opera-tional excellence” strategies will play a large role in downstream processing

profitability. Nonetheless, some grass roots refinery projects and major ex-pansions at existing facilities are still expected to be completed and onstream between 2012 and 2015.

The thrust of most investments planned by refiners revolves around operational excellence. Today, refiners’ priorities from Asia to North America include implementing operational ex-cellence strategies to increase refin-ing margins, and adopting measures to counter reduced demand with options such as switching from light and sweet crude or reducing oil-processing rate...

Copyright 2010. Hart Energy Publishing, LP.1

In This Issue:

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2

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56

VOL. 2 • ISSUE 4 • FEBRUARY 2010

FEATUREOperational Excellence: Balancing Safety, Reliability and Efficiency

ANALYSISProductivity and Operational Excellence

PROCESSING & OPERATIONSRecent Trends in Improving Energy Efficiency

QUESTIONS & ANSWERSEfficiency and Operational Excellence Programs Applied to Aromatics Plant Efficiency

REGIONAL PROJECT UPDATES1 Africa2 Asia3 CIS4 Europe5 Latin America6 Middle East7 North America8 Worldwide

UPDATES KEY

CONTACT INFO

Operational Excellence: Balancing Safety, Reliability and Efficiency

7

Preventive maintenance pertaining to thermal equipment, such as the heat exchanger depicted in this photo, is an important component of a refinery’s operational excellence program.

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www.WorldFuels.com/RT

A Hart Energy Newsletter Sample

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February 2010

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Efficiency and Operational Excellence Programs Applied to Aromatics Plant Efficiency

QUESTIONS & ANSWERS

>> Aromatics operators currently using distillation trays instead of structured packing should consider the relatively easy revamp when changing to struc-tured packing. Distillation trays require a lot of on-site welding on new tray rings, which is why structured packing should be considered to compress re-vamp and turnaround intervals.

Refinery Tracker: With reduced capital investment, the focus has shifted toward efficiency and operational excellence programs. How is this benefiting aro-matics plant efficiency?Steve Norwood, Norwood Consulting: With flat gasoline margins, refiners are trying to find ways to monetize cata-lytic reformer and fluid catalytic crack-ing operations, “traditional” gasoline producing machines, by shifting their yields more toward chemical grade aro-matics. This is even more so with cata-lytic reformer operations.

Taking into consideration that many

coastal refiners operate paraxylene and styrene units downstream from catalytic reforming operations, yield improve-ments and energy reduction from these units are primary objectives for remain-ing competitive in the aromatics busi-ness.

Much of the energy optimization oc-curring in an aromatics unit is in the dis-tillation train, operating in the positive pressure range. Typical fractionation columns seen in aromatics processing, such as ethylbenzene and styrene plants, require a significant investment in dis-tillation technology. For example, the separation of ethylbenzene from xylene isomers usually requires about 300 theo-retical stages and distillation is effected in the positive pressure range of about 1.0 to 5.0 bars. Today, column design is done with about 410 trays divided into twin columns with a tray spacing of about 280 millimeters and approxi-mately 70% tray efficiency.

However, use of structured

packing instead of trays could signifi-cantly reduce energy consumption due to the fact that structured packing has a much lower pressure drop compared to trays.

High performance structured pack-ings are being applied to avoid liq-uid buildup occurring from hydraulic disturbances between the gas/liquid interfaces in the transitional sections between packed bed elements. Capacity increases of as much as 50% have been reported when hydraulic disturbances are avoided.

It is obvious that any additional ca-pacity achieved with structured packing provides excellent opportunities for re-vamping existing columns or reducing capex for new columns by reduction in diameter. In other words, a smaller di-ameter distillation column with highly efficient structured packing technology can perform as well as a much larger column with conventional trays. n

PROJECT UPDATES: Africa1

Ugandan Government Awards Fea-sibility Study for Proposed RefinerySwitzerland-based Foster Wheeler of-ficials announced Feb. 2 that they’ve won a feasibility study contract from the government of Uganda for a proposed 150,000-barrel-per-day oil refinery.

“Foster Wheeler’s scope of work will include the development of the lo-cation and configuration of the planned refinery, which will process Ugandan

crude,” according to the company.“The study, which is scheduled for

completion in mid-2010, will also in-clude the assessment of options for the development of the oilfield, crude transportation and an evaluation of the relative economics of developing the new refinery vs. alternative options, including pipelines, for exporting the crude oil.” n

ESTIMATED TOTAL OUTPUT CAPACITIES

OF PROPOSED PROJECTS

BARRELS/DAY

2009 161,000

2010 672,000

2011 180,000

2012 220,000

2013 300,000

2014 1,470,000

2015 300,000

2016 200,000

Unspecified Date 3,890,000

GRAND TOTAL AFRICA

7,393,000

COUNTRY/DEVELOPMENT LOCATION COMPANY CAPACITY/

COMPLETION DATE NOTES

UGANDA

New Refinery Undisclosed State-run with Eni Spa as partner

150,000 barrels per day Italian foreign minister said his government is committed to support Eni Spa to build the new facility.

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February 2010

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COUNTRY/DEVELOPMENT LOCATION COMPANY CAPACITY/

COMPLETION DATE NOTES

AFRICA: UGANDA

New Refinery Undisclosed State-run with Eni Spa as partner

150,000 barrels per day Italian foreign minister said his government is committed to support Eni Spa to build the new facility.

COUNTRY/DEVELOPMENT LOCATION COMPANY CAPACITY/

COMPLETION DATE NOTES

ASIA PACIFIC: CHINA

Refinery Expansion Huizhou refinery, Guangdong

China National Offshore Oil Co.

22 million tons per year Phase 2 of upgrading project now under way. Phase 1 completed in early 2009.

ASIA PACIFIC: INDIA

Crude Refinery Bhatinda Hindustan Petroleum

9 million tons per year (t/y)/May 2011

Hindustan Petroleum will need to increase crude purchases from Iraq to 3 million t/y from 2 million t/y

COUNTRY/DEVELOPMENT LOCATION COMPANY CAPACITY/

COMPLETION DATE NOTES

EUROPE: TURKEY

Refinery Upgrade Izmit Tupras Residium upgrading Final decision made to produce 2.6 million tons per year Euro-5 quality diesel; Upgrades to fluid catalytic cracking unit cat reformer and a crude/vac tower

COUNTRY/DEVELOPMENT LOCATION COMPANY CAPACITY/

COMPLETION DATE NOTES

LATIN AMERICA: COSTA RICA

Refinery Upgrade Recope refinery

Recope & CNPC 60,000 barrels per day by 2015

Costa Rican government and China National Petroleum Corp. partnership to triple refinery capacity from 20,000 b/d to 60,000 b/d by 2015.

COUNTRY/DEVELOPMENT LOCATION COMPANY CAPACITY/

COMPLETION DATE NOTES

MIDDLE EAST: QATAR

Crude Refinery Ras Laffan Qatar Petroleum 140,000 barrels per day; completion 2008

MIDDLE EAST: SAUDI ARABIA

Refinery Upgrade Yanbu complex SABIC 600,000 tons per year (t/y) aromatics capacity

SABIC plans to expand its purified terephthalic acid and petroleum capacity to 700,000 t/y and 750,000 t/y, respectively.

COUNTRY/DEVELOPMENT LOCATION COMPANY CAPACITY/

COMPLETION DATE NOTES

NORTH AMERICA: UNITED STATES

Refinery Upgrade Port Arthur, Texas, refinery

Motiva 95,000 barrels per day coker; 2012

Previously announced project with Shell/Saudi Aramco (Motiva); Largest petcoke unit in United States

Efficiency and Operational Excellence Programs Applied to Aromatics

A Sampling of Project Updates

>> Bi-weekly data service detailing re-fining projects and capacity expansions with news about companies, people and regions. Focusing on important issues

facing the refining industry – process optimization, operations, financials, ef-ficiency and more – Refinery Tracker is a product that cannot be missed.

The below charts are a sampling of the valuable data and information that Refinery Tracker provides every issue. n

Sample Issue: regular issues of Refinery Tracker average 12-14 pages

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February 2010

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PROJECT UPDATES: Worldwide

KEY for Project Updates:

ColorsRED TYPE = Project cancelledGREEN TYPE = Project completedBLUE TYPE = Project status updated

Column InformationDevelopment = Type of projectLocation = Location of projectCompany = Company building projectNotes = Most recent information

Contact Information:

LESLEY HART To subscribe to Refinery Tracker+1 713-260-6462lhart@hartenergy.com

Hart Energy Publishing 1616 S. Voss, Suite 1000 • Houston TX 77057-2627 • USAwww.hartenergy.com • www.worldfuels.comCopyright 2010 by Hart Energy Publishing. Reproduction prohibited ex-cept for further use by the purchaser and expressly prohibited for resale. This information is obtained from publicly available sources and the intel-ligence of the staff of Hart Energy Publishing. While every effort is taken to ensure accuracy, it cannot be guaranteed to that this information has not been superseded. Hart Energy Publishing cannot be held liable for the results of actions taken based upon this information.

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WORLDWIDE ESTIMATED TOTAL OUTPUT CAPACITIES OF PROPOSED PROJECTS BARRELS/DAY

2009 1,444,000

2010 3,597,000

2011 2,210,000

2012 5,382,000

2013 1,428,000

2014 1,994,000

2015 1,462,000

2016 350,000

Unspecified Date 16,671,500

TOTAL 34,538,500