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1 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
OMV Refining & Marketing
Increasing refinery profitability and middle distillate production in this challenging climate Antwerp, 31st January 2014
2 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Legal Disclaimer
This presentation is prepared in order to outline our expression of interest. Nothing in this presentation shall be construed to create any legally binding obligations on any of the parties. Neither party shall be obligated to execute any agreement or otherwise enter into, complete or affect any transaction in relation to this presentation.
All figures and information in this presentation are strictly confidential, they are by no means binding and thus indicative only.
© 2014 OMV Aktiengesellschaft, all rights reserved, no reproduction without our explicit consent.
3 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
1. Introduction to OMV
2. Current and Future Challenges
3. Options to Overcome
4. OMV’s Answers in Schwechat Refinery
4 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
1. Introduction to OMV
2. Current and Future Challenges
3. Options to Overcome
4. OMV’s Answers in Schwechat Refinery
5 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Refineries in Austria, Germany, and Romania with total capacity ~17.3 mn t/a Germany: Burghausen (3.5 mn t), BayernOil share in sale (4.5 mn t)
Austria: Schwechat (9.6 mn t)
Romania: Petrobrazi (4.2 mn t)
20% market share in the Danube region High product quality and environmental standards Strong retail brand and high-quality, innovative
non-oil business (VIVA) Active in 11 countries with around 4,300 filling
stations in 2013 (incl. Petrol Ofisi) Total ~ 3,300 employees
OMV Refining & Marketing as European company is supplying over 200 mn people with energy
OMV filling station network
6 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Schwechat Refinery – The 10 mn t refinery in Austria Complex refinery for flexible crude intake 10% crude share from Austria Product pipelines District heating connection Petrochemical integration Diesel/Petrol ratio reflects Austrian demand
Total product output 2012: 8.19 mn t
Jet A1
Diesel fuels
Heating oil extra light
Petrochemicals
Gasoline
Bitumen
Heavy heating oil
Light heating oil
Other
20%
12%
8%
40%
7%
5%
1%
3%
4%
7 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
The OMV Refining & Petrochemicals Vision & Mission
Our Vision We are the most valued manufacturer of fuels and petrochemicals
and enable society’s mobility and economic prosperity in our markets.
Our Strategy We continuously extend our
cost & performance leadership, foster integration & flexibility
of our operations and make selective solid return investments.
Our Mission & Values We stand for world class refining performance
and continuously develop our people and assets to leverage our upstream, marketing & petrochemicals integration – safely, sustainably and with superior
profitability. With our innovation portfolio we combine customer needs with economical and environmental benefits.
8 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
1. Introduction to OMV
2. Current and Future Challenges
3. Options to Overcome
4. OMV’s Answers in Schwechat Refinery
9 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Year-to-date, European Net Distillate imports have averaged 700 kb/d in 2013 (through August), compared with 830 kb/d in 2012 and 1.1 mb/d in 2009.
Russia remains main supplier, providing 430 kb/d so far in 2013.
Increasing Diesel volumes coming from US (190 kb/d) and India (140 kb/d), sometimes US is surpassing Russia as key European supplier.
Europe represents less than a quarter of total US distillate exports, but share rising.
Europe's petrol exports to the US are decreasing to a current level of 300 kb/d
Refining in Europe is facing global competition. Import pressure is increasing, export markets are vanishing
source: IEA, Refining Forum, 27th Nov. 2013
source: IEA, Refining Forum, 27th Nov. 2013
-2000
200400600800
100012001400
2004 2006 2008 2010 2012 2014
US
petr
ol im
port
(k
p/d)
US total petrol importUS petrol import from OECD Europe
-200-100
0100200300400500600700
2004 2006 2008 2010 2012 2014EU D
iese
l im
port
(k
p/d)
IndiaRussiaUSA
10 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Diesel to petrol ratio in Europe in 2012
The middle distillate-to-petrol ratio is increasing, continuously, albeit there are regional differences
Middle distillates / Petrol ratio incl. biofuel in EU 27 + 2 mass based
souorce, Eurostat, National Statistic Agencies, Oil Industry Associations, KBC , and OMV, source: CONCAWE 2013
Diesel car sales have doubled in Europe compared to 2000.
Light duty vehicle efficiency improvements lead to less fuel consumption.
Heavy duty transport is increasing, but efficiency gains compensating midterm higher diesel fuel demand.
5.61
0.72
AT 3.6
2
4
6
8
2000 2005 2010 2015 2020 2025 2030
+159%
11 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
EU refinery energy costs
30
35
40
45
50
55
60
65
70
2015 2010 2005 2000 1995 1990
energy cost share [% of total OPEX]
year
EU
The share of energy costs in total OPEX increased continuously since 1992 across Europe to more than 60 %. Within 18 years, the share increases by 67 % A further increase is anticipated. Carbon costs – despite they are quite low today –
have to be added.
Feedstock and energy prices are significantly higher than in North America leading to less competitiveness in a global business.
Today, energy costs are 60 % of total operating costs in Europe
source: own data and CONCAWE „Refinery Energy Systems“, 2012
12 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
EU 20-20-20 targets are the primary drivers for current and planned set of legislation.
The plans to amend/change directives create uncertainty. Emission Trading Scheme (ETS), Renewable
Energy Directive (RED), and Fuels Quality Directive (FQD)
Transposition in national laws usually creates non-harmonisation (e. g. bio-quotas across Europe).
Legislation in the EU compared to other regions increase uncertainty and costs for refining operations.
Investments to stay in business with no actual return of capital employed are required.
source: European Commission, EUROPIA 2012
EU Energy Strategy ‘11-‘20
Energy Infrastracture Package ‚’10
Energy Efficiency Action Plan ‚’11
Energy Efficiency Directive ‘12
Fuels Quality Directive ‘ 09
Renewable Energy Directive ‘09
Medium Combustion Plant ‘13
European Trading Scheme ‘09
Industrial Emissions Directive ‘10
Energy
Transport
Climate
Environment
Until 2020, the legal landscape for European refining industry is still not fully defined
Policy issues in progress (not exhaustive)
Clean Power for Transport ‘13
Carbon Leakage Review ‘13
Large Volume Organic Chemicals BREF ‘13
Refining BREF ‘08
Backloading ‘14
Cross Sectorial Correction Factor ‘13
FQD Crude Differentiation ‘11
RED&FQD Cap and ILUC ‘13
enforced EU legislation
EU legislation in progress
13 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Europes ambiguous targets potentially plot the future oil demand
European oil demand [Mtoe]
source: European Commission, EUROPIA 2011 based on IEA and CONCAWE data
2020
• 20 % CO2 reduction • 20 % energy efficiency • 20 % renewables • 10 % renewables in transport
2030 • 40 % single CO2 reduction target • 27 % renewable energy target on EU level • no energy efficiency target
2050 • 80-95 % CO2 reduction • 60 % CO2 reduction in transport
power fuel & losses non energy & other
industry buildings marine
aviation road & rail
2050 scenarios
286 281 239
63
155314
2030
605
2020
654
2009
681
2050 IEA Blue Map
2050 NPS extrapol.
EUROPIA
474
14 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
1. Introduction to OMV
2. Current and Future Challenges
3. Options to Overcome
4. OMV’s Answers in Schwechat Refinery
15 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Development of operating rate w/o further CDU closures after 2015
Reduction in capacity and/or utilisation as result of weakening demand, increased import pressure, and vanishing outlets
1.7 mb/d refinery closures in Europe since 2008
source: CONCAWE 2013 source: IEA, 2nd Refining Forum 2013
If no further capacity reduction takes place, EU’s refinery utilisation will drop by 15 % in 2030.
Beside 1.7 mb/d refinery closures since
2008 in Europe, many refineries have changed ownership.
70
72
74
76
78
80
82
84
86
Utilitsation [%]
Cap
acity
&
Thro
ughp
ut
[Mt/a
]
-15%
2008 2010 2025 2020 2015 2030
Capacity Throughput Utilisation 0
200
400
600
mbb
l/d
2013 2012 2011 2010 2009 2008 2014
IT FR CZ
UK
DE
16 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
The EU needs an increase in conversion units to handle the tightening diesel-petrol-ratio EU27+2 Refinery Projects 2009-2015 Capacity change by process unit versus year-end 2008 Capacity change
source: CONCAWE 2013
additions
reductions
H2U (*10) HDS VIS COK FCC RHC DHC REF VDU CDU
17 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Petrochemical refinery integration (cracker) in Europe
An increase in integration is one opportunity to take advantage of local and global flexibility Downstream integration is the dominant business model in Western Europe
source: EUROPIA, 2012 source: AT Kearny, 2012
0 100 80 40 20
7
4
31
17 12
Western Europe
16
59
7
18
Asia Pacific
36
51
1 12
North Ameria
40
41
2
Ref
iner
y in
tegr
atio
n 20
11 [%
]
14
82
7
43
Eastern Europe
Others Middle East
CDU capacity [mb/d]
Merchant refiner Upstream integration
Vertical integration Downstream integration
18 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Energy efficiency of refineries
0
50
100
150
FSU Middle East
Asia Export
EU Eastern US and
CAN
Ene
rgy
Inte
nsity
Inde
x Energy efficiency must be a key competence
Energy consumption with and without efficiency improvements in EU refining
source: CONCAWE 2013 source: Solomon 2011 in Clingendael 2012
95
100
105
110
115
120
125
1990 1995 2000 2005 2010
Ene
rgy
cons
umpt
oin
MJ/
t net
inpu
t (in
dexe
d to
100
in 1
992)
10%
energy consumption w/o improvement energy consumption
19 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
1. Introduction to OMV
2. Current and Future Challenges
3. Options to Overcome
4. OMV’s Answers in Schwechat Refinery
20 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Intermediates and semi-finished product trade flows have a significant share in refinery optimisation and brand position
3 sites – 1 refinery
Burghausen
3rd Party/Bayernoil Petrobrazi
Schwechat
E&P OMV’s refining network optimisation
utilises high volume trade of intermediates across Europe. This is complemented by trades with other companies.
21 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
OMV’s petrochemical complex Schwechat Burghausen
FCC plant Metathesis
Ethylene plant Ethylene plant
Butadiene plant (2015)
Butadiene plant (Revamp 2014)
Aromatics Extraction
Propylene/propane
Crude C4
Butadiene
Propylene
Benzene rich gasoline cut
Ethylene
Propylene
Ethylene
Butadiene
Propylene
Benzene
Ethylene/Crude C4
Crude C4
naphtha naphtha FCC plant
22 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Shutdown in May/June 2012.
Maximized integration value from conversion of Romanian crude only Streamline refining nameplate capacity to
process 100 % domestic crude Projects include upgrade, running business,
safety and compliance
Full yield conversion to be finalized by 2014 as soon as Vacuum gasoil (VGO) conversion in place
Petrobrazi modernization program fosters upstream integration, increases middle distillate yield, and improves efficiency
Substantial value contribution [yield %]
Petrobrazi modernisation impressions
: 52in transfer line fit up
53 35
~45
Yield 2011 12
~10 ~45 Yield 2014
Middle distillates Other Own crude consumption
23 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Schwechat turns the „black ball“ into high value products:
Standard Quality Bitumen
SQB: Standard Bitumen HQB: High Quality Bitumen
HFO: Heavy Fuel Oil VHFO: Very Heavy Fuel Oil
residue
HFO
SQB
HFO
24 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
HFO
HQB
SQB
Schwechat turns the „black ball“ into high value products:
Standard Quality Bitumen
SQB: Standard Bitumen HQB: High Quality Bitumen
HFO: Heavy Fuel Oil VHFO: Very Heavy Fuel Oil
residue
H
F
O
High
Quality Bitumen
SQB SQB
BITUROX HQB
HFO
Gasification (high invest)
Low rate of return (stand alone)
Over compliance towards NOx, SOx
Increase of CO2 emissions (stand alone)
Thermal Cracker (moderate invest)
Economic HFO-decoupling
Insignificant emission increase
Upgrading for final revamp
Residue Hydrocracker (high invest)
Low rate of return
No sustainability towards NOx, SOx
Essential increase of CO2 emissions
All investments require
environmental measures.
25 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
HQB
HFO
HFO
SQB
Schwechat turns the „black ball“ into high value products:
Standard Quality Bitumen
SQB: Standard Bitumen HQB: High Quality Bitumen
HFO: Heavy Fuel Oil VHFO: Very Heavy Fuel Oil
residue HFO
H
F
O
High
Quality Bitumen
Gasoline
Diesel
Gasoline
Diesel
SQB SQB
VHFO Electricity &
Steam SNOx
BITUROX
TGU
HQB
26 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
High flexible and high efficient TGU coupled with a gas turbine and power plant connection makes OMV’s plant unique Twice the conversion rate of a visbreaker. Highly flexible regarding crude grade,
though yields depend on crude quality. Gasoil and naphtha can be processed in
existing units. No high-pressure hydrotreater needed. Highly energy efficient.
Plant characteristics
Type of plant and yield structure heavy fuel oil conversion with integrated gas turbine
Approx. yield structure 5 – 12 % petrol 25 – 30 % diesel 55 – 65 % very heavy fuel oil electricity as by-product
Capacity 700 kt/a
Motive for construction heavy fuel oil reduction
Power
27 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Low operating costs Energy saving by direct production of sulfuric acid
(reduction of life cycle costs) High heat recovery rate
H2SO4 as valuable product from flue gas treatment
Practically no limitation on sulfur in crude oil High plant availability No risk of catalyst damage for DeNOx catalyst High efficiency treatment system
Desulfurization (DeSOx): 95% - 99,7% Denitrification (DeNOx): > 95%
No solid waste from flue gas treatment Ash from Electric Precipitator is utilized in metal
industry (Ni, V)
SNOx - Efficient flue gas cleaning reduces crude oil costs
28 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Strong business integration, further increased asset utilization, and superior diesel-petrol-ratio
Source: Annual reports, OMV analysis.
Competition 2012 1 OMV 2012 OMV 2015
Competition 2012 1 OMV 2012 OMV 2015
1 OMV’s European competitors: BP Europe, ENI Europe, Exxon Europe, Lotos, MOL, Neste, NIS, Phillips 66 Europe, PKN. Orlen, Repsol Europe, Rompetrol, Shell Europe, Total Europe, Tupras.
E&P Refining
Retail
Petrochemical
Refining
Petrochemicals sales vol. % of refining capacity
Retail sales vol. % of refining capacity
Own crude oil % of refining capacity
Refining
Refinery utilization rate
>25% 18%
12%
>47% 42%
24%
>13% 10%
6%
~90% 88%
79%
Competition 2012 1 OMV 2012 OMV 2015
Competition 2012 1 OMV 2012 OMV 2015
31 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
OMV has successfully established it’s premium diesel brand. Solely produced in Schwechat Refinery.
In summer min. 60 cetane guaranteed.
In winter, cold flow plugging point max. -35 °C.
High quality bio-component.
High performance additivation.
32 | OMV Refining & Marketing, Dr. Dieter Tuppinger. 31st January 2014
Total material usage (crude oil & intermediates) in the Burghausen Refinery Since 2008: 4,4 Mn tons
(previously: 3,5 Mn tons) Equalizes increase of more then 25%
New, revamped, and changed units propylene splitter cracker furnaces ethylene unit tankfarm logistics & utilities ethylene pipeline HDS revamps coker revamp metathesis
Yield shift to high value chemicals: Total Monomer Concept incl. Europe's 1st metathesis.
8
35
229
55
275
33
Yield increase [%]
pet coke
jet
diesel
benzene
propylene
ethylene
metathesis
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