cht bip shell best practice - masterplanning

8/12/2019 CHT BIP Shell Best Practice - Masterplanning

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CHT - Integrated RefineryBusiness Improvement Program

BPCL KochiShell approach to Masterplanning

March 2007

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Supply and Manufacturing Masterplan

Development of a roadmapFrom corporate vision and broad strategy to a

recommended, financially robust project outlineintegrating supply and manufacturing options


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Project Spec

Project Spec

BOD

BOD

BDP

BDP

D&E, Procurement

Construction

D&E, Procurement

Construction

Basic Design

Master Plan

Definition EPCImplementation

Design

Preparation

Cost of

changes

Cost of

changes

100%

Progress

100%

Shell Global Solutions has proven to add value

Scouting Influence overmargin & cost

Influence overmargin & cost

Our major input is in the project phasesOur major input is in the project phases

with highest influence and impactwith highest influence and impact

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Premises : Key Business Drivers

$

Market Demands & Prices

Available Crudes & Prices

Emissions & Product

Quality Legislation

Fuels, Components Import

and Export Options

External factors

Available Options

max

BusinessAspirations

Return on Investment

Cash Flow

StrategicConsiderations

Market Deregulation

Chemicals OptionsStaged Investment

Opportunity

Growth

Minimum Investment

Case

Power Sales Options


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European emissions: trends inspecifications


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European Market projections

Diesel demand growth

Gasoline demand drop

EU is promoting shift from gasoline to diesel (fuel efficiency)by means of tax incentives in view of Kyoto commitments

Reduction SO2 emissions on-shore and in coastal waters

substitution by Natural Gas (Cogen) LSFO

High-Sulphur Fueloil demand drop

Gradual replacement of depleting North Sea by sour crudes

High-Sulphur Fueloil production increase


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Market projections Europe

-80

-60

-40

-20

0

20

40

60

80

2005 2010 2015

Product

balance

s

Million tonnes per year

HeavyFueloil

Gasoline

Diesel

Source: Wood McKenzie and Shell

Surplus

Deficit


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Diesel Fueloil 3.5 % S price differentials

$/barrel60

Future?

Actua

l

40

20

0

2010

2015

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

M t l i : d t th f t


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Masterplanning: road map to the futureSustainable competitive position & Value creation

Long termvision Premises

Developoptions Evaluation

Recommended

Supply Option(s) &MF configuration

Where do

you wantto go

Quantificationboundaries

How can

you get there

What are the cost,benefits, risk and

financial sensitivities

Roadmap

to the future

1st phase 2nd phase 3rd phase


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Basic Principles of Masterplanning

Strategy driven

- Based on integrated corporate strategies- Market ambitions (volume growth, product quality)- Supply options (crudes, feedstocks, blending components)- Integration objectives (crude/oil products/chemicals/power/others)

Business premises(to be defined by client; SGSi can help the client to develop robust premises through a challenge process)

- Crude availabilities, Target markets and Product demand levels- Consistent pricing assumptions for crudes and products

- Capital ceiling and investment criteria- Operating cost data

Options to be considered

- Alternative supply Options- Manufacturing configuration options

From long list to most promising option

Masterplanning: road map to the future


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Recommended


How can

you get there



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Residue conversion options

Carbon rejection Hydrogen addition OxidationAtm Residue

Vac ResidueCracked Residue

Coki

ng

Deaspha

lting

ResidHDM

ResHDS

Ebul/Slu

rryH

C

CatC

racking

FixBedHC

Bitu

men

Hyc

onbu

nker

Power

gen.

Gasifi

cation

ThermCr

/Vis

b

and many combinations only study options after initialscreening

Key driving forces steers best fit-for-purpose option


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VGO Conversion options

Maximum Diesel yield (%vol)in VGO conversion

VGOConversion

40Thermal Cracking feed + heat products + C

Catalytic Cracking feed + heat products + C

Hydro Cracking feed + H2 products + heat

cat

cat

35

80


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Hydrogen options

By-product

H2 plant

Hydrogen

CDUCrude

HCUVDU

HDS

Residue

Conversion

Gasification

Crude CDU HDS

Natural Gas

HMU

Hydrogen

HCUVDU

Residue

Conversion

By-product

Choice depends onprice of Natural Gasversus By-product


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De-coupling of technology selection andprocess licensor provides anindependent advice

Type of technology and required capacities selected inmaster planning exercise, not process licensor

Starting point is to include all possible process

configurations (long list), discuss and select via detailedjoint discussions taking into accountstudy premises, client drivers, capex constraints,

operability, maintainability, constructability


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Local Business Environment

Existing refinery Configuration / Integration optionsUtilities Refinery Facilities, Export/Import options

Logistics facilities Export/Import options

Natural Gas Availability and Price

By-products Markets and Prices

Economy of scale Refinery capacity increase / residue importOperability Reliability / Integration

Investments Restrictions / Financing options

Local Business Environmentwill have major impact on optimum solution



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Recommended


What are the cost,benefits, risk and

financial sensitivities



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Refinery simulation tool: REFSIM+

Special Exports planned export pools

Main Product Blenders(revenue driven blendoptimiser) LPG

Mogas

Kero GasOil

FuelOil

Refinery Fuel RFG

RFO

Non-linearProcessModels

based onShell GSIKnowledge

Balances

Mass

Energy

H2

Crudes- Mathematical

Representationof Crude(Properties)

Imports Feedstocks

Blending Components

o Mathematical

Representation ofBoth (Properties)

GRM



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Recommended


Roadmap

to the future



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Tailored Optimisation

Big investment requirements ($ 0.5 1.5billion) + Wide variety of technologies+ Impact of local business environments

+ Integration opportunities with existing refinerywarrants

Highly experienced team

Systematic procedure & appropriate tools

Comparison of all available options

Knowing how to successfully operate residue units

What does our customer think of our services?


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Profitable residue upgrading

at Gdask refinery

Basis and justificationof a capital-intensive project

Karol Sep Grupa Lotos SA

Paul Wessels Shell Global Solutions International BV

What does our customer think of our services?

Ch ll CEE il i d d Gd k


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Challenges CEE oil industry and GdanskRefinery, a client example

Competitiveness with rest of Europe

Long term profitability

EU legislation - Produce cleaner fuels EU4 EU legislation - Reduce refinery emissions

IMO legislation, e.g. Bunker 1.5% S in Baltic Sea

Create Business opportunities & Employment

Response to Challenges

Improve competitiveness / Long term profitability Cutting deeper into the barrel

Use heavy refinery residue for clean hydrogen, power & steam

K d i i f f Gd k j t


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Key driving forces of Gdansk project

Key drivers Best option

Zero HS fueloil production Combination ofDeasphalting & Gasification

Diesel Market/Quality Mild HydrocrackingProfitability World-scale units

Alternative: Export toRotterdam bunker market

Resulting in highest rate of return

K f t f j t


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Key features of project

ROSEDeasphalting

Shell MildHydrocracking

Shell Gasification

Hydrogen Power Plant

Diesel 10 ppm S + VGO for FCCto produce Gasoline 10 ppm SLPGNaphthaDiesel

Low-S VGOAtmospheric& VacuumResidues Hydrogen

PowerSteam

Highest yield of suitableHydrocracker feed Clean Power, Steam & H2

for existing + new complex

Sufficient feedstock byExpansion topping capacityImport of residues

e.g. HCUreactors of

600 mWorld-scale units

Gd k R fi C fi ti


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Gdansk Refinery ConfigurationPlanned Revamp

ClausClaus

E4ROSEAtmosph. Resid

BaseOils

Configuration with highest IRR

REF Gasoline

CDU

LPGSplitter LPGPlanned NewExisting ISOM

HCU

HDTPossible Closure

Diesel/Gas oil

Jet

HydrowaxHydrogenSteamPower

Sulphur

HSFOBitumen

Crude and

Vacuum Resid

Base Oils

Merox

HDS

Import of Residuesfor World-scale Units LHF

HVU

MHCDesalt

IGCC

Conclusions jointly drawn with client


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Conclusions jointly drawn with client

Challenges of GdanskRefinery can be profitably

met by Investment in residue 100% conversion complex

Comprising ROSE, Mild Hydrocracking, Gasification

Producing clean fuels, and

Replacing Utilities to reduce emissions drastically


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Masterplanning

to meet longterm businessobjectives

cht bip shell best practice - masterplanning

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