Operational flexibility for Indian Refiners - Petrotech

Operational flexibility for Indian Refiners 7th December, 2016 PetroTech, New Delhi Sanjiv Singh Director (Refineries), Indian Oil Corporation Ltd...

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The Growing Prominence of Asian Refining Plenary Session

Operational flexibility for Indian Refiners 7th December, 2016 PetroTech, New Delhi Sanjiv Singh Director (Refineries), Indian Oil Corporation Ltd.

Structure of the Presentation Indian Refining Scenario

Challenges facing Indian Refining Sector

Technological Interventions

Conclusion 2

Indian Refineries Refineries

No. MMTPA

IOC Group 11 BPC group 4 HPC Group 3 ONGC/MRPL 2 RIL (Pvt.) 2 ESSAR 1 Total 23

80.7 30.5 23.8 15.0 60.0 20.0 230.0

BHATINDA (9.0)

4th

largest in World Avg Size : 200000 bpd

PANIPAT (15) BONGAIGAON (2.35)

MATHURA (8.0) BARAUNI (6.0)

JAMNAGAR (RIL 62.0) (ESSAR 20.0) MUMBAI (BPC 12.0) (HPC 6.5)

KOYALI (13.7)

BINA (6.0)

VISAKH (8.3)

MANGLORE (15)

TATIPAKA (0.07 ) CHENNAI (10.5)

KOCHI (9.5 )

GUWAHATI (1.0)

NARIMANAM (1.0)

HALDIA (7.5) PARADEEP (15.0)

DIGBOI (0.65)

NUMALIGARH (3.0)

Economy of Scale Operations • Dismantling of APM to MDPM started in 1998. • Phased Capacity Addition for PSU Refys to meet – Product demand – Product Quality Upgradation – Bottom of the barrel upgradation – Complexity Factor Enhancement

• Operating higher no. of units - higher Opex • Strategy : –Capacity augmentation of existing Refys –New Refys with higher capacity & lesser no. of units Indian Refineries

23 (PSU-16, PSU JV- 4 and Pvt - 3)

Very Small Refineries =< 3.0 MMTPA

6 (IOCL-Digboi, Guwahati, Bongaigaon

Medium Refys > 3.0 but < 9.0 MMTPA

6 (IOCL- Barauni, Haldia, Mathura, HPCL- Vizag, Mumbai, BORL)

Large Refineries > 9.0 but < 12.0 MMTPA

3 (BPC-Kochi, HMEL & CPCL-Manali)

Large Refineries > 12.0 MMTPA

8 (IOC- Gujarat, Panipat & Paradip, MRPL, BPC-Mumbai, RIL -2 & Essar)

Coastal Refineries

12

Coastal Refys having direct Crude SPM

5 (RIL-2, Essar, MRPL,KRL, Paradip)

Refys. with crude pipeline >=1000 km

7 (IOCL-Panipat, Mathura, Gujarat, Haldia, Barauni, HMEL & BORL)

CPCL – Narimannan, NRL & ONGC – Tatipaka)

Refining Capacity & Complexity indicators mb/d

CDU capacity (mb/d) 700 600

500

14.00

14.00 12.20

11.30

200

12.00

10.40

10.50

11.80

10.00

10.00

400 300

NCI

Nelson complexity index

8.00 6.50

5.40

5.70

7.70 5.88

6.63

8.40

8.10

8.00 7.80 5.97

6.00

4.00

100

2.00

0

0.00

All these refineries are low capacity & low complexity compared to world avg. Further, Refineries in North East of India are very small capacity

Low Complexity Factor of many Operating Refineries

Need for Capacity Creep & enhancement of Complexity Factor 5/32

India’s Crude Oil Import India’s Refining capacity: 230 MMPTA (4.6 mb/d) PSUs : 135 MMTPA (2.7 mb/d) Pvt/JVC : 95 MMTPA (1.9 mb/d) India’s Crude Import Dependency : ~ 81% 5%

3% 4%

10%

18%

Middle East

11%

Africa Latin America 57% 18%

2014 3.7 mb/d

North America

63%

11%

Others

2040

7.2 mb/d Source : India Energy Outlook WEO 2015

Present Policy provides freedom in Crude Import

Refining Sector - Crude Scenario 250

85.00

India’s crude slate-2015

3 83.00 200

2.5

81.00 79.00 77.00 75.00

100

73.00

%

Sulfur Content (%)

150 MMTPA

2

1.5

1

71.00

0.5 50

69.00 67.00

0 0

0

5

10

65.00 2010-11

2011-12

2012-13

2013-14

2014-15

15

20

25

30

35

40

45

API Gravity -0.5

India

Saudi Arabia

Iraq

Venezuela

Installed Capacity(MMTPA)

Crude Imports(MMTPA)

Nigeria

Kuwait

UAE

Iran

Domestic Crude Production(MMTPA)

Import dependency (%)

Angola

Colombia

Brazil

Others

Based on consumption

Note: Bubble size represents % Vol

Domestic crude accounted for only 17% of total refinery intake in 2015

Indian Refining Sector - Current Scenario Installed Refining Capacity (MMTPA) 250 213 215 215

MMT

BS VI

193 178 185

200 150

230

127 132

BS IV

149 149

2020

BS III

100

2010

50

2017

Nationwide

Nationwide

Nationwide

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Figures as on 1st April of each year

Over the last decade, close to 70 refineries have closed globally, whereas India has grown at CAGR of 6% along with adoption of eco-friendly fuels

Refining Sector - Performance 240

220 180 160

140

187

MMT

200

127

141

151

196 204

219 222 223

161

79

75

% of crude processed

Refinery throughput (MMT)

74

73.3 73.4

78 77 76

120

100

Distillate yield 76.9

77.3

77.7

78.5

75.3

75 74

74.4

73

80 72

90

85

75 70 65 60 55

76.4

73.6

MBTU/bbl/NRGF

80

Specific Energy consumption (Industry avg) 70.7 69 67.8

65.7

Refinery Utilization

63.2 62.4 61.5 62

50

9/32 Source: PPAC/IHS

India Crude Processing Projection Need for Refining Capacity Expansion BP Energy Outlook 2015

345

India Energy Report 2015

381

IEA Energy Outlook, Current Policy 2015

348

IEA Energy Outlook, New Policy 2015

329

OPEC World Demand Outlook 2015

344

Current Refining Capacity in India

505 2040 458

2030 2015

478

230

0

100

200

300

400

500

600

With growing MS & Diesel growth, India’s Refining Capacity to reach from current 230 MMTPA to about 350 MMTPA (2030) & about 500 MMTPA (2040).

Huge Demand Growth of Transportation Fuel Gasoline projected to grow faster than Diesel Poses Challenges to meet growing Gasoline Demand Diesel : MS : 4.3

3.2

3.0

2.8

2.4 168

180 4.6%

Million Tonnes

160 140

5.1%

120

104 5.9%

100

MS

78

3.8%

80

7.9%

65 7.1%

60

7.1%

40 20

133

10%

15

24

70

HSD

48

34

0 2011-12

2016-17

2021-22

2026-27

2031-32

11

India fastest growing Petchem Market *POLYMER SUPPLY DEMAND TREND IN INDIA, KTA

20000

7.0

16000

5.9 5.1

7.1

17256

6.2

5.4

5.2

8.0

7.6

7.0 6.0

13153

5.0

12000

8000 5824

5977

6970

6293

7483

8491

1152

2160

1275

2500

9367

4.0 3.0

3180

4000

8722

3125

2.0

3737

2435

1.0

0

0.0 2007-08

2008-09

2009-10

CAPACITY

2010-11

DEMAND

2011-12

2012-13

IMPORTS

2013-14

EXPORTS

2014-15

2019-20

2023-24

kg / CAPITA

* : Includes LL+HD+LD+PP+PS+PVC+Ex-PS

• India Polymer consumption of 7.6 Kg / Capita far below world avg. 35. • Polymer consumption accounted 7% CAGR during past 7 years • Polymer Import tripled in past 7 years, growing @ 18% CAGR

Key facts about India’s Refining Margin • Refinery Margins improved owing to Crude Mix Optimisation, lesser price reduction of refined products vis-a-vis crude oil price and better refinery utilisation (108% in 2015-16).

• Despite increase in HS processing to 71%, Distillate Yield improved to ~ 80% due to improvements in Refining Processes and Technology.

• Indian Refiners moving towards more integrated and complex configuration considering volatile nature of Oil and Gas Market.

• Deregulation of MS and HSD.

• Seamless Integration of Supply Chain across Refinery and Petrochemicals to provide further margin improvement and flexibility.

Challenges for Indian Refiners  High Domestic Demand

:

highest demand growth

Quality upgradation projects

:

BS VI by 1st Apr 2020

Economy of Scale

:

Many refineries are old and small

Crude/Feedstock Flexibility

:

High dependence on imports ~90%

Maximise Value Addition

:

Cracks’ volatility & IMO “S” Spec.

Operational flexibility

:

POL demand fluctuation (SK, MS, HSD),

Integration with PetChem  Stricter environmental regulations : Reduced Emissions

BS VI Gasoline Challenges

Sulfur in Gasoline

Meeting LPG demand with 100% 95 RON

Sulfur 10 ppm

BIS 2000

2000

2000

ppm

Reformate High Aromatics

Pre Bis 2000

2500

BS-II

1500

BS-III

1000

1000

BS-IV

500

500

150

50

0 1999

2000

2005

10

2010

FCC gasoline High Sulfur, Olefins

Year

Aromatics 35 vol%

BS VI Gasoline

Isomerate Low RON

Olefins 21/18 vol%

Octane boosting Solution

95

RON of Gasoline

92

91

91

91 Pre BIS

90

RON 91/95

89 88 87

88

BIS 2000

88

BS-II

87

BS-III

86

BS-IV

85 1999

2000

2003 Year

2005

2010

Focus Areas for Indian Refiners  Increase in Refining Capacity  Upgradation & Expansion of Existing Refineries  Setting Up Grassroot Refineries

 Improvement in Refinery Performance  Refinery Margin Improvement  Energy Efficiency Improvement  Plant Reliability & Maintenance  Operational Excellence

 Ensuring Availability of Petroleum Products in India – Supply Chain Optimisation – BS-VI Quality Compliance Nationwide by 1.4.2020. – Infrastructure Development

Technological Intervention  Refinery Configuration/ Complexity Factor Improvement to address – Changing Feed Stocks : Input cost reduction • Quality – 0API / Sulfur / Acidity • Widening of crude basket – Product Mix improvement : Value addition • Growing demand with stringent product specs. (BS-VI by 2020) • Shifting Product demand (From Diesel to Gasoline) • Bio fuel options

– Upgradation of low value/surplus products • Naphtha to Petrochemicals • Black Oil to Distillates

 Energy efficiency improvement by use of – Energy efficient technologies/designs – Energy efficient equipments – Best operation and maintenance practices

Bottom of the barrel Upgradation  Heavy crude → Extra residue  Current employed technologies in India:  Coker - Low Cost major upgrading unit for Indian Refys Low value PetCoke:Profitable with Crude < 70 USD/BBL

 RFCC/INDMAX – Product flexibility with high CCR feed  Solvent deasphalting – Integration with Coker For further reduction/elimination of black Oil or PetCoke – Residue ebullated bed /Slurry Hydrocracking • Technology Selection linked with LSFO vs HSD maximisation

– Integration with Gasification

Resid Hydrocracking Fixed/Moving

Ebullated

Slurry

Asphaltene, CCR



↑↑

↑↑

Conversion (%)



↑↑

↑↑↑

Mature

Mature

Under demonstration

Status

Potential Gasification Feeds & Products CO2, N2, S

Natural Gas

Steam Refinery Gas

Combined Cycle

Vacuum Residue

Pitch

Gasification Plant Chemicals Production

Coal Pet Coke from Refinery Cokers Bio Mass

Slag for Construction Material & Metal Recovery

Fischer Tropsch Reaction

Electric Power  H2  CO  Fertiliser  Chemicals  Methanol  Acetic Acid  Naphtha  Jet  Diesel  Wax

Way Forward… •

Capacity Addition with flexible configuration



Leverage strategic advantage of coastal locations



Tighter project management for upcoming projects



Port Infrastructure for additional imports



Economies of scale for Cost competitiveness



Gap in domestic petrochemical capacity provides opportunity for integrated petrochemical complex



Significant investment required in hydro-treating capacities to meet planned cleaner fuel norms



Bio fuels usage to increase

Thank You