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
