Fischer-Tropsch Refining (DE KLERK:FISCHER-TROPSCH O-BK) || Principles of Refinery Design

489

Part VIRefinery Design

Fischer–Tropsch Refining, First Edition. Arno de Klerk. 2011 Wiley-VCH Verlag GmbH & Co. KGaA. Published 2011 by Wiley-VCH Verlag GmbH & Co. KGaA.

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24Principles of Refinery Design

24.1Introduction

One only has to look at the diversity of crude oil refineries to realize that there is nothing likea standard refinery configuration [1]. The same is true for Fischer–Tropsch refineries (Chapters6–12). So, how does one go about designing a refinery?

It is quite possible to deal with refinery design in similar terms as any other disciplinedealing with inputs and outputs. The principle underlying refinery design is straightforward(Figure 24.1). In refinery design, it is necessary to devise a transformation (separation andconversion processes) that will convert the input (raw feed materials) into a desired output(product slate). The same principle is encountered during process design in general, as well asin disciplines such as computer software engineering, business planning, and manufacturing.All of these disciplines deal with the transformation of an input to a desired output.

Different systems approaches have been advocated and these are discussed to evaluate theirapplicability to refinery design (Section 24.3). However, despite all the systems approaches thathave been advocated, there is no simple strategy that can be followed and by which refineriesare designed. In essence, refinery design is a creative process, which can be aided by a systemsapproach but cannot be efficiently replaced by it.

On the basis of the author’s experience, there are a few concepts that are important to asuccessful refinery design; some are philosophical in nature and others are more down-to-earth:

1) There are characteristics and peculiarities of the refining business that must be understoodfor a refinery design to succeed (Section 24.2.1).

2) Refineries are complex systems (Sections 24.2.2 and 24.2.3).3) Refining efficiency matters both to the environment and to the bottom line (Section 24.2.4).

24.2Refinery Design Concepts

24.2.1Characteristic of the Refining Business

Gary et al. [1] gave a very nice description of the characteristics of the refining business:

Fischer–Tropsch Refining, First Edition. Arno de Klerk. 2011 Wiley-VCH Verlag GmbH & Co. KGaA. Published 2011 by Wiley-VCH Verlag GmbH & Co. KGaA.

492 24 Principles of Refinery Design

Pyrolysis liquids

Fischer−Tropschsynthesis Syncrude

Gas condensates,crude oil products,bio-derived oils,alcohols, etc.

Pipeline gasLPGMotor-gasolineJet fuelDiesel fuelFuel oilChemicalsLubricantsIntermediatesWaste

Syngas production

Imported material

Input

Fischer−Tropschrefinery and

product blending

OutputTransformation

Figure 24.1 Principle of refinery design.

1) Every refinery is unique. There is no such thing as a cookie-cutter refinery design.2) Crude oils are all different. Every refinery is designed with a specific mixture of crude

oils in mind. The crude oil selection affects the sizes of the different units, the types ofproducts that can be produced, and even the metallurgy of the equipment. The same istrue for Fischer–Tropsch syncrude. In Fischer–Tropsch refineries, there is better controlover the syncrude, but the syncrude composition is affected by Fischer–Tropsch catalystdeactivation and operating conditions (Chapter 4).

3) Refineries are capital intensive, long lived, and very specific assets. The decision to constructa refinery is a long-term proposition and needs to make provision for potential futurechanges in the economy and product requirements. The 1955 Sasol 1 facility (Chapter 8) isa good example of a long lived asset.

4) Refineries change over time. The evolution of crude oil refineries has been described inChapter 2. It illustrates the dynamic nature of the refining business, which is influenced byraw material availability and changes in product requirements. Fischer–Tropsch refinerieslikewise changed over time (Sections 8.5 and 9.5).

5) Refining complexity differ. The number of units and diversity of products determinethe complexity of a refinery. It is very wrong to assume that a specific raw material isassociated with a certain refining complexity. This is illustrated by a comparison of differentFischer–Tropsch refineries employing similar syncrude, for example, Hydrocol (Chapter 7),Sasol 2 and 3 (Chapter 9), and Mossgas (Chapter 10).

6) Most refinery products are commodities. Commodities are undifferentiated from those of acompetitor and are sold on the basis of price. The marketing desire to differentiate fuels mayhave unintended consequences. The extremely restrictive synthetic jet fuel specificationsin DEF STAN 91-91 (Section 14.2.1) is a case in point. Differentiation caused more hasslesthan good.

7) Transportation fuels are mainly sold in regional markets. The local market situationdetermines the type and volume of products that can be sold.

8) Refinery optimization involves a multitude of trade-offs. This is related to the complexity ofthe system. In practice, refinery units are optimized and not always with respect to the total

24.2 Refinery Design Concepts 493

refinery. Total refinery optimization is more difficult, because it may occasionally requiresome units to operate less optimally for the total refinery to perform more optimally. Thisis a hard sell to the engineer in charge of the unit that must sacrifice for the greater good.

9) Refining is energy intensive. In this respect, a Fischer–Tropsch refinery has a benefit over acrude oil refinery, which must process more refractory materials [2]. In a Fischer–Tropschfacility, the energy intensity of the refinery pales in comparison to syngas generation, butthat does not detract from the fact that the refinery is also energy intensive.

10) Commodity prices are volatile. This is an extremely important aspect for syncrude refiners.The raw material cost for Fischer–Tropsch synthesis is not necessarily linked to the crudeoil price. In times of low crude oil price, it may be difficult to show a profit, but in times ofhigh crude oil price, syncrude may have a significant cost advantage.

11) Refinery economics is complicated. This hardly comes as a surprise considering thecomplexity of refining. It also reflects a multitude of trade-offs. The main implication forrefinery design is that a flexible refinery has a hidden economic benefit. In a Fischer–Tropschfacility, the ability to shift the production emphasis between fuels and chemicals, as well asbetween different fuel types, allows the refinery to respond to market and pricing changes.

24.2.2Complex Systems and Design Rules

Refineries are complex systems and the refinery designer must respect this fact. This also impliesthat one must pay attention to the detail. This is quite clear from a superficial comparison betweencrude oil and Fischer–Tropsch refining. Refining technologies and strategies that work well withcrude oil do not necessarily work well with Fischer–Tropsch syncrude. There are even differencesbetween the syncrudes that may lead to completely different designs. This is also true for catalysisin the refining of syncrude [3]. This can be formally stated as the first rule of refinery design:

Rule 1: The devil is in the details.

In complex systems, one should be careful not to employ a purely mathematical approach todesign. Not all refinery design decisions are subject to the two process engineering favorites:optimization and economic evaluation. Refinery optimization and economics are important, butthese carry a risk that is typical of complex systems. Optimization of a refinery design tends toreduce refinery flexibility. If the refinery design is robust, it will be amenable to optimizationlater on, but an inherently poor design may appear viable through optimization. When thishappens, the optimized conceptual design may look like a workable refinery design on paper,but it may be an untenable design in practice. This is something that should be avoided duringthe conceptual design phase.

Rule 2: Avoid optimization during conceptual refinery design.

The lessons that can be learnt from the wonderful book on Systemantics by Gall [4] should notbe lost on refinery designers. Because refineries are complex systems, they are subject to all thepeculiarities associated with complex systems. To quote Gall: ‘‘A complex system that works is


invariably found to have evolved from a simple system that worked.’’ Applied to refinery designit means that a simple unoptimized refinery design must work for an optimized refinery to work.

Rule 3: Any design must be as simple as practicable.

A refinery design must also obey the laws of nature. The literature on refining is not perfect andexperimental data are sometimes misleading due to analytical error or other happenstance. It isprudent to verify mass, atom, and energy balances. Conversion chemistry is not simple and noamount of wishful thinking will make it so. The chemistry defines the fundamental purpose ofthe conversion process. Whenever a technology is applied to achieve a goal that is contrary to itsfundamental purpose, the design is likely to fail. The belief that it will work is called religiousengineering and it may compromise the design.

Rule 4: The design must be fundamentally sound.

The behavior of complex systems is also closely linked to chaos theory, as illustrated by thewell-known novels on chaos theory by Crichton [5, 6]: Jurassic Park and The Lost World. Youcannot engineer a complex system and hope to anticipate or predict all the possible outcomes. Insuch a complex system as a refinery, there are just too many variables and interrelationships. Onemay be able to describe these interrelationships, but it is hard to predict the outcome beforehand.This can be formulated as the fifth rule of refinery design.

Rule 5: Complex behavior may be accurately described, but it is difficult to predict.

This rule holds some implications for refinery design and operation. If a complex system hasbeen created directly and it is not based on a fundamentally simple system, its behavior may beunpredictable. This in turn creates operability problems. Even with a proper model, the responseof the refinery can only be calculated after the fact. It is not possible to calculate all possibilitiesbeforehand. The unintuitive behavior may have serious safety ramifications: ‘‘The mode of failureof a complex system cannot ordinarily be predicted from its structure’’ [4].

A simple mathematical example illustrates the potential impact of underestimating the behaviorof complex systems. A Mandelbrot set is generated by plotting the number of iterations that isrequired for a simple equation (Equation 24.1) to reach a threshold criterion (Equation 24.2).

zj+1 = (zj)2 + c (24.1)∣∣zj

∣∣ > 2 (24.2)

The value of c, which is a complex number, can be represented as x,y-coordinates with thereal-value plotted on the x-axis and the imaginary value plotted on the y-axis. The Mandelbrotset is a three-dimensional picture (Figure 24.2), which is represented in two dimensions as acontour plot of j for various values of c.

Despite the simplicity of the mathematical description, it is impossible to a priori predict theanswer. Furthermore, even a small change in the value of c can significantly change the answer,thereby making even interpolation dangerous. There is beauty in Figure 24.2, but also a warning.

24.2 Refinery Design Concepts 495

Figure 24.2 Mandelbrot set showing thesignificant amount of variation when thezoom level is increased. Clockwise fromthe top left, the values of c being plottedare (−2 + 1.5i to 1–1.5i), (−0.65–0.51ito −0.45–0.71i), (−0.625–0.668i to−0.605–0.688i), and (−0.615–0.683i to−0.6137–0.6843i).

Unless a refinery design is clearly in a stable region, small changes in feed composition or refineryoperation may render the refinery inoperable or incapable of meeting product specifications.

It is not advocated that refinery design should steer clear of a mathematical description, quitethe contrary. However, it is advocated that conceptual refinery design must be as simple aspracticable and make fundamental sense. As already cautioned, a mathematically optimumrefinery design runs the risk of being brilliant only on paper. A distinction must be madebetween conceptual refinery design (Section 24.3) and real-world refinery design (Section 24.4).

Last and perhaps the most difficult realization about complex systems is that a complex systemhardly ever operates at a single design point. Although the design of a complex system isperformed with absolute numbers, in reality there are no absolutes. The concept of steady-stateoperation is a fallacy. It is a convenient fallacy, because it allows us to calculate our designperformance in terms of absolute numbers. This leads us to the last rule of refinery design.

Rule 6: Calculate in absolutes, but believe in variability.

Consequently, the robustness of a refinery design is not a ‘‘nice-to-have,’’ but an imperative. Itis critical to understand how much change a design can tolerate and still be able to perform itsdesignated function.

24.2.3Refining Complexity

In order to strive for the lowest practicable refinery complexity, it is important to define what ismeant by refinery complexity.

Complexity is a measure of the interconnectedness of the refining units. A refinery withmore units but less interunit transfers is less complex than a refinery with fewer units butmore interunit transfers. In mathematical terms, this can be expressed using digraph theory[7]. The refinery can be represented as a digraph, with each refinery unit being counted as anode (nodej = 1). For this calculation, nodes are not counted if they are just sources (i.e., feedstreams entering the refinery) or just sinks (i.e., products leaving the refinery). The least complexrefinery unit (nodej) has only one process stream entering the unit (indegreej = 1) and only one


process stream leaving the unit (outdegreej = 1). The refinery complexity can then be expressedin terms of a complexity factor (CF), which is the average number of additional streams enteringor leaving each refinery unit (Equation 24.3).

CF =∑

(indegreej + outdegreej − 2)∑

(nodej)(24.3)

A refinery design that has a CF of zero has the least overall complexity possible. It is useful toinclude the blending operation as a separate unit in order to capture the complexity of productblending as part of the overall refinery complexity. The same calculation procedure may also beperformed on each refining unit to determine the complexity of the technology, by taking eachunit operation in the technology as a node.

The CF has implications for refinery design. For the least complexity, it is required that thedesign must employ proper molecule management by ensuring that the feed to each separationand conversion unit is well matched to that unit. Molecule management heavily relies on properand clean separation. Sloppy separation causes increased refinery complexity, because moleculesthat are routed to the wrong units must be rerouted to the correct unit, thereby increasinginterconnectivity. It may also necessitate pre- or post-treatment steps that could otherwise havebeen avoided; this affects refining efficiency (Section 24.2.4).

Because complexity is a measure of interconnectedness, it also has implications for refineryoperability and stability. Refinery stability and operability increase with decreasing complexity,because an upset in one unit is less likely to affect the operation of other units in a complex way.

The number of steps involved in the refinery is not reflected in the complexity calculation(Equation 24.3). The number of refining steps affects efficiency, but not complexity.

24.2.4Refining Efficiency

Refinery efficiency can be expressed in terms of the average number of times that an atom visitsa refining unit before it ends up as a final product. Essentially, it measures the number of timesthe work has to be performed on an atom before it can leave the refinery.

Efficiency can be calculated in terms of an efficiency factor (EF) by adding the mass flow ofevery unit in the refinery (unit capacity) and dividing it by the total refinery capacity, which is themass flow of all the products leaving the refinery (Equation 24.4):

EF =∑

(unit capacity)j

(refinery capacity)(24.4)

The same calculation procedure that is used in the case of complexity, may also be performed oneach refining technology to determine its efficiency.

There is another aspect of efficiency that is not captured by the EF, which is the amount ofwastage. The green chemistry principles of atom economy and prevention of waste are importantefficiency metrics. These values can be calculated in terms of carbon efficiency (Equation 24.5)and E-factor (Equation 24.6) [8], as measures of the wastage.

Carbon efficiency = (mass of C in products)(mass of C in feed)

(24.5)

E–factor = (mass of waste generated)(mass of products generated)

(24.6)

24.3 Conceptual Refinery Design 497

24.3Conceptual Refinery Design

Irrespective of the complexity inherent in refinery design, some basic steps can be identified thatare common to all design approaches. In the development of any process configuration, threeaspects are implicitly considered (Figure 24.1), which are as follows [9, 10]:

1) Feed description (input). This defines the nature of the feed material that must be refined.This refers not only to the Fischer–Tropsch syncrude, but also to the material coproducedduring syngas generation, or the feed that is imported with the raw material employed forsyngas generation.

2) Product description (output). This includes the product slate required and the specificationsof each product. Intermediate products also have specifications, even if those specificationsare self-defined.

3) Refining technology (transformation). This includes the different separation and conversionprocesses that can be considered for the refinery design. This draws on the know-how of therefinery design engineer. It also includes the supporting utility infrastructure that is neededby each technology.

By knowing the feed and product description and having knowledge of the transformations,there is sufficient information for the development of a refinery configuration. With this level ofdetail, only conceptual studies are possible. It is nevertheless useful, since it allows the refineryconfiguration to be studied divorced from factors that influence real-world refineries. In thisway, the limitations and sensitivities of different refinery configurations can be probed, withoutgetting bogged down in the additional complexity introduced by issues related to the specificrefinery location.

It has been pointed out before that refinery design is essentially a creative process and thatthere are different tools and methodologies to guide the designing process. It is instructive tolook at some of the approaches that can be followed for refinery designs.

24.3.1Linear Programming

Linear programming can be employed to make a selection between different proposed refineryconfigurations based on specific design constraints [11]. The design constraints, such as theproduct specifications, are criteria that must be satisfied. Refinery configurations that cannotsatisfy the design constraints are eliminated. Further discrimination between different designscan be made with respect to objective functions, such as the highest profitability, the lowestcapital cost, and the maximum yield of a particular product.

For linear programming to have value in discriminating between different refinery designs,it presupposes the accurate modeling of the various refinery units used in the proposedconfigurations. Poor representation of the detail in any unit risks violation of the first rule ofdesigning complex systems. For example, when modeling a Fischer–Tropsch refinery with coalpyrolysis product co-feed, the content of cyclic material increases. Unless the models for unitssuch as naphtha hydroisomerization and naphtha reforming incorporate cycloalkane sensitivity,the calculation will not reflect the impact of the change on octane number. Linear programming


Address first(a) Feed characterization(b) Product specifications

Conversion processes

Separation process

Heat integration network

Address lastUtilities

Figure 24.3 Design hierarchy that in-dicates the order in which differentaspects of a refinery design must beaddressed.

will then fail to recognize refinery configurations that exploit this change in composition. Thevalue of linear programming is thus directly related to the quality of the model description.

Linear programming is well suited for optimization and is capable of solving complexmultivariable optimization problems. Applying it as tool in refinery selection is acceptable as longas the proposed refinery configurations are fundamentally sound and conceptually simple. Usingit as a tool to fine tune the design process, violates the second rule of designing complex systems.

24.3.2Hierarchical Design

A design hierarchy has been proposed for refinery debottlenecking, which can also be used toguide design (Figure 24.3) [12]. In the hierarchical design approach, the feed flow is used todetermine design bottlenecks, and it can also be used for analyzing subsystems of the refinery.For example, hydrogen availability can be used to guide refinery design [13].

The hierarchical approach is a very logical approach and it formalizes the principles of refinerydesign. First, you have to know what you want to refine and what you want to refine it to –the input and output in Figure 24.1. Then, you can select the transformation steps. Eachtransformation requires feed within a specific range and produces a product that needs to beseparated for blending and sale. Heat integration and the utilities that are ultimately required tomake the design work are the last to be addressed. Depending on the level of detail needed in theconceptual refinery design, heat integration and utilities may not even be addressed.

In essence, hierarchical design is akin to the Michael Jackson programming method [14],where the data flow ‘‘in’’ is transformed to ‘‘out.’’ This transformation determines the structureof the software design and by analogy the refinery design.

24.3.3Technology Preselection

The method of technology preselection simplifies the design process by ruling out refiningtechnologies and restricting the design to a limited number of preferred technologies. This

24.3 Conceptual Refinery Design 499

assists the design engineer by focusing further conceptual thinking on only the transformationsthat are allowed. The limited set of technologies may suggest specific configurations based on theirrespective feed requirements and product properties. For example, if only four naphtha conversionprocesses have been preselected, blending calculations will suggest the range of product ratiosthat yields on-specification products. This in itself may suggest a specific configuration in whicheach of these technologies may be employed.

This approach was applied to perform a conceptual refinery design for future refineries thatwould have less of an environmental impact than typical current crude oil refineries [15]. Therefining technologies were preselected on the basis of their environmental footprints, and therefinery design was subsequently performed on the basis of a logical ordering of the more limitedset of refining technologies.

Various selection criteria may be used. For example, political sanctions may prevent the licens-ing of technologies from the countries that imposed the sanctions. The refinery owner may alsohave specific preferences. Utility limitations can likewise rule out some technologies. Whateverthe selection criteria, the creative design process is streamlined by avoiding configurations thatwill have to be rejected.

In Fischer–Tropsch refining, the approach of technology preselection based on green chemistryprinciples is advocated [16]. The aim is to avoid the use of technologies that either inherentlyhave a large environmental footprint or that perform poorly with Fischer–Tropsch syncrude.Inefficient refinery configurations due to feed-technology incompatibility are thus avoided. Thismethod is especially helpful for refinery design engineers that are familiar with crude oil refinerydesign, because it allows the creative design process to focus only on technologies that will workwell, or even have an advantage in converting syncrude. From the discussion in Chapter 16, it isclear that the list of preferred technologies for syncrude refining (Table 16.4) is quite different tothat typically considered during conventional crude oil refining.

24.3.4Carbon-Number-Based Design

All refining technologies are designed to process a specific carbon number (or boiling point)range as feed material. Conversion processes for motor-gasoline production, or chemicals, aregenerally speaking more feed sensitive than residue-conversion processes. This is reflected by thedistillation cuts produced in a conventional crude oil refinery and an analogous situation existsin a Fischer–Tropsch refinery. The principle remains the same; namely, refining technologieshave preferred feed ranges.

Carbon-number-based refinery design allocates refining technologies to each carbon numberbased on the technology’s feed range. A refinery configuration can then be developed byconceptually routing all of the material through a conceptual carbon number separator, whichthen redirects the material to an appropriate conversion unit or allocates it as a final product(Figure 24.4). The products from each conversion either go to blending to become a final product,or are recycled to the carbon number separator.

If one looks at a conventional crude oil refinery (Chapter 2), the atmospheric distillation unit andthe vacuum distillation unit effectively produce some degree of carbon number separation basedon boiling point. Conceptual carbon number design reflects reality. This type of approach hasalso been suggested for Fischer–Tropsch syncrude refining [17]. In a Fischer–Tropsch facility,


Conceptual carbonnumber separation

Technology #1

C11−C15

C16−C22

C23−460 °C

460−550 °C

>550 °C

C10

C9

C8

C7

C6

C5

C4

C3

C2

Aqueous

Blending

Technology #2

etc.

Example:Technologiesfor C6 refining

(principle is applied toeach carbon number)

Finalproduct

Syncrudeor

Crude oil

Figure 24.4 Carbon-number-based refinery design concep-tually separates the refinery feed into carbon numbers orboiling ranges, for which each carbon number can be as-sociated with the most efficient refining technologies. Theproducts either go to blending to become final products orare recycled to the carbon number separator.

syncrude recovery in the Fischer–Tropsch gas loop enables a preseparation. This preseparationcan easily be turned into a real carbon number separation for the lighter fractions, where carbonnumber separation matters most.

24.4Real-World Refinery Design

Real-world refinery designs, as opposed to conceptual studies, have the aim of producing apractical refinery design for a specific purpose. A real-world refinery design is location specific.There are many factors influencing real-world refinery designs and when this added layer ofdetail is considered in the design process, the design becomes unique. It should be emphasizedthat beyond the conceptual stage, there is no such thing as a generic or even general refinerydesign, despite many real refinery designs being close to each other.

24.4 Real-World Refinery Design 501

In this section, some of the important factors affecting real-world refinery designs are discussed.It is shown that this is not just an added layer of detail that is superimposed on the conceptualrefinery design, but that it dictates the design by influencing the feed and product description,as well as the process selection. The arbitrary feed, product, and process selection that can bemade during conceptual design now becomes a requirement or a consequence of factors such aslocation, market, and politics.

24.4.1Refinery Type

The selection of refinery type is a business decision and constitutes the primary design objective.There are three main classes of products from refining (Section 2.3): fuels, chemicals, andlubricants. It is also possible to combine these different products in a single mixed-type refinerythat potentially have some economic benefits [18]. The decision remains the one that is made bythe business as an investment decision and that fits into its overall business strategy.

The conversion of a refinery from fuels to chemicals is quite feasible, as was demonstrated bythe evolution and transformation of some Fischer–Tropsch refineries (Chapters 8 and 9). Thereare some risks involved when integrating chemical production with fuel production (Section 9.5),but potentially there are also many rewards.

24.4.2Refinery Products and Markets

The types of products and the market into which each of the products will be sold, forms part ofthe business decision to build a specific type of refinery (Section 24.4.1). The identification of amarket gap or strategic positioning within a specific market may drive this investment decision.The products and markets should be considered together, since the products determine whatwill be made, while the markets determine the product specifications. For example, a refineryproducing fuels for the North American market looks different than a refinery targeting theEuropean market and both considerably differ from a refinery supplying the African market.

In principle, all refinery designs should aim to meet a future demand in a market requiringfuture fuel specifications. Anticipating changes in fuel specifications is therefore not merely amental game, but could have a huge impact on the cost and complexity of a refinery design.This places the discussion on future trends in fuel specifications (Sections 13.5, 14.4, and 15.4)into perspective. It is inevitable that there will be a number of years that will pass between thedesign, construction, and commissioning of a refinery. During this period, there may be changesin the market, because predictions about the future are inherently imprecise. The importance ofrefinery design flexibility cannot be overemphasized, since it is almost inevitable that even a newrefinery may have to be modified. It is almost guaranteed that a refinery will have to be modifiedin some way during its existence to keep up with changes in fuel specifications.

Understanding the market is sometimes much more important than adhering to, or anticipat-ing specifications. This is especially true of speciality markets for petrochemicals, but may alsobe true of fuels. A classic example can be found in the history of the oil industry [19].

When Marcus Samuel (founder of Shell) in the 1890s took on John D. Rockefeller (of StandardOil) in the kerosene market in the Far East, his plan hinged on the efficiency of shipping kerosene


in bulk. It was cheaper to ship the kerosene in bulk, rather than in tins that were packed inwooden crates as was the case with Standard Oil’s product. Both the tins and wooden cratesadded to the cost of getting the kerosene to the market. However, when the kerosene was placedin the market at half the cost of Standard Oil’s, nobody wanted it. It turned out that the tinsplayed a vital role in the Far Eastern way of life at that time, since the tins could be reused for themanufacturing of household items like buckets, cups, and much more. The tins were thereforemore important to the market than the kerosene itself. A container factory had to be built inorder to sell the kerosene.

Product preference and markets can also be influenced by contractual obligations. These obli-gations can be in the form of a supply agreement that necessitates the production of one or moreproducts, as well as restrictions that may lock the refinery into a specific market, or prevent the re-finery from selling its products in a market. Such agreements and obligations are a double-edgedsword. The following example, which is related to syncrude refining, illustrates the point.

In South Africa, there was a supply agreement between the synthetic fuels producer Sasol andthe crude oil refiners in the country. According to this supply agreement, the crude oil refinerswere required to purchase a certain minimum amount of synthetic fuels, irrespective of themarket conditions, thereby guaranteeing a market for the product. In exchange, Sasol could notenter the retail market on its own and a limitation was placed on the volume of synthetic fuelsthat could be produced. Among others, this affected the decision to increase chemical productionfrom syncrude (Section 9.5). The supply agreement was terminated at the end of December 2003at the request of Sasol. When this happened, the production volume of synthetic fuels was nolonger restricted, but the synthetic fuels were no longer guaranteed of a market either. Withno guaranteed market, it was found that the products produced by the Sasol Synfuels refinerywere not properly aligned with the local market. It left the synthetic fuels refinery exposed tofluctuations in the retail market for the first time since its construction. Furthermore, since thefuel price in South Africa is regulated, it was not possible to market any surplus fuel at a lowerretail price. Refinery operation had to respond to these changes in the supply and demand andhad to respond in direct competition with the crude oil refiners.

24.4.3Refinery Feed Selection

In a crude oil refinery, the feedstock, or basket of crudes that is selected, has a significant impacton the profitability of the refinery. The range of crudes that can be processed is determinedduring the refinery design phase and flexibility to deviate from the design basis is determinedby processing constraints. For example, if the atmospheric and vacuum distillation units weredesigned for Arabian Light (54% lighter than 350 ◦C material), it is quite possible to exchangeit with a crude such as Iranian Light (55% lighter than 350 ◦C material), but not with AlgerianHassi Messaoud (75% lighter than 350 ◦C material) or South American Bachequero (30% lighterthan 350 ◦C material) [10].

The price differential between low-quality heavy crudes and good-quality light crudes can easilyexceed US$10 per barrel. However, the refining infrastructure and operating cost required toprocess poorer crudes may not always justify the selection of cheaper feed [20].

The nature of the refinery feed determines the refining effort to produce the required productslate. The feed selection must match the product requirements. For example, it would make better


sense to select Venezuelan Tia Juana or Bachequero crudes that naturally yield good lubricatingoil properties as feed for a lubricant refinery, rather than selecting a crude oil that requiressignificant processing to achieve the same result. This is true for Fischer–Tropsch syncrudestoo, where the syncrude selection affects the ease of refining to produce specific products. Forexample, it makes more sense to employ low-temperature Fischer–Tropsch (LTFT) syncrudefor lubricating oil production by hydroisomerization than high-temperature Fischer–Tropsch(HTFT) syncrude.

It may also happen that exploiting a specific feed material drives the decision to build a refinery.This is often true of facilities that do not make use of crude oil. When the decision is motivatedby energy security, the feed material will typically be selected to match the national resource base.Other factors, including political expediency, may also suggest the use of specific feed materials.In such cases, the feedstock is preselected and is the driver for the refinery design, rather than amarketing opportunity or specific product demand.

A word of caution is prudent. When a refinery is designed on political preference or based ona trend, it is critical to ensure that the design is robust enough to weather a reversal in politicalopinion or change in trend. For every trend, there is a potential trend killer. It may be easy tospot the trend, but not always so easy to spot the trend killer. For example, with instability in oilsupply, coal-to-liquid (CTL) technology becomes a viable alternative means of energy security,but a potential trend killer is the perceived link between CO2 emissions and climate change. Itdoes not matter whether the correlation between CO2 and climate change is causal, or whetherit is just two variables that are both correlated with time. If it is a political reality, then a reversalin political opinion will cause the once favored feed material to become disfavored.

In a Fischer–Tropsch refining environment, the feed material has less of an impact on therefinery design. Irrespective of whether it is a biomass-to-liquid (BTL), CTL, gas-to-liquid (GTL),or waste-to-liquid (WTL) facility, the feed is first converted into synthesis gas. The indirectconversion makes all feed materials equivalent with respect to the refinery, unless they areassociated with coproducts such as associated natural gas liquids and pyrolysis oils. It is thereforethe choice of Fischer–Tropsch technology that determines the properties of the refinery feed thathas to be refined, and not the raw material used as feed for syngas generation.

24.4.4Refinery Location

The importance of selecting the location of the refinery is like the three P’s of propertyinvestment – position, position, and position. In general, refineries are located close to the sourceof the feed material, or on trade routes with easy access to the feed material. Most crude oilrefineries are consequently situated on the coast with easy access to shipping for supply of thefeed and export of the products. Inland refineries are less common and require either a local feedsource or access to a pipeline for supply.

In the case of Fischer–Tropsch based refineries, it has thus far been the practice to situatethe facility close to the feed source. The locations of commercial Fischer–Tropsch facilities areindicated in Figure 24.5. Solid-material handling is generally more difficult and expensive thanfluid handling, making it almost imperative to situate CTL and BTL refineries close to the sourceof the feedstock. To a lesser degree, the same applies to GTL refineries in the absence of pipeline


Mossel BayPetro SA (GTL)

SecundaSasol Synfuels (CTL)

SasolburgSasol 1 (GTL)

BintuluShell (GTL)

Ras LaffanOryx (GTL)Pearl (GTL)

Escravos

Escravos (GTL)

Figure 24.5 Location of Fischer–Tropsch facilities.

infrastructure, since GTL facilities need to compete with liquefied natural gas (LNG), which iseffectively the transportation alternative.

Yet, in selecting a location there are other aspects to consider that may outweigh the proximityto the feed material. The location directly impacts on the refinery design and operation in termsof design details and cost. Some location-specific aspects to consider are as follows:

1) Climate. This determines the insulation, heating, and cooling requirements. In extremeclimates, such as those found in the Arctic or desert regions,special measures are required todeal with either heating or cooling. Climate-dependent measures transcend the equipmentdesign. For example, the lubricating oils for rotational equipment need to be suitable for theclimate. The material of construction is also influenced by the climate, with atmosphericcorrosion being generally higher in coastal regions than in inland locations. The spate ofhurricanes in 2005 that affected the Gulf of Mexico also illustrated the potential impact ofextreme weather phenomena on refineries [21].

2) Geology. The geology of the refinery site may require special measures to be taken insite preparation and construction. Examples of such measures include the strengtheningof foundations for protection against an earthquake and the use of deep foundations inmarshy grounds to ensure that construction is supported by bedrock.

3) Natural resources. The lack of sufficient water or water of acceptable quality to make useof a standard cooling water design may add to the refinery cost. An example of this is therefineries in desert regions that employ salt water cooling systems.

4) Environmental sensitivity. Working in a sensitive ecology can markedly affect constructionand operating practices. This is also true for facilities that are situated close to communities.It may be required to use quiet rotating equipment, ensure that emissions are lowerthan legal limits, and invest in plant beautification. Communities that are not properlyinformed may even rebel at perceived emissions, such as steam. Construction in such areasneeds to be planned very carefully, since future expansion might be limited. End-of-lifesite remediation and the environmental impact of operations may dictate some design


decisions, such as on-site effluent treatment and investment in inherently low-emissiontechnologies only.

5) Utility access. Utilities may not be readily available at the location of the facility. In areaswhere potable water supply and sewerage works are not available, construction of theseutility systems may have to be undertaken as part of the facility. In locations where the powergrid is already taking a strain, it may be prudent to invest in on-site electricity generation.Dependence on third-party utility supply is always associated with some risk. Althoughcontracts may cover production loss due to supply interruption, it will not cover equipmentdamage. In regions where there is a risk of utility interruption (including climate-inducedutility interruption), the refinery design needs to take the effects of unplanned shutdownsinto account and consider the recommissioning time during optimization. Tight heatintegration may make a refinery more energy efficient, but may also prolong the timeneeded for recommissioning after a shutdown.

6) Location factor. Cost estimators use the location factor as a measure to indicate the impact ofthe location on the construction cost. The location factor tends to be of greater significancefor inland locations and for locations far from a significant skill base. If the refinery isnot situated close to a commercial harbor with the infrastructure to off-load large vessels,the supply and transport of equipment can become an issue. Unit sizes may have to berestricted to facilitate road transportation and it will also impact the construction schedule.Although this seems like a once-off impact, it is not. Siting a refinery in a remote locationwhere living conditions are not considered desirable can result in much higher operatingcost too. It may be necessary to pay more for labor (need for ‘‘location allowances’’), workforce productivity may be lower, and it may also be more difficult to attract and retain skilledpersonnel. This can be a very serious consideration. For example, a marked performancedeterioration was seen at the Sasol 1 facility when a key personnel was transferred to theSasol 2 and 3 facilities [22].

7) Legislation. Refinery design is subject to various laws. Environmental legislation may requireinvestment in technologies to meet specific emission limits, require CO2 sequestration,or even prevent the use of some technologies, such as HF-catalyzed aliphatic alkylation.The intellectual property protection provided is likewise an important consideration, sinceinadequate licensor protection might limit the basket of technologies that licensors arewilling to license for the refinery design at that location. Legislation also governs operationand profitability through labor laws, tax laws, competition laws, as well as religious andpublic holidays in the country where the refinery is sited.

8) Politics and governance. The local, national, and international politics of the region couldhave an impact on the refinery design. Preferred suppliers, sanctions, and boycotting ofsuppliers affect the technology selection. Global politics may also influence the refinerydesign. For example, the US government placed restrictions on the supply of technologyto some countries, which implies that a refinery design will be limited in its technologyselection. Other issues that may affect refinery construction and operation include security,crime, labor unrest, government integrity, and local bribery practices.

9) Marketing logistics. Although the product and market selection can be performed inde-pendent of the refinery site selection (product can be exported), the latter will impact therefinery design. The location imparts a location advantage or disadvantage for the differentproducts. For example, a fuels refinery close to an international airport has a location


advantage for jet fuel production, which is likely to be more profitable than producing dieselfuel with its more diffuse market distribution. In such a case, a refinery design favoringjet fuel over diesel fuel production would make more sense. The refinery configuration isnot only affected by the market for final products. The configuration may also be affectedby the market for intermediates and blending components. When a refinery is close toother refineries and petrochemical producers, business agreements can be put in placeto simplify the refinery design. By interrefinery exchange of intermediate products, whichcannot be sold to consumers, final products can be prepared by blending. In this way,refineries can decrease the capital investment required to refine products to specification.It may also be beneficial to deliberately sell a specific product as an intermediate, ratherthan refining it. However, transportation of intermediates over long distances can presentproblems. Depending on the product, the transportation routing may be dictated by locallegislation governing hazardous substances. For example, transportation of carcinogenicsubstances such as benzene may be prohibitively expensive and routing benzene throughsome countries may even be illegal. Reactive intermediates may also degrade duringtransportation and require repurification closer to the market. For example, it is best torepurify n-1-alkenes that are extracted from Fischer–Tropsch syncrude after long distancetransportation.

10) Intellectual property. Unless patent protection for a technology was filed very widely, somecountries have likely been omitted. The presence or absence of relevant patents in a specificcountry may either create an opportunity or provide an obstacle to the design. A competingcompany with strong patent portfolio in a country may hinder the design of an efficientrefinery by negating the use of key technologies.

24.4.5Secondary Design Objectives

The importance of secondary design objectives should not be underestimated, since it is theseobjectives that influence the details of the design. The secondary design objectives are set by thebusiness to guide the refinery design in order to meet the current financial situation, set strategicdirection, and reflect the corporate culture. The corporate culture is an important influence and itmay invite inventiveness, stifle creativity, foster environmental responsibility, or just be greedy.

The secondary design objectives are sometimes erroneously called a ‘‘wish list’’, but these aremore often than not a ‘‘must list’’ for the project. There are many possible secondary designobjectives, of which only some are discussed. Examples of typical secondary design objectives areas follows:

1) Minimize capital expenditure. This directive is necessary when the gearing of the companyis high and additional capital cannot be raised through share issues. The impact of this ona refinery design is to invest in the least expensive configuration that will meet the primarydesign objective. Typical side effects of spending the least amount of capital are reducedflexibility (more units operating at or close to nameplate capacity), increased operating cost(more labor-intensive units with less automation), reduced on-line availability (less redundantequipment, such as spare pumps), and increased maintenance cost (less expensive materialsof construction and lower quality of equipment).


2) Maximize net present value (NPV). In a refinery, there is a limited refining margin availableto generate profit in a regulated environment. Any capital spent on the refinery to keepup with changing fuel specifications by definition has a negative net present value (NPV).Such expenditures are seen as part of the cost of staying in business. The NPV can only bepositively affected if the yield of final products per unit volume of feed is increased, a cheaperfeed stock can be used to produce the same products, or the product slate is changed tocontain more high-value products. In this respect, the options open to the refinery designerare limited by the restrictions placed on the refinery type, feed selection, and product slate.In general, the highest NPV can be obtained by producing more nonenergy products, suchas chemicals.

3) Smallest environmental footprint. It is wrong to state that more environmentally friendlytechnologies cost more, although superficially speaking they generally do. The environmentalimpact of refining technologies can (and should) be considered in refinery technologyselection (Table 16.4). Often there is more than one way to achieve a specific outcomeduring refinery design. In the author’s opinion, environmentally friendly design is part ofresponsible engineering practice and it should always be a design objective.

4) Maximum liquid product volume. In fuels refining, this strategy forms the basis formaximizing refinery profitability. Fuels are sold by volume, and an increase in the volume offinal products per unit volume of feed usually translates into increased profits. This will driverefinery technology selection away from conversion processes that reduce the liquid volumeof products and will tend to drive refinery design to lighter products, such as motor-gasoline,unless there is a significant negative price differential with heavier products.

5) Refinery flexibility. Energy markets are cyclic, as typified by the ‘‘summer driving season’’and ‘‘winter heating market.’’ The same holds true for chemical markets. Refineries areexposed to these variations. It is a business decision to either invest in the capital necessaryfor refinery flexibility or to sell the production surplus at discounted prices. Investing inrefinery flexibility has other potential benefits too, but these are not immediately reflectedon the balance sheet. It will be easier to meet future specification changes (smaller chance ofspecific units constraining refinery upgrades), plant upsets are easier to deal with (reroutingof streams is possible), and plant shutdowns are less constraining (more capacity to workaway product). Added refinery flexibility may come at the cost of increased complexity, butthis is not always the case.

6) Least refinery ‘‘complexity’’. The most elegant refinery designs are those where the refineryhas the most flexibility with the least complexity and highest efficiency. Cost estimatorsdefine ‘‘complexity’’ in terms of the type and/or number of units in a plant or refinery, whichcan then be used to estimate the capital cost [23, 24]. This may be a sensible definition forpurposes of capital cost estimation, but it does not capture the interdependency of unitsor the actual amount of work that has to be performed (operating cost) to make a finalproduct. A distinction must be drawn between complexity (Section 24.2.3) and efficiency(Section 24.2.4). It is therefore important to clarify as to what is meant by ‘‘complexity’’, sincedifferent meanings will affect the design in different ways.

7) Shortest time to completion. The time pressure on a project schedule is driven by economics,which can be linked to the time-value of money, and sometimes a transient window ofopportunity. Whatever the business reason, the construction schedule of a refinery canonly be reduced by selecting commercial refining technologies with a low construction


complexity, which is not related to refinery complexity. Technologies requiring specializedmanufacturing, exotic construction materials, and highly skilled artisans to assemble areautomatically disqualified from the design.

8) Contractual obligations. Agreements, such as joint ventures, may lock the refinery designinto the use of specific technologies.

References

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