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Preparing Planning Models to Identify Profit Potential Use of Simulation Technology to Build Planning Models May 2014

Our Speakers Today

May 2014

KBC Corporate Profile > Leading independent consulting and technology group > Deliver competitive advantage to owners, operators and

investors in the oil and gas industry through risk management and improvements in business performance/asset value

> Established in 1979, AIM-listed, 2013 revenues ≈ £65 million > Full service international consultancy – 350+ employees

May 2014

People

Methodology

Technology and Tools

Impact of Planning Decision (Crude Purchase) on Refinery Margin

> Crude cost depends on a number of factors – including crude source, quality and vessel size

> Opportunity crudes and distressed cargos are attractive options to boost margin

May 2014

Refinery Cost Element

Crude Cost Margin

12%

88% 93%

7%

Feedstock

Other Cost

Western Refinery Asian Refinery

Other costs include Operating Expense, Selling/ Administrative Expense, Employee benefits, Depreciation/ Amortization and Interest/ debit Expenses

> Feedstock (crude) cost is the biggest expense for a refinery and has the most significant impact on refinery margin

> For a 200 kbpd refinery and crude @ $100/bbl – Crude costs approx US$7 billion/annum – 10 cents/bbl is worth up to $7 million/annum in increased margin – Wrong decision could cost much more

Source : KBC

100

66

23

910

70

46

16

67

Typical Benefits – Planning Model Update

May 2014

Typical Min Client #1 Client #3 Client #4 Client #2

Cents/bbl $MM @ Year @ 200 kbpd

Planning Models

May 2014

Actual Plan

Lost Opportunity

Best Achievable

Plan

Plan V/s Actual

Profit Potential

Typical Planning Model Accurately represents current Operation

Model representing Profit Potential of the asset

Linear models of non-linear refinery operations Key: Accurately capture Major Economic Drivers

Potential Opportunity

Cut Point/Routing Optimisation

May 2014

CDU

V D U

Gasoline

ATF/Kero

LPG

Aromatics

CCR

BLENDING

Kerosene HDS

Gasoil HDS

VGO HDS

Residue HDS

HCR

FCCU

Aromatics

Diesel

Fuel Oil

Naphtha vs. Kero

Gasoil max to cold

properties

Deep Cut vs.

Capacity

HCR vs. FCC

FCG / LCO LCO / Slurry

Severity Selection

May 2014

CDU

V D U

Gasoline

ATF/Kero

LPG

Aromatics

CCR

BLENDING

Kerosene HDS

Gasoil HDS

VGO HDS

Residue HDS

HCR

FCCU

Aromatics

Diesel

Fuel Oil

RON Balance Max Aromatics

H2 Balance

HDS vs. Charge Rate Feed Quality Run Length

FCC Synergy

H2 Balance Conversion

Operating Limit

Stream Quality Representation

May 2014

CDU

V D U

Gasoline

ATF/Kero

LPG

Aromatics

CCR

BLENDING

Kerosene HDS

Gasoil HDS

VGO HDS

Residue HDS

HCR

FCCU

Aromatics

Diesel

Fuel Oil

Full PONA Data Improved BTX

prediction

Contaminant Feed Paraffin vs.

Aromatics VGO vs. Resid

Contaminant Feed Paraffin vs. Aromatics

Blend Optimisation

May 2014

CDU

V D U

Gasoline

ATF/Kero

LPG

Aromatics

CCR

BLENDING

Kerosene HDS

Gasoil HDS

VGO HDS

Residue HDS

HCR

FCCU

Aromatics

Diesel

Fuel Oil

D86 Limits in Diesel,

Gasoline Blending

Cold Properties, ABN for FO

Blending

Reconcile/Validate Raw Data

May 2014

> Mass, Carbon, Hydrogen balance to reconcile Yield, Composition

– Sulfur, Nitrogen balance (if required)

> Assay Synthesis to validate Stream properties – E.g. Specific Gravity, Distillation, Flash Point

> Operating Conditions – Primary – to develop simulation model – Secondary – to validate simulation model

Selecting Calibration Case, Operating Envelope

> Single (or average) of multiple calibration cases > Provides ‘reasonably good’

match with reconciled plant data > Provides ‘reasonable’ predictions

over operating envelope

May 2014

Reformer

Stabilizer Mixed Xylene Unit

Heater Duty

Column BTMS

LP Data Generation Using Integrated Flowsheet

May 2014

Integrated Flowsheet Model Reformer and Mixed Xylene Unit

> Key Features: – Full Feed Definition (PONA) – Multiple Severities – Base Delta vectors to calculate:

• Yield shift • Composition • Change in yields from Mixed Xylene unit

– Change in distillation specifications (MXU) resulting in change in yield, composition

– Deferred cut approach allows more accurate LP results

– Constraints in any part of the plant can be modelled in LP

Simulation Key Advantage

May 2014

Solve Matrix

Solution Data

GRTMPS PSI

PIMS-SI Workbooks

Matrix Revisions

CSV Output

Text Input

Reduced Form Recursion

Loop

Use directly with PIMS AO

> Independently perturb key feed quality, operating parameter resulting in independent delta vectors > Run large number of cases (as statistically required) if generating LP vectors by regression > Ability to generate ‘customised’ stream quality data as required to support LP modelling

technique/option – Blend Index based on customised equation – PRP*SPG, PRP/SPG – Evaporation data to support D86 Blending

> Reduced equation form of process unit representation

– Including directly in the LP Model – Include via simulator link

Process Unit Monitoring, Model Tuning

May 2014

Compare Actual vs. LP

vs. Simulator Output Data Reconcile

Raw Data Raw Data

Run LP Sub Model &

Simulator

Plant Data

Calibration Factors

Update Calibration

Publish Results

No

Yes

Results OK?

Regenerate LP Vectors Update LP

& SIM Models • REF-SIM™, ISOM-SIM™ • FCC-SIM™, DC-SIM™ • HXX-SIM, HCR-SIM™ • ALK-SIM™, AROM-SIM™ • VIS-SIM™, OLEFIN-SIM™

Case Study - China Integrated Energy Company

May 2014

Business Situation KBC Role

Results and Benefits

Business Profile and Context

Largest integrated energy and petrochemical company in China with 168 MM te/y capacity through 33 refineries. Fuels retailing is in line with refining capacity. There is also some integration with upstream crude production. KBC is a trusted partner for application of global best methods and technologies. Since 2005, this has included two large Profit Improvement Programs™ with delivered benefits of over 50 c/bbl, energy reduction projects, process revamps, grassroots designs and software licenses.

Planning and scheduling methods | LP data generation | LP structure definition, building, commissioning | Backcasting process

Business Processes

• Strong growth in Chinese demand

• Chinese crude depleting, replaced by lower quality feeds from abroad

• Refinery expansions and revamps

• Energy reduction mandate of 20% in current 5 year plan

• Applying global best practices on profit performance as well as processing technology

• Advised on Planning process • Built new LPs for 2 large and

complex refineries • Simulation-based LP data

generation using Petro-SIM corporate license

• Formal training courses • Capability development of

headquarters team so they can lead roll out to new sites

• Lower feedstock costs from improved crude selection

• Feasible and accepted plans that enable optimised refinery operations

• Capable central team for roll out of LPs to other refineries

Closing > Additional questions and future topic suggestions can be

sent to answers@kbcat.com > Future webinar topics:

– CDU LP Representation – Mode vs. Swing Cuts – Reformer LP Representation – FCC LP Representation – Perturbation vs. Regression

> Video recording and presentation slides will go out shortly. > Look out for the next webinar invitation.

May 2014

May 2014

KBC Advanced Technologies

Thank you!