Mini and Tiny Refineries
M C Dwivedi Former Professor - Department of Chemical Engineering, Indian Institute of Technology Bombay, Mumbai

As crude oil is produced in remote, non-consumer locations, while major centers of refining and consumption are widespread, thus making smaller refining units unviable due to high transport and logistics costs for moving the crude. The author believes that smaller and older oil fields and those abandoned in past as 'uneconomical' will have to be reactivated to recover every trace of oil or gas as demand outstrips production, where the 'Mini and Tiny Refineries' will become relevant in future.

The current minimum, economically viable capacity for a petroleum refinery appears to be 6 million tons (preferably 9 million tons) per year. This is because of high transport and logistics costs and increasing complexity to reduce residual product (bottom of barrel) to around 10 per cent. With exception of USA and Russia, crude oil is produced in remote, non-consumer locations, while major centers of refining and consumption are widespread in countries like Europe, Japan, China, India, South Korea, etc. This causes huge movement of crude oil and refined products, making smaller units unviable.

Under special circumstances refineries with lower capacities are being operated.
  • At places away from sea port and oil pipeline, with small capacity oil field and adequate local market, eliminating transport or logistic factors.
  • Refinery specially designed to produce feedstock for a petrochemical unit at remote location and local market for products.
  • Local availability of 'odd' type of crude oil, difficult to blend and process with other crude oils.
  • Availability of 'easy to refine' stocks like oil field and gas field condensates, which could be refined with zero bottom of the barrel.
  • Political and social compulsions.
Mini Refinery
In most cases, feedstock is priced lower than that of international price and logistic costs are low. Refinery units with 50,000 tons to 2 million tons per year capacity could be called as 'Mini Refineries'.

These are mostly located in isolated places and process locally available feedstocks to meet local demands for fuels and other petroleum products. A number of these process oil field and gas field condensates to make motor gasoline, kerosene and diesel. Some produce value-added industrial solvents, for paint, varnish, resin, paint removal applications, vaporisable mosquito oils, insecticidal sprays, and process fluids; refluxing and reaction media, extraction solvents, rust preventive formulations, etc. Some of these units produce special naphtha stocks for steam reforming to make petrochemicals and fertilisers.

Such units have simple process schemes like Atmospheric distillation, Vacuum distillation (in some cases). Desulfurisation may be required with some stocks. Gasoline fraction from straight run distillation particularly those of condensates generally have major concentration of linear saturated hydrocarbons, with low octane number; 80 to 84. This could be sometimes upgraded by blending with high octane stocks or subjected to octane improvement processes like catalytic reforming including platforming, alkylation, hydroisomerisation etc.

A number of Mini Refineries are operated on crude oils, because of low production of oil and also low local demand. For example; demand for petroleum products in Bangladesh is about 3 million tons per year and Crude Oil production is about 1 million ton per year. Eastern Refinery (1 million tons/yr) at Chittagong processes this oil to meet about 50 per cent demand of motor fuels. This refinery is due for expansion to 3 million tons per year. Such refineries include Dehydration and Desalting Atmospheric Distillation, Vacuum Distillation, and mainly produce, LPG, gasoline, kerosene, diesel and fuel oil. Octane upgradation process and Desulfurisation process may also be included, if required. Light residual fuel oil is 40 percent or more, for topping units and about 25 percent for units with vacuum distillation. For waxy crudes, dewaxing and wax production units may also be included. For high asphalt crudes, bitumen process is included. Some units have industrial solvents and process fluid production processes to improve economics.

There were a large number of such units in India in 1970s. However due to non-conducive government policies and interference by local authority most of these have closed down. Some units operate as part or subsidiaries of major government oil companies. These include Guwahati Refinery (1 million ton), Dighoi Refinery (0.65 million ton) CPCL - Narimanam Refinery (1 million ton) all under IOCL, and Tatipaka Refinery (0.1 million ton) under BPCL.

Tiny Refinery
Tiny Refineries are small primitive batch distillation units, with batch size of 5 kl to 200 kl. These have rectification column, vapour condenser, reflux drum, reflux circulation system and product collectors. Residual bottom is also cooled and taken as a product. The major advantage is flexibility; that any number of distillate products with different boiling ranges could be taken in every batch. There may be batch to batch change of feedstock as well as product specifications. A number of batch units may be operated parallel. In such case these may be heat integrated so that heat of a batch could be used to preheat another batch. Energy saving is around 30 percent and also batch time is reduced.

Such units are useful at the beginning of the development of an oil field or gas field, as small quantities of crude oil or condensate are produced during exploratory drilling and well testing etc. Proper utilisation of these becomes difficult particularly in logistically remote and isolated locations. Obviously, these units disappear if a major oil or gas resource is found and major collection and refining facilities are established. Some oil or gas sources are too small for the development of economically feasible processing or collection facilities. However these quantities are enough to meet local or in-house demand. In the initial period of development and exploration, a number of such units come up in the area to process and utilise crude oil and condensate. During 1890 to 1920, hundreds of such units dotted California, Pennsylvania, Texas and other oil producing areas of USA.

In India first such unit was put in Margarita near Digboi around 1896. More than 100 units operated in Assam, Gujarat, Maharashtra in 1970s when India's exploration was at fast pace and new resources were being developed. Dubai and UAE Iran, Iraq, Saudi Arabia, Turkey etc, have large number of such units which process crude oils and condensates from small Oil/Gas fields and wash oil from the oil tankers and bulk storage tank farms and pipelines.

Emerging gas & oil industry in Bangladesh has given rise to 1015 tiny refineries in last few years. Myanmar oil and gas sector is developing fast with the China, and global E & P players like, Shell, Total etc are investmenting more than 14 billion USD in exploration and pipelines in the country. In the recent bids for 36 exploration blocks, provisionally selected companies include, majors like Chevron (USA), Royal Dutch Shell (UK ), Reliance Industries (India), Petronas (Malaysia) etc projected investment about USD 300 billion in Myanmar. An interesting aspect of Myanmar oil industry is presence of thousands of tiny oil diggers and refiners. Each of these occupies a small yard where small drills are used to make shallow oil holes, producing 10 to 200 barrels oil per day. The oil is decanted to remove associated water and then distilled in primitive wood fired retorts to distil out light fractions (BP up to around 2500C). The temperature of still is high (450 5000C) and distillation time is large (10 15hrs), so that heavy bottom fractions thermally decompose giving unsaturated light fractions. Distillate yield is 85-90 per cent; another 8-10 percent is coke. At the end of the process coke is chiselled out of the retort. Typically these retorts are 2 kl to 5 kl capacity and a batch takes one or two days. A typical unit has 8 to 10 such retorts running parallel. Equipment is of primitive and of crude design and last 30-40 percent distillate fraction is of poor quality with high degree of unsaturation. Thermal efficiency is very low and working conditions are unsafe. Other such rising destinations are Vietnam, South Sudan, Nigeria, Indonesia and some Central Asian Countries.

Oil and gas is becoming 'short supply' as demand out strips production. Smaller and older oil fields and those abandoned in past as 'uneconomical' will have to be reactivated to recover every trace of oil or gas. This is where the Mini and Tiny refineries will become relevant in future.