Improving the Competitiveness through Refinery Petrochemical Integration
Dr. Pranjal Kumar Phukan
M.I.E , F.I.P.E , M.I.I.E, CEng, PEng
Senior Manager (C & P), Contracts & Procurement
Brahmaputra Cracker and Polymer Limited, Lepetkata
PO: Lepetkata, Dibrugarh, Assam. Pin code: 786006

Petrochemical Integration is capable to moderate the risks related to raw materials while reducing the carbon footprint substantially. This article evaluates the level of integration achieved by petrochemical industry, a keydriver in the petrochemical sector and the future potential of integration of refinery and petrochemical businesses bringing resurgence in NE India.

Petroleum refining and the petrochemical industry account for a major share in the world energy and industrial market. In many situations, they represent the economy back-bone of industrial countries. Today, the volatile environment of the market and the continuous change in customer requirements lead to constant pressure to seek oppor tunities that properly align and coordinate the different components of the industry. In par ticular, petroleum refining and petrochemical industry coordination and integration is gaining a great deal of interest. Petrochemicals and refineries continues to grow in close co- operation and focus is on maximizing the synergies between the two technologies. In view of spiraling availability of the crude oil, associated- gas and refineries, it has become almost inevitable to look for value -added oppor tunities to be integrated with the already existing upstream facilities through petrochemical integration. With the advent of high- edge competitive market, price volatility of feedstock and products, and more stringent environmental regulations impacting the operating costs, it is necessary to identify and capture opportunities for more profitability through refinery.

Petrochemical Integration is capable to moderate the risks related to raw materials while reducing the carbon footprint substantially. The optimization of raw materials to ethylene cracking unit is a key step for integrative optimization of refining and petrochemical plants. Naphtha is the primary raw material to ethylene cracking unit, and is also the raw material for continuous reformer to produce benzene, toluene and xylene. It is an approach for profit increase to optimize amount of naphtha which feeds into ethylene cracking unit and continuous reformer. It can be concluded that integrative optimization of refining and petrochemical plants is the developing trend and should attract more concern in the future.

Th e Petrochemical industry is a network of highly integrated production processes where products of one plant may have an end use or may also represent raw materials for other processes. This multiplicity gives rise to a highly complex structure which requires proper planning tools and consideration of the different alternatives for future developments.

Consideration of uncertainty in such decisions is of a great deal of importance and interest by both the private companies and governments. Previous studies in the field have mainly considered the problem under deterministic assumptions or considered only part of the uncertainty in the process parameters.

Key words: Integration, Petrochemical, Refineries, Hydrocarbon, Profitability

Introduction
The petrochemical industry is a network of highly integrated production processes. The products of one plant may have an end use but may also represent raw materials for another process. Most chemicals can be produced by many different sequences of reactions and production
Figure 1: Single Route of petroleum feedstock to products


Figure 2: Petrochemical alternative use

processes. Petroleum feedstock, natural gas and tar represent the main production chain drivers for the petrochemical industry (B ell, 1990). Figure 1. From these, many impor tant petrochemical intermediates are produced including ethylene, propylene, butylenes, butadiene, benzene, toluene, and xylene. These essential intermediates are then conver ted to many other intermediates and final petrochemical products constructing a complex petrochemical network.

With outbreak of economic crisis in 2008-09 due to drastic change in crude oil prices, the refineries which are operating their plants at modest capacity and low operating margins have incurred losses in their profit margins. The idea of integration emerged for a desire of higher profitability in the competitive market. Further experts and researchers put their innovative ways to squeeze out costs and capture new oppor tunities to take advantage of close proximity to low-price feedstock source to make cost effec tiveness in the result of Refinery and Petrochemical Integration[1].

Integrated optimization of refinery and chemical plant has been concerned widely worldwide. Some famous petrochemical companies have studied this subject for years, and gained huge profit through experiences. In the integrated optimization of refinery and chemical plant, it is very important to realize providing raw materials each ot her between refinery and chemical plant. The optimization of raw materials of ethylene cracking unit is a key step especially for integrated optimization.Taking into account the risks associated with setting up a petrochemical in integration with refinery in North East India, it is imperative that the viability of the project be sufficiently ensured. This requires (i) reducing the level of investment (ii) confirmed feedstock availability at moderate price (iii) competitive finished product pricing considering remote location of the plant. The petrochemical business being cyclical in nature, the project financials must be sound enough to absorb the polymer price fluctuations.

The per capita consumption of plastic in the North-Eastern region is ~ 2.8 kilogram against a national average per capita consumption of ~9.7 kilogram, and global consumption of ~28 kilogram. Until recently, the entire NE region accounted for a share of around 9 percent of the polymer consumption whereas it has a share of 23 percent of the Indian population. Setting-up of BCPL has provided the NE region the necessary fillip in feedstock sourcing in the polymer processing sec tor along with increased growth in End-user industries which would propel the growth of plastics in North-East India further.

Process integration
The innovative design of different refinery processes while considering downstream petrochemical industry is an illustration of the realization of refining and petrochemical integration benefits. Some of the available technologies include cracking for high propylene and gasoline production (Fujiyamaetal.,2005), maximum gasoline and LPG production, and low-pressure combinat ion-bed catalytic reforming for aromatics (Wang, 2006). Other technologies include different extractive treatments of refinery streams, e.g. aromaticrecovery from light straight-run (LSR) naphtha.[2] The alternative use of refining streams is shown in Figure 2.

Considering the geographical remoteness and logistics constraints in NE region- the seven sister states connected with mainland of India through a "Chicken-Neck", the dream of petrochemical industry came into reality with the help of integration with the major players in hydrocarbon sector in NE India. Natural gas from OIL & ONGC, Naphtha from other refineries, if provided with moderate prices will give a strong economic advantage to the petrochemical unit in turning natural gas and naphtha into intermediate chemicals and an array of finished polymer products.


Figure 3: Existing BCPL Plant integration

Pyrolysis gasoline (pygas), a byproduct of stream cracking, can be further processed in the BTX complex to recover the aromatic compounds and the raffinate after extraction can be blended in the gasoline or naphtha pool (B alaraman, 2006). If there is no existing aromatics complex to further process the pygas, it could alternatively be routed to the reformer feed for further processing (Philpot, 2007). However this alternative may not be viable in general as most reformers run on maximum capacity. Pygas from steam cracking contains large amounts of diolefins which are undesirable due to their instability and tendency to polymerize yielding filter plugging compounds. For this reason, hydrogenation of pygas is usually recommended prior to further processing.

Integrative optimization process
M/s OIL, the main supplier for natural Gas to the petrochemical unit, had taken steps to augment its natural gas production potential in Assam. The terminal gas production potential has been already increased and with the commissioning of the Baghjan-Madhuban gas pipeline, and substantial amount of associated natural gas is being monetized. Potential is also being explored for using of condensate by-product of the LPG Recovery Plant as a cracker feed in the petrochemical unit (Figure 3). Further, possibility of utilizing the vented CO2 from the petrochemical unit, Gas Sweetening Unit is being explored for the oil well blanketing which will help to lower down the global warming.

The C2 and C3 components present in natural are recovered in the Gas processing unit, in the petrochemical unit, with C2+ recovering technology, and the "lean natural gas", containing almost 99% methane is sent for use in down stream fertilizers.This lean gas can be used as a fuel replacing naphtha and fuel gas in both petrochemicals and refineries. Also, the additional saved naphtha can be used as a feedstock in Cracker unit for petrochemical complex.

It should be evaluated that how the next decade will be different for the petrochemical and plastic industry from other previous decades as it relates to the prominence of these raw materials?

Propylene Integration
Fluidized catalytic cracking (FCC) technology was developed to increase gasoline production derived from crude -derived vacuum gas oil (VGO) and, in some cases, atmospheric resides. This continues to be the primary objective. According to a Purvin and Gertz study, as of 2010, cracking-based conversion accounts for approximately 50 percent of the world's refining capacity. As fuels market needs to evolve, FCC technologies are being repurposed to produce high-grade petrochemical feedstocks along with transportation fuel .[3]

Existing Refineries are planning to recover Propylene by proposed Propylene Recovery Unit along with the upcoming INDMAX FCC Units for increasing LPG Production.(Figure4). The process has been optimized to enhance propylene yield from reduced crude oil lighter fraction, with approximately 12-27 percent of the feed getting converted to Propylene. The heavy petroleum oils and low- value residues will be converted into high yields of propylene, ethylene and butylenes etc. In existing facility LPG produced in FCCU is mainly used for domestic purpose as a fuel. This future modification will enhance propylene in directly contributing to mitigate the higher demand of polymers.[6]


Figure 4: Propylene recovery scheme

FCC feed quality is the most critical parameter in determining propylene production potential. There is a strong positive correlation between the FCC feed hydrogen content and propylene yield. Feeds that are richer in hydrogen are capable of producing more propylene largely due to increased feedstock conversion. Fur thermore, this potential for propylene is harnessed by the FCC technology and process conditions. Propylene production from an FCC unit is framed by several fac tors that when combined with licensed technology provide the means for propylene/petrochemical modes of operation.

Because propylene production is equilibrium limited, recycling higher molecular weight olefins can be used as another technique to maximize propylene yields. The linking of reac tion equilibrium concepts with reac tor and regenerator technologies results in the latest maximum propylene FCC technology. This latest technology highest-yield propylene.[4]

FCC process uses a multi-stage reactor system comprising a primary hydrocarbon feedstock reaction stage, and a secondary recycle reaction stage utilizing a common regeneration stage with continuous circulation of fluidized catalyst between both reac tor stages and the regeneration stage.

Refinery Off-gas integration
Refinery off-gas generally contain heavy hydrocarbon which is almost greater than 30 mole% C2. Refinery off- gases from different units of refinery may be used to extract petrochemical compounds like ethane, ethylene, propylene, butanes and propane etc. But it may not be cost effective for some time as the processing of such gas involves higher operating cost in comparison to the price of associated / nonassociated natural gas.

Future Butene-1 and HPG integration
Hydrogenated Pyrolysis Gasoline, a by-product at BCPL, is unsuitable to be directly used as MS blend component due to high Benzene content. Also the inherent characteristics of HPG being carcinogenic and prone to adulteration in MS, a long term solution for safe and convenient evacuation of HPG is required. Looking into this, a Second stage hydrogenation plant of Pyrolysis-Gasoline is proposed, which will hydrogenate the Pygas followed by benzene saturation of C6 streams to convert benzene to cyclo -hexane. (Figure 5). This resultant HPG is expected to meet a benzene specification of 1 Vol % (max) and Sulphur less than 10 ppm by weight, with a RON and MON value of ~95 and ~82 respectively, so as to blend it with Motor spirit.[5]

A Butene-1 plant is proposed to be set up in BCPL for catering the needs of the Polymer Unit (PE Plant) with a t ypical ethylene dimerization process. The by-product of this plant will be a C6 rich stream, which may be used for blending with MS in the nearby refineries.

New RPI based development concepts which are continuously growingup need to be assessed, analysed and evaluated properly based on its potential and through CBA-cost benefit analysis. Anyhow, what is stated in this article clearly shows that there is potential for achievement of positive synergies between NE oil and gas players through refinery & petrochemical integration.[7]

Optimal integration and coordination:
In view of the current situation of high oil prices and the increasing consciousness and implementation of strict environmental regulations, petroleum refiners and petrochemical companies started seeking opportunities for mergers and integration. This is evident in the current projects around the world for building integrated refineries and the development of complex petrochemical industries that are aligned through advanced integration platforms which states a typical refining and petrochemical industry supply chain. The realization of coordination and objec tive alignment benefits across the enterprise has been the main driver of such efforts.[8]

Conclusion
The main driving force for RPI is to enhance profit knowing that this integration is no longer a theoretical postulate and has already materialized in the Industrial practice in India resulted in enlarged profits bringing down the doubts, but it is still unexplored that to which degree of new integrations this RPI will be economically viable. In a country like India this viability has been calculated as a mixture of socio - economic interests keeping in mind that Techno- economic feasibility and price forecasting for valorizing of exchange streams to the highest possible degree is important for increasing the overall revenues for the refinery-petrochemical integrated complex. BCPL is the latest addition to RPI in the NE region of India, will prove to be a potential game - changer in shifting the focus of plastic industr y to eastern states of India and become the hub for future growth. Refining and petrochemical integration provides many economic benefits. For the petrochemical producer, integration provides a constant supply of attrac tively priced feedstock. For the refiner, integration provides the opportunity to increase product revenue and maximize project return on investment8.


Figure 5: Butene-1 & PG integration

BCPL being the only mega Petrochemical Industry in the entire NE region, it is expected to bring a renaissance in the polymer sector in NE India. With raw material readily available, numerous downstream polymer industries will be setup in the region, and polymer consumption will also rise. A plastic park in the nearby region is also coming up, for facilitating entrepreneurs for setting up new polymer industries. It is expec ted to house around 256 downstream plastic industries, and to market the products in South-East Asia including Myanmar, Bangladesh and Bhutan.

Indian petrochemical industry has unrealized potential and latest studies indicates that with adequate support from government and growth in end use demand, the market for plastic processing industry in India is expected to grow at a CAGR of 10. 5% from FY15 to reach 22 MMTPA by FY20 . Polymer import dependency remained high at 32% in 2015-16 and is expec ted to come down in next two years to ~30%. India's petrochemical industry, like the overall economy, faces near-term challenges, but the long-term growth outlook for the industry remains positive through refinery- petrochemical Integration.

References:
1. Petroleum Refining and Petrochemical Industry Integration and Coordination under Uncertainty, Khalid Y. Al-Qahtani, University of Waterloo, 2009
2. Hallale, N., 2001. Burning Bright:Trends in Process Integration. Chemical Engineering Progress7 97pp.30-41
3. Refining/petrochemical integration:a new paradigm, Joseph C Gentry, GTC Technology US, LLC, Houston, USA
4. Integration of Refinery and Petrochemical Plant, Toyo Engineering Corporation, February 22-23, 2011
5. Synergy between Refinery-Petrochemicals and Future Configuration for Aromatics, Shailendra Mohite, Kuwait Petroleum International, September 18 2014, Platts 2nd Annual Aromatics Summit 2014.
6. Creating petrochemical growth platforms:leveraging upstream and existing assets with world class technology, Aslam Moola, Shell Chemicals, Petchem 2009, October 2009, Abu Dhabi
7. Integration oppor tunities in Refineries- Petrochemicals, Vinay Gupta, EIL, May 25-26 2017, BEC, Mumbai
8. Integration of refinery and petrochemicals with "over the fence" supply of gas utility molecules, Prasad K Panicker, BPCL, Kochi Refinery, Istanbul, 22nd World Petroleum Congress, July 09-13, 2017.