Operational flexibility for Indian Refiners

Transcription

1 The Growing Prominence of Asian Refining Plenary Session Operational flexibility for Indian Refiners 7 th December, 2016 PetroTech, New Delhi Sanjiv Singh Director (Refineries), Indian Oil Corporation Ltd.

2 Structure of the Presentation Indian Refining Scenario Challenges facing Indian Refining Sector Technological Interventions Conclusion 2

3 Indian Refineries Refineries No. MMTPA IOC Group BPC group HPC Group ONGC/MRPL RIL (Pvt.) ESSAR Total th largest in World Avg Size : bpd JAMNAGAR (RIL 62.0) (ESSAR 20.0) MUMBAI (BPC 12.0) (HPC 6.5) BHATINDA (9.0) KOYALI (13.7) PANIPAT (15) MATHURA (8.0) BINA (6.0) BARAUNI (6.0) VISAKH (8.3) GUWAHATI (1.0) HALDIA (7.5) PARADEEP (15.0) BONGAIGAON (2.35) DIGBOI (0.65) NUMALIGARH (3.0) MANGLORE (15) KOCHI (9.5 ) TATIPAKA (0.07 ) CHENNAI (10.5) NARIMANAM (1.0)

4 Economy of Scale Operations Dismantling of APM to MDPM started in 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 Medium Refys > 3.0 but < 9.0 MMTPA Large Refineries > 9.0 but < 12.0 MMTPA Large Refineries > 12.0 MMTPA 6 (IOCL-Digboi, Guwahati, Bongaigaon CPCL Narimannan, NRL & ONGC Tatipaka) 6 (IOCL- Barauni, Haldia, Mathura, HPCL- Vizag, Mumbai, BORL) 3 (BPC-Kochi, HMEL & CPCL-Manali) 8 (IOC- Gujarat, Panipat & Paradip, MRPL, BPC-Mumbai, RIL -2 & Essar) Coastal Refineries 12 Coastal Refys having direct Crude SPM Refys. with crude pipeline >=1000 km 5 (RIL-2, Essar, MRPL,KRL, Paradip) 7 (IOCL-Panipat, Mathura, Gujarat, Haldia, Barauni, HMEL & BORL)

5 mb/d Refining Capacity & Complexity indicators CDU capacity (mb/d) Nelson complexity index NCI Low Complexity Factor of many Operating Refineries All these refineries are low capacity & low complexity compared to world avg. Further, Refineries in North East ofindia are very small capacity Need for Capacity Creep & enhancement of Complexity Factor 5/32

6 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% 3% 4% 10% 5% 18% Middle East Africa 11% Latin America 18% 57% North America Others 11% 63% mb/d mb/d Source : India Energy Outlook WEO 2015 Present Policy provides freedom in Crude Import

7 MMTPA Sulfur Content (%) Refining Sector - Crude Scenario India s crude slate % Installed Capacity(MMTPA) Crude Imports(MMTPA) -0.5 API Gravity India Saudi Arabia Iraq Venezuela 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

8 MMT Indian Refining Sector - Current Scenario Installed Refining Capacity (MMTPA) BS III BS VI BS IV 2020 Nationwide 2017 Nationwide 2010 Nationwide Figures as on 1 st 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

9 MBTU/bbl/NRGF MMT % of crude processed Refining Sector - Performance Refinery throughput (MMT) Distillate yield Specific Energy consumption (Industry avg) Refinery Utilization 9/32 Source: PPAC/IHS

10 India Crude Processing Projection Need for Refining Capacity Expansion BP Energy Outlook India Energy Report IEA Energy Outlook, Current Policy IEA Energy Outlook, New Policy 2015 OPEC World Demand Outlook Current Refining Capacity in India With growing MS & Diesel growth, India s Refining Capacity to reach from current 230 MMTPA to about 350 MMTPA (2030) & about 500 MMTPA (2040).

11 Million Tonnes 11 Huge Demand Growth of Transportation Fuel Gasoline projected to grow faster than Diesel Poses Challenges to meet growing Gasoline Demand Diesel : MS : % % % % % 70 MS HSD % % %

12 India fastest growing Petchem Market *POLYMER SUPPLY DEMAND TREND IN INDIA, KTA CAPACITY DEMAND IMPORTS EXPORTS kg / CAPITA 0.0 * : 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, 18% CAGR

13 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 ). 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.

14 Challenges for Indian Refiners High Domestic Demand : highest demand growth Quality upgradation projects : BS VI by 1 st 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

15 ppm BS VI Gasoline Challenges Meeting LPG demand with 100% 95 RON Reformate High Aromatics Sulfur 10 ppm Sulfur in Gasoline FCC gasoline High Sulfur, Olefins Year Pre Bis 2000 BIS 2000 BS-II BS-III BS-IV 10 Aromatics 35 vol% Isomerate Low RON BS VI Gasoline Olefins 21/18 vol% Octane boosting Solution RON of Gasoline RON 91/ Year Pre BIS BIS 2000 BS-II BS-III BS-IV

16 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 Infrastructure Development

17 Technological Intervention Refinery Configuration/ Complexity Factor Improvement to address Changing Feed Stocks : Input cost reduction Quality 0 API / 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

18 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 (%) Status Mature Mature Under demonstration

19 Potential Gasification Feeds & Products Natural Gas CO 2, N 2, S Steam Refinery Gas Vacuum Residue Combined Cycle Electric Power Pitch Coal Pet Coke from Refinery Cokers Bio Mass Gasification Plant Slag for Construction Material & Metal Recovery Chemicals Production Fischer Tropsch Reaction H2 CO Fertiliser Chemicals Methanol Acetic Acid Naphtha Jet Diesel Wax

20 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

21 Thank You