CHAPTER 1 EXECUTIVE SUMMARY

Transcription

1 CHAPTER 1 EXECUTIVE SUMMARY

2 1.0 EXECUTIVE SUMMARY BS VI quality fuels compliance Project 1.1 Introduction The Kochi Refinery of Bharat Petroleum Corporation Limited (BPCL-KR) located at Ambalamugal, in Ernakulum District (Kerala), India was established in 1966 and has been expanded to current capacity of 9.5 Million Metric tons per Annum (MMTPA) through successive revamps/ new facilities. It currently has two trains of primary distillation units (CDUI and II), secondary processing facilities viz VGO-HDS, FCCU, DHDS, petrochemicals like benzene toluene production facilities and other associated treating and utilities facilities. Currently, the refinery is implementing the Integrated Refinery Expansion Project (IREP) which will enhance refinery capacity to 15.5 MMTPA by processing of 100% high sulphur crudes and also upgrade auto fuels quality to Euro-IV specifications. IREP includes implementation of a Crude/ Vacuum Distillation Unit, a Naphtha Hydrotreater/ Isomerization unit, a Diesel Hydrotreater unit for Hydrotreating Diesel, VGO Hydrotreater unit to hydro treat feed for Fluidized Catalytic Cracking Unit, a Fluidized Catalytic Cracking Unit to maximize Propylene production, a Poly Propylene Unit for production of Poly propylene and a Delayed Coker Unit for the Residue Up gradation. BPCL intends to maximise and upgrade MS and diesel processing capabilities to meet BSVI fuel specifications by 1st April BPCL has entrusted EIL to carry out the job of preparation of pre-feasibility report (PFR) for BSVI quality fuels production. 1.2 Background As per Auto Fuel Policy 2025, The Ministry of Petroleum and Natural gas is laid down a roadmap for complete transition to BS IV automotive fuel by the end of 2017 and the transition to BS V automotive fuel is slated to take place and completed by 1 April 2020 in the entire country. Though, in post IREP scenario, BPCL Kochi Refinery will be able to produce BS IV quality MS and Diesel along with partial production of BS VI products, it will require additional facilities to achieve BSVI quality specifications for MS and HSD. In view of the above, BPCL intends to maximize and upgrade MS and diesel processing capabilities to meet BSVI fuel specifications by year 1st April In first phase of project implementation, BPCL desire to establish the facilities for BS VI MS and diesel production with processing of high sulfur Mumbai VR of 400 KTPA. Also maximum achievable capacity increase in crude throughput by utilizing in built owner s design margin of the process units without necessitating major modifications and change in crude mix (AL: AH) basis. In View of above M/s EIL is requested to prepare the Pre-feasibility Report for BS VI quality Fuels of Kochi Refinery for following cases: Case 1: Maximization of BS VI MS and diesel VI considering new MS and Diesel facilities for post IREP configuration with additional processing of 400KTPA Mumbai VR. Case 2: Based on over all material balance across the units for case1 crude mix basis, establishment of the maximum crude throughput considering owners design margin Case 3: To achieve desired throughput of about MMTPA, change in crude mix with processing objectives as in case1 without any additional / augmentation of secondary / residue unit capacities except MS block and DHDT.

3 1.3 Basic Design Parameters Crude Mix The following crude mixes are considered: Case 1 &2: wt% Arab Light wt Arab Heavy. Case 3: 38.6 wt% Arab Light wt Arab Heavy Refinery Capacity The study is carried out for three cases: Case 1/2 : 15.5 MMTPA (CDU-II 5.0 MMTPA & CDU-III 10.5 MMTPA) Case 3 :16.55 MMTPA(CDU-II 5.0 MMTPA & CDU-III MMTPA) On-Stream hours The stream hour considered for the study is 8000 Hrs/Annum Objectives of the study Meeting BS VI Specifications of MS and HSD. Maximization of MS and Diesel. Minimization of naphtha Product Demand The product demand considered for the PFR is as below: Table 1.1: Product Demand (KTPA) Product Minimum Maximum LPG (Domestic) 520 Optimize Naphtha To be Minimized Benzene Toluene MS-Regular BS -IV NIL MS-Regular BS -VI 1111 Maximize ATF SKO * MTO Product Minimum Maximum HSD - Euro-IV To be Minimized HSD - BS-VI 4248 Maximize Bitumen (VG-30) *50 % of the Kero sale shall be Hydro treated Kero Feed, Product and Utility Prices The feed and product are the actual average of five years (Financial years ).

4 Table 1.2: Feed and Product Prices Price Rs/MT Products (avg of years ) / (Price Rs/KL) Feed Arab Light Arab Heavy HS VR From BPCL MR Natural Gas Imported Fuel Oil Make Up Hydrogen from BOO Products Propylene Chemical Grade Propylene- Polymer grade LPG Domestic (Note-1) LPG Commercial (Note-1) Benzene Toluene Naphtha Export MS BS IV / MS BS VI Regular 51223/ MS BS VI Premium / ATF / SKO / SKO Industrial MTO HSD BS IV 46437/ HSD BS VI 46939/ Bitumen 60/70(Bulk) (Note-2) Bitumen 6-/70 (Pack) (Note-2) Coke 7000 Sulfur Notes: 1. LPG Price is considered as weighted mean of commercial and domestic (Commercial 60 % and Domestic 40 %) 2. Average price of Pack/Bulk is considered Table 1.3: Utility Prices Utilities UOM Price Raw Water Rs/KL 8.19 Power (captive) Rs / KWH Imported Power Rs/KWH 6.15 Cooling Water Rs./1000 M DM Water Rs./KL Steam Rs./MT Nitrogen Rs./Nm Oxygen Rs./Nm Product Specifications Product specifications as provided by BPCL in Annexure A of Chapter 4 (Design Basis) has been followed in the Study. MS and Diesel shall confirm to BS VI quality.

5 1.4 Refinery Configuration Study Refinery configuration study is performed to establish the material balance and unit capacities for BS VI quality fuels up gradation. The performance of the existing refinery is evaluated using the base case LP model. Base case LP model is developed from the design basis in conjugation with the revised IREP DFR model developed during July Refinery Configuration for Phase 1 Project (BS VI quality fuels compliance) As per Scope of work, following cases have been studied under this section: Case 1: Base case Crude mix at 15.5 MMTPA configurations was studied to produce 100 % BS VI MS and HSD with naphtha minimisation. The excess naphtha is upgraded to BS VI MS in new MS Block. Case 2: The objective of Case-2 was to arrive at the maximum crude throughput by retaining the same crude mix as that of Case-1. In Case-1, it was observed that DCU capacity is 115 % of the design capacity which restricts crude throughput achievable with Case1 crude mix at 15.5 MMTPA. Hence the material balance and unit capacities etc for Case-2 will be same as Case-1. Case-3: MMTPA configuration was studied by utilizing 10 % design margin available in CDU-III. The crude mix was suitably adjusted to limit the DCU capacity same as base case. The various options are studied to arrive at the most optimum refinery configuration. The detail of refinery configuration study is provided in section 7.2 of the report. In phase1, facilities required for BS VI quality fuels up gradation were planned for implementation. 1.5 Prefeasibility Report In Phase-1, the followings configurations are taken up for further pre feasibility of project. - For BS VI quality Fuel Up gradation (Case 1, 2 &3) a new MS block comprising of NHT, NSU, LNISM and CCR and associated facilities. MS block can be designed taking care of Phase-2 MS requirement. 1.6 Phase-1 Implementation Material balance The material balance for cases for Phase-1 along with base case considered for IRR estimation are presented below in the Table-1.4.

6 Stream Table 1.4: Material Balance for Phase-1 cases (KTPA) Sulphur Hydrogen Rich Gases Fuel And Loss Gross Refinery Margin Gross Refinery Margin (product sales-feed stock purchase) for Phase-1 cases along with base case is provided in Table 1.5 below: Table 1.5: Gross Refinery Margin for Shortlisted Phase-1 cases Economic Parameters Base Case Base Case Case1/2 (LP Case No 130) Phase1 Case 3 (LP Case No 321) FEED (KTPA) Arab Light Arab Heavy RLNG Imported LSFO Mumbai VR Hydrogen from BOO PRODUCT (KTPA) Propylene LPG Naphtha Benzene Toulene Gasoline BS IV Gasoline BS VI ATF Kerosene Hydrotreated Kerosene MTO HSD BS IV HSD BS VI Bitumen Coke Case1/2 Case 3 (LP Case 130) (LP Case 321) Phase1 Gross Refinery Margin ( Rs Crores / Annum) Gross Refinery Margin (US $/ bbl of Crude) Design Capacities of New/Revamp Process Units Design capacities of new/revamp process units considered in Phase 1 cases for Capital cost estimation is as below

7 Table 1.6 Design Capacities of New/Revamp Process Units A. Main Processing Unit Units Capacity PHASE 1 1 Naphtha Hydrotreater Unit. MMTPA Light Naphtha Isomerization Unit MMTPA Continuous Catalytic Reformer Unit MMTPA New Utility Systems Following new Utility systems are considered Phase 1 Cooling Tower Cells Table-1.7: New Utility Systems for Phase-1 UTILITY SYSTEM Phase 1 Recirculating Cooling Water Pumps Cooling Water Make up Pumps Recirculating Cooling Water System CT-1 : Capacity : 3000 m3/hr Number : 2w+1s Capacity : 3000 m3/hr Number : 2w+1s Capacity : 240 m3/hr Number : 1w+1s Instrument Air Dryer Air Compressor LP Air Receiver Instrument Air System Capacity : 3000 Nm3/hr Type : Dual Bed Number : 1 Capacity : 3000 NM3/hr Number : 1w+1s Type : Reciprocating Number : 1 Diameter : 4 m Height : 1.6 m Power Plant Configuration Power Unit New GTG: 1 Power : 33 MW Type : Frame VI HRSG : 1 X 110 TPH Grid Power Import : 3MW Flare System Flare System New 2+ 1 demountable flare. Similar to IREP Flare

8 Existing utility systems of Raw Water, Nitrogen, DM water, Condensate, BFW, Steam & Plant Air are capable to meet the requirement of Phase 1 facilities New offsite facilities Sl. No. No New Crude and product storage facility has been envisaged under Phase 1.Following offsite facilities shall be augmented by adding only new intermediate storage tanks and pumps in DHDS & IREP area in Phase 1. Table- 1.8: List of new Intermediate tanks for Phase-1 Service No. of Tanks Type Liquid Stored Capacity of Each Tank (m3) 1. NHT Feed tank 1 Doom Roof Isomerate Feed Tank 1 Doom Roof Reformate Feed tank 1 Doom Roof In addition to the above new tanks, service change of some of the existing tanks is identified under this study. Details are provided in chapter 7.6 of this PFR. Sl. No Table 1.9 : List of new intermediate pumps for Phase-1 Service NHT Feed Pump Isomerate Feed Pump Reformate Feed Pump No. of pumps Flow (m3/hr) TYPE 2W+1S 130 Centrifugal 1W+1S 65 Centrifugal 1W+1S 65 Centrifugal Capital Cost Estimate Key Assumptions: The basic assumptions made for working out the capital cost estimate are as under: Cost estimate is valid as of Ist Quarter 2016 price basis. No provision has been made for any future escalation. No provision has been made for any exchange rate variation. It has been assumed that all units and utilities / off-sites facilities would be implemented on conventional mode Process units cost estimates are based on reference technology. Any change in technology shall have impact on unit s cost estimates. EPCM/PMC services cost provision is as a factor basis and is indicative. All costs are reflected in INR and all foreign costs have been converted into equivalent INR using exchange rate of 1USD=Rs 65 It has been assumed that existing land, infrastructure facilities and township are adequate for this project.

9 Exclusions: Following costs have been excluded from the Project cost estimate: Forward escalation Exchange rate variation Cost towards statutory clearances Pipeline/ SPM / COT Table-1.10: Capital cost (Rs. Crores) of shortlisted cases S.No. Cases Fc Ic Total Capital 1 Case Case Cost estimate is based on cost information available from EIL s current in-house cost data and Engineering inputs for cost estimation purpose. In-house cost data has been analyzed and adopted for estimation after incorporating specific project conditions. Cost data has been updated to prevailing price level using relevant economic indices Financial Analysis Based on capital cost, operating cost and sales revenue, financial analysis have been carried out for calculating internal rate of return (IRR) with a view to establish profitability of the project. The IRR of Phase-1 cases is presented in the Table 1.11 below: Table-1.11: IRR of Phase-1 cases S No. Case Case-1 Phase-1 Case-3 1 Capital Cost (Rs Lakhs) Variable Operating Cost (Rs Lakhs) Fixed Operating Cost (Rs Lakhs) Total Operating Cost (Rs Lakhs) Sales Revenue (Rs Lakhs) IRR (Pre Tax) on Total Capital 7 IRR (Post Tax) on Total Capital 10.02% 6.49% 8.68% 5.64%

10 1.6.8 Sensitivity Analysis Sensitivity analysis has been carried out for all the cases to assess the impact of variation of capital cost, operating cost and sales revenue and no. of stream hours on IRR on Total Capital. Impact of these variations have been tabulated below: Table-1.12: Sensitivity Analysis Case-1 Case-3 S.No. Description IRR (Pre Tax) IRR (Post Tax) IRR (Pre Tax) IRR (Post Tax) 1 Capital Cost 2 3 Base Case 10.02% 8.68% 6.49% 5.64% Stream Hours Opex +5% Sales +5% +10% 8.78% 7.62% 5.43% 4.76% -10% 11.46% 9.92% 7.74% 6.68% 10.55% 9.15% 6.99% 6.06% 10.78% 9.35% 7.20% 6.24% 4 1 Yr Avg Prices 14.28% 12.40% 17.23% 14.95% 5 3 Yr Avg Prices 10.25% 8.88% 6.09% 5.29% 6 Futuristic Prices 15.58% 13.53% 17.72% 15.37% Energy Conservation Efforts Many state-of-art energy conservation measures outlined in Chapter-8 of this PFR are being incorporated at the design stage itself in order to minimize the overall energy requirement. Efforts shall be made to bring down the specific energy consumption of the proposed units to meet the global benchmark standards Environmental Impact In order to minimize the impact of the project on the environment, due attention is being given for implementing effective pollution control measures. The design stage endeavors to mitigate the problems related to health, safety and environment at the process technology/source level itself. The design basis for all process units lays special emphasis on measures to minimize the effluent generation at source. Liquid effluents The liquid effluents from the proposed new units will meet the Minimum National Standards as specified under proposed effluent and emission standards for petroleum oil refineries by suitable augmentation of Effluent Treatment Plants Also suitable provisions are made to enable maximum recycle and reuse of treated effluent. Gaseous Emissions All the emission from the Refinery Complex shall meet the stipulated standards under PROPOSED EFFLUENT AND EMISSION STANDARDS FOR PETROLEUM OIL REFINERIES. The total Sulphur Dioxide emissions from the refinery complex after development of proposed additional units and capacity expansion is estimated at 1580 Kg/hr. Natural gas has been considered in GTGs. Low sulphur Fuel oil has been considered for firing in the furnaces. Heaters/furnaces will be provided with well-proven Low NOx burners to restrict the emissions of Nitrogen Oxides (NOx) to meet the proposed emission standards for Petroleum Oil refineries.

11 From the above it is evident that there will be no additional impact of gaseous emissions on the environment due to expansion. Solid Wastes The solid wastes i.e. Spent Catalysts, ETP Sludge, General Solid Wastes, Tank Bottom Sludge etc. generated in the Refinery shall be minimised by implementing solid waste implementation management plan Recommendations To meet the stipulated BSVI quality fuels as per Auto Fuel policy In Phase-1, BPCL Kochi intends to maximise and upgrade MS and diesel processing capabilities utilizing full potential of existing facilities by the available design margins thus maximizing revenue with minimum investments. As enumerated in the report, the production of BSVI quality fuels by processing of 15.5 MMTPA of crude along with 400KTPA of Mumbai VR can be achieved by implementing a MS block comprising NHT, NSU, CCR and light naphtha isomerisation units and associated facilities for MS up gradation and maximization. BSVI quality diesel can be complied with existing diesel up grading facilities and by production of low sulphur (less than 10ppm) diesel from VGO HDS and VGOHDT units. For BS VI quality fuel project (Phase1 Case 1 implementation), the total estimated capital cost is Rs Crores with an accuracy of ± 30% & the validity of I st Qtr. of Considering the crude and product prices (five year average of ) as mentioned in report, post tax IRR is estimated as 8.68 %. For BS VI quality fuel project (Phase1 Case 3 implementation), the total estimated capital cost is Rs Crores with an accuracy of ± 30% & the validity of I st Qtr. of Considering the crude and product prices (five year average of ) as mentioned in report, post tax IRR is estimated as 5.64 %. Overall project implementation is scheduled within 36 months from zero date (date of award of contract to EIL) with additional one year for licenser evaluation, BDEP preparation etc.