Mini refinery feasibility study Introduction The first part of any study into a mini-refinery application is an initial assessment of its economic feasibility. This requires an understanding of what a mini-refinery is able to do, as well as information on the proposed feedstock and intimate knowledge of local market conditions. Technical issues relating to plant engineering or design are rarely important considerations at this initial feasibility stage. This paper is intended to assist the project developer in making an initial feasibility study. SCA can only provide meaningful assistance once this initial feasibility study has been performed and the attached questionnaire completed in as much detail as possible. Economy of scale A mini-refinery (typically <4000 bpd) does not have the economy of scale of a large refinery (typically >100,000 bpd). The capital cost to refine a liter of crude oil is inevitably higher in the case of a mini-refinery. This cost disadvantage can only be offset if the mini refinery has access to cheap crude oil (for example from remote or otherwise non commercial oil fields) and/or offers savings in fuel or crude oil transportation costs (typically in remote or inaccessible regions) and/or government incentives to support economic activity in isolated communities. A seaboard location for a proposed mini-refinery site has to be examined carefully against the alternative of importing refined product in bulk from a major refining country. On the other hand, remote or inhospitable inland locations will tend to provide favorable conditions for mini-refinery fuel production as distances and/or road conditions results in high transportation costs for imported fuels. To minimize its capital cost, the mini-refinery is most often supplied only as a simple straight run atmospheric distillation refinery for diesel and/or kerosene production, with naphtha and fuel oil as by-products. In some situations, it may be economical to provide a second distillation tower to vacuum distil the fuel oil component from the atmospheric tower into a clean heavy diesel (vacuum gas-oil) and a heavy residual oil. A thermal cracker or coker to convert the some or all of the heavy residues into more valuable lighter products is neither practical nor economic at a mini-refinery scale.
Naphtha represents the gasoline fraction of the crude oil but it is unsuitable for automotive gasoline without octane enhancement through further processing and/or blending. With the phasing out in most countries of TEL (lead) additives to gasoline, there is now no simple (and therefore cheap) way to octane enhances the naphtha at low production volumes. A catalytic reformer to reform that naphtha into automotive gasoline is normally not economically justifiable as it has a relatively high capital cost for the relative low production volumes, bearing in mind that naphtha typically constitutes no more than 25% of the crude oil feedstock some of which will be consumed in the reforming process. A catalytic reformer can be expected to increase the cost of a straight run mini-refinery by approximately 80% to 100%. The major challenge in a mini-refinery project is not what to do with the diesel but to be inventive as to the most economical disposition of that typical 50% to 75% of the crude oil, which ends up as the by-products of naphtha and fuel oil. Alternative fuel costs The proposed mini-refinery needs to deliver refined product into the targeted market at a more competitive price than the existing fuel supplies. Knowledge of the local price of fuel (and other available fuels such as gas or LPG) in the targeted market and its sensitivity to price competition is therefore crucial to any feasibility study. In some countries, fuel prices in remote communities may be government subsidized which may make it difficult for a refinery to compete economically in that market. In some cases (but not often) the crude oil may be of sufficiently high quality that it is suitable for use in heavy diesel plant without the need for any refining. Although not suitable for the general diesel market, if the quality is good, crude oil can be used in dedicated heavy plant applications (eg pumps on a crude oil pipeline). Crude Oil A straight run refinery merely fractionates by distillation the crude oil feedstock into its boiling point components. Distillation does not alter the molecular structure of its chemical components. Therefore the natural characteristics of the crude oil (or condensate) and the required specification of the final refined products are the determinants of the product yields from the refinery. To avoid scaling and fouling within a refinery, the crude oil should have a maximum salt content of 1 Kg per 1000 barrels. Where the salt content exceeds this level, a pre-treatment process may be required. Although adding a de-salter to a minrefinery is quite feasible, it does require a fresh water supply and a means for disposing of the salt water waste.
Other undesirable components in the crude oil such as sulphur will carry over into the refined product streams. The maximum allowable sulphur levels for refined products are normally set by government regulations. Crude oils with <1% sulphur will normally refine within the allowable fuel specifications for diesel and naphtha without the need for a de-sulphering process. However reference should always be made to the local regulations as there can be significant differences from country to country. Roughly 70% of the sulphur will be concentrated in the heavy fuel residue. Fuel oil specifications may determine the maximum allowable sulphur content in the crude oil to avoid desulphering plant. In summary, the optimal feedstock for a mini-refinery is generally a high API crude oil or condensate that has a relatively high natural diesel fraction in its assay. It also should be low in sulphur, salt or other contaminants to avoid the capital costs associated with providing additional plant. The refinery products The usual products from a straight run mini-refinery are naphtha, diesel and fuel oil (residual oil). Some mini-refineries can also be designed to produce kerosene. Local regulations will determine the required specifications for each product. It should be noted also that in regions where the ambient temperature changes significantly during the year, some of these specifications may vary seasonally. The diesel is a highly desirable product but the refinery by-products of naphtha and fuel oil find a less ready market. Depending on the crude oil characteristics and the required product specifications, the percentage volume of these by-products could represent typically between 50% and 75% of the crude oil feedstock so the problem is significant. Operating costs To minimize operating costs, the MICROSTILL does not require cooling water or steam. It does require the customer to provide electrical power as well as products storage tanks, load out facilities and associated pipe work. Recommended manning requirement is 1 man per 12 hour shift with a supervisor on call. The automated design of the MICROSTILL means that it will be sufficient to have refinery operators with a basic technical background and who can be trained in the operation of the refinery.
Optimizing the project There are a number of things that can be considered to improve the project economics: 1. In the case where there are a number of possible oilfields to supply from, choose the oil field that have the best crude oil qualities, particularly the one with the highest diesel yield in its assay. 2. If a crude oil pipeline exists nearby consider putting the unwanted by-products into the pipeline. This will require amongst other things, an acceptable purchase arrangement for the refinery by-products with the oil company, pipeline company or end-of-pipeline refiner. 3. Find local markets for the by-products. For example naphtha can be considered for turbine fuel (but check availability of competing gas or LPG) or could be used as a solvent or petrochemical feedstock. In arctic climates the naphtha is often used as a non-freezing well completion fluid instead of diesel. Fuel oil can be used as bunker or boiler fuel or heavy fuel for power generation if it has acceptable characteristics. 4. Vacuum distillation will extract heavy diesel (vacuum gas oil) from the residual oil thereby reducing the quantity of residue that ultimately needs to be dealt with. Vacuum gas oil is suitable as a heavy plant fuel (eg power generation). 5. While the familiar industry standard turbines do not tolerate heavy diesel as fuel, there are turbine gensets manufactures which will run on a naphtha and vacuum gas oil mix. These turbines are skid packaged plants and can complement the MICROSTILL installation. For planning purposes assume that an input of 100 bpd of residual oil produces about 1.5MW of output electrical power. 6. If the naphtha has suitable properties it may be able to be blended with octane improvers such as high octane gasoline, toluene or oxygenates (MTBE, ETBE. etc) to produce low octane gasoline. However relatively high volumes of these products are required and would therefore entail significant additional purchase, transportation and storage costs. The above issues are not matters that SCA is in any position to deal with. They can only be effectively dealt with by the project developer who is familiar with the local territory and markets.
Mini-refinery Questionnaire Proposed mini-refinery location: Is the local climate arctic, temperate or tropical? Is the proposed location within an existing plant or industrial park? Is steam or water available on site? Is there an approved means for disposing of waste water if crude oil desalting is required? What is the anticipated price per liter (or barrel) for the crude oil feedstock to be delivered to the mini-refinery? Is there a local community or town with labor supply nearby? What is the required refinery capacity (tones per annum or barrels per day)? Distance from source of oil? Distance to nearest oil pipeline? Distance to nearest seaport? Distance to main fuel markets? Distance to nearest refinery? Source of crude oil: Quality of crude oil: Crude oil or condensate? Density (API or g/cc): Maximum sulphur content: Maximum salt content: Maximum water content: Attach the assay results of the proposed feedstock (in particular the True Boiling Point distillation of the feedstock): Product specifications: Attach the required product specifications for the gasoline, diesel, fuel oil: Alternative fuel supplies Is the local market presently served by pipelined gas? What is the cost per GJ (or mcf) of gas? What is the existing source of imported liquid fuels? Cost per liter of imported diesel: Cost per liter of imported standard octane petrol: Cost per liter imported fuel oil: Can the market absorb additional electrical power generation? What is cost per KWh for locally supplied electricity? Can the unwanted by-products be pipelined to market? What is the anticipated price selling price for the by-products. What is proposed market for the naphtha product? What is the anticipated naphtha selling price per liter What is proposed market for the fuel oil? What is the anticipated fuel oil selling price per liter?