Outlook for India s Refining Landscape Thank You Antony Francis Reliance Industries Ltd Singapore 9 th March 2017
Disclaimer Any statement, opinion, prediction, comment, or observation made in this presentation/publication are those of the presenter/author only and in no condition should be construed necessarily representing the policy and intent of Reliance Industries Ltd. (RIL). The information presented herein are of the presenter/author s own and in no way RIL attracts any liability for any inconsistency or irregularity in terms of the accuracy completeness, veracity, or truth of the content of the presentation/publication. In addition, RIL shall not be liable for any copyright infringement and misrepresentation for the presented content as the content is presumed in good faith to be a creation of presenter s/author s own mind. The scope of this presentation/publication is strictly for knowledge sharing purposes and not necessarily to provide any advice or recommendation to the audience/readers. Any endorsement, recommendation, suggestion, or advice made by the presenter/author shall be in his personal capacity and not in professional capacity as an employee of RIL. Any person acting on such endorsement, recommendation, suggestion, or advice will himself/herself be responsible for any injury/damage. Reliance Industries Ltd. 2
Refining Outlook Growth High demand growth, driven by India s GDP + population growth Divert products from export to domestic markets short term Expand + upgrade + modernize existing refineries short term Add new, complex + integrated refineries long term Quality Upgrade gasoline + diesel to Euro 6, by skipping Euro 5 Upgrade fuel oil to 0.5% S, as per IMO/MARPOL Integration Refinery + petrochemicals Oil + gas co-feeds Conventional + renewable co-products Automation Internet of Things (IoT) Advanced automation Artificial Intelligence (AI) Higher volumes + superior quality- India s refining outlook 3
India s refining: History 30 25 20 15 mmt/yr 10 5 0-5 -10-15 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: PPAC Gasoline Diesel Reliance Jamnagar 1 = Usher in fuel self sufficiency in India Reliance Jamnagar 2 = Transform India into an export hub for refinery products India s refining transformation: Imports to exports 4
Growth: Refining capacity 290 270 250 230 mmt/yr 210 190 170 150 2015 2016 2017 2018 2019 2020 2021 Source: IHS CAGR = 4%, for next 6 years No new refineries planned, after IndianOil Paradip, up to 2021 Major debottlenecking + expansion of existing refineries for supply growth Continuous refining capacity increase by creep Squeeze max product from a crude barrel to satisfy demand growth 5
Growth: Gasoline + diesel 100 90 80 70 60 mmt/yr 50 40 30 20 10 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Source: IHS Gasoline Diesel Gasoline CAGR = 6.1%, from 8.3%, up to 2025 Diesel CAGR = 2.5%, from 4.6%, up to 2025 GDP + population growth drive refinery fuel demand in India 6
Quality: Gasoline + diesel Gasoline Euro 6 Sulphur, wt ppm Max 10 FBP, 0 C Max 210 RON Min 95 Aromatics, vol% Max 35 Olefins, vol% Max 18 Benzene, vol% Max 1 Diesel Euro 6 Density, kg/m 3 Max 845 Sulphur, wt ppm Max 10 T95, 0 C Max 360 Cetane number Min 51 Reduce S from existing 50 350 ppm to 10 ppm or Euro 6 Improve air quality, with clean fuels Skip Euro 5 or 50ppm S to harmonize with global standards. Target a common,10 ppm ultra-low S fuel quality, throughout India. With 2020, only 3 years available for quality changeover Require major refinery revamps for quality upgrade Leap-frog fuel quality in India 7
Quality: Marine bunker Fuel Oil (FO) for marine bunker New IMO/MARPOL regulations for FO in 2020 Reduce FO from existing 3.5% to 0.5% S by 2020 Require either on board scrubbers or FO quality upgrade FO quality upgrade shall transform future refining Processing impact FO outlet blocked for blending high S refinery streams Process heavies or perish Blend kero / diesel into FO Hydro-treat FO to 0.5%S Hydrocrack VGO, with unconverted to FO Hydrocrack resid to distillates, with unconverted to FO Refinery impact Transform FO from ve to +ve crack margin Boost jet / diesel margins driven by FO blending Implement bottom-of-the-barrel upgrading in refineries: Resid hydrocracking = Ebullating or slurry Need low cost H2 or gas integration for hydrocracking Unconverted hydrocracker bottoms = Future 0.5% S FO blend-stock Revolutionize bottom-of-the barrel processing 8
Integration: Petrochemicals Demand Petrochemicals >> fuel demand growth in India Major imports of chemicals ~ 30% and growing Transform India s refining into petrochemical supply hubs Integration Heavy naphtha to aromatics, via CCR reforming Lt naphtha / hydrocracker btms to olefins, via steam cracking VGO to olefins, via max - conversion FCC Refinery off-gas to olefins, via steam cracking Syngas to chemicals, via C1 chemistry C 3 + C 4 to propylene + butadiene, via de-hydrogenation Deepen petrochemicals integration with refinery Refining must drive India s petrochemicals growth 9
Integration: Gas LNG imports Co-gen fuel for power + steam Feed to H 2 for clean fuels Fuel additives via methanol Syngas alternative Gasify pet-coke + resid to syngas Substitute LNG with syngas Syngas as a fountainhead for chemicals: Acetic acid + acetyl derivatives Methanol + methanol derivatives Oxo alcohols + ester derivatives MDI + isocyanate derivatives MEG + polyester derivatives MMA Integrate oil + gas as co-feeds in refining 10
Integration: Renewable COP 21 Reaffirm India s commitment to COP 21 Paris accord Reduce C intensity by 33% Generate 40% electricity from renewable resources Renewables in refining Integrate renewable fuels in refining Target agricultural waste as biomass feed Convert biomass to pyro fuel for internal fuel Upgrade biomass to 2G ethanol, for gasoline blending Future fuels = Conventional plus renewables Stretch crude to fuels with renewables Integrate renewable fuels in refining 11
Automation Internet of Things (IoT) Embed instrument + control systems, with self communication capability Upload big data from refineries to the cloud Analyze big data for intelligent refining Advanced automation Measure + monitor + evaluate, 24 x 7, with cloud - connected sensors Global view, from integrated + streaming data, via cloud computing Pattern recognition + machine learning, via refinery big data analysis Enhanced mobility + support for refinery field operators Advanced 3D visualization for troubleshooting Artificial intelligence(ai) Abnormal event detection to prevent loss time incident Augmented reality to support refinery maintenance + inspection Preserve refinery knowledge base, via AI driven search engines Data is the new oil for 21 st century refining 12
Conclusion Transform refineries Max fuels from crude barrel Clean fuels for ecology Bottom-of-the-barrel processing for marine transport Integrate refineries Fountainhead for petrochemicals, with deep integration Co-process oil + gas for hydrocarbon optimization Augment fuel volumes, with renewables Automate refineries Implement IoT, + advanced automation + AI in refining Ultimate in safety + flexibility + reliability for refining Transform processing into smart + intelligent refining Innovate for sustainable refining 13
Thank You