KNPC Think K Event
Tuesday 27th October 2015
Refinery – Petrochemical Integration
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Agenda
 World Refining Scenario
 Benefits of integration
 Strategic Advantage
 KPC’s Strategic Direction
 ZOR – Petchem Study
 Configuration options
 Conclusion & Path Forward
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World Refining Scenario
In the past, Refining was seen as more of an independent business enjoying good margins.
Currently Refining business is facing challenges due to
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Volatile oil prices
Unstable refining margins
Increased alternative fuel awareness
Global overcapacity
Superior product quality requirements
Stringent emission regulations
Increased processing of heavy and sour crude
Increased emphasis on bottom-of-the-barrel conversion
Integration with Petrochemical is vital to deal with ongoing uncertainty in refining
business and to sustain and improve Profitability.
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Benefits of integration
 Proximity of Feedstock
 Reduction in transport (costs and risks)
 Working capital savings
 Synergies from joint infrastructures and logistics
 Reduction in Operating costs (steam, utilities)
 Shared support services: maintenance, HR, HSEQ management, F&A, etc.
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Strategic advantage
 Product Diversification
 Reduced exposure to market risk
 Independence and supply security
 Long-term stream exchanges
 Common business and investment strategy
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KPC’s Strategic Direction
 Grow KPC domestic refining capacity up to 1.4 mmbpd on the medium term
 Maximize disposal of Kuwaiti heavy crude in domestic refineries
 Maximize complexity of KPC domestic refineries, while meeting local energy
demand requirement
 Provide petroleum products that meet domestic energy, transportation and
industrial requirements and international market needs in terms of Quantity and
quality
 Operate KNPC refineries with high standards of operational excellence
 Provide required Gas Processing capacity according to upstream Gas availability
profiles
 Maximize integration of refining and petrochemical operations domestically
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Objective of ZOR-Petchem Integration Pre Feasibility Study
“Establish the most feasible petrochemical option for Kuwait on a
commercially competitive basis and to develop a configuration for
a World-Scale Petrochemical Complex Integrated with ZOR”
• Achieved by conducting:
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Market Study
Strategic Assessment
Prefeasibility Study
Feasibility Study
Single configuration to be selected to develop in more detail
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Key study basis
• Two crudes would be run for each proposed configuration:
 Mixed crude as the reference case
 Kuwait Export Crude (KEC)
• Maximise economic returns for each proposed configuration
• Meet gasoline (95/98 octane) demand (1-2 MMTPA) while minimising impact on LSFO supply
• Increase synergies between the domestic refining & petrochemical business
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Configuration options
(Paraxylene)
Options
(Propane Dehydrogenation)
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Conclusion and Path Forward
• Option 3 and Option 6 are shortlisted after Pre Feasibility Study
• Option 3 results in good integration economics, Option 6 provides higher product diversification.
• One option will be selected at the end of Feasibility Study which is expected to complete by Dec.
2015
• FEED is expected to start by early 2017
• World scale Grass root ZOR – Petrochemical complex will place KPC and Kuwait in a privileged
position in World’s Oil Industry
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Thank you
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Glossary
• PDH – Propane Dehydrogenation
• PX – Para Xylene
• FCC – Fluidised Catalytic Cracker
• SC – Steam Cracker
• LSAR – Law Sulfur Atmospheric Residue
• VGO – Vaccum Gas Oil
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Products considered in ZOR - Petchem Integration study
Option 6
Option 3
Core Products
Derivatives
Key Uses
Aromatics Block
Para Xylene
PTA / PET
Benzene
Plastic Industry
Styrene
FCC Block
Propylene
To PDH Block
Mogas
Local Market / Export
PDH Block
Propylene
Poly Propylene, Propylene
Acrylic Polymers, Glycol, Epoxy
Oxide, Propylene Glycol, Polyols Resins
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Core Products
Derivatives
Key Uses
Aromatics Block
Para Xylene
PTA / PET
Benzene
To Cracker Block
Plastic Industry
FCC Block
Propylene
To Cracker Block
Mogas
Local Market / Export
Cracker Block
Ethylene
PE (Poly Ethylene), EAO (Ethanol
Amine), MEG (Mono Ethylene
Glycol), Styrene
PVC (Poly Vinyl Chloride), Polyesters
Propylene
Poly Propylene, Propylene Oxide,
Propylene Glycol, Polyols
Acrylic Polymers, Glycol, Epoxy Resins
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Back Up
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Petrochemical derivatives considered
Butene-1
Core
PE
Assessed
EAO
Ethylene
EO
MEG
Abbr.
Styrene
Benzene
PP
Propylene
PG
MEG
PO
Polyols
PTA
PX
PET
PTA
PX
Butadiene
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Long form
PE
Poly Ethylene
EO
Ethanol Oxide
EAO
Ethanol Amines
MEG
Mono Ethyl Glycol
PP
Poly Propylene
PO
Propylene Oxyde
PG
Propylene Gylcol
PTA
Purified Terephthalic Acid
PET
Polyethylene Terephthalate
Petrochemical Derivatives
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Option 3 configuration
C5/C6
411
C5/C6 to H2 Plant
ISOM ERIZAT ION
to Gasoline
400
Raffinate
FR Naphtha
3441
Naphtha
Splitter
NHT
Benzene
343
Aromatics Block
CCR and PX
Complex
C7+
2225
PX
1000
to Gasoline
319
Alky
VGO ex ARDS
2262
M T BE
FCC
Gasoline
C4 from Aromatics Complex Recovery
LCO
Gasoline HDT
Slurry
Isomerate
400
FCC Block
PP
375
Isom and CCR C3
41
Purchased Propane
880
* all values in TPD
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PDH
PG
750
PDH / PP Block
PO
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Polyols
100
200
Option 6 configuration
Aromatics and
Naphtha
Isomerization
FRN
Light Naphtha
Raffinate
LPG
PX
1000
Benzene to Styrene
Isomerate
to Gasoline
C4 from Aromatics Complex Recovery
Gasoline
Alkylate
VGO
LCO
FCC
Alkylation
Gasoline HDT
Propylene Derivatives
Treated FCC gasoline
Propylene
PG
100
MTBE
Slurry
PO
Polyols
200
PP
Ethylene
1400
Recycle streams
LLDPE/HDPE
Total PE
Propylene
Refinery LPG
EO
Steam Cracker
(550kta)
MEG
Ethylene Glycol
Purchased Propane
EOA
Butene-1
80
Butene-1
(50kta)
Benzene from PX
Styrene
Styrene
Butadiene
* all values in TPD
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Ethylene Derivatives
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Incremental Economics
Total Project Capex
Total Project IRR
Integration IRR
Options
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Refinery
18180
-1.10%
Option1 Option2* Option3 Option4 Option5 Option6
24238
22823
25177
30383 30284 31874
0.8%
3.4%
4.6%
2.6%
2.6%
4.5%
6.0%
10.2%
13.8%
7.3%
7.4%
9.9%
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Based on Economics Option 2, 3 && 6 are shortlisted
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Option-2 was excluded as it is more of a refining option,
without much integration with petrochemicals
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Option 3 & 6 both have Aromatics and FCC. Additionally
Option 3 has PDH and Option 6 has Steam Cracker
•
Option 3 provides integration with Propylene Value chain
•
Option 6 provides integration with Propylene as well as
Ethylene value chain
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Preferred Options
• Based on Economics Option 2, 3 && 6 are shortlisted
Options
• Option-2 was excluded as it is more of a refining option,
without much integration with petrochemicals
• Option 3 & 6 both have Aromatics and FCC.
• Additionally Option 3 has PDH and Option 6 has Steam
Cracker
• Option 3 provides integration with Propylene Value chain
• Option 6 provides integration with Propylene as well as
Ethylene value chain
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Integration Synergies / Benefits
• Naphtha, raffinate and LPG integration
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Use of these streams can be optimized by routing to steam cracker feed, PX feed, hydrogen feed or
gasoline pool as optimal
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One naphtha hydrotreater only to serve the entire project
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All LPG used internally
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Depending on the selected option, all naphtha also used internally
• FCC and steam cracking have a number of synergies:
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Ethylene recovery from FCC dry gas
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Propylene recovery
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C4s and MTBE
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Use of LCO as quench oil (not in the LP)
Specific to
Option 6
• Common or linked hydrogen system
• Common or linked fuel gas system
• Capital cost synergies in the utilities and off-site system
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Estimated at 1-2% of OSBL costs in a very preliminary manner
• Operating cost synergies
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FS expected to
provide a better
estimate
Ethylene Uses
Ethylene - C2H4 - is used for accelerating the ripening of bananas, and maturing the color of citrus fruits. It is also used to increase the growth rate of
seedlings, vegetables, and fruit trees; in oxyethylene welding and cutting of metals; in manufacture of mustard gas, ethylene oxide, ethylene alcohol,
polyethylene and other plastics; and as an inhalation anesthetic.
The simplest member of the olefinic hydrocarbon series and one of the most important raw materials of the organic chemical industry; chemical
formula, CH2 {double bond} CH2. It occurs in both petroleum and natural gas, but the bulk of the industrial material is produced by heating of higher
hydrocarbons. Numerous large-scale processes have been developed, using raw materials ranging from ethane to whole crude oil; in the U.S., ethane
and ethane-propane mixtures are commonly used.
Ethylene undergoes polymerization (combination of small molecules to form large molecules) to polyethylene, a plastic material having many uses,
particularly in packaging films, wire coatings, and squeeze bottles. The polymerization may be carried out at high pressures and temperatures or by
the more recently introduced Ziegler process, which uses a catalyst. With sulfuric acid, ethylene forms a mixture of sulfates that can be hydrolyzed to
ethyl alcohol; it combines with chlorine or bromine to yield the corresponding ethylene dihalides, useful solvents and gasoline additives. The reaction
of ethylene and oxygen gives ethylene oxide, used in the manufacture of antifreeze, detergents, and other derivatives. Ethylene and benzene combine
to form ethylbenzene, which is dehydrogenated to styrene for use in the production of plastics and synthetic rubber.
In botany, ethylene is a plant hormone that inhibits growth and promotes leaf fall. In fruit, how-ever, ethylene is regarded as a ripening hormone.
Involved in its action in fruit is some other
factor that influences ethylene sensitivity of the tissues.
Pure ethylene is a colourless, flammable gas having a sweetish taste and odour; it freezes at -109.4° C (-272.9° F) and boils at -103.9° C (-155.0° F).
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