Jump menu

Secondary Navigation | back to top

Main content |  back to top

Amid the growing number of mega-scale refineries under construction, especially in the Middle East and China, there is a noticeable trend for many to be built next to and closely linked with a petrochemicals facility. And this trend is not restricted to grassroots facilities; numerous existing refineries are finding ways to enhance the level of integration that they have with a petrochemical neighbour.

Süleyman Özmen, Vice President, Refining and Chemical Licensing, Shell Global Solutions International BV, explains the premise. “There are often optimisation opportunities across the refinery–petrochemicals interface. Some refineries are sending hydrocracker residue to the steam cracker to make ethylene, for example, thereby enhancing the economics at both sites. Some refiners are also tuning their fluidised catalytic cracking units to maximise propylene for polypropylene production.”

Shell’s approach is to run the entire hydrocarbon chain, from the refinery through to the chemical crackers and derivative plants, as a single, optimised operation. This can help to maximise the value to the overall enterprise, rather than just to an individual unit.

Aslam Moola, New Business Development Manager, Shell Chemicals, says that most of the integration value comes from directing hydrocarbons to the highest-value application, irrespective of traditional refining–chemical boundaries. “Secondary or by-product streams from refining units may have their highest value as feedstock for chemical units,” he says. “Likewise, by-products from chemical units may be most cost-effective as refinery feeds or fuel blending components.”

Shell has had great success in capturing these synergies at several sites worldwide. These include Norco in the USA, and Pernis and Moerdijk in the Netherlands. Perhaps the highest profile example, however, is the Shell Eastern Petrochemicals Complex investment project in Singapore,which created a world-scale, fully integrated refinery and petrochemicals hub from new and existing assets.

This project involved the installation of an ethylene cracker, a butadiene unit and a monoethylene glycol plant on Jurong Island, a major petrochemical zone, and their full integration with Shell’s Pulau Bukom refinery. The refinery was upgraded so it produces a variety of feedstocks for the cracker ranging from liquefied petroleum gas to heavy liquid hydrocarbons such as hydrowax, thereby enabling Shell to change feedstocks on the basis of market economics. It also provides greater security of supply for customers.

Although this project unlocked synergies in terms of feedstocks, operations and logistics, some analysts view refinery-petrochemical integration less favourably because of the volatility of petrochemical prices. However, Bakhit Al Rashidi, Deputy Managing Director, Planning and Local Marketing, Kuwait National Petroleum Company, recently described it as not an option but a necessity. “Cyclic trends in refining margins and a thin band of margin operation for overall profitability make integration essential to even out the margin vagaries,” he says. “All new refinery projects essentially incorporate integration with petrochemicals because much greater savings in investment and operating costs will result.”

Page Tools