Anne K. Rhodes
Refining/Petrochemical Editor
The worldwide refining industry strengthened capacity in most major downstream processing categories during 1991. But distillation capacity will remain essentially flat at some 74.9 million b/cd as of Jan. 1, 1992, according to the Journal's most recent refining survey.
The Asia/Pacific region, as in so many other areas of industrial and economic activity, did show noteworthy growth of over 4%. For the first time, this issue also contains the refinery-by-refinery survey of the huge U.S. refining industry, which historically has appeared 2 months later in March.
Publication in the same issue now makes worldwide comparisons and trends more evident.
The table below shows regional and world crude capacity and, in broad strokes, how the various regions compare with one another. The downstream processing figures in this table are, however, incomplete because a number of countries, such as the Soviet Union, China, and other members of the former communist bloc, still report only total refineries and crude distillation capacity.
A welcome exception in this year's survey is a more comprehensive listing of 10 Romanian refineries with their not inconsequential capacity of over 650,000 b/cd.
The net changes in the refining category totals reported in this article, however, do not include the new Romanian listings, so as not to skew the survey results.
Details on the Romanian refining industry and changes taking place there will be the topic of an article in the Dec. 30 Journal.
The gaps in reporting from the other former communist bloc members can be ascertained in the refinery-by-refinery tables.
The Soviet Union does have a noteworthy amount of home-grown fluid catalytic cracking (FCC) capacity. The picture will probably become clearer as the republics go their own way and some of the chaos diminishes.
The survey tables also go into detail on the national refining capacity in the countries where more comprehensive data are available.
The U.S. survey will continue to appear in a late December issue along with the other worldwide refining industries in coming years. In previous years, U.S. totals were included in the Western Hemisphere figures in this issue, but the detailed survey did not appear until, as mentioned, later.
Also, historically the surveys of worldwide refining capacity and oil and natural gas production have appeared together in our year-end issue. The production survey will be published next week.
INDUSTRIAL REGIONS
Table 1 compares the refining industries in three powerful economic regions, the U.S., E.E.C., and Asia/Pacific, which includes Japan, Taiwan, and Korea.
As the capacity and variety of downstream units reveal, the U.S., because of its automobile-dominated transportation system, still has the world's largest and most elaborate refining industry.
As Figs. 1 and 2 show, the U.S. ratio of capacity of important downstream gasoline-producing and conversion units to crude distillation capacity is more than double that in the E.E.C.
It should be noted that, although not part of the E.E.C., Norway, Sweden, and Finland have 10 refineries with a combined crude capacity of 963,500 b/cd. Some, such as Statoil's Mongstad, Norway, refinery, have configurations similar to U.S. high conversion refineries.
The U.S. also holds an edge in comparison with the Asia/Pacific region. However, downstream conversion and octane capacity are being beefed up there, as shown by some of the healthy, even double-digit gains, in downstream growth.
U.S. INDUSTRY
U.S. refineries are continuing a trend of increased processing capability (Fig. 1, Table la).
At 15.3 million b/cd, U.S. crude distillation capacity has dropped to its lowest reported level since the 1987 Journal survey. At the beginning of 1980 it was at an all time high of 18.5 million b/cd.
Despite slight decreases in crude and vacuum distillation capacities-mostly accounted for by two closed refineries-there have been gains in the conversion categories (Table la).
A major portion of these gains are in Texas.
Valero Refining Co. has made large increases in catalytic reforming and catalytic hydrocracking capacities at its Corpus Christi, Tex., refinery. Star Enterprise has likewise appreciably increased catalytic cracking and hydrocracking capacities at its Port Arthur, Tex., refinery.
And several other Texas refiners have made small to moderate increases in reforming and alkylation capacities.
Large additions in other states include Chevron's boosting of catalytic hydrocracking capacity at its Richmond, Calif., refinery by 22,000 b/sd.
Relatively small changes at U.S. refineries accounted for modest increases in most survey categories, with the following exceptions:
- A slight decrease in crude and vacuum distillation capacities
- A slight decrease in catalytic hydrorefining capacity
- A slight decrease in lubes capacity
- A slight decrease in coking capacity.
Table 2 shows that last year the primary hydroprocessing gains in the U.S. were focused on heavier materials.
One major change has occurred in the list of U.S. refiners with over 200,000 b/cd of capacity.
Citgo Petroleum Corp. jumped from slot 15 to slot 10 with its acquisition and integration of the former Champlin Refining & Chemicals Inc. 130,000 b/cd Corpus Christi refinery (Table 3).
Once again, the portion of U.S. crude capacity operated by these larger refiners is continuing to decrease (Table 4).
EUROPEAN INDUSTRY
The trend toward increased processing capability holds true among E.E.C. refiners as well, although cracking capacities have grown more rapidly over the past decade than those related to octane (Fig. 2).
Of the 108 refineries in E.E.C. countries, 65 (or 60%) are owned by larger refiners with more than 200,000 b/cd capacity (Table 3). This is the first time these figures have been tabulated from Journal survey responses.
Paradoxically, a former East German refinery, PCK Schwedt, has jumped into this E.E.C. list.
It has been purchased by a European consortium headed by Veba Oel.
Veba is also a major shareholder with Petroleos de Venezuela in Ruhr Oel.
ASIA/PACIFIC INDUSTRY
The Asia/Pacific region is currently the fastest growing, in terms of capacities and sophistication. Although the total number of refineries in this region appears to have decreased significantly since the last survey, this is an inaccurate conclusion.
Based on difficulties encountered in interpreting survey data from China, the number of refineries attributed to that country has changed from 40 last year to 17 this year.
Table 1c shows the changes in all refining categories for the Asia/Pacific region over the past year. Refiners in the region have increased capacities for all the major processes except coke, lubes, and asphalt.
INACTIVE REFINERIES
Despite the apparent "paper" net decrease in the number of operating refineries worldwide, crude capacity has increased marginally by about 375,000 b/cd.
Among the newly inactive refineries are Chevron U.S.A. Inc.'s 22,000 b/cd Kenai refinery in Alaska and Amoco Oil Co.'s Casper, Wyo., refinery.
Chevron blamed marginal profits and the expense of compliance with Alaska's new law regarding a Cook Inlet spill response preparedness program for its closing. Kenai was dismantled in June of this year. Amoco cites the high costs of complying with U.S. environmental rules as the cause of its refinery closing.
Another candidate for whole or partial closure is Shell Oil's Wilmington, Calif., refinery. Unocal may buy part of the facility, but the deal has apparently not been consummated and Shell says for the time being the refinery is still running.
Petroleos Mexicanos also closed its 105,000 b/cd 18th of March refinery in the Azcapotzalco district of Mexico City, in response to an order by Mexican President Carlos Salinas. The closure, which cost Pemex $500 million, was designed to cut air pollution.
It should be noted that Kuwait's four refineries are still included in the survey, and in the total and regional figures. Kuwait's pre-Gulf War crude capacity was 819,000 b/cd.
As of last month only a fraction of this capacity was being operated because of war damage. However, capacities were retained because it is felt that the trend to full operation is already under way, although one of the major refineries may be fully revamped.
OXYGENATES
With the deadline for oxygenated fuels in the U.S. quickly approaching, refiners worldwide are gearing up by adding the capacity needed to meet rapidly growing demand for these oxygenates, particularly methyl tertiary butyl ether.
For the first time, this year's survey includes a table of oxygenates capacities (Table 5).
This table includes both integrated capacities-tabulated from survey responses-and capacity at stand-alone facilities.
This list should grow rapidly over the coming years as more capacity comes on line in preparation for oxygenated and reformulated fuels.
Europe is also part of the oxygenates trend as refiners there are building capacity. Norway's Statoil has one of the most ambitious programs.
It includes a stand alone plant at its only gas processing facility and methanol feedstock from a grassroots methanol plant (OGJ, Nov. 25, p. 37). Statoil is involved with product export to the U.S. East Coast from its Mongstad refinery.
CONSTRUCTION
There are several major projects under way, covering most areas of the world. In addition to a small number of new refineries in the construction and planning stages, many expansion projects are ongoing.
Common among the list of these expansions are crude distillation units, cracking process units such as catalytic crackers and hydrocrackers, and octane-producing units such as catalytic reformers.
ASIA/PACIFIC
One of the most active spots in the area of construction is the Asia/Pacific region. Among the projects in this region is Indian Oil Corp.'s 120,000 b/d refinery in Karnal, India, to be completed some time next year at a cost of about $1.1 billion.
China Petrochemical Corp. is building three refineries:
- A 20,000 b/d facility at Erliand, Inner Mongolia, planned for completion by end-of-year
- A 20,000 b/d plant at Golmud, Qinghai-Tibet, costing $88 million, planned for completion in mid-1995
- A 350,000 b/d facility at Huian, Fujian province, planned for completion in 1994.
A 125,000 b/d refinery is being built by Pertamina at Balongan, West Java. And Pilipinas Shell Petroleum Corp. is building a 38,000 b/d refinery at Tabangao, Batangas, Philippines, expected to come on stream in 1994.
There are also several ongoing expansions of crude unit capacities. One such addition is a new 150,000 b/d crude unit that should come on stream at Kyung In Energy Co. Ltd.'s Inchon, Korea, refinery at any time. Also to be added at Inchon is a 20,000 b/d vacuum distillation unit, which is expected some time in 1992.
In Thailand, Bangchak Petroleum Co. Ltd. is adding a 40,000 b/d crude unit, a 7,000 b/d reformer, a 13,800 b/d naphtha hydrodesulfurization unit, and a 3,000 b/d LPG Merox unit.
Likewise, Chinese Petroleum Corp. is expanding crude units at Kaohsiung, Ta lin pu, and Tao-yuan, Taiwan, by 91,700 b/d, 100,000 b/d, and 64,200 b/d, respectively.
These three projects are expected to be complete in mid-1993.
Thai Oil Co. Ltd. is also expanding its crude distillation capacity at Sriracha by 100,000 b/d, as well as adding a 23,900 b/d platformer, a 32,900 b/d naphtha hydrodesulfurization unit, and a 19,000 b/d kerosine Merox unit, all in the third quarter of 1992.
Yukong Ltd. will be completing three units at its Ulsan, Korea, refinery some time in 1992: a 63,000 b/d vacuum distillation unit, a 30,000 b/d hydrocracker, and a 30,000 b/d residuum hydrodesulfurization unit.
Other regional projects include:
- A 25,000 b/d fluid catalytic cracking unit (FCCU) for residual oil that is expected to start up at Tohoku Oil Co. Ltd.'s Sendai, Japan, refinery in 1992
- A 30,000 b/d residuum hydrodesulfurization unit that is expected to start up at Chinese Petroleum Corp.'s Kaohsiung, Taiwan, refinery sometime in 1993.
SOUTH AMERICA
South American construction projects include Petroleos del Peru's expansions of vacuum capacity at its Iquitos, La Pampilla, and Talara refineries by a combined total of almost 57,000 b/d. The company is also increasing FCC capacity at two of the sites, and adding a 33,000 b/d UOP visbreaker at La Pampilla.
In Colombia, Ecopetrol is in the basic engineering stage of a 75,000 b/d refinery to be built at Middle Magdalena.
And Brazilian company Petroleo Brasileiro SA is planning to add 113,200 b/d of crude capacity at its Canoas, RGS refinery, and 143,000 b/d combined atmospheric and vacuum distillation capacity at its Mataripe refinery.
In another area project, Foster Wheeler is engineering a 60,000 b/d coker for Maraven SA for its Cardon, Venezuela, refinery.
E.E.C.
The former Mobil Oil refinery at Wilhelmshaven was scheduled to be started up in October, according to Erdoel Information Dienst, after being shutdown for a number of years.
The new owner, Beta Raffineriegesellschaft Wilhelmshaven mbH, says the facility is expected to reach full capacity of 160,000 b/d this month.
The refinery, which does not appear in the survey, has no cracking capacity, but is considering building a hydrocracker.
In Italy, Saras SpA is building a 100,000 b/d mild hydrocracker for its Sarroch, Italy refinery. Another major heavy oil project is under way at Agip Petroli's Milazzo refinery. This 200,000 b/d refinery is adding a resid hydroconversion unit. It is a 20,000 b/d LC-Fining unit licensed by ABB Lummus Crest.
MIDDLE EAST
In the Middle East, National Iranian Oil Co. is building a $1.8 billion, 150,000 b/d refinery at Arak, Iran, expected to be completed in December of next year.
NIOC also plans a 230,000 b/d refinery at Bandar Abbas on the Strait of Hormuz,
Units planned for this site include a 36,000 b/d platformer, a 36,000 b/d naphtha hydrodesulfurization unit, and a 25,000 b/d kerosine hydrodesulfurization unit.
NORTH AMERICA
Two North American companies have major projects in the works. Petroleo Mexicanos is building a 50,000 b/d visbreaker at each of its Cadereyta, Nuevo Leon, and Salina Cruz refineries, a 40,000 b/d FCC unit at Salina Cruz, and a 30,000 b/d reformer at its Tula refinery.
Husky Oil Operations Ltd. of Calgary is building a 54,000 b/d heavy oil hydrocracker (HRI) and delayed coker at its Lloydminster refinery, costing $1.3 billion, which are expected to be up by September of next year.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.