OGJ SPECIAL Refining Report Venezuelan refiner completes $2.5-billion refinery expansion

Petroleos de Venezuela subsidiary Maraven SA has completed a $2.5 billion expansion of its Cardon refinery. Shown here are the new flare and LPG spheres, with the refinery in the background (photo courtesy Maraven).

About this report...

THE JOURNAL'S EXCLUSIVE REFINING REPORT, written and edited by refining editor Anne K. Rhodes, examines important industry trends:

• Major refinery expansions designed to produce maximum conversion

• Increased use of modular units in both small and large refineries

• Improved schemes for cradle-to-grave catalyst management

• Increasing global refinery complexity.

Maraven SA, a subsidiary of Petroleos de Venezuela SA (Pdvsa), is starting up a major expansion of its refinery at Cardon, Venezuela.

The $2.5-billion project includes conversion and upgrading units that will enable the refinery to meet international fuel specifications.

Venezuela's refineries export gasoline, kerosine, and other fuels to many countries. Maraven needed increased conversion and upgrading capabilities to enable it to produce fuels meeting the tight environmental standards of a number of those countries while processing Venezuelan crudes that are becoming increasingly heavier.

Maraven calls the project PARC, or Proyecto de Adecuacion de la Refineria Cardon. The expansion will produce a major shift in refined product yields. This shift will enable the refinery to produce reformulated gasoline for the U.S. market, and to supply high-octane reformate to other Pdvsa-affiliate refineries for gasoline blending.

The refinery expansion includes a 60,000 b/sd delayed coker, an enclosed coke conveyor belt, and a fifth jetty for loading coke. Shown here are the coke drums and enclosed conveyor (photo courtesy Maraven).

History

The Cardon refinery is in Venezuela's Falcon State, in the southwest corner of the Paraguan peninsula (see map). The refinery began operating more than 45 years ago as a Royal Dutch/Shell facility with an initial capacity of 50,000 b/d.

Major additions to the original refinery include:

• A lube oil complex in 1952

• Two vacuum distillation units, a fluid catalytic cracking (FCC) complex, and the No. 1 alkylation unit in 1957, in addition to conversion of two thermal cracking units to visbreakers

• A fourth distillation unit, with consequent expansion of other refinery units, in 1958

• A third visbreaker, converted from a thermal reformer, in 1965

• A hydrodesulfurization complex in 1969

• An improved system for metering and blending tetraethyl lead in the mid-1970s

• A lube oil packaging and blending plant in 1982

• A second alkylation unit and an experimental, heavy-crude, residue hydrodemetallation unit in 1983

• MTBE and TAME units, along with a 68-mw power plant with six 155 ton/hr high-pressure steam boilers, in 1994.

Before PARC, the refinery had the capacity to process 300,000 b/d crude and 18,000 b/d diluent. It comprised 34 process units, 21 million bbl of storage, and four jetties, with capacity to load 12 ships simultaneously.

PARC

By 1991, Cardon was producing 234,000 b/d naphtha, gasoline, and distillates; 85,000 b/d high-sulfur residue; and 13,000 b/d of other products. After start-up of PARC is complete, the refinery will produce 249,000 b/d of light products and 17,000 b/d of other products (Fig. 1 [31588 bytes]). Production of high-sulfur resid will decrease by 68% to 27,000 b/d, a quantity that matches local demand.

PARC will enable Maraven to decrease resid output while increasing the proportion of heavy crudes processed and eliminating the margin-squeezing practice of adding high-value diluent to the crude blend (Fig. 2 [30176 bytes]).

Project scope

Currently one of the world's largest refinery projects, PARC will add nine process units to the Cardon refinery. Also included in the project are more than 20 tanks, a new T-shaped pier for loading coke, a third-party cogeneration plant, and an in-line gasoline blending system.

The power plant and blending system started up in late 1994, as did key utilities to support the new process units. The catalytic reformer was the first major unit to start up in the first quarter of 1996. Maraven expects the distillate hydrotreater and delayed coker to be on line by press time.

The PARC construction schedule is shown in Fig. 3 [59326 bytes].

Process description

Maraven classifies the PARC process units in three categories:

• Residue reduction-A 60,000 b/sd delayed coker and associated units, including a gas plant and coke storage, handling, and shipping facilities

• Product upgrade-A 48,500 b/sd distillate hydrotreater, a 60,000 b/sd naphtha hydrotreater, and a 45,000 b/sd catalytic reformer

• Secondary processes-Two 220 ton/day sulfur plants, a 470 ton/day amine treating unit, and a 1,500 ton/day sour water stripper.

A process flow diagram of the new units is shown in Fig. 4 [66331 bytes].

The delayed coker will be fed vacuum residue and asphalt from the existing refinery. The coke will be stored in piles and transported by enclosed conveyor to the new jetty.

Offgases from the coker main fractionator will be amine treated to remove sulfur, then sent to the refinery's fuel gas system. LPG will be amine and caustic treated, and coker naphtha will be split into light and heavy fractions.

Light naphtha from the coker will be caustic treated to remove mercaptans, then sent to the refinery naphtha blending pool. Heavy naphtha and light coker gas oil will be sent to the distillate hydrotreater, along with other refinery streams. The hydrotreater will remove sulfur, nitrogen, and heavy metals, and hydrogenate polyaromatics and other unsaturated compounds.

Hydrotreated heavy naphtha then will be sent to the naphtha hydrotreater to remove additional sulfur, nitrogen, and other impurities that could poison the downstream reformer catalyst. Maraven will use low-sulfur gas oil from the distillate hydrotreater as diesel blend stock.

Light naphtha from the naphtha hydrotreater will be used as gasoline blend stock, while heavy naphtha will be upgraded in the UOP-designed Platformer. Maraven and other Pdvsa refineries will use the Platformate to improve gasoline octane.

Reformer by-products include LPG, fuel gas, and a hydrogen-rich stream. The hydrogen stream will be used in the two new hydrotreaters, and in existing refinery units.

Sour gases from the new hydrotreaters will be processed in the amine treater, while sour water from the hydrotreaters and coker will be sent to the new sour water stripper. A new sulfur recovery unit will produce elemental liquid sulfur from the H2S-rich gases from the amine treater, sour water stripper, and coker.

Fig. 5 [142586 bytes] is a diagram of the overall refinery, showing the location of the new process units, utilities, and off sites, in addition to the privately owned power and nitrogen plants.

Support facilities

PARC includes extensive utilities and off sites to support the new process units. In addition to the utilities already mentioned, the expansion project included:

• Condensate, boiler feedwater, and seawater cooling systems

• Flare and related systems

• Air compression and distribution system

• LPG storage and refrigeration system

• Marine facilities

• Emergency shutdown and distributed control systems

• Fire-fighting system

• Heavy crude oil desalter

• Storage and loading facilities for liquid sulfur

• Potable water pipeline, plus a system for storage and distribution of potable, plant, and raw water

• Sanitary sewage system

• Treatment systems for oily water and waste water

• Inert gas distribution system

• Storm water drain system

• Power distribution system

• Fuel gas blending and distribution system

• Instrumentation systems

• Management information system with optical fiber loop.

Nitrogen and additional power and steam are provided by third-party suppliers.

These third-party systems are located on refinery land, with Maraven providing interconnection with the process units.

The project infrastructure includes 210 single-family houses. Maraven also has upgraded basic utility services in various communities surrounding the refinery. These upgrades include a new water pipeline and storage tank.

Project management

To direct overall project execution, Maraven formed an integrated project management team. Participants in the Maraven Project Management Team (MPMT) were Maraven, M.W. Kellogg Co., BP, and Inelectra SA.

The project was divided into four packages:

• Package A-The delayed coker, naphtha hydrotreater, and catalytic reformer, with engineering, procurement, and construction (EPC) by Foster Wheeler USA and Otepi Consultores SA

• Package B-The distillate hydrotreater, sulfur recovery unit, amine treater, and sour water stripper, with EPC by Overseas Bechtel Inc. and Jantesa SA

• Package C-An HDH project (a residue hydroconversion process developed by Pdvsa affiliate Intevep SA) being executed separately

• Package D-Utilities, off sites, and infrastructure, with EPC by M.W. Kellogg and Inelectra.

Organization

Contractor selection began in the second half of 1991. Engineering and procurement took place in 10 operating centers in Venezuela, Italy, and the U.S.:

• The project management group was located in Caracas initially, then moved to Cardon in July 1994.

• An on site team in Cardon oversaw construction and support activities.

• A second team in Cardon is responsible for commissioning and start-up.

• A team oversaw engineering and procurement (E&P) for Package A from centers in Clinton, N.J., Milan, and Caracas.

• A team in Houston and Caracas oversaw Package B E&P activities.

• A team oversaw Package D E&P from bases in Houston and Caracas.

• A Houston-based team provided technical support.

EPC contracts for Packages A, B, and D were let in 1992. Maraven chose Foster Wheeler as contractor for Package A because Foster Wheeler recently had designed and built a coker and reformer of similar capacity. Packages B and D were subjected to competitive bidding.

Maraven temporarily deferred work on Package C, but Fluor Daniel has completed front-end engineering on this project.

To increase use of Venezuelan resources, Foster Wheeler, Bechtel, and M.W. Kellogg were associated with leading Venezuelan engineering firms: respectively, Otepi, Jantesa, and Inelectra. Through this integration, Maraven facilitated the transfer of technology in the areas of refining processes, management, design, and construction.

Project objectives

In order to ensure that PARC met its goals of improved product quality, enhanced conversion, reduced resid production, and increased processing of heavy crudes, Maraven established 10 project objectives:

1. Protect health, safety, and the environment (HSE)

2. Optimize quality per defined project objectives

3. Comply with applicable laws and regulations

4. Minimize capital investment and risk

5. Complete project according to defined expenditure plan

6. Achieve design objectives using commercially proven technologies

7. Start up new units in accordance with project schedule

8. Maximize use of Venezuelan resources

9. Enhance technical capabilities of Venezuelan firms

10. Foster good public relations.

HSE

An independent environmental impact assessment (EIA) was performed before the project began. Venezuela's Ministry of the Environment and Renewable Resources approved the EIA.

The facilities were designed in accordance with Maraven's engineering practices, using a documentation system for approved deviations. The location of units, construction offices, spheres, tanks, and flare were subjected to quantitative risk analyses early in the project.

Hazard and operability analyses also were performed on all facilities, as were third-party project safety reviews. Project design and construction incorporated the results of these analyses.

Maraven established an annual, progressively reducing target for construction safety, measured as gross frequency rate (GFR). During 1994, PARC achieved a GFR of 9.34, winning the Cardon refinery Pdvsa's Casco de Oro (golden helmet) award for safety achievement. In July 1995, PARC reached 8 million construction work-hr without a lost-time accident-a Venezuelan safety record.

Since start-up of the gasoline blending system in December 1994, Cardon's gasoline products contribute toward improving the environment in the areas in which they are consumed. And the new process units will enable the refinery to produce even cleaner refined products.

In addition to improved fuels specifications, environmental soundness also is reflected in the design of the new process units.

Quality

The project management team instituted a series of reviews and audits to ensure that each element of the project met the total quality management principle of "fitness for purpose." The EPC contractors carried out additional quality-control design reviews and audits addressing issues including: consistency, safety, operability, maintainability, and constructability.

Transfer of quality technology to the associated Venezuelan companies was a part of the project's quality objective.

Regulations

The project, of course, had to comply with national and local laws and regulations. This included meeting all permit requirements.

In addition, the project met the requirements of Venezuela's Organic Law for the Safeguarding of the Public Patrimony. The provisions of this law call for "transparency in conducting business both at home and abroad," according to Maraven.

Capital investment

In order to stay within the budget approved by Pdvsa and Maraven, PARC employed a variety of cost control and cost-reduction means. These methods included:

• Third-party agreements, such as those made for production of power and inert gases

• Optimized constructability, including use of modularization and preassembly techniques

• Maximum integration with existing refinery facilities.

Expenditure plan

Each year of PARC, the project had to meet an expenditure profile established by Pdvsa and Maraven based on the availability of funds. The project had to use innovative execution methods to meet the established targets.

As a result of these methods, the project met its targets within acceptable margins throughout its duration.

Technologies

Although the project did not require the use of developmental technologies, processes were selected carefully, taking into account existing refinery facilities and the licensors' track records. This resulted, in some cases, in the duplication of units operating in other refineries.

Licensors of the major project units are:

• Delayed coker, Foster Wheeler

• Naphtha hydrotreater and Platformer, UOP

• Caustic treaters, Merichem Co.

• Distillate hydrotreater, Shell Oil Co.

• Sulfur recovery, amine treating, and sour water stripping, Comprimo International BV

• HDH project, Intevep SA.

Project schedule

Careful planning and schedule integration among the various contractors enabled Maraven to uphold the project schedule. Back-to-front planning techniques were used to ensure that front-end activities would support start-up on schedule.

When construction was about 80% complete, the teams made the transition from completion of construction to completion of piping and electrical systems. This ensured the proper sequence for start-up of the various units.

Maraven says a formal process of identifying and handling critical issues was key to staying on schedule.

Venezuelan resources

Dividing the project into smaller packages promoted the participation of Venezuelan firms. The association between national and international firms optimized use of national services and materials while enhancing the Venezuelan companies' technical capabilities.

Venezuelan investment in the project totaled $1.311 billion or 53% of the total project investment. In addition to the three national engineering firms, 134 Venezuelan subcontractors and 142 equipment and materials suppliers, distributors, and fabricators participated in the project.

Technology transfer

The enhancement of the Venezuelan firms' technology and know-how involved several areas of operation. These areas included:

• Quality-assurance

• ISO-9001 methodology

• Computer-aided drafting and design

• Modular design

• Project management

• Licensor process technology

• Supplier technology

• Fabrication technology.

Public relations

The project teams regularly informed governmental bodies, the business community, the public, and labor at all phases of the project. Worker wages and benefits were guaranteed, placing the project in full compliance with Venezuela's Collective Labor Agreement and Federation of Petroleum Workers.

Good relations with neighboring communities were maintained through such actions as reduction of noise and protection from noise, effluent emissions, dust, and light (from the flare). In addition, Maraven provided basic infrastructures for the communities of Cardon, Trifurcacion, Puerta Maraven, and Punta Cardon, including improvements in supply of potable water to the area.

As part of the project, Maraven also provided training in crafts and trades necessary for the project. Under an arrangement with Pdvsa's training center, 3,000 workers were trained as pipe fitters, welders, electricians, carpenters, insulators, masons, millwrights, and operators.

Project challenges

Maraven's multibillion-dollar refinery upgrade presented several technological and logistical challenges to the project management team. A project as large as this one required careful management in areas such as construction, hand-over, and infrastructure.

The following sections describe how MPMT met some of the project challenges.

Blending start-up

Before the blending system came on line in late 1994, the refinery produced gasolines by batch blending. This time-consuming, labor-intensive process increased quality giveaway.

Because the new motor-gasoline blending system was a critical item in the completion schedule, it was built and started up in an accelerated phase of the project. When the new process units are brought on line, the new blending system will be fully operational and able to handle the additional gasoline components.

The continuous, in-line blending system was designed to handle 11 streams produced in the refinery, in addition to 4 streams imported from other Pdvsa refineries. The streams will be blended to produce four grades of gasoline: two leaded gasolines for Venezuela's market and two unleaded grades for export.

The gasoline components and additives are blended simultaneously in a blend header. The header accurately blends finished, on-specification gasoline, which flows directly to storage.

The system is operated by a Honeywell TDC-3000 distributed control system (DCS) with a blend ratio controller. An advanced process control computer controls the blend properties and optimizes the blending process.

On-line analyzers measure Rvp, MON, RON, density, and distillation. The analyzer results are used to correct selected qualities during blending.

Labor management

With the help of other Pdvsa affiliates, Maraven conducted an extensive national survey of available labor skills. The survey results provided the management team a tool for determining labor availability and identifying training requirements.

To lessen labor demand, the Package B units were designed for modular construction. This package comprised 20 process modules and 29 piperack modules, the largest being 26 m long x 12 m wide x 16 m high and weighing 800 tons. All but seven of the process and piperack modules were constructed in Venezuela and shipped to the site by barge as completed units.

Construction

Modular construction also was used for the elevated pipeways between process units. The expansion required 90 single-level pipeway modules, 43 two-level modules, 60 three-level modules, and 26 road-crossing modules.

These modules were 10 m wide x 12 m long. The three-level modules were 17 m high above-grade.

The total length of elevated pipe structure for the project was nearly 6 km. The pipeways are routed mostly over existing pipe sleeper ways, according to Maraven. The pipeway modules are supported by concrete columns which, in congested areas, have drilled-shaft foundations.

Soil stabilization

The northwest shore of the refinery has experienced progressive soil erosion for many years. The erosion had become so extensive that it was threatening existing installations and casting doubt on Maraven's plans to use the adjoining plot for LPG spheres and a flare.

Project management therefore decided to include a soil stabilization project as part of the PARC scope. The project involved sloping and stabilizing about 300 m of shoreline.

Since completion of this phase of the project, the refinery's northwest shoreline is now home to a 160-m high, three-stack flare structure.

Third-party agreements

The third-party supply agreements included in Maraven's expansion marked the first use of this strategy in Venezuela's petroleum industry. The major third-party agreements are:

• Nitrogen supply by C.A. Gases Industriales de Venezuela

• Power and steam generation by Generacion de Vapor CA, a subsidiary of Electricidad de Caracas C.A.

The 300 mw power plant will more than meet the needs of the refinery. Excess power will be exported to Lagoven SA's Amuay refinery, with the balance going to the local power grid.

Maraven supplies land and utilities to these independent units.

Process control/MIS

The DCS forms the heart of the process control system. The process control system is responsible for regulatory control, emergency shutdown, advanced process control, and process optimization. Process data are available in real time, permitting operators to make effective analyses and decisions rapidly.

The advanced process control and optimization system resides in stand-alone process computers. These computers use the DCS data base for all control and optimization calculations.

The scope of PARC also included a new management information system (MIS). The MIS project involved:

• Reengineering the maintenance system into a new integrated maintenance-management system

• Designing and installing an engineering technical document system, which is integrated with the existing infrastructure for electronic data

• Replacing the existing data collecting/trending module with a new, integrated manufacturing system

• Installing a fiber optic network to link the entire refinery.

The MIS upgrade project has consolidated refinery data and made it accessible from all connected work stations.

Hand-over

After mechanical completion of the refinery expansion, more than 1,060 individual systems and subsystems had to be certified and handed over. Division of the project into systems and subsystems ensured that phased completion and testing could remain on schedule.

Maraven used a computerized management and control system, called Mancon, to manage testing and turnover of the systems. A standardized, certificate-based system backs up Mancon, documenting that inspection and testing have been performed and accepted.

Based on Mancon's records, certificates of completion, hand-over, and acceptance are awarded to the EPC contractors.

The motor gasoline blending system was tracked in this way, and thus served as a trial run for the rest of PARC.

Potable water project

The refinery's water supply comes from the Trifurcacion community. The water is pumped to seven tanks owned by Maraven and located about 4 km from the refinery.

The water source supplies several surrounding communities. Neither the flow nor pressure of the water, however, was sufficient to meet the peak loads of the refinery or the communities.

As part of PARC, Maraven has increased water supply not only to the refinery, but also to the nearby communities. The potable water project comprises a new pumping station at Trifurcacion and a new 20-in. diameter pipeline from the pumping station to Cardon.

Another new pumping station at Cardon provides additional water to the refinery and an adjacent industrial park through a new 20-in. pipeline. The total length of the new pipeline is about 10 km.

One of Maraven's existing tanks is dedicated to supplying the communities, as are the new tank and pumping station. This project, completed in late 1993, improved both the pressure and the reliability of the water supply to the communities.

Maraven, along with Lagoven and Venezuela's Ministry of Environment and Renewable Natural Resources, provided funding for another water project upstream of Trifurcacion. This project involves upgrading several branches of the network that supplies water to the Paraguan Peninsula.

Called the Falconiano Project, this upgrade will add 800 l./sec of water supply to the peninsula, in addition to the 350 l./sec increase resulting from the PARC potable water project.

Housing

Also as part of PARC, Maraven built the Los Semerucos housing project east of the refinery. The houses initially were used by construction personnel. After project completion, however, the houses will remain under refinery management and be used to meet a housing shortfall in the area.

The housing project includes streets, potable water, fire water, sewer, electricity, street lighting, and telephone service. Since completion of the housing project in mid-1994, it has consistently achieved a 100% occupancy rate.

Environment

This major refinery expansion involved a number of environmental considerations.

A new waste water treatment system segregates and treats process, storm, and cooling water from the refinery. The system includes:

• Primary and secondary treatment of oily water

• Oxidation of water containing high concentrations of H2S

• Biological treatment of process water.

Effluent from all portions of the system is monitored continuously prior to discharge.

In addition to improved water treatment, furnace stacks for the expansion were designed to ensure maximum dispersion of emissions. And gas and particle-sampling facilities have been installed on each stack.

All burners on the new fired heaters comply with emissions requirements. And the new flare location was chosen to minimize the impact of noise and luminosity to the surrounding area.

The new coke-handling system is equipped with enclosed conveyors and a spray system to suppress the formation of dust during transport and storage of refinery coke. Three stations were installed to monitor dust emissions.

Economy

In addition to the usual logistical challenges of a major construction project, PARC had to weather a difficult economic period in Venezuela that began shortly after project inception.

In mid-1992, Pdvsa decided to alter the scope of PARC significantly. This caused project management to change its execution strategies and reset project goals.

The combination of a banking crisis in Venezuela, devaluation of the bolivar against the dollar, and a high national inflation rate caused project costs to increase, in terms of bolivars. This created a tenuous situation, especially for the Venezuelan vendors, suppliers, and subcontractors involved in PARC-particularly those importing materials.

The economic circumstances that developed during PARC increased risk for the overall project schedule. Through close coordination between Maraven, Pdvsa, and the Venezuelan government, all financial obligations were met and costs were controlled within reasonable margins.

Thus, through careful teamwork and management of an array of factors-including economic difficulties, environmental regulations, labor requirements, and community relations-Maraven was able to complete a major construction project that places it among the world's most sophisticated refiners.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.