Petrochemcomplex shields refining profits

Integrating existing refinery operations into petrochemical production can improve refining profitability.

In the past 10 years, the return on replacement capital in the U.S. petrochemical industry has averaged 15.6%, and that in refining has averaged 2.4% (Fig. 1 [57,299 bytes]). The benefits of integration are:

Reduced capital investment or working capital as a result of efficient infrastructure utilization
Reduced fixed costs as a result of shared services
Optimization of overall refinery product yields
Higher value of transfer streams and products
Petrochemical downturns tempered by more stable refining cycles.

These are conclusions of a recently completed study, "Petrochemicals from Refineries: Maximizing the Potential," by Chem Systems, Tarrytown, N.Y.

Integrated complex

Table 1 [44,562 bytes] lists refinery streams that provide feedstock for a petrochemical plant. Fluid catalytic cracking units (FCCUs) provide ethylene, propylene, and butylenes. Delayed cokers also produce ethylene, propylene, and butylenes, although in smaller quantities. Catalytic reformers produce aromatics, such as benzene, toluene, and mixed xylenes (BTX).

A typical U.S. Gulf Coast (USGC) aromatics complex produces benzene and paraxylenes. It consists of a BTX separation and extraction plant and a mixed xylenes separation (via adsorption) and isomerization plant. A typical refinery reformate has enough mixed xylenes to produce 400,000 tons/year of paraxylene.

Toluene and C₉+ aromatics, byproducts of the aromatics extraction facility, are used as high-octane gasoline blendstock. Raffinate, also a byproduct, is used for the refinery light-naphtha product.

Economics

Chem Systems compared the historical performance of three regional petrochemical complexes: the USGC, Rotterdam, and Singapore. Historical base-refinery and integrated-complex returns for a typical USGC refinery are shown in Fig. 2 [54,476 bytes]. Except for 1991, since 1990, the overall cash return of the integrated plant is higher than that of the base refinery.

Returns on incremental investment to achieve integration are significantly higher, 28% on average. Historical returns illustrate the cyclical nature of the petrochemical industry. The peak in 1995 resulted in high paraxylene prices and profitability. Furthermore, the low refinery margins of 1995-96 were offset by the stronger aromatics returns.

Fig. 3 [56,506 bytes] shows the 1996 returns on investment (ROI) for various USGC petrochemical products. These stand-alone economics include the benefits of pricing feedstocks at their refinery blending values, but do not include the additional savings from integration: lower offsites (for example, tankage), working capital, maintenance, and overhead costs.

Integrated refinery/aromatic complexes generally resulted in higher ROIs for the same facilities.