mini refinery feasibility study

8/6/2019 Mini Refinery Feasibility Study

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Mini refinery feasibility studyIntroduction

The first part of any study into a mini-refinery application is an initial assessment ofits economic feasibility. This requires an understanding of what a mini-refinery isable to do, as well as information on the proposed feedstock and intimate knowledgeof local market conditions. Technical issues relating to plant engineering or designare rarely important considerations at this initial feasibility stage.

This paper is intended to assist the project developer in making an initial feasibility

study. SCA can only provide meaningful assistance once this initial feasibility studyhas been performed and the attached questionnaire completed in as much detail aspossible.

Economy of scale

A mini-refinery (typically <4000 bpd) does not have the economy of scale of a largerefinery (typically >100,000 bpd). The capital cost to refine a liter of crude oil isinevitably higher in the case of a mini-refinery. This cost disadvantage can only beoffset if the mini refinery has access to cheap crude oil (for example from remote orotherwise non commercial oil fields) and/or offers savings in fuel or crude oil

transportation costs (typically in remote or inaccessible regions) and/or governmentincentives to support economic activity in isolated communities.

A seaboard location for a proposed mini-refinery site has to be examined carefullyagainst the alternative of importing refined product in bulk from a major refiningcountry. On the other hand, remote or inhospitable inland locations will tend toprovide favorable conditions for mini-refinery fuel production as distances and/orroad conditions results in high transportation costs for imported fuels.

To minimize its capital cost, the mini-refinery is most often supplied only as a simplestraight run atmospheric distillation refinery for diesel and/or kerosene production,with naphtha and fuel oil as by-products.

In some situations, it may be economical to provide a second distillation tower tovacuum distil the fuel oil component from the atmospheric tower into a clean heavydiesel (vacuum gas-oil) and a heavy residual oil. A thermal cracker or coker toconvert the some or all of the heavy residues into more valuable lighter products isneither practical nor economic at a mini-refinery scale.



Naphtha represents the gasoline fraction of the crude oil but it is unsuitable for

automotive gasoline without octane enhancement through further processing and/orblending. With the phasing out in most countries of TEL (lead) additives to gasoline,there is now no simple (and therefore cheap) way to octane enhances the naphthaat low production volumes. A catalytic reformer to reform that naphtha intoautomotive gasoline is normally not economically justifiable as it has a relatively highcapital cost for the relative low production volumes, bearing in mind that naphthatypically constitutes no more than 25% of the crude oil feedstock some of which willbe consumed in the reforming process. A catalytic reformer can be expected toincrease the cost of a straight run mini-refinery by approximately 80% to 100%. Themajor challenge in a mini-refinery project is not what to do with the diesel but to beinventive as to the most economical disposition of that typical 50% to 75% of thecrude oil, which ends up as the by-products of naphtha and fuel oil.

Alternative fuel costsThe proposed mini-refinery needs to deliver refined product into the targeted marketat a more competitive price than the existing fuel supplies. Knowledge of the localprice of fuel (and other available fuels such as gas or LPG) in the targeted marketand its sensitivity to price competition is therefore crucial to any feasibility study. Insome countries, fuel prices in remote communities may be government subsidizedwhich may make it difficult for a refinery to compete economically in that market.

In some cases (but not often) the crude oil may be of sufficiently high quality that it issuitable for use in heavy diesel plant without the need for any refining. Although not

suitable for the general diesel market, if the quality is good, crude oil can be used indedicated heavy plant applications (eg pumps on a crude oil pipeline).

Crude OilA straight run refinery merely fractionates by distillation the crude oil feedstock intoits boiling point components. Distillation does not alter the molecular structure of itschemical components. Therefore the natural characteristics of the crude oil (orcondensate) and the required specification of the final refined products are thedeterminants of the product yields from the refinery.

To avoid scaling and fouling within a refinery, the crude oil should have a maximumsalt content of 1 Kg per 1000 barrels. Where the salt content exceeds this level, apre-treatment process may be required. Although adding a de-Salter to a min-refinery is quite feasible, it does require a fresh water supply and a means fordisposing of the salt water waste.



Other undesirable components in the crude oil such as sulphur will carry over into

the refined product streams. The maximum allowable sulphur levels for refinedproducts are normally set by government regulations. Crude oils with <1% sulphurwill normally refine within the allowable fuel specifications for diesel and naphthawithout the need for a de-sulphering process. However reference should always bemade to the local regulations as there can be significant differences from country tocountry. Roughly 70% of the sulphur will be concentrated in the heavy fuel residue.

Fuel oil specifications may determine the maximum allowable sulphur content in thecrude oil to avoid desulphering plant.

In summary, the optimal feedstock for a mini-refinery is generally a high API crudeoil or condensate that has a relatively high natural diesel fraction in its assay. It also

should be low in sulphur, salt or other contaminants to avoid the capital costsassociated with providing additional plant.

The refinery productsThe usual products from a straight run mini-refinery are naphtha, diesel and fuel oil(residual oil). Some mini-refineries can also be designed to produce kerosene.

Local regulations will determine the required specifications for each product. Itshould be noted also that in regions where the ambient temperature changessignificantly during the year, some of these specifications may vary seasonally.

The diesel is a highly desirable product but the refinery by-products of naphtha andfuel oil find a less ready market. Depending on the crude oil characteristics and therequired product specifications, the percentage volume of these by-products couldrepresent typically between 50% and 75% of the crude oil feedstock so the problemis significant.

Operating costsTo minimize operating costs, the MICROSTILL™ does not require cooling water orsteam. It does require the customer to provide electrical power as well as productsstorage tanks, load out facilities and associated pipe work.

Recommended manning requirement is 1 man per 12 hour shift with a supervisor on

call. The automated design of the MICROSTILL™ means that it will be sufficient tohave refinery operators with a basic technical background and who can be trained inthe operation of the refinery.



Mini-refinery QuestionnaireProposed mini-refinery location:Is the local climate arctic, temperate or tropical?Is the proposed location within an existing plant or industrial park?Is steam or water available on site?Is there an approved means for disposing of waste water if crude oil desalting is required?What is the anticipated price per liter (or barrel) for the crude oil feedstock to be delivered tothe mini-refinery?Is there a local community or town with labor supply nearby?What is the required refinery capacity (tones per annum or barrels per day)?Distance from source of oil?Distance to nearest oil pipeline?Distance to nearest seaport?

Distance to main fuel markets?Distance to nearest refinery?Source of crude oil:Quality of crude oil:Crude oil or condensate?Density (API or g/cc):Maximum sulphur content:Maximum salt content:Maximum water content:Attach the assay results of the proposed feedstock (in particular the True BoilingPoint distillation of the feedstock):Product specifications:

Attach the required product specifications for the gasoline, diesel, fuel oil:Alternative fuel suppliesIs the local market presently served by pipelined gas?What is the cost per GJ (or mcf) of gas?What is the existing source of imported liquid fuels?Cost per liter of imported diesel:Cost per liter of imported standard octane petrol:Cost per liter imported fuel oil:Can the market absorb additional electrical power generation?What is cost per KWh for locally supplied electricity?Can the unwanted by-products be pipelined to market?What is the anticipated price selling price for the by-products.What is proposed market for the naphtha product?What is the anticipated naphtha selling price per literWhat is proposed market for the fuel oil?What is the anticipated fuel oil selling price per liter?

mini refinery feasibility study

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