India is one of the fastest-growing economies in the world and one of the largest importers of oil. India’s refining capacity is expected to increase to about 439 million tonnes per year by financial year 2029-30, according to a report of the Working Group on Enhancing Refining. As new and existing refineries continue enhancing their infrastructure, a significant addition to the current capacity will be contributed by the west coast refinery in Maharashtra when it comes on stream in 2025 . Amidst this growth trajectory of India’s refining business, it is imperative to note that India is moving to Bharat Stage emission — BS-Vl fuel regime by 2020. To meet this deadline, the industry must adopt the latest technologies to make the business efficient and profitable. At present, the leading global trend in a refining ecosystem is an end-to-end integration of applications that will make business operation more profitable, especially in a fast-changing global energy marketplace.
Therefore, an important long-term concept that is gaining traction and adoption is ‘Refinery of the Future’. It is based on the philosophy that refineries must be designed to facilitate product evolution and deliver sustainable competitiveness by addressing concerns of production cost, capital efficiency, regulative and competitive responsiveness, and profitability. The Refinery of the Future is also designed keeping in mind flexibility, which can deal with changes in market conditions, in the short-term as well as adapt with long-term transformations. Today’s refiners face an array of new challenges. Of those, the biggest challenges are the need for investments in building capacity for cleaner burning fuels, react to market dislocations, and adapt to the widely predicted plateau in demand for transportation fuels. Each of these challenges will affect product mix and investment strategies for refiners in the future. Added to these is the need to drive turnover from operation and deal with an environment of increasing complexity that ranges from feedstock to products.
For many, the stricter rules intending to eliminate the use of high-sulfur bunker fuel presents a pressing challenge. At the same time, many countries are also moving away from burning fuel oil for power generation and heating. With India a party to the Paris Agreement, the focus will be on producing and transitioning to cleaner fuels, such as natural gas to meet increasing petrochemicals demand. The Indian government has also made clear its intent of increasing the share of non-fossil fuels in the energy mix to 40 per cent. With increased regulation and monitoring, this will provide the impetus for refineries to switch to alternative and cleaner energy sources. Current projections show that global demand for petrochemicals is set to account for over a third of growth in oil demand by 2030 and nearly a half by 2050, ahead of trucks, aviation and shipping. Petrochemicals are also poised to consume an additional 56-billion cubic meters of natural gas by 2030 . Therefore, even in markets where domestic fuel consumption is growing at a healthy rate, refiners are looking to diversify into petrochemicals, where the demand and profitability are even higher.
This strong demand for petrochemicals is being driven by dozens of countries such as China, India, and Indonesia, where nearly 3 billion people will graduate into the middle class by 2050. These consumers will fuel demand for more synthetic fibers, packaging, automobiles, new food options and pharmaceuticals, and countless other consumer goods.
To satisfy this growing demand, the Refinery of the Future must have the ability to upgrade crude oil into high quality cleaner-burning fuels, and into higher-value petrochemicals. The technologies that enable both production of cleaner byproducts and establishment of an efficient pathway to “crude to chemicals” from cost-advantaged feedstocks are essential to the long-term profitability of refiners. There was a time when refineries that converted 15 per cent to 25 per cent of their production into petrochemicals were considered highly integrated. Today, world-scale complexes are being constructed that will efficiently convert more than half its crude intake into petrochemicals. Even at this level, 50 per cent is by no means the technological limit.
Refineries such as this – integrated with substantial petrochemicals production – are likely to be among the most consistently profitable over the long run. In fact, refineries that produce only petrochemicals are clearly on the horizon. As important as any other factor, the Refinery of the Future will be a digitally connected facility. It will be equipped with cloud-based connected plant services that analyse plant performance data with proprietary models to provide recommendations that improve process optimisation and operational reliability, minimise energy consumption and emissions, eliminate waste products and better manage water. It also can bridge gaps in experience caused by retirements and personnel attrition, providing insights and guidance to plant operators.
Therefore, the benefits of a connected plant are increased efficiency, reduction in cost and a refinery that is prepared to meet the demands of the future.