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Durban Refinery overview
7 March 2007
ARA
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Agenda
Brief Refinery History and Processing
Scheme
Clean fuels programme
Bio fuels programme
Shutdown cooperation
Safety cooperation
Environmental challenges
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Refinery History & Processing Scheme
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Original Refinery - 1955
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Engen Refinery today
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Refinery History1951 - Construction begins
1954 - First start up of a small but Complex (for the time) refinery
1954 - 1969 Refinery expanded and new units added 4 times
1972 - Lube base oil manufacturing plant added
1973 - Sapref started. Crude imports moved away from Durban harbour
1974 – 1976: Two more expansions
1977 - Aromatic Solvents (BTX)
1981 -1993: Five Major investments to make higher quality products
1998 - Petronas buys 100% of Engen, delists Engen
2000 - WAIH buys 20% of Engen
2001 – 2005: Four Investment steps in Environmental projects and Clean fuels
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Simplified flow diagram
Engen Refinery(2006)
Only the main plant units are shown, and many of the
interconnections have been omitted for clarity
Units in Red: Modified in Clean fuels phase 1
Units in yellow: Value compromised by Clean fuels phase 1
specifications that deviate from “Euro 3”
PROCESS
CONTROL
CENTRE
CR
UD
E O
IL D
IST
ILL
AT
ION
TO
WE
R
•
• - Phase 1 upgrade of new unit
- Phase 2 upgrade of new unit
OVERHEADS
(will become petrol)
SIDESTREAM No. 1
(will become paraffin/
jet fuel)
SIDESTREAM No. 2
(will become diesel)
BOTTOMS
(will become
lubricating oil
fuel/furnace oil
bitumen)
REFORMER
• NCPX
KERO HYDRO-
TREATER (HKT)
SCPX
CATALYTIC
HYDRO-
DESULPHURISER
(CHD)
NCPX
VACUUM
TOWER
COMBO
VISBREAKER
No. 2
(viscosity breaker)
COMBO
GAS PLANT
• NCPX
ALKYLATION
(OCTANE IMPROVER)
SCPX
ISOMERISATION
(OCTANE IMPROVER)
SCPX
PETROL PREPARATION
AND BLENDING
• OM&S
SULPHUR RECOVERY
• SCPX
BTX SOLVENT
PRODUCTION
SCPX
(increases octane rating of petrol)
(removes sulphur)
(removes sulphur)
LUBRICANT BASE OIL
PREPARATION (SAFOR)
FLUID CATALYTIC
CRACKER (FCCU)
• COMBO
ASPHALT UNIT
SCPX
EFFLUENT
TREATMENT
PLANT
• OM&S
Used process water
from all over the refinery
LPG
PENTANE
HEXANE
AVIATION GASOLINE
PETROL
AROMATIC SOLVENT
ALIPHATIC SOLVENT
SULPHUR
PARAFFIN
JET FUEL
DIESEL
LUBRICANT
BASE STOCK
HEAVY FUEL OIL
BITUMEN
ENVIRONMENTALLY
CLEAN/SAFE
EFFLUENT WATER
Crude Oil
Storage tanks
back to C
HD
back to g
as
pla
nt
to p
etr
ol
pre
para
tion
and b
lendin
g
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Clean Fuels Programme
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Phase 1 requirements
Elimination of lead in gasoline
Reduction of sulphur in diesel from 0,3 to 0,05%
Reduction of sulphur in gasoline from 0,15 to 0,05%
Effective 1 January 2006
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Phase 1 elements
Dehexaniser
Cat Naphtha Splitter
Modifications to Diesel
de-sulphurisation unit (CHD)
Total cost: $40 million
Requirements were met but we had issues..
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Phase 1 IssuesThe timeline was too rushed to deliver value to our
shareholders
CHD project was declared too late for optimal design
(energy and catalyst cycle length)
Hasty Engineering process caused environmental
impacts
Conclusion: We needed more time between
finalisation of specifications and start-up
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Phase 1 Issues
Varying Planning and Construction Management skills within
Engineering and Construction companies
Loss of Contractor staff to other projects in Middle East / Asia
Lead contractor staff spread to thinly over refineries
implementing CF projects in same time-frame
Lack of development for good young resources
70% of construction workers were “first timers” despite our
training centre program
Conclusion: Stage implementation of such specification
changes
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Phase 1 Issues
Change from original product specification assumptions
Imports of high octane blend stock
Large volume low octane petrol exports
Extent is that harbour berths are over-subscribed
Pentane and Hexane exported at prices below crude
Conclusion: Projects can not be built where exact
product specification roadmaps are not firm
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Cleaner Fuels Phase 2
The objective of the Cleaner Fuel programme is to
produce fuel that enables motor vehicles to
substantially reduce exhaust and other fuel
emissions
The need to make CF1 fuel changes including the
removal of lead were clearly apparent
CF2 is more complex and changes should be driven
on a scientific rational approach
We must ensure that the changes have a net
positive impact on the environment taking all local
factors into account
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CF2 scope
The proposal to introduce changes based on the Euro IV specifications, subject to the rational scientific approach and if justified the following units may have to be built at the Refinery:
Hydrocracker Unit (MHC)
Hydrogen Plant
Benzene reduction Unit
Sulphur Recovery Unit
Off site tankage, piping and utilities to support the above units
Together these projects will represent the most challenging programme ever undertaken by the Refinery with costs of $ 400 million
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Phase 2: Engineering Issues• Globally, Engineering and Construction resources are limited due to world
economic growth. Several of our good construction resources have already
left the country
Major equipment like reactors and compressors can not be specified early in
projects of this nature. High pressure compressors and thick walled vessels
now require ~3 years lead time
EIA process for high pressure units is likely to be complicated
• Strong Engineering milestone review process needed as Engineering
resources available to us are relatively inexperienced
Locally, Engineering/Construction resources will compete with Infrastructure
improvement projects and other refinery Clean Fuels phase 2 projects
Conclusion A 5 year time-frame has been accepted for CF projects after
final specifications are declared
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Phase 2: Economic Concerns
Will we have Euro 4 specifications,
USA specifications or a hybrid
specification?
Will Biofuels (Ethanol) introduction
into petrol lead to more Pentane and
Hexane exports?
How firmly can we understand final
cost, given the worldwide
construction boom?
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Biofuels Programme
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Bio-fuels status
A draft strategy document was issued for comment in December 2006
The programme aimes at using renewable raw materials to produce petrol and diesel components to supplement fossil fuel resources
Target of 4.5% of petrol and diesel volumes
Strategy suggests a maximum E10 in petrol and B5 in diesel
The programme is anticipated to be fast tracked and will reflect early in the already busy CF2 project plan
Depending on the specifications decided on the implications for the Refinery may be significant involving widespread project input
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Bio-fuels Challenges
The introduction of ethanol into the gasoline pool, especially at low %s has impact on Refinery gas balance in the absence of waivers on gasoline volatility specs
Typically every litre of ethanol introduced into the petrol pool causes the displacement of 1 litre of light end hydrocarbon
Impacts of the introduction of Methyl esters into the diesel pool are being investigated, density and cold flow properties may impact on jet avails
Integration and implementation in the same window as clean fuels 2
Setting parameters that will ensure sufficient consistent quality and quantity of bio product for blending
Realistic fuel-price structure that will ensure viability for all concerned
Coping with additional demands on the country’s already stretched construction and engineering skills resources during development phases
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Shutdown cooperation
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Shutdown Network Forum
Vision
To create value by enabling effective large shutdown execution through the sharing of:
•Real time information
•Best practices
•Resource development
Mission
To create an environment where member companies obtain information to drive excellence in maintenance and construction to mutual benefit by:
•Providing integrated shutdown planning
•Managing resource quality and availability
•Influencing and communicating pertinent legislation
•Facilitating forums for sharing experiences and best practices
•Creating environments for skills development projects
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OG & CM Artisan Skills Training
Project
• Widening of Scope– Early 2000s, skills shortage evident: quality and quantity
– Decision to look at training collaboration to meet construction and shutdown needs.
• Quantifying the shortage– National Advisory Council for Innovation
(NACI 2003)• 6000 skilled people short by 2010
• Focus on:
1. Electricians
2. Instrument mechanicians
3. Welders
4. Boilermakers
5. Fitters
6. Riggers
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OG & CM Artisan Skills Training
Project• OG&CM established in May 2004
– Phase 1: R25 million discretionary grant from the CHIETA for 1 000 learnerships at NQF Level 2
– All six trades catered for.
• 18 training centres across the country
– Industry related
– Private
– FET Colleges
• Database of skills and generic safety induction
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Safety cooperation
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Advisory Risk Management Comm (ARMC)
Refinery GM level committee
Significant incidents are shared
Refinery visits / audits
Workshops, recent topics
Major Hazardous Installations
Sewer safety
Management of change
Permit to work
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S A Petrochemical Fire Chiefs Committee
Advance Petrochemical fire training
Petrochemical Emergency Response Preparedness
Sharing of Fire/Incident Reports
E.g. Vacuum tower bottom line failure ignited the product.
Sharing of best practices, examples
Fire Pre-planning standards
Breathing Air Quality – use of air compressor and/or air cylinders, to supply workers working in tanks
Approach for Off-Site Emergencies
Evacuation Plans for Buildings
Floating Roof – Fire Protectio
Fire protection systems on floating roof tanks
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Environmental challenges
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General Environmental Issues
Engen refinery: its location makes it the most visible
Industry in the area
One of about 140 industries in South Durban
Responsible for about 10 - 20% of the emissions in
South Durban (from MPP cost allocation database)
Local Environmental NGO will not engage
constructively (e.g. objections to projects that reduce
emissions)
Tighter legislation and regulatory monitoring
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Refinery History
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History of the Refinery
ENGEN
Settlers Primary School
SAPREF
MONDI
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Flares
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Noise limit
Residential
(SANS 10103)
Industrial (SANS
10103)
Engen
permit
Daytime (06:00 to 18:00) 55 70 60
Evenings, Weekends
(18:00 to 24:00)
55 70 55
Night-time (00:00 t0
06:00)
45 60 50
Noise limits are a mixture of industrial and residential limits
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Tighter Legislation
Permit limits on Sulphur Dioxide:
19 t/day source emission
35 allowed exceedances of ambient ground level 10
min limit per year.
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Meeting the Challenges
VOC – VRU, ETP covers, fenceline monitoring (passive sampling)
SO2 – 2 x sulphur plants, ambient monitoring, DeSOx additive in FCCU
Flare – system is BAT compliant
Noise – steam leak repair programme
PM10 – FCC fourth stage separator, isokinetic sampling
Community engagement – complaints management, Community Liaison Forum, environmental awareness
ISO 14001 implementation
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Questions? And Answers!