1

Integration of Petrochemical and Refinery Plants as an Approach to

Compete in Hydrocarbon Market

M. R. Jafari Nasr1*

, Saeed Sahebdelfar2, Maryam Takht Ravanchi

2, Majid Daftari Beshelli

2

1-Research Institute of Petroleum Industry (RIPI), P.O.Box 14665-137, Tehran-Iran

2-Petrochemical Research and Technology Company, National Petrochemical Company, P.O. Box 14358-

84711, Tehran-Iran

*Email address; nasrmrj@ripi.ir

Abstract:

The recent shift from local markets to a large global one increased the competitive

pressures on petrochemical industries. Further, because of fluctuations in products' price

and high price of feedstocks, economical attractiveness of petrochemical plants can be

considered as a main challenge. The ever-increasing cost of energy and more stringent

environmental regulations impacted the operational costs. When cheap feedstocks are not

available, the best method of profitability is to apply integration and optimization in

petrochemical complexes with adjacent refineries. This is valid for installed plants and

plants under construction. Petrochemical-refinery integration is an important factor in

reducing costs and increasing efficiencies. Moreover, it guarantees the supply of

feedstock for petrochemical industries. Integrated schemes take the advantage of the

economy of scale as well. On the other hand, an integrated complex can produce more

diverse products. Petrochemical-refinery integration avoids selling crude oil, optimizes

products, economizes costs and increases benefits. Nowadays, there is an integration

approach in various commercial processes of well-known licensing companies.

This paper tries to reveal the advantages of such integration between petrochemical and

refinery plants. The incentives, benefits and challenges will be discussed. Some typical

examples are provided. The emphasis is on integration of petrochemical plants and

refineries as a key factor in sustainable competitiveness in the market using the advantage

of the synergy between petrochemical plants and refineries.

Keywords: Petrochemical-Refining Integration, Product re-processing, Production

Planning, Economics.

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1. Introduction

Currently, hydrocarbon-based industries have faced the problem of increased feedstock

and energy prices as well as environmental tight restrictions. Therefore, optimum

utilization of hydrocarbons in chemical industries has been received special attention.

The approaches commonly use improvements in processes and their catalysts to increase

the yield, reduce the wastes and using byproducts of a process as a feedstock for another

process. Consequently, the integration approach of the plants to maximize the use of

feedstocks has been applied in petrochemical plants and refineries. As a good example a

similar approach has been applied in term of energy in chemical plants to integrate

energy consumption through pinch technology [1]. Integration includes diverse areas

with further examples including integration of products and power generation, integration

of technology (for example automation technology in petrochemical plants) and

integration for optimization of scheduled equipment maintenance.

Stand-alone petrochemical plants and refineries exhibit limited flexibility for product re-

processing and by-product distribution. The inter-relation of petrochemical-refining plant

has been of interest since earlier times and many petrochemical plants have been

constructed adjacent to refineries to use their byproducts. Domestic examples are

common. Table 1 shows a number of refining streams which can be high quality feed

when used in petrochemical industry. In normal case, these cuts are used as fuel or fuel

additives in refineries.

Table 1- Alternative usage of refinery streams in petrochemical industry [2]

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To improve the refining margins, the strategy is to integrate refinery and petrochemical

plants so that to produce high price petrochemical feedstocks (such as propylene and

aromatics). In general, in Asia, part of refinery capacity has been devoted to

petrochemical feedstocks and fuel as by-product.

Potential types of petrochemical-refining integrations can be divided in three main

categories [3]:

Process integration (innovative designs considering down-stream petrochemical

plants)

Utility integration (heat, hydrogen, water, steam and electricity)

Treatment of gas fuel (utilization of hydrogen and hydrocarbons present in gas

fuel as petrochemical feedstock)

Traditionally, refineries have been mostly involved in fractionation, conversion and

blending of petroleum cuts. The refining industry has its own challenges. Regarding the

ever-increasing use of heavy oils, new catalysts and processes will be necessary, while

expected that in the future the products will be characterized in terms of molecular

properties rather than measuring bulk properties or behavior parameters such as octane

and cetane numbers, etc. Also the carbon to hydrogen ratio will be higher than the present

value due to the removal of aromatics and olefins [4].

An emerging concept is “petrochemical refinery” where process petroleum produces the

feedstock of petrochemical plants. In this way, heavy oil will supply part of

petrochemical feedstock.

In recent years, the global map of hydrocarbon industries has been influenced by radical

changes. Rapid growth of demand in Asia conducts the petroleum and petrochemicals

consumers to the center of attention. The Middle East with large hydrocarbon resources

and strategic position is going to become the main supplier of the growing market of

Asia-Pacific, in border of Europe and Africa. These changes, will affect the role of Iran

as a major leading player in the petroleum and petrochemicals markets. Never-the-less, in

the Middle East, the benefits of integration of refining-petrochemical plants has not been

well realized.

In this paper the integration of petrochemicals and refining is studied. The incentives,

benefits and challenges will be discussed. Some typical examples are provided. The

emphasis is on integration of petrochemical plants and refineries as a key factor in

sustainable competitiveness in the market using the advantage of the synergy between

petrochemical plants and refineries.

2. Benefits of integration

The profitability of refineries and petrochemical plants had many fluctuations and in

periods was under pressure (Fig.1). Therefore, these industries are continuously looking

for opportunities to remain competitive and profitable through increasing the value and

improving product slates.

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Petrochemical industries encountered important economic challenges. Globalization

resulted in a large market with severe competition between the producers. Market

fluctuation and high price of raw materials and energy are considered as additional

problems. The limitation of flexibility in terms of re-processing of the products and by-

product distribution along with strict environmental regulations are other important

challenges.

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25

30

35

2000 2001 2002 2003 2004 2005 2006 2007

Ret

urn

on

ca

pit

al

em

plo

yed

Year

Petrochemical

Refining

Figure 1- Petrochemical and refinery profits [5]

The integration of petrochemicals and refining may be performed by integration of

product; refinery streams as the feedstock for petrochemical plants (such as propylene,

propane, ethane and refining gas) and petrochemical streams as blend stock for refining

operations (such as pyrolysis gasoline (Fig. 2)).

The aim of integration of refiners is upgrading of their byproducts, reducing the operating

cost and increasing the benefit and the main objective of petrochemical producers is to

upgrade the feed quality and feed availability, decreasing the operating cost and

increasing the benefits [6].

The integration of refining and petrochemicals production is an important factor in

lowering the costs and improving the efficiency. Also, the security of feed supply to

petrochemical industries is ensured. Both industries are searching for opportunities to add

value to their products and product slates. When the refining margins are low, refiners

seriously search for opportunities to increase their profits. Providing more petrochemical

feed rather than fuels through innovative routes received attention. Petrochemical

operator continuously seeking for cheap feedstocks while the refiner seeks to add value to

its product [7]. Refiners and petrochemical producers have always benefited from their

mutual relationship. This association, however, is changing due to the shift of product-

demand by the customer.

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Product streams in refineries have been traditionally oriented to produce the

transportation fuels that they could be processed to produce aromatics and valuable

chemicals. In this way better margins or more products are obtained. This would be

considered as another benefit of integration.

Figure 2- Integrative optimization of refining and petrochemical plants

Single site integration of refining and petrochemical capacity results in advantages such

as availability of product, working capital saving, synergy from joint infrastructure and

logistic, reducing variable costs (steam and utility) and the effect of size on supporting

services (maintenance, human resources, health management, safety, environment and

quality etc). The integration of refining and petrochemical plants results in more

flexibility to produce more valuable products, operation optimization and realization of

cost effectiveness form physical integration.

3. Integration challenges

Despite the potential benefits of integration, there are certain challenges in

implementation of petrochemical-refining integration [8]. The integrated plants are more

complex and, consequently, could face with some technical difficulties. They are

operationally less flexible because of the more complex network of interacting process

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streams. Therefore, the integrated refining-petrochemical industry is continuously

looking for processes with increased flexibility to produce various olefins from refining

products.

Integration may result in conflicting of planning and operational objectives and diffusing

of business focus. This is a natural consequence of more varied and diverse products.

These difficulties can be overcome by using more advanced process technologies and

also capitalization on information technology [8]. Therefore, establishment of

collaborative business and operational planning procedures is a common practice to

develop innovative, efficient and cost-effective technologies. Many integrated

technologies are the results of joint-ventures research and development activities.

4. Global approach

Several important oil companies have employed the integration of refining-

petrochemicals in different ways (Fig. 3), such that many of the new licenses are offered

in integrated form or are capable of adopting integration mode of operation. In the

following parts of this section examples of integration in petrochemical industries and its

advantages are discussed.

24%

39%

74%

90%

BP Shell Total Exxon Mobil

Figure 3- Petrochemical – refinery integration in Europe [9]

4. 1. Lurgi’s integrated process for co-production of methanol and ammonia

Lurgi developed an integrated process for co-production of methanol and ammonia

(Figure 4). Natural gas as the main feedstock of the plant is at first desulfurized and pre-

reformed if needed. Together with process steam and oxygen it is then converted to

synthesis gas by pure auto-thermal reforming in a proprietary reactor. Auto-thermal

reforming reaction is performed in a reactor with Lurgi MegaSyn®

Technology. The hot

reactor outlet is used for the generation of high pressure steam as well as for warming up

various other process streams. The un-reacted water is separated from the gas mixture by

further cooling the gases below dew point. After separation of the water, the gas mainly

consists of hydrogen and carbon monoxide as well as some inerts (mainly methane,

carbon dioxide, nitrogen and argon).

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Part of the synthesis gas can be directly converted to methanol in a two-stage synthesis

(Lurgi MegaMethanol Technology). The produced methanol is separated by cooling the

gases below dew point and the raw methanol is purified afterwards in a two- or three-

stage distillation unit. The unconverted feed gas is recycled to the reactors and a small

amount is purged for use as fuel.

The balance of synthesis gas is used for production of ammonia. Hence, this stream is fed

to a CO-shift reaction stage to convert the undesired carbon monoxide and increase the

hydrogen content of the product gas. The converted syngas is rigorously cleaned by

means of a Rectisol®

wash and a Liquid Nitrogen Wash to remove the carbon dioxide as

well as other inerts such as carbon monoxide, methane and argon. The nearly pure

hydrogen is enriched with the required amount of nitrogen, which is a by-product of the

air separation unit. The hydrogen/nitrogen mixture is then converted in a proprietary two-

stage ammonia synthesis section using well-proven Casale technology. The ammonia is

separated from the un-reacted feed gas, which is recycled to the reactors.

This integrated plant with production capacity of 5000 mtpd methanol and 4000 mtpd

ammonia, results in a reduction of capital costs by 15% compared to a separate Mega

Methanol and a separate Mega ammonia plant and by 25% compared to separate Mega

Methanol and conventional ammonia plants.

Overall advantages of this integrated technology can be summarized as follow:

Large scale production of more than one product;

Cost reduction due to shared process equipment and utilities;

Reduction in gas consumption and CO2 emissions to atmosphere;

High efficiency;

Flexibility in methanol and ammonia productions;

Pure CO2 production as a by-product to be used in ammonia conversion to urea.

Figure 4- Lurgi’s integrated process for co-production of methanol and ammonia [10]

4.2. ATOFINA/UOP Olefin Cracking Process

Propylene has been a key interface between the refinery and petrochemical processes

[11]. The rapidly increasing demand of propylene has resulted in development of some

on-purpose production technologies using side stream products of processing streams.

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The ATOFINA/UOP Olefin Cracking Process (OCP) converts C4 to C8 olefins to

propylene and ethylene at high propylene to ethylene ratio [12]. The joint development

activities included the large scale successful demonstration of the technology, process

design, and catalyst manufacturing development. The process is designed to process

olefinic feedstocks from steam crackers, refinery FCC and coker units, and MTO units,

with typical C4 to C8 olefin and paraffin compositions. It can be integrated with them.

The Olefin Cracking Process features fixed-bed reactors operating at temperatures

between 500 and 600 °C and pressures between 1 to 5 bars gauge. The process utilizes a

proprietary zeolitic catalyst supplied by UOP and provides high yields of propylene. The

catalyst minimizes the reactor size and operating costs by operating at high space

velocities and high conversions and selectivities without requiring an inert diluent stream.

A swing reactor system is used for catalyst regeneration. Separation facilities depend on

how the unit is integrated into the processing system.

Methanol to olefins (MTO) offers a new source of light olefins based on natural gas via

methanol. Although the MTO reactions are quite selective, C4+ by-product streams are

produced. Achieving good valuation of these by-products can sometimes be difficult

because MTO projects can be installed in remote locations. By integrating Olefin

Cracking into an MTO complex the overall yield on feed to the complex can be greatly

increased (Fig. 5). The yield of methanol feed that goes to light olefins (carbon basis) for

an MTO complex augmented with Olefin Cracking can approach 90%.

Figure 5. Olefin cracking and methanol to olefin processes integration [12].

Integration of UOP OCP-Total Petrochemicals into steam cracking allows maximizing

the propylene to ethylene yield ratio. A schematic of this integrated process is depicted in

Fig. 6. Olefinic feedstock (which can be recycled stream from the steam cracker or light

FCC gasoline imported from a refinery) is introduced to an olefin conversion unit. The

effluent is compressed and depropanized. The overhead from depropanizer column is sent

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to product recovery section and the downstream is sent to steam cracker furnaces.

Another option is co-cracking of olefinic stream with straight run naphtha.

Figure 6. A schematic of UOP-Total petrochemicals integrated process [13]

Propylene to ethylene product ratios as a function of coil outlet temperature for steam

cracking and steam cracking-olefin conversion integrated process is shown in Fig.7. In

integrated process, propylene production is higher. In the integrated process, C4 and

higher olefins are converted into propylene and a small fraction is converted to ethylene.

Figure 7. Propylene to ethylene ratio as a function of coil outlet temperature for various

feeds [13]

4. 3. Petrochemical plant integration with Ras Tanura refinery complex and

Jua`ymah gas processing plant

Saudi Aramco’s Ras Tanura Integrated Project (RTIP), as an example of petrochemical-

refinery integration, is shown in Fig.8. Saudi Aramco Co. in conjunction with Dow

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Chemicals decided to integrate Ras Tanura refinery and Jua`ymah gas processing unit as

a joint venture project. Ras Tanura refinery complex deliver naphtha, vacuum gas oil

(VGO) and reformate to petrochemical plants from which more than 30 value-added

products will be produced. By-products will recycle back to refinery for re- processing.

This integrated plant, valued $20 billion, would be the largest plastic and chemical

producer in the world that produce approximately 8 million ton product per year.

Ethylene, propylene, aromatic and chlorine derivatives are main products of this

integrated plant. The original project scope includes production units for polyethylene,

ethylene oxide and glycol, propylene oxide, chlor-alkali, vinyl chloride monomer,

polyurethane components, epoxy resins, polycarbonate, amine and glycol ethers. An

industrial park is considered to be developed adjacent to the integrated plant with the aim

of providing business opportunities for industries and products’ consumers.

Figure 8- Integrated plant of Ras Tanura refinery complex and Jua`ymah gas processing

plant [14]

5. The petro-refinery in Iran

In Iranian oil industry terminology, integrated petrochemical and refinery plants are

known as petro-refinery. Construction of petrochemical complexes adjacent to refineries

for feed provision is samples of this approach, for example, in the case of Abadan,

Tabriz, Isfahan, Bisotun and Arak petrochemical complexes. Abadan petrochemical

complex is the first one in Iran and Middle East to use propylene and refinery off-gas as a

part of its feedstock.

The Northern Isfahan Petro-Refinery Complex (NIPRC) is a private joint-stock company

established in Meime, Northern Isfahan Province, Iran, is first private project to

implement in the field of oil and gas nationally. Investments made in the project amount

to four Billion Euros in foreign currency and 4,500 Billion Rials in local currency. The

feedstock needed by the complex is 150,000 barrels of crude oil daily and 2.4 billion

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cubic meters of gas annually, with the aim to operate a refinery plant, two petrochemical

plants, olefin and aromatic, and seven chemical sub-plants.

This complex, with two olefin and aromatic petrochemical units, one refinery unit and

seven related chemical units, needs an investment of more than 4 billion Euros. In this

plant, 150,000 barrel per day crude oil, 4.2×109 m

3/y gas, 18×10

6 m

3 water and 200,000

kW power is consumed. In refinery section of this plant C4, gasoline, white oil, fuel oil,

gas oil, naphtha, sulfur, lube cut and grease are produced from crude oil. In petrochemical

section of this plant, polyethylene, polypropylene, polybutadien, polyester and gasoline,

acetaldeyhde, acetic acid, vinyl acetate, butanol, 2 ethyl hexanol, ethylene oxide and

glycols are produced from natural gas. Adjacent to this plant, seven chemical units

including maleic anhydride unit, sulfuric acid unit, lubricant and industrial grease unit,

graphite electrode unit and linear alkyl benzene unit will be constructed [15].

6. Conclusions

Nowadays, construction of refinery and petrochemical plants as separate plants is not

economically attractive in the global hydrocarbon market; however, when integrated,

they will balance one another. The future petrochemical refinery aimed at production of

petrochemical feedstock could extend the petrochemical feedstock to unusual

hydrocarbon sources such as heavy oils and residues. By-products can be re-processed to

increase more valuable products.

Petrochemical-refinery integration, as a developing goal, results in synergies between

refinery and petrochemical and results in competitive and strategic advantages. This

integration will cause optimization between petrochemical and refinery products,

increasing cash margin and damp the influence of fluctuations of feed and products cost.

Security of feed supply and optimum utilization of energy are other benefits.

The resulted benefits suffer from increased complexity and reduced operational

flexibility. This necessitates employing more sophisticated process technologies which

bring about the licensors to develop joint venture cooperation.

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