Ask any expert in the field and they will tell you that building a refinery these days is not the easiest of tasks.
Engineering, construction and design firms face a new challenge every day. From market competition driving requirements for maximum efficiency and better feedstock use, to putting new technology on old plants and making sure it works, engineers — just like most operators nowadays — are increasingly having to do more with less.
On top of this, countries particularly in the GCC have set themselves some very ambitious targets to raise production from their fields, optimise their plants’ performance and explore new ways of making profit. This has been driving significant investment in new and existing facilities and infrastructure both offshore and onshore, says Peter O’Sullivan, chief executive officer of London-based engineering firm Penspen with offices in the Middle East, Europe, Africa, the Americas and Asia-Pacific.
“A lot of the investments in this region in particular is focused on upgrading or rehabilitating existing production facilities to extend their life, to increase their production capacity, etc. The UAE for example has a goal to get production up to 3.5mn barrels a day and to do that they are investing in existing production facilities which have already been producing for 20 or 30 years to try and extend them, and also in building some new facilities.”
“From a midstream and a downstream perspective, the focus is on export,” he adds.
Having worked on a number of oil and gas developments in the region such as the Khazzan natural gas field in Oman, the Abu Dhabi-Fujairah pipeline and the huge Saudi-Kuwait joint Khafji field, Penspen’s CEO is quite familiar with local operators’ requirements in plant engineering, construction and design, and says integration continues to be a reoccurring topic.
“The link between upstream and downstream is a lot closer here, in the Middle East then it is in other regions where it has sort of become separated. In Saudi certainly there is a strong link between the downstream petrochemical industries and refining industries, and the upstream.”
The drive for closer integration between upstream and downstream assets has been accelerated since the price of oil started to fall, making the downstream sector much more appealing than the upstream. In O’Sullivan’s view, cheaper oil has promoted significant investment in the GCC’s oil refining, storage and distribution facilities, which in turn means more business for EPC contractors like Penspen.
After integration, perhaps the second most important driver in plant configuration is gas monetisation and better use of different feedstock. Perhaps due to how capital intensive projects of this kind can be and a certain lack of awareness in some states, the GCC hasn’t been as good as other regions at making use of flared gas. But this is starting to change significantly, with huge investments being made in the development of liquefied petroleum gas (LNG) and supporting infrastructure. Thanks to recent technological developments and modern-day engineering, LNG operations can be developed both on a large and small scale, depending on project specifications, business objectives, etc., and operators, particularly in the GCC, have been quick to take advantage.
“We are seeing investment in floating LNG regasification facilities, where the operator would import LNG, store it and regasify it on a floating vessel, which gives some optionality to the owner,” said O’Sullivan.
“What’s even more interesting, we had a project in the North Sea’s Nar field recently for an offshore production facility that involved a little bit of what you might call refining technology.”
The equipment Penspen decided to use was what is known in the industry as ‘debutaniser’. Its sole purpose was to separate and refine the butane from the gas produced from the field, and though it wasn’t easy to install due to a number of engineering challenges, the benefits were significant.
“Butane has higher value than methane – but [the operator] wasn’t able to get the value because it was just going out the methane export line. So our team designed a column to strip out the butane form the gas and store it separately which paid for itself in about six months because of the value of the butane,” said O’Sullivan. “That’s very novel [and] it’s not been done very often elsewhere partly because to do this you’d need a very high column. In a platform that sways that creates all sorts of engineering challenges.”
However, O’Sullivan is certain that in the future more refining process engineering will be brought to upstream production facilities both offshore or onshore. The reason for this is financial — why waste perfectly good feedstock, when you can use it to produce higher value products and boost your profit — but also demand-driven.
“The focus is starting to shift from commodity to specialty products,” says Boris van Thiel, CEO of thyssenkrupp’s industrial solutions division in the Middle East and North Africa (MENA) region.
“The key trends we see in this area are driven by innovative technology and advances in plant efficiency. In today’s environment of lower product margins and fixed feedstock prices, the only way to increase efficiency is by working to increase the capacity of older plants and the continuous improvement of product quality,” he adds.
In addition, technological requirements such as plant automation and remote control are driving investment in data capture not just from production facilities but from pipeline distribution operations and downstream facilities as well, says O’Sullivan.
“There is a lot more data available these days form oil and gas facilities and that’s an increasing trend. I think it started in the subsurface in the reservoir — that’s where it all really kicked off, but we are now beginning to see it more in the production facilities such as topsides for example. These days we would build in the instrumentation and controls to provide that sort of data.”
The challenge for all is how to use this data in the most time and cost-efficient way, O’Sullivan explains. Also, a bigger focus on optimisation and plant reliability is driving demand for a so called ‘predictive design’, where plants are able to predict, control and ultimately eliminate a problem that’s set to occur in the future.
“What we are actually beginning to see here is design for integrity, which is thinking about the full life of the facility and what are the issues it may experience in 10, 15 or 20 years that might undermine the integrity of the system and try to design the system now to address these,” O’Sullivan explained.
“We have a team within the business where we focus solely on the integrity of production facilities, for example, in a pipeline if there’s corrosion and there is a risk of failure what can be done to fix it and so on.
“Those skills in evaluating risk and expected life are becoming more drawn into the engineering up front to improve the lifetime of the facility and that’s a new trend I think that we are seeing.”
Meanwhile, environmental regulations worldwide are becoming ever more stringent, driving requirements for yet greener and cleaner refineries and petrochemical plants. It was in response to this trend that thyssenkrupp developed a technology for nitric acid plants that is able to reduce NOx emissions to less than 1 ppm. It is currently deployed across a number of plants in the Middle East, saving the equivalent of around 1.4mn tonnes of CO2 per year.
Bio-refineries are also beginning to gain traction more so in the West than the GCC, but as Thiel explains there is a good reason for this: “There has been a lot of discussion regarding bio-refineries in the Middle East and ultimately, what it requires is a sustainable supply of biomass which is ultimately dependent on geography. Countries such as Egypt have great potential due to the amounts of crop waste it produces, while other countries are looking at imported bio-mass or in the longer term developing alternative sources such as algae. In the current oil price markets large scale bio-refineries will require governmental support as part of a long term strategic vision for diversification from hydrocarbons. We see this as remaining a niche market in the ME for the short to medium term,” he concluded.
