CPE656

PETROLEUM REFINING
ENGINEERING

CHAPTER 1
Overview of Petroleum Extraction and
Field Processing
1.1 Origin of crude oil
1.2 Upstream/Downstream
1.2.1 Crude oil processing
1.2.2 Gas processing IR. TS. MOHD FADHIL BIN MAJNIS
SCHOOL OF CHEMICAL ENGINEERING
COLLEGE OF ENGINEERING
UNIVERSITI TEKNOLOGI MARA (UiTM)
https://www.linkedin.com/in/fadhilmajnis/
MARKET OVERVIEW
Crude oil: Import
and Export
• Malaysia import and
export crude oil.
Currently, the export
volume is more than
the import value
(Figure 1).

Figure1: Crude oil products: import and export. Source: https://meih.st.gov.my/statistics

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 Imports of
Petroleum
Products
• Import of petroleum
products shows an
increment for motor
petrol followed with
diesel (Figure 2).

Figure 2: Imports of petroleum products (ktoe). Source: https://meih.st.gov.my/statistics

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 Exports of
Petroleum
Products

Figure 3: Exports of petroleum products (ktoe). Source: https://meih.st.gov.my/statistics

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 Consumption
Details

Figure 4: Final consumption of petroleum products (ktoe). Source: https://meih.st.gov.my/statistics

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Petroleum Refining Industry: History
• The petroleum industry began with the successful drilling of the first
commercial oil well in 1859 (Pennsylvania), and the opening of the first refinery
two years later to process the crude into kerosene.

• Petroleum refining has evolved continuously in response to changing consumer

demand for better and different products.

• The original requirement of refinery was to produce kerosene as a cheaper and

better source of light than whale oil.

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Petroleum
Refinery
It is an organised and
coordinated arrangement of
manufacturing processes
designed to produce physical
and chemical changes in crude
oil and convert it to petrol,
diesel, lubricating oil, fuel and
bitumen.

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 Melaka I Refinery (Petronas), 100,000 bbl/d (16,000
m3/d)

Melaka II Refinery (Petronas/Phillips 66), 170,000 bbl/d

(27,000 m3/d)
SHELL REFINING
COMPANY (FOM) Bhd
Kertih Refinery (Petronas), 40,000 bbl/d (6,400 m3/d)
Oil
ESSO (MALAYSIA) Sdn Bhd
Hengyuan Port Dickson Refinery (Hengyuan Refining
refineries in Company), 156,000 bbl/d (24,800 m3/d)

Malaysia Petron Port Dickson Refinery (Petron), 88,000 bbl/d

(14,000 m3/d)

Kemaman Bitumen Refinery (TIPCO), 30,000 bbl/d (4,800

PETRONAS PENAPISAN m3/d)
(MELAKA) Sdn Bhd PETRONAS PENAPISAN
(TERENGGANU) Sdn Bhd

Source: Wikipedia 8
 Petroleum Products Schematic

Conversion Processes
Fractionation

Blending
Raw Materials Products

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 Crude Oil
Gas
Gas Gas Sweetening,
LPG
Desalting Separation Catalytic Blending
Isomerization Aviation
Light SR Naphta
Light Distillate Gasoline
Heavy SR Naphta Catalytic Sweetening, Motor
Atmospheric
Kerosene Reforming Hydrotreatment, or Gasoline
Distillation
Blending
Solvents
SR Gas Oil Alkylation Jet Fuel

Vacuum Light Vacuum Middle Distillate Diesel Fuel

Polymerization
Distillation Gas Oil Hydrotreatment, or Solvents
Fluid Catalytic Blending
Dewaxed Heavy Vacuum Distillate
Gas Oil Cracking Fuel Oil
Oil
Dewaxing Residual
Deasphalted Oil Hydrocracking Heavy Distillate Fuel Oil
Visibreaking Hydrotreatment, or Lubrication
Solvent
Blending Oil
Desaphalting Grease
Wax Coking
Asphalt CONVERSION FINISHING
SEPARATION Coke
Waste Water Hydrogen H2S from Elemental
Support Sulfur Recovery
Treatment Production Hydrotreatment Sulfur

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 Origin of crude oil

NA
SA

http://en.wikipedia.org/wiki/Image:Moscow_traffic_congestion.JPG http://upload.wikimedia.org/wikipedia/commons/c/ce/Oil_well.jpg
en.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg en.wikipedia.org/wiki/Image:Oil_platform.jpg

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Origin (1): Chemistry
en.wikipedia.org/wiki/Image:Petroleum.JPG en.wikipedia.org/wiki/Image:Octane_molecule_3D_model.png

Hydrocarbon

• Oil and gas are made up from a mixture of

different hydrocarbons.
• Hydrocarbons are made up from hydrogen
atoms attached to the backbone of carbon.
Crude Oil
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Origin (2): Plankton
Plant plankton Animal plankton
cache.eb.com/eb/image?id=93510

en.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg

en.wikipedia.org/wiki/Image:Copepod.

• Most oil and gas originated from microscopic plants and animals
that live in the ocean.
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Origin (3): Blooms
serc.carleton.edu/images/microbelife/topics/red_tide_genera.v3.jpg

• Today, most plankton can be

found where deep ocean
currents rise to the surface

• This upwelling water is rich in

nutrients and causes the
plankton to bloom

• Blooms of certain plankton

called dinoflagellates may
© Miriam Godfrey give the water a red tinge
Dinoflagellate bloom
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Origin (4): On the seabed
upload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg

When the plankton dies it deposits

on seabed to form an organic mush.

en.wikipedia.org/wiki/Image:Nerr0328.jpg

If there are any animals on the

Seabed seabed these will feed on the
organic particles.

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Origin (5): Black Shale
upload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg
• However, if there is little or no
oxygen in the water then animals
can’t survive and the organic
mush accumulates

• Where sediment contains

more than 5% organic matter,
it eventually forms a rock
known as a Black Shale

© Earth Science World Image Bank

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 Origin (6): Cooking
As Black Shale is buried, it is heated.

Organic matter is first transformed into

Kerogen kerogen

Around 90°C, it is
Oil transformed into liquid state
Catagenesis
Around 150°C, it is
Gas transformed into a gas
www.oilandgasgeology.com/oil_gas_window.jpg A rock that has produced oil and gas in
this way is known as a Source Rock
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 Origin (7): Migration
www.diveco.co.nz/img/gallery/2006/diver_bubbles.jpg
• Hot oil and gas are less dense than
the source rock

• Oil and gas migrate upwards up

through the rock in much the same
way that the air bubbles of an
underwater diver rise to the surface

• The rising oil and gas eventually gets

trapped in pockets in the rock called
reservoirs
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Exploration: Oil Traps
• Some rocks are permeable
Impermeable and allow oil and gas to freely
pass through them

• Other rocks are impermeable

and block the upward passage
of oil and gas

• Where oil and gas rise up

into a dome (or anticline)
capped by impermeable rocks
Dome Trap it can’t escape. This is one
Permeable type of Oil Trap.

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Exploration: Reservoir Rocks
• The permeable strata in an oil trap
is known as the Reservoir Rock

• Reservoir rocks have lots of

interconnected holes called pores.
They absorb the oil and gas like a
sponge

This is a highly magnified picture of

Earth Science World Image Bank Image #h5innl
As oil migrates it fills up the pores
a sandy reservoir rock (water-filled
(oil-filled pores shown in black)
pores are shown in blue)
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Exploration: Methods
The principles used are magnetism (magnetometer), gravity
(gravimeter), and sound waves (seismograph).

These techniques are based on the physical properties of materials that

can be utilized for measurements and include those that are responsive
to the methods of applied geophysics:
Gravity
Magnetic
Seismic
Electrical
Electromagnetic
Radioactive
Borehole logging

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Exploration and Production:
Drilling the well
• Once an oil or gas prospect has
been identified, a hole is drilled to
assess the hydrocarbon reservoir.

• The cost of drilling is very great.

On an offshore rig, it may cost
$10,000 for each metre drilled.

• A company incurs vast losses

for every “dry hole” drilled
en.wikipedia.org/wiki/Image:Oil_platform.jpg

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Exploration and Production:
Enhanced Oil Recovery
• Although oil and gas are less
dense than water and naturally
rise up a well to the surface,
in reality only 40-50% of the
total will do so.

• To enhance recovery, a hole

is drilled adjacent to the well
and steam is pumped down. The
hot water helps to push the oil out
of the rock and up into the well.
© California Department of Conservation

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Exploration and Production:
Transport
Trans-Alaskan Pipeline • Once extracted oil and
gas must be sent to a
refinery for processing

• Pipelines transport
most of the world’s oil
from well to refinery

• Massive Oil Tankers

also play an important
role in distribution
United States Geological Survey

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Exploration and Production:
At the Refinery
Oil refinery Distillation
Plant
Car fuel
Jet fuel

Road tar
en.wikipedia.org/wiki/Image:Anacortes_Refinery_31911.JPG
en.wikipedia.org/wiki/Image:Crude_Oil_Distillation.png

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Petroleum Pathway

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Oil & Gas Industry Sector
Upstream
Finding, lifting, and
processing oil & gas from
subsurface into surface and
ready for transportation.
Also known as Exploration
and Production (E&P).
Midstream
Transportation and Downstream
storage of crude oil and
natural gas from E&P Further processing of crude oil
plant for further and natural gas into useful
processing by pipeline, final product or raw material
railway, road, or tanker. for other industry.
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Upstream Oil & Gas Life Cycle
• Activities to search for oil & gas deposits on
Exploration the reservoir beneath the earth’s surface

• Activities to define the oil & gas volume and

Appraisal characteristic more precisely after discovery

• Activities to build the subsurface & surface

Development facilities to produce oil & gas safely and efficiently

• Activities to extract, process, and export oil & gas

Production as per contract agreement

• Activities to plug wells permanently, remove surface

Abandonment facilities, and restore the field as per initial state

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 Exploration & Appraisal
• Exploration
• Activities to find oil & gas prospect
beneath the earth surface by means of
gravity survey, magnetic survey, and
seismic reflection survey.
• Once prospect is likely to be found,
exploration (wildcat) drilling will be
conducted to determine the presence of
oil & gas reserve.
• Most wildcat drilling fail to find oil & gas
(dry hole), only few (less than 25%) hits
oil & gas layer (discovery).
• After discovery, more drilling is
required to “appraise” the reservoir.
• Appraisal
• It is required to determine the
reservoir size which define the
volume & to get better characteristic
of oil & gas.
• Volume will be measured in million
barrels (MMbbls) oil and billion cubic
feet (Bcf) gas, both original in place
volume (Oil Initial In Place / OIIP and
Gas Initial In Place / GIIP) &
recoverable volume.
• Important characteristic includes
pressure, temperature, oil viscosity,
hydrocarbon composition,
compartmentalization, and
contaminants.
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Reserve Type
• Once appraisal conducted, it will determine the quantity of petroleum which can be recovered /
produced. Typically, only 30% of oil and 70% of gas can be recovered, can be more if advance
technique applied like water injection & submersible pump.
• Proved (1P) : Quantities of oil and gas, which, by analysis of geoscience and engineering data, can
be estimated with reasonable certainty to be economically producible–from a given date forward,
from known reservoirs, and under existing economic conditions, operating methods, and
government regulations. At least 90% probability (P90) that the quantities actually recovered will be
equal or exceed the estimate.
• Unproved : Reserves are based on technical data similar to that used in estimates of proved
reserves; but technical, contractual, economic, or regulatory uncertainties preclude such reserves
being classified as proved. Unproved reserves may be further classified as probable reserves and
possible reserves.
– Possible (2P) : Unproved reserves which analysis of technical data suggests are more likely than
not to be recoverable. At least a 50% probability (P50) that the quantities actually recovered will
equal or exceed the sum of estimated proved plus probable reserves.
– Probable (3P) : Unproved reserve which analysis of technical data suggests are less likely to be
recoverable than probable reserves. At least a 10% probability (P10) that the quantities actually
recovered will equal or exceed the sum of estimated proved plus probable plus possible
reserves.
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 Field Development Plan (FDP)
• Once the estimated recoverable value is determined, the Company will prepare a plan to
monetize the reserve, called Field Development Plan / Plan of Development (PoD).
• FDP shall contain at least :
➢ Subsurface characteristic (OIIP, GIIP, contaminants, etc)
➢ Recoverable reserve in P90-P50-P10
➢ Production Rate & Field Life
➢ Production Facilities (number & type of wells, surface facilities type)
➢ Project Plan (including Cost, Schedule, Quality)
➢ Project Economics
➢ Other aspects like Risk, Health Safety Environment (HSE)
• FDP shall be approved by the host authority. Once approved, the Company will conduct a
tender for facilities development.
• In the same time, Company will secure the hydrocarbon sales, especially gas, known as Gas
Sales Agreement (GSA). While for oil, it will be absorbed by the market as per oil price trend.
• Once the GSA secured and cost of development known from proposed tender price, the
Company will further calculate the project economic. If it meet the criteria, the Company will
sanction (commit to invest money) the project, known as Final Investment Decision (FID)
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Production Facilities
• A set of equipment to extract (lift)
oil & gas from subsurface to
surface, process, & export it to
customer as per requirement
Offshore specified in the contract.
Oil tanker FPSO Surface • Based on the location, it consists of
Facilities subsurface (wells) & surface
facilities.
Wells • Optimum facilities size will depend
on reservoir size & contract
duration which will define the
optimum production rate
Reservoir

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Drilling & Completion (Wells)
• A well is created by drilling a hole into the earth by using a
drilling rig that rotates a drill bit.
• Once drilled, a steel pipe called casing is placed in the hole &
secured with cement. This process is continued by using a smaller
drill bit & casing until reaching the reservoir target.
• After reaching the target, the well must be “completed”. The
process of preparing the well to produce oil & gas is called
“completion”.
• Completion is designed to allow oil & gas to flow but to block
unwanted material like sand.

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Surface Production Facilities
• Surface Facilities consist of the wellhead, processing,
and exporting facilities.
• Wellhead is the top part of the wells used to control the flow,
protect from excessive pressure, and interface between the
surface and reservoir.
• Main processing function is to separate the mixture of oil, gas,
water, and other contaminants (i.e. CO2, H2S) and to condition
the crude oil and natural gas as per required sales
specification.
• Once crude oil is processed, it will be exported through the
pipeline, oil tanker, truck, or railway.
• For natural gas, can only be exported by pipeline. If the volume is
too big or the distance is too far, gas has to be liquefied and
exported in the liquid phase by an LNG tanker.
• Based on the location, it can be placed on land (onshore) or sea
(offshore).

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Offshore Facilities
• Based on the substructure
(the structure which
supports the equipment
above-called topside),
offshore facilities are divided
into :
➢Bottom Supported &
Vertically Moored
➢Floating & Subsea

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Oil & Gas Processing Facilities
• Oil-gas-water mixture is
separated in separator.
• Oil will be stabilized by
removing more gas, then
pumped to pipeline or FPSO.
• Gas will be treated to remove
more liquid, then
compressed to pipeline.
• Water will be treated
before disposed
overboard / re-injected into
reservoir.

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Production Period

Plateau phase Plateau

Primary
recovery
Tertiary recovery
Secondary
recovery
Time

• Typical production phase starts with ramp-up period (increase production rate up to the peak, normally
less than a year), then plateau (maintain peak for several years, for oil production normally less than 5
years while for gas production between 5 to 10 years), then declining until reach economic limit
(timing when operating cost is higher than production revenue) or end of the contractual period.
• Plateau & decline phase can be extended by applying secondary recovery (i.e. gas injection & water
injection) and tertiary recovery (i.e. chemical injection & steam injection), however, cost to benefit
ratio must be carefully calculated since secondary/tertiary recovery is more expensive than primary
recovery. 37
Abandonment
Special vessel to remove offshore platform
• The last phase in the upstream life cycle is
abandonment.
• The activities comprise well plug &
abandonment (P&A) and surface facilities
removal.
• Well must be permanently closed and sealed
so that no more hydrocarbon can escape to
the surface.
• Surface facilities must be removed until a few
meter below seabed or left on the seabed as
an artificial reef after free hydrocarbon
condition reached.
• Site must be restored to as close as its
original condition.
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Downstream Industry
• A portion of the industry that is responsible for the refining,
distributing, and retail of petroleum products, sometimes also
called Refining & Marketing (R&M).

• Refining means processing the raw materials (crude oil & natural
gas) into higher value products, either the final product (ready to
consume like LPG for home cooking) or intermediate product
(raw material for further processing like ammonia for fertilizer).

• Downstream plants include oil refineries and petrochemical

plants.

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Oil Refinery
• Crude oils are not uniform, but rather are mixtures of thousands of different
compounds called hydrocarbons. Each component of each compound has its
size, weight and boiling temperature.
• Crude oils have low value if not processed/refined.
• Petroleum refining is a physical and chemical process to transform crude oils
into useful products.
• First, crude oils are washed in a desalter and then heated.
• Next, they enter the crude fractioner (tall vertical column), which separate the oil
components based on each component’s boiling point without chemical reaction.
• From crude fractioner, crude components are further processed, sometimes
involving chemical reaction, to create higher value products.

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Simplified Oil Refinery Diagram
Refinery Products :
• Light distillates :
➢ Liquid Petroleum Gas (LPG)
➢ Gasoline (Petrol)
➢ Naphtha (flammable liquid
hydrocarbon mixtures)
• Middle distillates :
➢ Kerosene
➢ Diesel Fuel
➢ Heating Oil
➢ Light Fuel Oil
• Heavy distillates :
➢ Heavy Fuel Oil
➢ Bunker Fuel Oil
➢ Asphalt

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More Complex Oil Refinery Diagram

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Petrochemical
ethylene propylene butadiene
• It is a chemical product derived from petroleum.
• Primary petrochemical are divided into 3 groups based on their chemical structures :
➢ Olefins include ethylene (C2H4), propylene (C3H6), and butadiene (C4H6). Ethylene and propylene
are important sources of industrial chemicals and plastic products. Butadiene is used in making
synthetic rubber. Olefin is produced by fluid catalytic cracking of petroleum fraction or steam
cracking of natural gas liquid.
➢ Aromatics include benzene (C6H6), toluene (C7H8), and xylenes (C8H10) or BTX. Benzene is a raw
material for dyes and synthetic detergents. Benzene and toluene are used in making
polyurethanes. Xylenes are used to produce plastics and synthetic fibres. Aromatics are produced
by catalytic reforming of naphtha.
➢ Synthesis gas is a mixture of carbon monoxide (CO), and hydrogen (H2) used to make ammonia
and methanol. Ammonia is used to make the fertilizer urea, and methanol is used as a solvent
and chemical intermediate.

benzene toluene xylene ammonia methanol

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Petrochemical Simplified Diagram

Fluid Catalytic Cracking is a chemical

process using liquid catalysts to
create new, smaller molecules from
larger molecules (cracking) to make
gasoline and distillate fuels.

Steam Cracking is a chemical

process using steam to thermally
cracked the feedstock into lighter
hydrocarbon.

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Marketing
• Downstream consumers include commercial and retail consumers.
• Commercial consumers include petrochemical & industrial manufacturers,
utilities (especially power plants), transportation fleets (airlines, trucks, vessels),
and municipalities.
• Downstream industry may also only involve in the distribution and sales of
petroleum products, either to the commercial or retail consumer, without having
any plant.
• Downstream product pricing, especially mass products like gasoline, highly
depends on the oil price. However, a specialized product like racing lubricant is less
sensitive to the oil price.

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Oil & Gas Industry Sector Boundary
• Actually, the boundary between upstream, midstream, and
downstream is sometimes not clear / grey area.
• Pipeline from upstream industry to downstream industry may be
owned by upstream company or independent midstream company.

• LNG industry is normally considered midstream or downstream

industry, however with FLNG revolution, it is now part of upstream
sector.

• Due to large investment & complex requirement, normally a

company only involve in one sector only, however some very large
companies involve in upstream- midstream-downstream sector,
known as integrated oil & gas companies, i.e. Shell, ExxonMobil, and
Petronas.
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