Refinery of the future: bankable,

flexible, and sustainable

Efficient use of molecular precision across an integrated refining and petrochemical
operation uncovers the best roadmap for refiners to meet their changing objectives

Keith Couch
Honeywell UOP

A
s firms work to realise their vision of how they want
to engage the market across the energy transition,
implementing those plans requires an investment
strategy that is simultaneously bankable, flexible, and sus-
tainable. In a business where investment opportunities are
aligned with three-to-five-year maintenance turnaround
schedules, opportunities span from smaller, highly tactical
investments to longer-term strategies.
While smaller investments can be funded out of cash flow,
bolder projects often require access to external financing.
These projects face increased challenges to secure the cash
needed to bridge the energy transition. Simply responding
to changes in the marketplace risks being too late and an
inability to invest fast enough to maintain a going concern.
The fundamental challenge is to invest in profitable invest-
ments aligned with society’s increasing focus on environ-
mental, social and governance (ESG) goals. Rising to these
challenges is how Honeywell UOP helps its customers realise
their refinery of the future.
Healing a fractured business model
Please, get rid of transfer pricing. Whether a firm operates a
basic oil refinery or the most highly integrated refinery and
petrochemicals complex, entitlements are pervasive in the
form of transfer pricing between internal lines of business.
These can be west-side vs east-side, conversion units vs
others, and refinery vs aromatics vs olefins, to name a few.
As the industry looks to drive efficiencies via connected and
Carbon
Putting the right
molecules in the right place
C all the way to BTX. But what should we convert it into? The
Hydrogen
Optimising
the sources H Capital
and uses
$ in future markets.
Driving for the most
bankable project
Emissions Water
Providing for a CO₂ H₂O Treated as a
better tomorrow scarce resource
Figure 1 Focus on six fundamental efficiency metrics
digital, we learn more about the inefficiencies associated with
such entitlements. Connected and digital themselves do not
fix inefficient business models. As China has been the world
leader in integrated R&P complexes, it drives step-change
higher efficiency in the ‘Chairman’s Model’, in which each
internal business is driven towards the same goal: the best
overall profitability of the firm, not just their domain.
Any digital or connected approach will simply mirror the
inefficiencies of a fractured business model. Several major
firms are realising this fundamental inefficiency and have
started their journey to improvement – leadership structures
are being modified, incentives are being realigned, and ben-
efits are being realised. The first step in creating a future-for-
ward refinery is to ensure the organisational structure reflects
an integrated business model approach. When we consider
decarbonisation and driving efficiencies, it is imperative to
consider the whole operation.
Efficient integration with molecular precision
As we look at ways to increase a plant’s efficiency, we start at
the macro level, but very quickly dig deeper into what is hap-
pening at the most micro level. It is no longer good enough
to talk about boiling ranges of feedstocks or even individual
carbon numbers. Strategies for molecule management have
matured to one of true molecular precision. Latest technology
advancements manage operating efficiency at the level of
individual isomers as we drive to minimise the work intensity
for each component.
As engineers and chemists, we can take almost any mol-
ecule and convert it into almost any other molecule. But
certain molecules want to be certain things. For example, by
exerting energy (work) and capital, we can convert propane
answer is: the thing that creates the highest value with the
Utilities least amount of work and capital. To do that, we need to
Doing more
with less integrate efficiently across the entire enterprise. Less efficient
operations are systematically losing their right to participate
How to measure efficiency?
At Honeywell UOP, we focus on six fundamental efficiency
metrics (see Figure 1). The five on the outside ring (carbon,
hydrogen, utilities, emissions, and water – treated as a scarce
resource) are in tension with each other and with capital at

16 PTQ Q2 2023 www.digitalrefining.com

the centre. Whether a firm or an investor is focused on finan-
cial or ESG measures, doing this well, aligned with each firm’s
goals, is critical in securing access to the cash required to
realise their vision.
With carbon, we want to put the right molecules in the
right place. This can be the right process unit or separating
the right product pool. With hydrogen, we want to optimise
the sources and uses – put it on to do good things, take it off
to do good things, and do that as few times as possible. With
utilities, we want to do more with less and minimise utility
usage. When we are successful with utilities, emissions also
come down. But emissions can also be favourably reduced
when we employ the proper molecular management and
drive towards smaller equipment to carry out the objectives.
Water is critical. We want to treat water as a scarce
resource because it is. There is a growing competition for
water between civil, social, societal, agricultural, and other
industrial uses. We need to minimise new water consump-
tion and strive for zero water discharge.
Finally, it must be noted that the approach to securing
capital has shifted dramatically over the past few years.
Large banks have shifted their lending profiles towards
green projects (see Figure 2). Financial portfolio manage-
ment is extending beyond traditional measures, such as net
present value (NPV), internal rate of return (IRR), and debt
service coverage ratio (DSCR), and increasingly focusing on
sustainability measures, such as CO2 per tonne of product
and CO2 per dollar invested. Boards of directors are also driv-
ing this proliferation. As this communication cascades down
organisations, project managers at the individual site level
are increasingly asking us to help them achieve the financial
measures, but also the ESG measures.
Scope 1, 2 and 3 emissions
Scope 1 emissions, commonly known as direct emissions,
are produced as part of day-to-day business. These include
emissions exiting process units and heater stacks, emissions
from on-site generation of utilities, fugitive emissions from
flanges and valves, and company vehicle emissions.
Scope 2 emissions frequently are referred to as indirect
emissions. These are associated with the generation of
energy needed to run a facility that is produced by and pur-
chased from someone else.
Scope 3 emissions arise primarily from the ultimate com-
bustion of fuels that a refinery produces and sells. Scope 3
also includes emissions associated with disposing of waste
streams and emissions generated when others fabricate,
manufacture, and deliver such things as catalyst, specialty
equipment, vessels, exchangers, and pumps on the facil-
ity’s behalf. Scope 3 encompasses everything upstream and
downstream of the facility, making this the largest compo-
nent of its carbon footprint.
There are several ways an existing enterprise can reduce
emissions. These range from low-cost tactical ‘just go do’
activities to the most strategic shifts, such as pivoting from
fuel to petrochemicals production.
No- or low-cost solutions include reducing slops reprocess-
ing, reducing or eliminating flaring, and avoiding over-reflux-
ing columns. These can often be solved through visualisation
www.digitalrefining.com
Fossil fuel
$50B
Green projects
industry $10B
2015 2016 2017 2018 2019 2020 2021
J P Morgan
Wells Fargo
Citigroup
B of A
securities
RBC Capital
Markets
Note: Includes top five largest lenders to fossil fuel industry since 2016
Source: Bloomberg league tables
Figure 2 Greening of the big banks
tools to quantify processes and understand how to get the
most out of their assets every day, across every shift.
At a slightly higher cost, operators can consider using
higher activity catalysts. These reduce reactor temperatures,
leading to a reduction in the amount of fuel used and a subse-
quent reduction in the CO2 footprint. Operators can optimise
pump efficiencies by properly sizing impellers and control
valves or improving the compressor anti-surge control sys-
tem hardware, software, and programming.
Moderate- to high-cost options might include adding to the
heat exchanger network, optimising hydrogen and electrifica-
tion networks, monitoring and mitigating fugitive emissions,
and replacing exchangers with higher efficiency systems.
When we engage with the customer to start this journey,
we start with a Concept Development Workshop – effectively
a voice-of-the-customer exercise where we align our listen-
ing skill set to understand where the firm wants to transition
or improve across time. It helps us identify the right ideas to
assess. Then, working with the current value of carbon in
the global region, we create a carbon abatement curve for
the customer, in which carbon reduction opportunities and
their CO2 impact are paired with the cost per tonne of CO2
reduced. This provides a roadmap through which a firm can
plan its journey.
Cost of hydrogen production drives regional
technology selections
The cost to produce hydrogen varies from region to region
around the globe and has a profound impact on the types
of technologies employed and market participation. For
example, the cost of hydrogen in China out of a steam meth-
ane reformer (SMR) is approximately $2,000/t compared to
$750/t in the Middle East. As a result, China drives crude oil to
aromatics projects; when they search for olefins projects, they
end up importing propane (effectively as a hydrogen source)
to feed their propane dehydrogenation units.
Lower energy prices result in a cost advantage for produc-
ing light olefins in the US, the Middle East, and places that
have a similar cost structure, while places that have a high
hydrogen cost structure (China, SEA, India) are looking more
towards aromatics production and/or imported feedstocks.
PTQ Q2 2023 17
 Reducing emissions through carbon capture
250 Another way firms can reduce emissions is to implement car-
200
bon capture, sequestration, and utilisation. To address CO2
capture, Honeywell UOP offers an Advanced Solvent for
150 $130 NPV10 Carbon Capture (ASCC) system.
An advanced solvent allows for a higher mass transfer rate,
NPV, $MM

$120 NPV10
100
which enables regeneration at a higher pressure, delivering
50 CO2 at 5-6 bar(g) instead of just 1 bar(g). As a result, the unit
$20 NPV10
$2 NPV10 is smaller for lower Capex, while the higher pressure sub-
0
12% 26% 69% 73% stantially reduces Opex – up to $10-15 per tonne captured.
IRR IRR IRR IRR
-50 Adding an advanced solvent for carbon capture to the four
5% 10% 15% 20% 25% 30% 35% 40%
Discount rate key stacks in a refinery that produce 93% of the CO2 emis-
30 mol% $5 Gas - $0/MT CO2 50 mol% $20 Gas - $0/MT CO2 sions for the entire complex, we were able to reduce net CO2
50 mol% $5 Gas - $0/MT CO2 50 mol% $20 Gas - $100/MT CO2 by 81% (see Figure 4). The economics behind CCUS are
dramatically impacted by government policy. It is important
Figure 3 NPV sensitivity to discount rate to understand the regional tax benefits, carbon credits, and
traded carbon market values associated with carbon capture.
How does this impact the ways in which we try to improve Another way to improve the CO2 footprint for many refiners
carbon efficiencies and operations costs? It means there is a is to bury the petroleum coke (petcoke) produced rather than
huge argument for capturing the hydrogen that refiners have reselling it as a high-carbon fuel. Petcoke traditionally com-
already made. petes with coal in the fuel market. In a decarbonising world,
governments will set coal policy. Refiners can only impact
Capturing stray hydrogen what they control, and that is the decision of whether to sell
A survey of operating sites showed that many facilities petcoke as a fuel, or to sequester that carbon in solid form.
operate in the range of 30-50 mol% H2 in their fuel gas This avoids the high Scope 3 CO2 footprint created when the
headers; some even higher. This is due in large part to solu- eventual end user burns it and has a net cost of CO2 avoid-
tion losses. The higher the operating pressure of a unit, ance of $10-40 per tonne.
such as a hydrocracker, the higher the solution and purge
losses into the fuel gas. If one assumes 30 mol% H2 in the Pivoting from refined fuel products toward
fuel gas in a region with a (low) cost of $5 per million BTUs petrochemicals
with no CO2 credit, you can see that hydrogen recovery can Finally, an effective strategy to increase the internal rate of
lead to a 12% IRR)(see Figure 3). If the hydrogen content return of a facility and reduce Scope 3 emissions is to con-
in the fuel gas is 50 mol% at the same cost of $5, you see sider a pivot from refined fuel products toward petrochemi-
an IRR of 26% by recovering this grey hydrogen that is oth- cals. It is not a question of immediately and forever getting
erwise lost to fuel. out of fuels; it is simply considering a migration across time
When you move to Europe and Asia, where you typically that may align with the business plan of your firm.
see fuel costs closer to $20 per million BTUs, you start to see The production of petrochemicals centres around the
IRRs in the range of 69-73%, depending on the amount of mixed feed steam cracker, or naphtha cracker, commonly
CO2 credit available. In a typical 100K b/d refinery, the invest- the heart of an integrated facility’s operation. One can feed
ment to recover the hydrogen you have already made is $15- a broad range of hydrocarbons into a steam cracker, with the
$18M. The chemical value of the hydrogen so far exceeds the preferred output being ethylene. All other products, while
fuel value of the hydrogen. It is clearly worth recovering, given useful, are not the primary aim of this process. In fact, while
the IRRs previously discussed. heavier products (propylene, butadiene, benzene, and mixed

Retrofit 4 key stacks that produce 93% of complex CO2 emissions Complex CO2 emissions by area 3,100 KMt/y cr ude LP 530
1. Steam cracker 16,000
2. SMR hydrogen plant CCPP (steam & power)
14,000 NViro (steam)
3. NViro - SDA pitch and steam cracker pyoil to steam
H2 plant
4. Combined cycle power plant 12,000
Steam cracker
ASCC on 4
Capture additional CO2 produced from power and steam needed 10,000 PDH
Stacks
CO2 t/d

for ASCC units1 MaxEne

8,000
AroFlex NS
15,073 t⁄d CO2 captured
6,000 Pygas NS
8% more than base emissions
81% CO2 HCU
4,000 reduction SDA
Economic burden on the project was (4%) IRR with no
NHT/NS
government support 2,000
CDU
Notes: 0
1. 75 MW power, 730 MT/hr MP steam and 30,000 m3/h CW needed for case Base Complex ASCC Complex
2. ‘NS’ is naphtha splitter

Figure 4 Impact of ASCC on 3,100 KMt/y crude case

18 PTQ Q2 2023 www.digitalrefining.com

aromatics) have some potentially attractive market value,
there are much more efficient and clean ways of achieving
those particular products. Recall the discussion on molecular
precision and management. The least useful products, fuel
gas and pyrolysis oil (pyoil), are generally to be avoided.
UOP has a suite of tools – MaxEne, IsoFlex, AroFlex, and
OCP – that allow the mixed feed steam cracker complex to
handle a variety of feedstocks more efficiently. Steam crack-
ers prefer lighter feedstocks. They also prefer normal paraf-
fins to iso paraffins, and naphthenes to aromatics.
An Integrated Olefins Suite (IOS), combined with a pro-
pane dehydrogenation (PDH) unit (Oleflex) to process the
propane, can be applied to an embedded mixed feed steam
cracker, with MaxEne and IsoFlex process units upstream
and AroFlex and OCP process units downstream of the
steam cracker. In one customer case, application of the IOS
enabled the light olefin yield to increase by 57%. The crude oil
consumption of the complex was reduced by 9%. Petchem
operations earn cash by minimising the quantity of feedstock
required to make the target products. The 9% reduction in
crude oil enabled the sizing of all associated equipment to
be reduced. Improved feedstock management to the steam
cracker enabled multiple furnaces to be removed from the
design. This design eliminates net pyrolysis gas, butanes,
and butylenes while decreasing pyoil production by 95%.
The net CO2 production per tonne of light olefin is reduced
by 40%. Processing propane in a PDH unit rather than a
steam cracker reduces the CO2 footprint per tonne of pro-
pylene by 94%.
In brief, putting the right molecules through the right pro-
cesses will more efficiently make the right products. UOP’s
next generation of IOS will enable the elimination of mixed
feed steam crackers, allowing that technology to operate
where it is most efficient: the conversion of ethane feedstock.
www.digitalrefining.com
Next generation IOS does not require a steam cracker to cre-
ate value. It will also enable refiners to pivot naphtha out of
the gasoline pool and convert it to propane at quantities to
support a PDH investment. As we have seen with high pro-
pylene FCC units, propylene is the easiest petchem product
market for most refiners to enter.
Conclusion
Today’s refiners can achieve bankable, ESG-aligned goals by
managing feedstocks to meet their target product objectives.
As an industry, we must start thinking and acting differently
to survive in a decarbonising world across the energy transi-
tion. Through efficient use of molecular precision across an
entire integrated refining and petrochemical operation, lever-
aging the economic value of CO2, operating firms can cre-
ate the best roadmap to meet their changing objectives and
become the refinery of the future today.
MaxEne, IsoFlex, AroFlex, and Oleflex are marks of Honeywell UOP.
Keith A. Couch is Senior Director of Global Technology Sales and In-
tegrated Projects within UOP’s Process Technologies business. He has
over 28 years’ experience in manufacturing, R&D, field service, techni-
cal service, technical sales, and business management. He holds a BS
degree in chemical engineering from Louisiana Tech University and a
Master of Business Administration from the University of Chicago, Booth
School of Business. Email: Keith.Couch@honeywell.com
LINKS
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PTQ Q2 2023 19