Prof. Dr. J. Clifford Jones Oil Refining: the International Scene
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PROF. DR. J. CLIFFORD JONES OIL REFINING: THE INTERNATIONAL SCENE 2 Oil Refining: The International Scene 1st edition © 2019 Prof. Dr. J. Clifford Jones & bookboon.com ISBN 978-87-403-3003-8 Cover picture shows an oil refinery in Houston, Texas 3 OIL REFINING: THE INTERNATIONAL SCENE CONTENTS CONTENTS Foreword 8 1 Preambulary discussion 10 References 11 2 The EU and non-EU European countries 12 2.1 Country-by country coverage of the EU 12 2.2 Further comments on EU countries 34 2.3 European countries other than EU countries 35 References 37 3 The OPEC countries and former OPEC countries 46 3.1 Overview 46 3.2 Supplementary comments 64 3.3 Non-OPEC Middle East countries 64 References 66 Free eBook on Learning & Development By the Chief Learning Officer of McKinsey Download Now 4 OIL REFINING: THE INTERNATIONAL SCENE CONTENTS 4 The USA and Canada 75 4.1 Overview of the USA 75 4.2 Overview of Canada 103 4.3 Concluding remarks 106 References 107 5 Central America, South America and the Caribbean 118 5.1 Overview of Central America 118 5.2 Overview of South America 122 5.3 Overview of the Caribbean 129 5.4 Further comments 130 References 130 6 The Former Soviet Union 136 6.1 Overview by country 136 6.2 Further remarks 143 References 144 7 The Indian Subcontinent 146 7.1 Introduction 146 7.2 The Indian refineries classified by location 146 7.3 Pakistan 153 7.4 Bangladesh 154 7.5 Sri Lanka 154 7.6 Afghanistan 155 7.7 Further comments 155 References 156 8 Japan, South Korea and North Korea 158 8.1 Refineries in Japan 158 8.2 Refineries in South Korea 165 8.3 North Korea 168 8.4 Further comments 168 References 168 9 China, Taiwan and Mongolia 172 9.1 Major refineries in China (strictly People’s Republic of China, PRC) 172 9.2 Teapot refineries 180 9.3 Refineries in Taiwan 181 9.4 Mongolia 183 References 183 5 OIL REFINING: THE INTERNATIONAL SCENE CONTENTS 10 Australia, New Zealand and Papua New Guinea 187 10.1 Past and present refineries in Australia 187 10.2 New Zealand 190 10.3 Papua New Guinea 190 10.4 Further comments 190 References 191 11 The Far East 192 11.1 Malaysia 192 11.2 Thailand 195 11.3 Vietnam 196 11.4 The Philippines 197 11.5 Singapore 197 11.6 Other countries in the region 201 References 201 12 Africa 204 12.1 Introduction 204 12.2 Cameroon 204 12.3 Chad 204 12.4 Côte d’Ivoire 205 12.5 Egypt 205 12.6 Ghana 207 12.7 Kenya 208 12.8 Morocco 208 12.9 Senegal 209 12.10 South Africa 210 12.11 Sudan 211 12.12 Tanzania 212 12.13 Tunisia 213 12.14 Small refineries in other African countries 213 12.15 General afterword 214 References 214 6 OIL REFINING: THE INTERNATIONAL SCENE Dedicated to: Eileen Fletcher (Bowyer) at the time of her 90th birthday. 7 OIL REFINING: THE INTERNATIONAL SCENE FOREWORD FOREWORD Oil refineries are a critical part of the global industrial infrastructure providing energy & chemical products on which the world depends. Professor Clifford Jones’ book provides a whistle stop tour round the many and varied refinery facilities that exist today stretching right around the globe. Each one is different. Each one is shaped by its history and the location’s particular challenges in terms of crude supply and market requirements. The result is an amazingly diverse network of facilities essential to growing the world’s economies and serving society’s needs not only today but for the foreseeable future. When I started my career in the downstream oil industry in 1975, there were 19 refineries in the UK and today there are only 6. And yet the importance of those oil refineries has never been more important in securing the resilience of the nation’s energy supplies. The geographical pattern of refinery capacity has changed markedly in those intervening years too with many facilities closing in the developed world, and with new, larger and more complex refineries springing up in oil producing countries and in the rapidly developing economies of Asia. This has impacted on the oil product supply balances with the developed world moving from significant exporters of oil products to significant importers, and with a growing reliance on product supply from those new refineries. Over the same period, there has been a substantial growth in global demand for oil products but also a marked change in its makeup. There has been a significant decline in residual fuel oil, a marked shift from petrol to diesel, a sustained growth in aviation turbine fuel and an unrelenting pressure to reduce environmental impact of both facilities and oil products. These developments have provided significant challenges to refineries in terms of investments, which coupled with low and sometimes volatile margins, have impacted on their economic viability. The pattern of ownership has changed too. National oil companies/state owned enterprises play a much bigger role. Joint venture activities help spread risk and the oil majors play a much smaller part of the makeup which has opened up opportunities to new market entrants. Professor Clifford Jones’ book provides a truly global perspective on oil refining activity. The diversity of the facilities in terms of size & complexity reflect the interplay of historic, economic and political factors as refineries attempted to find their particular niche in matching available crude supply sources to their market demands economically and sustainably in a very interconnected world. 8 OIL REFINING: THE INTERNATIONAL SCENE FOREWORD The detailed snapshot Professor Clifford Jones provides of the global refinery scene shows a vibrant and important international business sector delivering the energy and chemical products that society needs. Refineries will continue to play an important role in the years ahead, whether as a provider of a transitional fuel supply on the journey to a sustainable low carbon economy or of a vital pathway to producing the chemicals & pharmaceuticals on which the world depends. The recently published BP Energy Outlook 2019 shows oil consumption of 4.5 billion tonnes in 2017 with projections ranging from 4 to 6 billion tonnes for 2040. One way or another oil refineries, which convert crude oil into useful and saleable products & intermediates, are going to be an important part of our global industrial base for a significant time into the future. Ken Rivers June 2019 Ken Rivers is currently President of the Institution of Chemical Engineers. His extensive international career in the downstream oil industry spans 40 years and included being CEO of Refining NZ and responsibility for Shell’s UK refining operations. He is a past President of UK Petroleum Industry Association. He also chaired the ‘Midstream Oil Sector Government and Industry Task Force’, which considered ways of improving the resilience of the UK oil product supplies following the government’s review of the Refining and Fuel Import Sectors in 2014. 9 OIL REFINING: THE INTERNATIONAL SCENE PREAMBULARY DISCUSSION 1 PREAMBULARY DISCUSSION It is one of the most widely known facts of the oil industry (e.g. [1]) that the first oil well in the US was that at Titusville Pennsylvania, developed by E.L. Drake and first producing in 1859. It is much less widely known where the oil from it went for refining. In fact it went in fact to a refinery in Pittsburgh owned by one Samuel Kier [2]. There the oil was heated in horizontal receptacles (‘stills’) capable of holding about 200 gallons. That there was a ‘ready-made’ refinery at the time of the Drake well is remarkable. Samuel Kier was in the salt well business, and frequently brine from a salt well was contaminated with crude oil from seepage. Kier did not dismiss the oil as an annoyance but started to collect and refine it to make illuminating oil, which was sold for $1.50 per gallon. That was several years before the Drake well, oil from which was naturally directed to Kier’s refinery. At $1.50 per gallon the illuminating oil was a highly expensive commodity. Application of an online ‘purchasing power calculator’ indicates that this is equivalent to about $50 per gallon at the 2019 value of the US dollar. Samuel Kier’s illuminating oil would have had to compete on the market with whale oil and possibly with tallow candles. The average daily amount of crude oil refined in 2018 was 82.2 million barrels [3]. A useful approximate correlation is the ‘7 barrel per metric tonne rule’, according to which a tonne of crude oil contains 7 barrels = (7 × 0.159) m3 = 1.113 m3 or (7 × 42) US gallons = 294 US gallons. Obviously, this is precisely true only for a particular crude oil density, but the rule is often applied in an approximate fashion without knowledge of the precise density as indeed it is in several places in this text. The ‘particular crude oil density’, for which 1 tonne has a volume of exactly 7 barrels, is 898 kg m-3 as the interested reader can easily confirm. It sometimes comes as a surprise to the newcomer to petroleum technology that API (American Petroleum Institute) gravity, for over a century the way of expressing the density of a particular crude oil, is an inverse scale, that is, the higher the density the lower the API gravity. That is for the following reason. When in the early 20th Century the motor car proliferated, gasoline was by far the most important product from crude oil.