PLANT/PROCESS OPTIMIZATION SPECIALREPORT
Rethink planning and scheduling’s
role in refinery optimization
New tools improve prediction of unit feed qualities and yields
M. SWENSEN, Valero Energy Corporation, San Antonio, Texas;
and C. ACUFF, M3 Technology, Houston, Texas
P
lanning and scheduling are the core business functions
whereby refiners adjust the entire manufacturing process to
improve profits and achieve better results. Whether it’s used at
a small refinery or a large one, planning and scheduling can have a
major impact on profitability. A case in point is Valero Energy Cor-
poration’s 14 refineries with crude and feedstock throughput ranging
from 90,000 barrels per day (bpd) to over 300,000 bpd. Improved
planning and scheduling can have a positive impact within the refin-
ery as well as across the company’s supply chain. With today’s crude
prices pushing past $100/bbl, a small “per barrel” impact can be very
significant. Regardless of size and economies of scale, the specifics
of planning and scheduling are applicable throughout the industry.
This article will cover the challenges, solutions, results and benefits
of planning and scheduling in refinery optimization.
Planning and scheduling/blending defined. The pro-
duction planning system provides the strategic direction regarding
which crudes to purchase and in what proportions, the need for
additional feedstocks, the operating rates and conditions of each
process unit, and the optimal product slate. A linear program (LP)
is the primary tool used to vary all of these parameters to optimize
refinery profitability over the planning period, taking into account
projected market prices, unit operating constraints and avail-
ability, and expected demand for products in various channels of
trade. The planning tool assumes a continuous, steady supply of
crude and feedstocks, and a continuous demand for products and
stable refinery operations over the period. It does not model the
build or draw of inventories. Based on these assumptions, the LP
produces the optimal “period-average” operating plan.
In reality, refineries do not operate on averages. Crude and
feedstocks arrive in batches, and product is shipped in batches.
While the refinery runs continuously, individual units may run
differently for periods of time for various reasons. Planning is not
event based, which is why scheduling is needed. Scheduling takes
all of these discrete events into account with the goal of imple-
menting the operating strategy developed in the planning process.
Scheduling provides dynamic responses to changes as they
occur (called event-based capabilities). Scheduling details out the
events as they will occur in the refinery, including such things as
the timing of receipts and the tanks into which crude and feed-
stocks will be received. The scheduling tool predicts the resulting
tank composition and qualities. The schedule reflects details
such as how various intermediate streams will be routed within
the refinery, operating rates, parameters and yields on each pro-
cess unit for each day. It also includes timing of batches, recipes
required to produce different product grades and the detailed
product shipment schedule into the future.
Scheduling also makes use of offline built-in optimizers for
maximizing profit for crude and product blending. The blend
optimizer can be used to optimize a single crude or gasoline blend,
or it can be used to develop optimum recipes for a sequence of
blends through time (multi-period optimization). In the case of
products blending, the optimizer maximizes profitability as well as
minimizes quality giveaway, all while meeting target specifications
and managing inventory balances of component tanks.
In short, scheduling/blending is the development of the detailed,
executable plan to implement the operating strategy developed in
the planning process, running the refinery up against identified
physical or economic constraints to maximize profitability.
Solution for Valero’s diverse refining operations.
Beginning with just one refinery in 1997, Valero has grown
through acquisitions and mergers to become North America’s
largest independent refiner, with 14 refineries having a combined
production capacity of more than 2.6 million bpd. Valero’s refin-
ing network stretches from the US West Coast, Mid-Continent
and Gulf Coast to Canada and the Caribbean. Such a diverse set
of assets produces many unique challenges. For example, crude
supply can be ratable, locally produced crude or foreign imports.
Refineries might be landlocked or have direct access to waterborne
movements. Storage tanks can include a mixture of offsite/third-
party terminals and onsite refinery tanks. Tank stratification or
partial mixing and the use of running-gauge tanks can have a big
impact on operations. Tracking pipeline line-fill volumes and
compositions can be essential in some situations and unnecessary
in others. Product blending facilities range from batch blend-
ing and run-down blending to configurations with individual
component tanks, online analyzers, and online batch quality
control. Product specifications include California Air Resources
Board (CARB) grades, unique one-time export grades, Refor-
mulated Blendstock for Oxygenate Blending (RBOB) and other
grades such as Conventional Blendstock for Oxygenate Blending
(CBOB) and conventional grades.
In mid-2008, Valero initiated a project to improve and stan-
dardize refinery scheduling and blending tools, as well as work
processes. After completing software selection, end-user align-
HYDROCARBON PROCESSING JUNE 2011
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SPECIALREPORT PLANT/PROCESS OPTIMIZATION

ment, and implementation plan development, the first refinery database-backed scheduling system. As of early April 2011, imple-
implementation kicked off in early March 2009. The main focus mentation is nearing completion across all Valero’s US refineries.
of the project was the deployment of refinery scheduling and a
multi-blend optimizer software as a new standard crude, feed- Refinery optimization is a collaborative effort. At
stock and product scheduling/blending platform. The new tool Valero, many groups and individuals participate in the opti-
would replace multiple non-standard, non-integrated spread- mization of a refinery, including the refinery planner, refinery
sheets at each refinery. The scheduling/blending platform captures schedulers (e.g., crude, process unit, distillate/other products,
the uniqueness of each refinery and its associated logistics while and gasoline blenders/schedulers), crude and feedstock planning,
allowing for central support of models and reports, development product planning, transportation, supply and trading, refinery
and sharing of best practices, and data mining/reporting from a operations, and refinery oil movements.
In the past, scheduling systems were restricted to a scope of
“inside the fence” of the refinery. Today, scheduling systems
Alkylate span across the supply chain, terminals, refineries and organiza-
1st blend Product
header tanks tional groups. This enables a collaborative effort, better visibility
and additional points of adjustment for improving economics.
Component
tanks Adjustments are seen by multiple groups, enabling faster response
Product and awareness.
tanks
Reformate Scheduling integrates data, technology and people. The more
2nd blend
header feedback and comparison that is enabled, the more effective the
optimization becomes. For example, the planning model’s pro-
Product
Component tanks
cess unit sub-models are shared with the scheduling system. The
tanks scheduling system compares simulated unit performance vs. actual
3rd blend unit performance. The refinery scheduler can apply biases to
Naphtha header
Product compensate for sub-model inaccuracy. The planning group then
tanks receives feedback on sub-model accuracy, and this information
Process Manifold Manifold is then used to tune submodels, ultimately benefiting both the
units
planning and scheduling tools.
FIG. 1 Rundown blending optimization with three blend headers. Timely updates of shipments and receipts (i.e. nominations)
from the supply and trading group are reflected in the refinery
scheduling system for the crude, feedstocks and product’s schedul-
ers. Supply and trading receives feedback on actual arrival/depar-
ture times, demurrage events, quantities and material properties.
Refinery operations and oil movements receive daily operating
orders from the refinery schedulers, including direct import of
receipts, shipments, blends and tank transfers into oil movement
tracking systems. In short, scheduling is the hub that coordinates the
Drying Technology contributions of many to optimize the refinery.

Rundown blending optimization. Fig. 1 shows the sche-

matic for rundown blending optimization. Rundown blending
involves multiple process unit streams as continuous feed com-
ponents into blend headers. The blend headers may also pull feed
from typical component tankage. As depicted, at any point in
time, three blend headers receive feed from any of the component

Primary Pipeline A Pipeline B Pipeline C Finished

crude Refinery product
blending tank
terminal farm
Marine Pipeline D

CARBO
N Secondary
liftings

DR O
You
ficar HY
t io n crude
terminal

eci
Pipeline E
Ke
ep Distribution
sp terminal

Wa
te r
CONTR
O L .. .
u nd
er Simulation scope includes terminal activities,
pipeline batches, refinery, and distribution

FIG. 2 Refinery supply-chain logistics.

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 PLANT/PROCESS OPTIMIZATION SPECIALREPORT

tanks and process unit rundown streams. Rundown streams must
be completely consumed in the three blends, since there is no other
possible destination for these streams. Volume of each blend can be
fixed or allowed to vary. The blend optimizer solves the group of
three blends together to meet specifications for each grade, mini-
mize quality giveaway and maximize profits. The optimizer can
also optimize sequential groups of blends in a multi-period optimi-
zation. While Fig. 1 shows three blend headers, the solution is user
configured for any number necessary for the site. While depicted
with gasoline blending, it can also be configured to optimize diesel
or fuel-oil blends that are often managed as rundown blends.
implementation of a more robust tool as well as the improvement
of associated work processes. Several observed benefits were noted:
• Data from the process historian, lab information system,
movement systems and commercial nomination schedule system
are integrated using web services and the supplier’s integration tool
• Tracking of crude properties in each tank and in the crude
feed blends provide prediction of unit feed qualities and yields:
o At one Valero refinery, crude total acid number (TAN)
was increased an average of 0.2 points by better predicting the
TAN of a particular side draw.
o At another refinery, use of the blending tool for crude

Refinery supply-chain logistics. Managing supply and Crude and product blend comparison
demand is a requirement for achieving overall refinery optimiza-
Deviation analysis
tion. Without doing so, a refinery can be constrained on blend Actual blend results
feedstocks, production rates, or shipment of finished product. At …
Valero, the refinery supply-chain network includes a variety of Scheduled blends
Blend
performance
docks, terminals, tank farms, refineries and pipelines. Fig. 2 shows Destination facility multi-dimensional
the supply-chain scope for a marine-based refinery with multiple Component facilities comparison
Recipe
pipelines and terminal assets. These assets along with the produc- Heel(s)
tion capability of the refinery are visually shown in a model mak- Volumes, properties
ing it easy to see the possible inventory limitations, throughputs
Blend #1 Blend #2 Blend #3 Blend #4 Blend #5 Blend #6
and constraints across the refinery supply chain network.
Pipelines A, B, C, D and E reflect real logistical challenges to
maintaining balance across the network. Each pipeline has unique Single blend Multi-blend Long-term blend
optimizer optimizer optimization using
linefill, minimum/maximum rate constraints, multiple inlets/out- aggregate tankage
lets, and default throughput rates. Crude pipeline chains, such as A
and B, can work sequentially with or without the secondary crude FIG. 3 Single- and multi-blend performance analysis.
terminal. Likewise, the product pipeline chain has the flexibility to
provide product to a secondary distribution terminal or to a com-
mon carrier pipeline (E). The solution is to simulate the pipeline
batches, terminal activities and refinery production/consumption
across the supply-chain network to see the big picture of where
each asset stands. Volume and properties for each pipeline batch
and pipeline segment are available at any point in the simulation.

Blend performance analysis. To use either the single blend

optimizer or the multi-period blend optimizer, the blending/
scheduling tool must accurately predict the properties and quali-
ties of product batches. Constant vigilance is required to ensure
that blend property prediction correlations are properly tuned.
In Fig. 3, scheduled blends that have been optimized using the
blending tool’s single- and multi-blend solvers are transferred to
refinery operations for execution. Once the blends are executed,
results are brought back into the blending tool for comparison
and analysis. The goal is to measure the deviation (i.e., between
predicted and actual product qualities) in order to tune the blend-
ing correlations.
Inspect what you expect! Blend performance analysis provides
an easy way to compare scheduled vs. actual results. For example,
the actual recipe can be applied to the scheduled component qual-
ities. Or the effects of the scheduled recipe can be analyzed with
the actual component qualities (instead of simulated qualities).
Comparisons include simulated vs. actual for: (1) blend recipe, (2)
component quality, (3) destination tank quality including heel,
and (4) batch quality, excluding heel. Deviations are automatically
calculated across the multiple dimensions. This makes tracking
down the root cause for the deviation much faster.

Benefits across the organization. Benefits from the sched-

uling/blending project have materialized, both as a result of the
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57
SPECIALREPORT PLANT/PROCESS OPTIMIZATION

blend optimization allowed better utilization of all process units
during the higher-demand summer gasoline season
o At yet another refinery, the blending tool’s virtual blend
feature allows optimized crude recipes to include crude cargoes
that are yet to be received into tankage.
• Cargoes of lower-quality intermediate feeds no longer result
in surprises for unit operations because receipts can be simulated
before being used.
o Rate on one resid cracking unit would typically fall by
6,000–8,000 bpd when impacted by lower quality feeds. Now,
due to better scheduling and blending of feeds, the production
rate impact is typically only 2,000–3,000 bpd.
• At a West Coast refinery, schedulers used to work with three
separate tools: a legacy DOS-based blend optimizer, a spreadsheet
scheduling tool, and the CARB predictive spreadsheet model,
The blend otimizer can use “passing CARB” as a product quality
specification. Now all three tools are combined into one.
• Common gasoline blend property predictions are available
by integrating Valero’s proprietary blend equation library into
both the planning tool and the scheduling/blending platform.
o Combined with the blending tool, it optimizes profit-
ability while still managing inventories was accomplished.
o During Reid vapor pressure transition, one Gulf Coast
refinery had always required purchases of a high-cost blend stock.
They were able to manage the most recent transition with no pur-
chases needed.
• Tracking and managing dock availability and utilization
allows better management of inventories and minimization of
inventories.
o One scheduler at a marine-based refinery noted that they
used to be able to tell oil movements whether a ship could be
brought to the dock tomorrow, but can now tell them what time
tomorrow to bring it in.
Valero expects to capture more benefits going forward with
the completed scheduling/blending platform implementation.
Valero will leverage best practices with the improved scheduling/
blending platform and corporate commercial scheduling tools.
The integrated refinery scheduling/blending tool has become the
foundation for better communication, and it serves as the conduit
for all information related to planned plant operations as well as
for crude, feedstock and product movements. HP
Mark Swensen is director of supply-chain optimization for
Valero Energy Corp. He has been with Valero for nine years. Mr.
Swensen’s other roles at Valero include strategic planning, mergers
and acquisitions, Latin American business development, and alterna-
tive energy business development. Before Valero, his employment
included business strategy consulting and roles as process engineer and startup/com-
missioning engineer. Mr. Swensen earned a BS degree in chemical engineering from
Brigham Young University and an MBA degree from the Darden School of Business at
the University of Virginia.
Craig Acuff is the business development director with M3 Tech-
nology’s SIMTO (scheduling and simulation) and M-Blend (single/
multi-period blend optimization). Mr. Acuff has 24 years of experi-
ence and has been involved with implementing refinery systems for
achieving business process improvements, along with assisting many
end users with making the transition to best practices. Mr. Acuff earned a BS degree
in mathematics from Oklahoma State University and an MS degree specializing in
computer science from the University of Central Oklahoma.

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