JON D.
STROUP
Viewpoint
What characteristics define the world’s best refineries?
JON STROUP is a senior consultant at HSB
Solomon Associates with 23 years of experience
in the refining and petrochemical industries.
His areas of expertise include operations,
maintenance, process and project management,
as well as engineering design and support
functions. He is experienced in process control
and advanced process control.
A number of significant forces are
reshaping the global refining industry.
However, what characteristics define the
world’s best refineries? HSB Solomon As-
sociates LLC’s recent “Fuels Refinery Per-
formance Analysis (Fuels Study)” investi-
gated 2012 refining data from participating
global refineries. Solomon Associates has
been collecting detailed data from refiner-
ies worldwide for over 30 years. Using the
company’s proprietary methodologies,
this information is calculated as bench-
marks for individual refinery performance.
World’s best refineries. To be included
on the “world’s best refineries” list, a re-
finery must show excellent performance
across a broad range of metrics and per-
form them consistently. To be in this elite
group, the refinery must achieve strong
performance over a minimum of three
consecutive studies (six years) in metrics
such as return on investment, energy inten-
Senior consultant, HSB Solomon Associates LLC, Dallas, Texas
sity, maintenance efficiency and net cash
margins (NCMs). For the purposes of the
2012 review, the “world’s best refineries”
are categorized into mid- and large-sized-
capacity groups. TABLE 1 summarizes the
average configuration, age and basic feed
properties of these refineries by group.
Global commodity business. With a
few isolated exceptions, the fuels refining
industry is a global commodities business.
The low-cost supplier ultimately prevails.
Approximately 67% of the global refin-
ery fuel production is directed to making
transportation fuels—gasoline, distillate
fuels and jet fuel.
When averaging the cost of transpor-
tation fuels (CTF) for a group of refiner-
ies that have either closed or announced
closure since 2010, the results showed
that these refineries were among the high-
est-cost producers in the world (FIG. 1).
The average of the two world’s best
groups’ CTF is plotted in FIG. 1; the results
are roughly at the break between the first
and second quartiles.
The front end of this curve (the low-
cost suppliers) primarily comprises North
American refineries that have been able
TABLE 1. World’s best refineries in 2012
Mid-sized average
capacities, thousand bpd
Crude 186
Vacuum 63
Coker 11
Hydrocracker 28
Reformer 35
FCC 40
Diesel HT 68
Sulfur, ltpd 154
Complexity 11
Average age, yr 27
Crude sulfur 1.2
Crude gravity 34
to take advantage of the distressed crude
supply in the mid-continent. Low-cost
raw materials for these refineries have
created unique opportunities that even
exceed those for the world’s best refiners.
This pricing anomaly is expected to be re-
solved, and the cost curve should flatten
back to previous cycle conditions.
Achieving and sustaining world’s
best performance. A common thread
with all of the best performers is that
their refineries are consistently available.
High availability translates to reliable op-
eration that can take advantage of market
opportunities.
A very strong correlation exists between
high availability and low total maintenance
costs. If process equipment is reliable, then
less time and money are spent to maintain
it. However, availability is not a switch that
a refiner can turn on and off. It is a culture
and a way of doing business that must per-
meate the entire organization.
A detailed look into the hundreds of
refineries indicates that facilities with high
availability provide time and opportunity
for their staffs to be proactive: time to study,
to plan, and to make positive changes that
Large-sized average
capacities, thousand bpd
Crude 447
Vacuum 169
Coker 48
Hydrocracker 34
Reformer 67
FCC 114
Diesel HT 128
Sulfur, ltpd 626
Complexity 14
Average age, yr 21
Crude sulfur 1.7
Crude gravity 32
Hydrocarbon Processing | MAY 201449
 Viewpoint
145
135 Dated Brent price
2010—US$79/bbl
2012—US$111/bbl
125
LG
Cost, $/bbl
115
MD
105
95
85
75
1 2
Quartile
Source: HSB Solomon Associates
FIG. 1. Transportation fuel production costs by survey respondents
in 2010 and 2012.
continuously advance the performance of
the facilities. Refineries with low availabil-
ity typically have staffs that are in “firefight-
ing” mode. They move from one crisis to
the next and have no time to do proactive
work that moves the facility forward.
A review of long-term trend data
clearly indicates that the only sustainable
means of achieving low maintenance cost
is to first drive availability to higher levels.
Maintenance and operating procedures,
equipment modifications and monitoring
systems must first be put in place. After a
facility is able to achieve sustained reliable
operation, then maintenance cost reduc-
tions will follow.
Another key factor in achieving high
availability is an organization’s ability
to minimize the amount of annualized
turnaround downtime. By definition, an-
nualized downtime is the total number
of days a unit is out of service (duration)
divided by the number of years between
turnarounds (interval). Directionally, an-
nualized turnaround duration is reduced
by increasing the interval between turn-
arounds, assuming a fixed duration. How-
ever, the aggregate from the 2012 Fuels
Study data suggest that there is a point
of diminishing returns as the interval ex-
tends far beyond industry averages. The
best performers typically have short-du-
ration turnarounds at slightly higher than
industry-average intervals.
The world’s best refineries minimize
both the duration and the cost during a
turnaround by rigorously challenging all
of the work done and how that work is ex-
ecuted. By challenging paradigms and us-
ing state-of-the-art techniques for inspec-
tion and repair, they are able to achieve
performance that significantly outpaces
the rest of the world.
50MAY 2014 | HydrocarbonProcessing.com
Competitiveness
Return on investment
2012
Net cash margin
Efficiency indicators
Operational availability
Process utilization
2010
Energy
Maintenance
3 4 Non-maintenance personnel
Source: HSB Solomon Associates
FIG. 2. Ranking of key index quartiles for world’s best refineries,
mid- and large-sized refineries.
Other key cost—Energy. The largest
single component of operating cost is
energy. The world’s best refineries not
only have excellent energy performance,
but they also continue to find ways to
improve. These refineries incorporate
energy improvement into revamps and
replacement projects.
The world’s best refineries do not ig-
nore mass loss. At US$100/bbl of raw
material, fractions of percent material
losses will have a significant impact on
refinery NCM. Having monitoring sys-
tems in place, and the discipline to use
them, is an essential part of doing busi-
ness for these leading refineries.
Myths and misconceptions. A huge
misconception is that the world’s best re-
fineries are new and very complex sites.
Results from the study proved that many
of the top-performing refineries are not
the most complex. New does not guar-
antee lead performance; most of the top-
performing refineries are in the middle
of the pack with respect to age.
The last misconception is the belief
that the best performers are in the first
quartile in every major category. This is
not the case, as shown in FIG. 2. It is es-
sential for an organization to have suffi-
cient resources to operate and maintain
its refinery, along with the resources nec-
essary to seek out and implement con-
tinuous improvement. From the 2012
study, the world’s best performers are
not in the first quartile when it comes to
non-maintenance personnel.
To-do list. How can you get your refinery
on the world’s best refineries list? Here
are some recommended action items:
Improve operational and mainte-
Mid-sized Large-sized
2 2
1 2
1 1
2 1
1 1
2 1
2 3
nance performance. Both are key to
long-term success. Refineries must ac-
tively implement ways to improve reli-
ability while driving down annualized
turnaround duration. Both actions will
result in lower maintenance costs while
providing the opportunity to fully utilize
the capital investments to take advantage
of market opportunities.
Improve energy efficiency. One of
the cornerstones of a world-class opera-
tion is energy efficiency. Refineries must
be more creative and aggressive in find-
ing new ways to lower energy usage and
costs, especially in an environment in
which the justifications are not particu-
larly enticing.
Keys to long-term success. Although
new construction may improve a facil-
ity’s total performance, operational and
maintenance excellence are factors to
attain and sustain long-term success.
Operational availability is a key marker
for a facility’s drive to become one of the
world’s best refineries.
Like any commodities business, the
high-cost suppliers of transportation
fuels are likely to become extinct. The
best will continue to get better. Those
organizations with the plans and vision
to improve do so, leaving those who are
static to decline in performance relative
to their peers. New low-cost suppliers
are coming online as well, particularly in
the Middle East and Asia-Pacific. They
will put additional pressure on the high-
cost producers in the now fully global
refining markets.
ACKNOWLEDGMENT
This is an updated version of a presentation at the
2014 AFPM Annual Meeting, March 23–25, 2014 in
Orlando, Florida.
 Process Design
a dynamic depressuring as part of the simulator. This added
flexibility addresses the value in the selection of construction
materials for vessels as well as orifice sizing. It overcomes se-
rious deficiencies identified in earlier commercially available
tools. The model can provide a high degree of solution accuracy
and is robust for three-phase systems. The model consistently
predicts liquid formation when it occurs experimentally and
demonstrates stable solution behavior in systems with many
components. The utility offers a large number of accurate ther-
modynamic models and can be used to model vessels with any
torispherical head style. It also performs rigorous calculation of
initial phase equilibrium and vessel conditions.
NOTES
a
The dynamic vessel model calculations described previously have been incor-
porated in a new dynamic depressurization utility of the UniSim Design process
simulator, named the Blowdown Utility.
LITERATURE CITED
Complete literature cited is available at HydrocarbonProcessing.com.
JEFF RENFRO is an engineering fellow of Honeywell’s Automation and Control
Solutions business. At Honeywell, he has worked with advanced process control,
MES and simulation groups as a solution architect and consultant. Dr. Renfro is a
member of the UniSim Design development team. He has also worked for Shell
Development Co., Dynamic Matrix Control Corp., Dynamic Optimization Technology
and Products, and PAS. During his career, he has supported the OPERA, DMO and
NOVA optimization and modeling systems, and served as both a consultant and
implementer for their online applications. Dr. Renfro holds a BS degree in chemical
engineering from the University of Texas and a PhD in chemical engineering from the
University of Houston.
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76MAY 2014 | HydrocarbonProcessing.com
GRANT STEPHENSON is an engineering fellow of Honeywell’s Automation Control
Solutions business. In his current role, he serves as the global process simulation
architect for Honeywell Process Solutions. Based in London, Ontario, Canada, he
has worked in the field of process simulation for more than 35 years, with particular
interest in dynamic simulation, equation-oriented modeling and simultaneous
solution of flowsheet models, and the application of modeling and optimization to
plant operations. Mr. Stephenson is the originator of the dynamic simulation engine
of the Shadow Plant dynamic simulator and is a pioneer of the hybrid solution
architecture and its application to large-scale dynamic simulation. Mr. Stephenson
has held positions with DuPont Canada, Atomic Energy of Canada, the University
of Western Ontario (SACDA) and Honeywell. He holds an MSc degree in applied
mathematics from the University of Western Ontario.
ESTEBAN MARQUES-RIQUELME is a senior application developer for process
engineering applications in Shell Global Solutions International B.V. In his current
role, Dr. Marques-Riquelme provides technical consulting services to build steady-
state and dynamic models with several commercial flowsheeters and leads software
development projects in process engineering. Throughout his career at Shell, he has
held several positions in the statistical modeling and distillation disciplines. Before
joining Shell, Dr. Marques-Riquelme worked as principal researcher for PEQUIVEN.
In this position, he was responsible for R&D projects aiming at the optimization of
polymer plants, the development of new products, and process modeling. He holds
a PhD in chemical engineering from the University of South Florida, and an
MA degree in applied mathematics from the University of Georgia.
CHIPPLA VANDU is a concept engineer with Shell Global Solutions International
B.V. At present, he works in front-end project development as a process integrator,
while also providing process engineering services. In the course of his career with
Shell, Dr. Vandu worked as a research technologist, developing simulation models
for gas-to-liquids plants and later as a process engineer involved in the design and
development of upstream facilities. He also served as a focal point for emergency
depressuring, consulting to various projects and operational facilities. Dr. Vandu
holds an MSc degree in chemical engineering from the University of Twente and a
PhD in chemical engineering from the University of Amsterdam.
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