Integrating Refining & Petrochemicals Profitably

As crude prices start its upward journey, refineries will experience a resurgent challenge of managing their feedstock costs with a result of huge pressure on the margins. Coupled with this global phenomenon, refiners are getting region specific challenges to modify its processes to comply with BS-VI /Euro –VI product neutral Sulphur emission norms. The % Sulphur content in ULSD (Ultra Low Sulphur Diesel) will almost be equivalent to Gasoline /MS as per BS-VI /Euro-VI standards.

While the dynamic pricing in retail market eases the pressure, it does not give an ultimate relief to refiners from input cost pressures due to operational/process engineering changes which involves CAPEX and high costs of feedstock in the inventory. In such a dynamic market situation, Refiners needs to find new ways of ensuring margins and profitability in the future. A much obvious answer to it is the refinery –Petrochemicals integration to build new product portfolio which has better demand in the markets. Polypropylene, Propylene are some of the examples of products in demand for quite some time now, which can be targeted by refiners for the integration.

Some of the examples of Refinery-Petrochemicals integration are Reliance off-gas plant commissioning in Jamnagar, India; Sabic & Aramco…