IPA Refining and Petrochemicals

IPA Industries
and Areas

The refining and petrochemical industry has a significant incentive to improve capital performance. The products of this industry are commodities. By definition, commodities are products that are undifferentiated from a competitor, and, hence, are sold on the basis of price. The price competition keeps the margins on commodity products relatively low. In addition, because commodity products are often manufactured on a large scale to lower the unit cost of production, significant capital investment is required to build the manufacturing facilities. With low-margin products, the amount of capital investment required to make the products has a significant role in the profitability of the asset.

Globally, governments are reducing the amount of sulfur in gasoline and diesel fuel. These requirements will require refinery modifications resulting in significant capital investment over the next decade. Typical modifications include the installation of new desulfurization process units, including new hydrocrackers, hydrotreaters, sulfur recovery units, amine treatment units, hydrogen production, or other sulfur removal processes. Many companies are investing in grassroots hydrotreaters that employ new technology to bring sulfur content in line or lower than the coming requirements. IPA can evaluate whether a company's estimated costs and schedules for the clean fuels projects are competitive. IPA can quantify the risk associated with the new technology. IPA also has experience evaluating gas-to-liquids (GTL) projects and programs for reducing NOX emissions at a plant site.

IPA'S APPROACH TO REFINING AND PETROCHEMICALS

The basis of our work is the Refining and Petrochemicals Database that includes more than 2,000 projects executed worldwide.

The database includes a number of grassroots/colocated projects of standard refining and petrochemical units, from atmospheric and vacuum distillation to hydrogen compression and manufacturing. From these data, we have developed cost-estimating relationships that serve as tools for benchmarking the cost of these projects.

For more information, contact Mike McFadden (+1 703-726-5368).

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