A revolutionary new chemical process technology called crude oil-to-chemicals (COTC) could more than double the profitability derived from a barrel of crude oil, according to a new, independent economic assessment from IHS Markit.
Currently, global, integrated refining/ petrochemical companies typically earn about $8.50 per barrel of refined crude oil, but by leveraging the new COTC process technology in a world-scale refining and chemical facility, owners could increase their plant net margins to approximately $17 per barrel, according to findings published in the IHS Markit Process Economics Program scenario analysis: "Crude Oil to Chemicals and Oxidative Coupling of Methane: Potential for Synergy?"
"This innovative new COTC-process technology is still in its infancy, but according to our independent analysis, if commercially proven and built to worldscale, it has the potential to more than double the value refiners can unlock from a barrel of oil," said Don Bari, vice president of chemical technology at IHS Markit and an author of the report along with Michael Arné, executive director, emerging technologies research. "This process is both transformative in terms of its potential and timely, as refiners face declining future demand for gasoline and fuel production due to carbon emission mandates, greater vehicle fuel efficiency and an increasing penetration of electric vehicles."
Global chemicals demand is growing at a significantly higher rate than fuel demand, Bari said, so the desire to produce higher-value chemicals from lower- value feedstocks like crude and ethane is driving tremendous interest in these disruptive technologies. One of the most significantly disruptive technologies or categories of technologies being developed, based on sheer volume, is crude oil-to-chemicals, Bari said. These projects fuse a refinery and petrochemical plant together in a fundamentally new way.
"This goes well beyond the state-of-the-art refinery petrochemical integration by implementing new, reconfigured unit operations into a refinery," Bari said. "The objective is to shift the product slate derived from a barrel of oil to a range of 60-percent to 80-percent chemical production and nonfuel products, up from the traditional range of 10 percent to 15 percent or so, in order to significantly increase the value of crude oil reserves and provide demand security in Aramco's case. This transformative COTC technology goes beyond even the most 'highly' integrated sites today that are pushing 30-percent to 40-percent chemicals production with traditional approaches," Bari said.
"One of the reasons these crude oil-to-chemicals technologies are of such great interest is because they are potentially so disruptive to the industry's current processes and capabilities," Arné said. "This is due largely to the scale involved and what it will deliver in terms of volumes. In time, COTC could literally disrupt the global chemical balance."
According to the IHS Markit analysis, the COTC process affords the refiner/petrochemical producer sustainability gains by reducing the overall carbon footprint of a facility due to integration and optimization of assets, which become more efficient.
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