Operations Management in Modern Refineries - A Macroscopic Perspective

Anshul Jain | July 11,2011 11:16 am IST

In this article, we will try to understand basic principles of Operations Management followed in Modern Day Refineries. A refinery is classified as a process industry and consists of extreme form of repetitive production operations to produce products that blend together in bulk rather than being in discrete units.

Since the operations are designed for high-volume production of standardized products, the layout of the process is essentially determined by the manner in which the product is constructed, i.e., Refineries adopt a product layout.


Core Refinery Products

Before understanding operations, let us define what are the major products produced in a Refinery, in general. The products include:-

1. Off-gas or Refinery fuel gas which consists of large proportion of methane and ethane and small percentage of propane. It is mainly used as Industrial fuel in burners and steam boilers.

2. LPG, which consists of Propane and Butane in almost equal quantities with very small quantities of propene, butene, pentane and pentene.

3. Gasoline, commonly known as petrol, which consists of hydrocarbons with carbon in molecular range of C5-C11. High Octane gasoline is mainly used in automobiles. Its other use is as Straight-Run Naphtha for industrial applications.

4. Kerosene, which consists of hydrocarbons with carbon in molecular range of C12-C16. It is widely used to power jet-engined aircrafts as Aviation Turbine fuel. In domestic applications, it is commonly used as a heating fuel.

5. Diesel, which consists of hydrocarbons with carbon in molecular range of C16-C28. Diesel is used in automobiles, generators, ships and blending with bio-diesel.

6. Rest of the heavy stuff goes as fuel oil, lube oil, asphalt, etc.


Core Refinery Processes

After having understood different refinery products, it is important to understand major refinery processes and the design and sequence of various refinery units. A detailed schematic of modern day refinery is shown in Exhibit 1. Refinery processes can be classified in 2 different ways. First classification is based on straight-run processes like Atmospheric Distillation in which refinery products are directly obtained and sent for upgrading. Other processes are non-core processes where some chemical transformation is accomplished to produce standard products. FCC and Hydrocracking are two examples of such processes. Other classification is based on core and non-core processes. Processes like Atmospheric distillation, Platforming, FCC, Hydrocracking etc are called core refining processes like Merox, SHP, Catalytic Condensation are called non-core processes. To get to the core of refinery operations, the understanding of the process flow is the key factor. A very basic layout is shown in Exhibit 1.

Refinery Operations

Once the unit is brought on-stream, the unit is expected to run smoothly till the next turnaround which varies between 3-5 years depending on the type of unit. Also, the refinery unit may need to be shut down for any maintenance issues and replacement of damaged parts.


As per process flow, crude oil is received by the customer at the refinery which is sent to Atmospheric distillation unit to separate straight-run products from the crude oil which goes for further upgrading or processing as explained in Exhibit 1. The left over component, also called atmospheric residue is sent to vacuum distillation unit for further separation. There the products are separated as Light VGO, Heavy VGO, Lube oil, fuel oils and asphalt. These products undergo further upgrading and then blended with straight-run products.


Refinery Operations are divided into blocks. Each major refinery process is built into a block or divided into blocks depending on the type of unit. There is also a separate block maintained for critical refinery utilities like fuel oil, fuel gas, electricity, nitrogen, steam, cooling water, process water, process air, sea water, boiler feed water, catalyst inventory, equipment spare parts like piping, valves etc. All the blocks are connected as per flow chart and Operations parameters are maintained in the Control Room on DCS. Due to criticality of the unit, the operations are maintained 24 hours a day, 7 days a week by refinery operators in shifts. The blocks are connected through a precedence diagram and a process upset affects all the downstream processes, so proper functioning of critical process blocks is very important.


Refineries experience variability in demand of certain products on a regular basis and are also dependent on crude oil prices. All refinery processes and equipments are designed for flow rates which can typically vary from 50% - 110% of the design flow rate, i.e. if the crude oil prices go very high and refinery margins dwindle, then refiners reduce their consumption of crude oil and runs all the process units on reduced flow rate or turndown flow rate which is typically 50-60%. On the other hand, if the demand for refinery products increases, then the refiners have the option to operate the process at 110% of the design capacity. Here it is very important to consider the role of utilities. Maintenance of continuous supply of utilities is very critical to the smooth running of the refinery and their non-availability can bring the entire refinery to a halt leading to loss of production.


Labor Schedules and Planning

There are two typical models for refinery shifts – 3 shifts of 8 hours a day or 2 shifts of 12 hours a day and it varies from refinery to refinery. The DCS screen contains screens for controlling each individual blocks with dedicated trained operators. Besides Control room operators, there are Field operators who regularly scan the field to collect field data, take pressure gauge surveys, investigate any leaks, and identify damaged equipments, if any.


A refinery unit operation is susceptible to various process offsets and as such requires adequate safety arrangements and safety equipments. The most critical equipments are Pressure Safety Valves and Flare Headers. Proper sizing, design and location of flare headers and Pressure Safety Valves is very critical to safe refinery operations. To ensure safety, each refinery gets a detailed Process Hazard Analysis done before unit start-up. Also, cause-effect tables are prepared to analyze various failure scenarios and Emergency Interlock System is used to cut the supply of input in event of critical process upset.

Exhibit 1
Refining Flow Diagram

                 Operation management in Modern Refineries

Image Source: www.uop.com





Anshul Jain is currently pursuing MBA from IIM Indore (batch of 2010-12). He is a B.Tech. in Chemical Engineering from IIT, Delhi. Anshul worked for four years with UOP Honeywell soon after completing his B Tech from IIT Delhi. He also represents CoolAvenues as CampusAssociate at IIM Indore....