ASEAN ENGINEERING AWARD 2015

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1 COMPANY BIODATA : Company = PT PETROKIMIA GRESIK Address = Jl. Jenderal Ahmad Yani - Gresik 61119, Indonesia Telp. : Fax. : , pkg@petrokimia-gresik.com Employees = ± Employees Type of Industry = Petrochemical Industry Age of Industry = 40 Years (1972) Nature of Business = Fertilizer Company Head Management : 1. President Director : Ir. Hidayat Nyakman, MSIE, MA 2. Commercial Director : Drs. T. Nugroho Purwanto, Ak 3. Technical and Development Director : Ir. F. Purwanto, MM 4. Production Director : Ir. S. Nugroho Christijanto, MM 5. General Affair and HRD Director : Irwansyah, SE. COMPANY ACHIEVEMENT & EXPERIENCE 1. Engineering Experiences And/Or Related i. Project NPK with Raw Material of Mixed Solid-Liquid Ammonium Sulfat (Paten No. ID P Proses Untuk Menghasilkan NPK dengan Menggunakan Gabungan Amonium Sulpat Basis Padat Dan Basis Cair ) ii. Project NPK II,III & IV Capacity of MTPY Each Plant. iii. Project Revamping Phosporic Acid, Sulfuric Acid and Byproduct Plant. iv. Project NPK Phonska III Capacity of MTPY. v. Project NPK Phonska IV Capacity of MTPY. vi. Project ROP II (SP-36) Capacity of MTPY. vii. Project Plant ZA III Capacity of MTPY. viii. Project Petroganik Capacity of MTPY, Etc. 2. Research Experiences And/Or Related i. Bio Decomposer PetroGladiator. ii. Biofertilizer PetroBiofertil. iii. Probiotik for Fish, PetroFish. iv. Probiotik for Chicken, PetroChick. v. Probiotik for Cows & Sheeps, Petrofeed. vi. NPK Kebomas (Formula By Order). vii. Petro Kalsipalm. viii. Organic Fertilizer, Petroganik. ix. Low glycemic-index rice, Fitrice. x. Superior inbred rice seed, Petroseed. xi. Superior hybrid rice seed, Petrohibrid. xii. Superior Chili Pepper seed, Petrochili. 3. Specific Invention / Innovation / Technology Creation i. Project NPK Phonska I with PN Tank Reactor ii. Replacing Raw Material in Form of Liquid Ammonia To be Vapor Ammonia at Plant ZA I & ZA III iii. Installing Steam Turbine Generator 12,5 MW as Pressure Reducing Device at Steam System Plant III from 36 BarG to 10 BarG.

2 4. Domestic Level Achievements / Awards Last 2 (two) year a i. BUMN Awards 2013 ii. BUMN Marketing Award 2013 iii. SNI awards 2013 iv. Responsible Care Award v. Green Industry vi. Proper Rating Blue, etc b i. Adhicipta Engineering by Persatuan Insinyur Indonesia (PII) Award 2014 ii. Corporate Governance Perception Index (CGPI) Awards iii. Others 5. International Level Achievements / Awards i. The Best at The Eighth ASEAN Best Practices Competition for Energy Management in Buildings and Industries ASEAN Energy Awards (AEA) Category : Industrial Management ii. received the Rank 1 and Best Report Cover Awards in worldwide (overall) category and Platinum Award in the category of company in chemicals industry in the 2013/2014 Vision Awards Annual Report Competition held by the League of American Communications Professionals LLC (LACP) in Florida, USA. iii. the Bronze Award in the category of company with Annual Revenue > USD 1 billion in the 2013/2014 Vision Awards Annual Report Competition held by the League of American Communications Professionals LLC (LACP) in Florida, USA.

3 Project Name : OPTIMIZING THE ENERGY CONSUMPTION AT PROCESS PLANT ZA I AND ZA III BY SUBSTITUTING RAW MATERIAL IN FORM OF LIQUID AMMONIA TO BE VAPOR AMMONIA Project Address : PT Petrokimia Gresik is the largest and most comprehensive fertilizer company in Indonesia. Fertilizers which are produced include Urea, ZA, SP-36, NPK Phonska, DAP, NPK Kebomas, ZK and organic fertilizer that is Petroganik. ZA (ammonium sulfate) fertilizer is produced from a chemical reaction between sulfuric acid (H 2 SO 4 ) and ammonia vapor (NH 3 ). Base on licensor original design, the supply of ammonia was liquid phase, which was derived from ammonia storage tank and transferred by the pumping system. Ammonia vaporizer is responsible to vaporize liquid ammonia into vapor with steam as the heating medium, then vapor ammonia is fed to the saturator (reactor) to produce ZA. In order to reduce the energy consumption at ZA I & III, then the replacement from liquid based into vapour based feeding system is conducted. Previously, ammonia feeding is supplied from storage tanks using pump system, replaced by ammonia vapor from existing refrigeration unit of ammonia plant. During the year of 2010 to 2014, the project has significant benefits in saving the energy totaled 342,652 GJ/year, further more the utility of steam at ZA vaporizer is converged into zero. Therefore the total amount of steam was decreased to 37.31% (average). In other hand, power consumption is also decreased due to the transfer pump of liquid ammonia from the tank to the plant ZA and the fan of cooling tower which are not operated. Average Financial savings reached USD 4,666,213/year. 1. PROJECT BACKGROUND 1.1. DESCRIPTION PT Petrokimia Gresik (PKG) is a state-owned company engaged in the agriculture fertilizer industry. Currently PKG is the largest and most comprehensive fertilizer company in Indonesia, which comprised of 21 plants fertilizer and non-fertilizer with a total capacity of 6,077,600 ton per year. Fertilizer products compose of Urea, ZA, SP-36, NPK Phonska, DAP, NPK Kebomas, ZK and organic fertilizer named Petroganik. PKG has also produces nonfertilizer products such as Sulfuric Acid, Phosphoric Acid, Ammonia, Dry Ice, Aluminum Fluoride, Cement Retarder, etc.

4 ZA fertilizer ((NH 4 ) 2 SO 4 ) is generated from the chemical reaction between liquid sulfuric acid (H 2 SO 4 ) and vapor ammonia (NH 3 ). The supply of ammonia derived from ammonia storage tank (SP-501) then transferred to ZA reactor by ammonia transfer pump (P-301 ABC). Ammonia vaporizer (E-304 A/B) is a tool attached which is responsible to vaporize liquid ammonia into vapor by utilizing steam as the heating medium, finally vapor NH3 is fed to the reactor (R- 301 A/B/C/D). Currently there are plant ZA I and ZA III, both of them have the same process. The capacity of each plant are 200,000 and 210,000 metric ton per year. Total requirement of Ammonia as raw material reach 13,480 kg/h, while the need for sulfuric acid totaled 38,458 kg/hr. NH 3(V) + H 2 SO 4(L) (NH 4 ) 2 SO 4 (ZA) Condensate H2SO4 Liquid NH3 LP Steam TANK (VAPORIZER) System Liquid NH 3 Feed will be replaced REACTOR Figure 1. Existing Flow Diagram (FD) of Neutralization & Crystallization ZA ((NH 4 ) 2 SO 4 ) (Original design) Product ZA (Liquor) In the other hand, PT Petrokimia Gresik has ammonia plant which is producing ammonia in form of liquid and vapor product. This unit will be interconnected with plant ZA I & III Figure 2. FD of Refrigeration Sys at Ammonia Plant. The ammonia product is condensed and stored at 120-CF (Chiller). Evaporation in the 120-CF occurs as a result of heat exchange which is formed to ammonia vapor. Vapor from chiller (120-CF) is compressed to higher pressure by refrigerant compressor (105-J), then pressurized vapor is cooled down in a cooler 127-C using cooling water as cooling medium. Finally it is expanded to form liquid ammonia and returned to the chiller (120-CF). This process known as refrigeration loop. Mass balance for production and consumption of ammonia at plant is described as follow: Table 1. Mass balance of Ammonia Ton/hour Production of Ammonia 56 Consumption of Ammonia : Plant Urea 31 Storage SP

5 1.2. TARGET The primary purpose for this project is to achieve operating efficiencies, by reducing energy required on ZA ((NH 4 ) 2 SO 4 ) production The main targets are: Reducing energy per unit production (kj/ton ZA) at ZA I & ZA III plant by 35%. Reducing energy per unit production (kj/ton Ammonia) at Ammonia plant by 15%. 2. CONCEPT DEVELOPMENT & EVALUATION 2.1 ENGINEERING CONCEPT Energy consumption becomes one of the most important parameter on the production both in plant ZA I & III and plant ammonia. Less energy consumed per unit plant means that those plants operate efficiently. In order to reduce the energy consumption at plant ZA I & III, then the replacement from liquid based into vapour based feeding system is conducted. Previously, ammonia feeding is supplied from storage tanks using pump system, replaced by ammonia vapor from existing refrigeration unit of ammonia plant, as depicted in the flow chart below (point A). AMMONIA PLANT NH3 Vapour to plant ZA I & III Condensate ZA PLANT NH 3 VAP 3 A H2SO4 NH 3 (v) NH 3 (V) INTERCONNECTION PIPE (NEW) Liquid NH3 2 2 NH3 LP Steam 1 Product ZA Figure 3. FD of Neutralization & Crystallization ZA ((NH 4 ) 2 SO 4 ) New (after modification) This project was completed with following activities: No Activity Period Care-Taker 1. Plant identification End of 2000 Dept of Production 2. Alternative Evaluation 1 st quarter of 2001 Dept of Process & Engineering 3. Detail Design & Drawing 2 nd to 4 th quarter of 2001 Dept of Engineering 4. Construction & Perform 2002 to 3 rd quarter of 2003 Engineering & Production 5. Online production End of 2003 until now Dept of Production 2.2 EVALUATION OF IMPLEMENTATION The implementation of this innovative engineering design shows that there are significant benefits for the last 5 (five) year, comparing the condition before and after project, which can be shown by three essential points (corresponding to point on the above Figure.3) : 2

6 1). Energy requirement for ammonia evaporation is zero, hence steam consumption at ZA Plant decline sharply. Steam acts as a heating medium in the ammonia vaporizer (E-304) to vaporize liquid ammonia totaled 106,762 ton/year to be vapor, it is equivalent to the use of thermal energy for 140,281 GJ/Year Gigajoules/year. When the liquid ammonia feeding is replaced to vapor After ammonia then practically there is not any requirement of steam in the vaporizer (vaporization energy = 0) Before Graph 1. Ammonia Vaporation energy which result the steam consumption trend decline sharply. The actual at Vaporizer energy savings reached 173,915 Gigajoules/year as shown in Graph 1. 37% Graph 2 shows that ZA production capacity has increasing trend from year to year, but the consumption of steam utility has decreased to 37.31% (average) from year 2010 to Before Prod. of ZA (Ton) Consumption Steam (Ton) Graph 2. ZA Production & steam consumption at plant ZA I & III After 40% Energy production index for ZA (steam-based energy) experienced a downward trend up to 40% compared to before the project as describe at Graph.3. Before Graph 3. ZA Energy index (KJ/Ton ZA) Resume for steam consumption and cost for ZA plant is described as below : Table 2. Steam Requirement of ZA I & ZA III Before After % Reduction Boiler Production (Ton) 1,089, ,836 26% Steam Consumption : Plant ZA (Ton/y) 160,387 93,611 Subsidiary plant (Ton/y) 2,224 2,020 Ammonia Plant (Ton/y) 927, ,205 NG Fuel Consumed (MMBTU) 2,915,643 2,307,732 21% Fuel Cost (Million USD) % Saved Cost (Million USD)

7 2). The condition of liquid ammonia transfer pump is not in operation mode. Therefore the pump power consumption is zero. Pump P-301 ABC are responsible to transfer liquid ammonia from ammonia storage tank (SP-501) to the vaporizer ZA plant (E-304 A/B). As the new line of ammonia vapor is constructed then practically this pump is not operating at normal condition, instead for emergency purposes. This provides benefits in terms of power consumption at its electric motor. Table 3. Operating condition and performance P-301 ABC Parameter Before After % Reduction Flow NH 3 Liquid (m 3 /hour) Power Consumed (kw) % Saved Energy (GJ/year) 7,413 Saved Cost (USD/year) 23,308 SP-501 SP-501 P-301ABC E-304 A/B ZA REACTOR Figure 4. Diagram of feeding liquid ammonia to ZA I & III 3). The workload of heat exchanger 127-C (cooler) in the refrigeration unit at existing ammonia plant is reduced and energy index of ammonia plant operation decreased. Since some amount of vapor ammonia were delivered to ZA plant then the duty of ammonia cooler 127-C is also reduced. This causes consumption of cooling water in the exchanger is decreasing. Table 4. Operation and performance of Ammonia Cooler 127-C Parameter Before After Flow NH 3 vapor (kg/hour) 65,554 50,034 Temperature Inlet/outlet ( o C) 107.2/ /36.7 Heat Exchanged (MJ/hour) 86,310 65,669 Energy Saved (GJ/year) 161,324 Saved Cost (USD/year) 107,576 Graph 4. shows the energy index (base cooling water) in ammonia plant experienced a 20% decrease at nearly equal production rates. By reducing consumption of CW level in the ammonia plant, the operation of cooling tower T-1201 A can be optimized which impacts the cooling tower T B & C can be shut-downed to minimize energy consumption by saving power consumption of its fan motor. The saved cost reached USD 107,576 per year. Before 20% Graph 4. Energy index at Ammonia Plant (MJ/Ton NH 3 ) 4

8 T-1201 A T-1201 B T-1201 C A B C D E F G H I L M N ZA/ASP/ CO2 Plant ZA/CO 2 A B C D E F G H I L These Cells had demolished T-1201 A T-1201 B T-1201 C 5 M N ZA/ASP/ CO2 Plant ZA/CO 2 NH3 & GTG Plant NH 3 GTG NH3 Plant T-2211A D E F G H ZA/ASP/ CO2 Plant ZA/CO 2 Plant Urea UREA NH3 & GTG Plant NH 3 GTG NH3 Plant T- D E F G H ZA/ASP/ CO2 Plant ZA/CO 2 Plant Urea UREA Plant NH 3 T-2211B A B C Plant Urea Plant NH 3 T-2211B A B C Plant Urea UREA UREA Figure 5. Cooling Tower Operation (Before) Figure 6. Cooling Tower Operation (After), Cell of Cooling Tower T-1201 B&C were Demolished. Totally this innovative engineering design project provides energy savings as much as 342,652 Giga.J/year or equal to cost savings of USD 4,666,213/year. 342,652 GJ/Y Save Energy on Utility Cooling Water at Ammonia Plant Save Energy on Power of Liquid Ammonia Transfer Pump Save Energy on evaporation energy at Evaporator ZA I&III Graph 5. Saved Energy 2.3 EFFECT ON THE ENVIRONMENT Ammonia vapor pipeline project for replacing the ZA feeding system from liquid ammonia to be vapor ammonia, provides positive impact in reducing emission of greenhouse gases (CO 2 ) and unexpected pollutant gases. The amount of reduced CO 2 emission is explained as follow : Reduction of CO 2 emission related with steam usage, ton/y Reduction of CO 2 emission related with power usage, ton/y Graph 6. Reduction of CO 2 Emission Graph 6. Shows the amount of CO 2 emission gases which can be avoided by applying this innovation project, related with burning of fuel natural gas at boiler and at power generator. The average CO 2 emission which can be avoided (reduced) is 12,584 ton/year, related with 2 (two) major items : Equal to reduce 9664 ton/y of CO 2 at Boiler. Equal to reduce 2920 ton/y of CO 2 at Gas Turbine Generator. 5

9 2.4 ECONOMIC EFFECT OF COMPANY Investment The investment of this project was the installation of ammonia vapor pipeline 10 inches in diameter along 250 meters, and equipped with pressure controllers, valves, elbows, fittings, and other accessories. The amount of the investment cost was USD 96, Payback period Financial benefit of the project is USD 1,676,566 per year. Investment Cost (USD) Saved Cost (USD) Payback Period (Year) 96,805 1,676, PROVEN BASIC DESIGN To prove the concept and design, mathematical calculations are performed in which the inner diameter, pressure drop profile, temperature drop profile, and working pressure serve as boundary or initial conditions. Additionally, adjustments to the mechanic features of materials are made during the construction stage. Based on the simulation of pressure drop, temperature drop, and velocity then required nominal diameter is obtained. Thus, pipe material and schedule number can be identified. Graph 6. Simulation on Pressure drop & Temperature drop along the pipe length 6

10 4. CHALLENGING CONCEPT & SOLLUTION OF DESIGN/CONSTRUCTION PROBLEM There were challenging matters during detail design as well as construction stage. There was high pressure ammonia vapor from ammonia plant (18 kg/cm 2 G), hot fluid 110 o C, and also very strong pungent odour. In other hand the ammonia coming to ZA reactor shall be less than 2 kg/cm 2 G. The engineer must calculate and make a precise simulation to determine appropriate sizing and instrumentation/control devices. - Make calculation for determining pipa diameter, schedule, rating, etc - Make simulation for pressure drop profile and temperature drop profile - Make simulation for pipe stress analysis - Select the suitable pipe material base on standard and fluid handled - Install pressure regulating control valve to reduce pressure from 18 kg/cm 2 G to 2 kg/cm 2 G - Install pipe insulation with 30 mm thickness of glass wool to avoid heat loss during transmission. During construction, tapping activity on existing pipe must not shutdown the ammonia plant. This was challenging by implementing hot tap procedure to connect new pipe on existing pipe, while the plant was running. Figure 7. Hot tap method & application Ammonia vapor delivery from ammonia plant to ZA I/III must not interrupt the operation of ammonia plant, it was the other challenging problem. The solution is arrange hazard analysis by Petrokimia Gresik s engineering team to ensure the safety procedure of delivery. 5. PIONEERING USE OF BASIC DESIGN It was the one and pioneer of vapor ammonia delivery directly as feeding to produce ZA fertilizer in Indonesian fertilizer industries or even the first in the world. The use of basic concept was first applied to the plant ZA I/III and until now the design will be installed for other plant which is ZA II. Basically, there are several technologies to produce ZA fertilizer. In PT Petrokimia Gresik there are two different technologies manufacturing ZA, they are : i. Chemico Process ZA crystal is generated from the gradual reaction. Firstly, reaction occurs between ammonia vapor with gaseous CO 2 to form ammonium carbonate, named as 7

11 carbonation reaction. Ammonium carbonate further reacted with solid gypsum to form crystals ZA. This process is used in the plant ZA II to process gypsum as a by-product of phosphoric acid plant. CO 2 + NH 3 (NH 4 ) 2 CO 3....(1 st Reaction) (NH 4 ) 2 CO 3 + CaSO 4.2H 2 O ( NH 4 ) 2 SO 4 + CaCO H 2 O..(2 nd Reaction) NH 3 (V) CO 2 (V) REACTION PRODUCT ZA CARBONATION SOLID GYPSUM Figure 8. Diagram of Chemico Process ii. Direct Crystallization Process In this process, crystal ZA is formed as the result of the neutralization reaction between ammonia vapor with liquid sulfuric acid. Plant ZA I and ZA II are using this process technology. Both above processes at ZA I/III and ZA II use vapor ammonia as feed of reaction for producing ZA fertilizer so that it is more effective to deliver ammonia vapor directly than liquid ammonia as reactors feed. Seeing the success on ZA I/III, currently being designed installation of ammonia vapor delivery pipeline to the plant ZA II. PT Petrokimia Gresik is very proud to this engineering design project not only from financial and environmental benefits, but also the wealth of human resources. The originality idea of project was come from internal department of PT Petrokimia Gresik by long-term identification, furthermore evaluation of production aspect and detail design engineering were created by our own human resources. 6. DETAILED DESIGN AUDIT Each designed and manufactured of pipe had met the requirements of international standard which are : ASTM (American Standard of Test Material) ASME Sec.IX (American Society of Mechanical Engineers Welding & Brazing Qualifications) SSPC (Steel Structure Painting Council) ANSI B.31.3 (American National Standard Institute, Chemical Plant and Petroleum Refinery Piping) For the purposes of acceptance, the pipe has been tested on a laboratory scale (material composition, verify material test certificate of pipe and or mechanical properties) in accordance with its application/use. 8

12 After construction and installation, the pipe system must be flushed by pressurized air continue with pneumatic-tested up to 1.1 from design pressure and purge by Nitrogen blowing until 10 hours. 7. INNOVATION IN PLANNING AND CONSTRUCTION Various innovations have been conducted during the design and its implementation in the industry: a. Temperature monitoring of ammonia vapor was improved from local indication to the DCS (Distribute Control System) in accordance to ease the operators. b. Pressure gauge was modified to control room display. c. To ensure the quantity of ammonia vapor delivery, flow indication is also attached at DCS. Figure 9. Innovation during construction 8. CONSTRUCTION Construction of transfer pipe consist of preparation of pipe rack, installation carbon steel pipe A53 Gr.B, installation of instrument devices such as pressure control valve, pressure indicator, temperature gauge, flow indicator and related accessories from ammonia plant to ZAI/III plant along 250 meters. The construction period was almost one year due to procurement processes. 9. CONCLUSION The Project of Optimizing The Energy Consumption At Process Plant ZA I And ZA III By Substituting Raw Material In Form Of Liquid Ammonia To Be Vapor Ammonia which originally built by PKG s human resources was installed successfully and had obtained several significant benefits : Average Financial savings reached USD 4,666,213/year. Saving the energy total 342,652 GJ/year Reducing energy per unit production (kj/ton ZA) at ZA I & ZA III plant by 35%. Reducing energy per unit production (kj/ton Ammonia) at Ammonia plant by 15%. Reducing CO 2 emission up to 12,584 ton/year 9

13 SUPPORTIVE STATEMENT : PT Petrokimia Gresik had finished the detail engineering and construction of project with the theme Optimizing The Energy Consumption at Process Plant ZA I And ZA III By Substituting Raw Material In Form Of Liquid Ammonia To Be Vapor Ammonia. The project has been proven to provide many significant benefits especially to the company and generally for national, regional and or worldwide. We are proud to these engineering design because of : 1. The originality idea and evaluation of project was come from internal department of PT Petrokimia Gresik by long-term identification. 2. There was a courage from management to seek and face the innovation program related to the operational of plant 3. Detail design engineering were created by our own human resources, include calculation, simulation, detail drawing & document as far as construction and control, and performance test. 4. It was the one and pioneer of vapor ammonia delivery directly as feeding to produce ZA fertilizer in Indonesian fertilizer industries or even the first in the world. The use of basic concept was first applied to the plant ZA I/III and until now the design will be installed for other plant which is ZA II. 5. We obtained financial benefits by implementing the design as much as USD 4,666,213/year (Average) 6. We reduced (saved) the energy involved in the production up to 342,652 GJ/year 7. This project is very favorable in terms of the environment issued by reducing CO 2 emission up to 12,584 ton/year 8. The engineering design was very applicable for similar companies both domestically or among ASEAN countries in order to improve their production efficiency. Base on those argumentation, PT Petrokimia Gresik deserves to be awarded.