Cost-Effective Refinery Expansion Enables Lighter Crude While Maximizing ULSD

Transcription

1 Cost-Effective Refinery Expansion Enables Lighter Crude While Maximizing ULSD Presented to: AFPM 2015 Annual Meeting March 24, 2015 By James W. Jones Page 1

2 Introduction Delek Refining is on the verge of completing an expansion of its Tyler, Texas refinery. The project will expand crude capacity by 20%, improve distillate recovery and improve the refinery s ability to handle lighter crude oil. This highly successful project was accomplished through a collaborative effort between Delek, Turner, Mason & Co. and KP Engineering utilizing a non-traditional approach to project development and execution. Page 2

3 Agenda Project description Discuss some underlying principles Examine the non-traditional approach employed for project development & execution Project cost, schedule and economics Conclusions Page 3

4 Project Summary Crude unit revamp New pre-flash tower Modify pre-heat train Modify upper section of vacuum tower Parallel DHT reactor train NHT/Sat Gas plant modifications Coker fractionator cooling improvements Page 4

5 Crude Unit Pre-Flash Tower Page 5

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7 Vacuum Tower Modification Page 7

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11 Inability to pull high EP distillate traced to fractionator cooling imbalance Replaced an idle air cooler in the unit with a new two-bay cooler to Create a distillate PA cooler Supplement overhead condensing Reduce gas oil PA/steam generator duty Implemented during previous Coker outage Page 11

12 Never allow low cost processes (distillation, medium pressure hydrotreating, etc.) to bottleneck refinery capacity Maximize utilization of high cost processes Leverage existing infrastructure Strive for high return solutions Build upon prior successes Page 12

13 Prior Successes Frontier-Cheyenne, WY Vacuum Tower (KPE) WRC-Wynnewood, OK Expansion (TMC/KPE) Crude revamp, new VDU, new DHT Increased refinery rate by 33% - $4,500/BPD High incremental yield of ULSD WRC-Wynnewood, OK Prime G (TMC/KPE) New FCC Naphtha Selective HDS Sole source EPCM execution 70% of capital cost vs. similar units Page 13

14 Project Development Traditional Approach Refiner conceives project Refiner established design basis Refiner awards process design work Consultant reviews project economics Refiner prepares preliminary cost estimates & economics Engineering firm completes process design Page 14

15 Project Development Non-Traditional Approach Consultant/EPC firm conceive project Refiner authorizes process study Consultant/EPC firm performs process study/process design EPC completes infrastructure review & process design Consultant/EPC/ Refiner establish design basis Consultant prepares project economics Page 15

16 Project Execution Traditional Approach Refiner submits process design for FEED package bids Refiner reviews bids & award FEED package preparation Engineering firm prepares FEED and improved cost estimate Refiner reviews EPC bids and awards project EPC firms prepare bids based upon FEED package FEED package submitted to EPC firms for bids Page 16

17 Project Execution Non-Traditional Approach EPC firm advances design to the point required for LSTK proposal Refiner/consultant update cost estimate & project economics Refiner accepts LSTK proposal (or elects to pursue FEED) Page 17

18 Ability for consultant & EPC company to help shape project scope and design basis Allows constructability and infrastructure issues to play a larger role in the design basis Ability to shorten schedule when high returns are available and quality of the cost estimate is not relevant to a go/no go decision Page 18

19 Project development period of months vs. 2-3 years utilizing traditional approach Project conception to completion 26 months Page 19

20 $70 MM ($64 MM ex. owner improvements) Low percentage of OSBL spending Page 20

21 41 o API WTI feedstock Additional 12 MBPCD Majority of incremental yield is ULSD Page 21

22 Conclusions Highly cost-effective project 20% increase in refining capacity High incremental yield of ULSD $5,100/BPD investment cost Potential 18 month simple pre-tax payback Non-traditional approach contributed to project success Allowed for a 26 month schedule Design basis set to achieve most bang for buck Leveraging existing facility further maximized ROI Page 22

23 Conclusions (cont.) Principles and approach applicable to almost any process facility but most effective when Projects involve existing facilities; Facilities have underutilized units/equipment; Client is willing to embrace a non-traditional approach; and Client is open to collaboration with third parties at the early stages of the project Page 23

24 James W. Jones Turner, Mason & Company 2100 Ross Ave STE 2920 Dallas, TX turnermason.com