EBRD & EGPC : Oil Refineries Modernisation and Efficiency Improvement Study
Introduction to the EBRD The EBRD is a triple-a rated* bank with a capital base of 30 billion. Operating in 35 countries from central Europe to central Asia, the EBRD: The EBRD s annual business volume 2000-2014 (cumulative, EUR in billion) Promotes transition to market economies Mobilises foreign direct investment Improves people s lives through enhancing municipal services Encourages sustainable development The EBRD is owned by 65 countries and two intergovernmental institutions. Japan 9% 100 90 80 70 60 50 40 30 20 10 0 95 79 86 71 62 48 43 37 30 33 17 20 22 23 25 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 13 14 USA 10% Others 11% EBRD region excluding EU 7% (2) 18 February 2016 EU 27 Countries 63% (1) Note: Unaudited as at 31 December 2014 2
The EBRD s Energy Efficiency and Climate Change Team The E2C2 team is a group of: technical experts - engineers finance specialists marketing experts policy experts Examples of E2C2 team s work: Project identification Definition of investment programmes Management of technical assistance Programme implementation Facilitation of policy dialogue on legislations relevant to energy efficiency, renewable energy and resource efficiency Governors Directors President Evaluation Members Audit Finance Environment Banking OCE OCCO OSG Agribusiness Financial Institutions General Industry Municipal and Environmental Infrastructure Natural Resources Power and Energy Property and Tourism Transport Energy Efficiency and Climate Change 18 February, 2016 3
SEI in Southern and eastern Mediterranean (SEMED) Investments in 2012 2014 ( in million) 561 million invested in 23 SEI projects MOROCCO TUNISIA EGYPT JORDAN SEI 88 0 363 110 ABV 366 139 698 159 3.4 million tonnes of CO 2 reductions per year SEI investments by business area ( in million) 14% 11% 4% Industrial energy efficiency (EE) 170 EE in the energy sector 228 30% 41% Municipal Infrastructure EE 77 Renewable energy 61 Sustainable energy financing facilities (SEFFs) 25 Total 561 SEI projects accounted for 41% in EBRD financing volume in the SEMED 18 February, 2016 4
SEI business areas CORPORATE ENERGY CORPORATE ENERGY EFFICIENCY EFFICIENCY SUSTAINABLE ENERGY SUSTAINABLE ENERGY FINANCING FACILITIES FINANCING FACILITIES ENERGY EFFICIENCY IN THE POWER SECTOR ENERGY SECTOR ENERGY EFFICIENCY Making energy efficiency investments in energy-intensive industrial processes such as steel manufacturing, aluminium smelting, cement and glass production, as well as major transport investments, such as in railway operating companies. Financing facilities through local financial institutions in countries of operations to support industrial energy efficiency in small and medium-sized enterprises, small-scale renewable energy and building energy efficiency projects. Improving energy efficiency of transmission networks and thermal power stations. The ageing energy infrastructure includes a large number of plants with low generation efficiency, high running costs, and excessive pollution and carbon emissions. MUNICIPAL INFRASTRUCTURE ENERGY EFFICIENCY ENERGY EFFICIENCY MUNICIPAL INFRASTRUCTURE Upgrading neglected municipal infrastructure to provide efficient district heating, public transport networks and water supply systems. RENEWABLE ENERGY Supporting the development of renewable energy sources by providing project finance and technical assistance to shape the institutional and regulatory frameworks for renewable energy investments. CLIMATE CHANGE ADAPTATION Developing approaches to integrate climate risk management and adaptation into project appraisal and development with a particular focus on the private sector. 18 February, 2016 5
EBRD project cycle Stages at which technical assistance is made available Project repaid Concept review Structure review Technical assistance Feasibility study Energy audits Investment plan review Technical assistance Validation Construction completed Final review Technical assistance Implementation Signing Board approval 18 February, 2016 6
Partnership with EGPC Memorandum of Understanding ( MoU ) signed on 5 March 2015 Review opportunities to modernise and improve energy efficiency along the oil and gas value chain in Egypt Prepare a sustainable roadmap for the Refinery Sector. Understand the competitiveness of the sector within a global context Understand the regulatory status and gaps with EU practices/directives Understand the market supply/demand imbalances current and future Understand investment opportunities to modernize and to decrease GHGs and air emissions in line with EU directives Engagement and cooperation of Egyptian Authorities & Refineries necessary : Feedback on opportunities for enhancement of legislation Share data/information for each refinery Identify possible financing opportunities. 18 February, 2016 7
Oil Refineries Modernization Study Objectives To review and analyse the existing situation and general technical condition of the Oil Refineries in Egypt; To assess at a preliminary level the needs for investment projects for modernisation and performance improvement including among others to improve energy efficiency and produce products in compliance with National as well as international standards; To undertake a regulatory review of the downstream oil sector and identify gaps with relevant EU directives; To prepare a long list of appropriate modernisation projects and sub-projects that could be implemented in the oil refineries together with an order of magnitude estimation of the investment costs; To undertake a carbon intensity benchmarking analysis as per the relevant EU-ETS methodology for the downstream oil refinery sector for the current situation and for the future identified projects; and To disseminate the results of the study through a workshop; 18 February, 2016 8
Project Scope Task A: Market Review Data Gathering Energy/Mass balances Market analysis (product supply/demand and specifications) Timeline for adjustment to EU standards as a benchmark. Task B: Analysis of Investment Needs Gap analysis and opportunity identification: modernization of existing units, new Processing Units, Reconstruction and modernisation of Power and Heat Supply systems, improvement of Managements Systems, Analysis of the GHG potential in each Energy Efficiency project, etc Master Investment Program (MIP) development Task C: Results Dissemination Material Presentation Workshops 18 February, 2016 9
Project Execution Deliverables & Timeline Inception Report Interim Progress Report for tasks A & B Draft Final Report Final Report Workshops Workshop Report 10
Bank s normal procurement policies: Jacobs Consultancy has been awarded the contract 1957 established as Pace Consultants Inc. 1974 acquired by Jacobs Engineering Worldwide network of 200 consultants London Manchester Stockport Experience in areas of: Calgary Leiden Refining Natural Gas & LNG Madrid China Chemicals Petrochemicals GHG Management Energy, Power & Utilities Asset Management Renewables Chicago Houston Saudi Mumbai 11
Drivers Behind Refinery Upgrades Old and poor performance,owing to: o High fuel losses o High Specific Energy Consumption o Low Nelson Complexity Index Many Refineries are not provided with the necessary downstream processes to produce high-value and high-quality refined products Environmental legislation Investments are therefore required to: Replace existing technologies Rehabilitate/modernise present units Install new processing units Improve Energy Efficiency and Performances Meet environmental requirements Process Units Quality-Related Investments Utilities Investments Environmetally-Related Investments 12
Energy Sources Refinery Fuel Gas from light hydrocarbons Heavy fuel oil (low value liquid products) FUEL Coke from cracking reaction (FCC) and Coking process (DCU) Natural gas (purchased OSBL) Generated in fuel fired boilers or in CHP plants ISBL Generated in process units from heat recovery from either fired-heaters flue gases or hot process streams STEAM Imported from OSBL Produced ISBL through steam turbines (+ gas turbines in CHP plants) and through power recovery turbines Imported from OSBL 13
Main Energy Consumers FUEL Fired heaters burning liquid or gaseous fuels, transferring heat to process stream (250 500 C) High pressure steam (40-100 bar) used for driving turbines coupled to large rotating machines (e.g. compressors) and for electricity generation STEAM Medium pressure steam (10-40 bar) as heating medium for e.g. fractionation / separation of relatively light hydrocarbons mixtures Low pressure steam for continuous heating and frost protection of piping (steam tracing) etc. Motors (inc. Pumps, Fans and Compressors) Instrumentation Lighting ELECTRICITY 14
Operational versus Design Operational Focus on low hanging fruit, quick wins, good housekeeping Checklist review of operating parameters Dynamic trending of key performance indicators Advanced control and optimisation Typical savings of 2-5% Design Step change in energy use through capital investment Heat exchange equipment Distillation scheme changes Motor replacement & VSD Cogeneration Often synergies with other capital investment projects Typical savings of 5-10% 15
Support Requirements Support required by EGPC and Egyptian refineries to provide input for the study areas including: Refinery Configurations and material balance Utilities Management systems Asset/Turnaround Management, Quality Management, Environmental Health and Safety Auxiliary systems features water treatment, instrumentation and control systems Jacobs Consultancy to visit specific refineries to collect information and to work directly with the Refineries Your support is needed 16
Next Steps- Questions Selected visits to be made to key refineries (budgeting based on 6 visits maximum) Visits intended to enhance information already received, as opposed purely introductory in nature Contacts: Dimitris Koufos, Senior Engineer, koufosd@ebrd.com, Tel: +442073387934, Mob: +447540703681 Gabriel de Lastours, Senior Banker, DELASTOG@EBRD.COM, Mobile: +447921039660 Ahmed Mortada, Associate Banker, MORTADAA@EBRD.COM, Tel: +201222389135 Shahir Zaki, Principal Manager, ZAKIS@EBRD.COM 18 February, 2016 17