Introduction to Petroleum Industry

“The Kingdom of Heaven runs on righteousness, but the Kingdom of Earth runs on OIL!”

Quote by Ernest Bevin at the British Parliament during a heated discussion concerning the Middle East.

 

Petroleum, or crude oil, is a naturally occurring oily bituminous liquid, which forms the raw material for a wide range of fuels and other products. Modern industrial civilisation, with its mega-cities and sprawling suburbs, replete with labour-saving appliances and electronic gadgets, is possible largely because of the ample and inexpensive supply of petroleum and its products. This dependency of modern civilisation, in its present form, on petroleum is probably what earned the latter the moniker “black gold”.

 

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  1. Origins

Petroleum, which literally means, “rock-oil”, was formed millions of years ago from the decomposition of organisms (living things of both plant and animal origin). These were mainly marine organisms, though there were contributions from land organisms that were carried down to the sea. The resulting deposits, which were rich in organic materials, became the source rock for the generation of crude oil.

 

Carboniferous Forest of Hundreds of Millions of Years Ago most likely looked like this

 

These sediments grew denser and therefore sank to the sea floor. The constantly increasing weight resulted in enormous pressures, and temperatures of several hundred degrees Celsius. Under such extreme conditions, lasting for millions of years, a number of things happened:

 

  • Mud and sand hardened into shale and sandstone;
  • Carbonate precipitates and skeletal shells hardened into limestone;
  • The remains of dead organisms are converted into crude oil and natural gas.

 

On formation, crude oil flows upwards through the earth’s crust under the propulsion of its lower density, which is lower than that of the brines that saturate the interstices of the shales, sands and carbonate rocks that constitute the earth’s crust. This upward migration continues until the oil (and gas) encounters impermeable shale or dense rock layers – often known as the cap rock – and thus becomes trapped. The permeable rock formation between the source rock and the cap rock, in which the oil resides, is known as the reservoir rock. Oil migrations that are not trapped in this manner result in surface deposits of crude oil.

 

 

 

 

 

 

 

Example of Trapped Oil Pool

 

It is noteworthy that crude oil formation can take from 10 million to 100 million years, i.e., in what can be termed a geological time frame.

 

  1. History of Crude Oil Use

Surface deposits of petroleum have been known for thousands of years, and have been used for limited purposes such as waterproofing of boats, dwellings and clothing; sealants and adhesives; fuel and lighting; and medicinal remedies. There was some distillation of these surface deposits to produce lubricants and medicinal products from the 14th century.

 

The search for a better lamp oil drove the greater demand for “rock oil”. Hitherto, whale oil had been the normal fuel for lamps, for home and street lighting. Increasing urbanisation resulting from the Industrial Revolution increased the demand for whale oil to the extent that whales were nearly hunted to extinction.

 

In 1852, a Canadian named Abraham Gessner obtained a patent for kerosene, an affordable, clean-burning lamp fuel derived from petroleum. This invention initiated such a demand for “rock oil” that could not be satisfied by surface deposits alone, thus kicking off the search for petroleum below surface.

 

Prior to this, drilling for water and salt had sometimes yielded wells that were infiltrated by oil – considered a nuisance.  The first deliberate drilling for oil took place in Germany in 1857 and 1859.

 

However, the petroleum industry really began in 1859, when “Colonel” Edwin L. Drake successfully drilled an oil well in Titusville, near Oil Creek, in Pennsylvania. By 1860 there were 15 refineries in operation; these refineries were known as “tea kettle” stills.

 

These stills each consisted of a large iron drum and a long tube that served as a condenser. The first component to boil off was highly volatile naphtha (the then “worthless” precursor of petrol), after which came the kerosene or “lamp oil”, and lastly heavy oils and tar that were simply left in the bottom of the drum.

 

By 1869, the number of refineries in the world had grown to about 195, mainly in the United States of America.

 

It was at around this time (1869) that Robert Cheesebrough discovered how to make petroleum jelly, and named his new product Vaseline.

 

The invention of the motorcar, and the rapid spread of its use, led to increasing demand for gasoline (petrol), which is a lighter fraction of the crude oil that had hitherto been considered worthless. This demand propelled the rapid growth of the oil industry.

 

It was at the beginning of this period that a former bookkeeper, John D. Rockefeller, made his entrance. He established Standard Oil in 1870, which controlled 10% of US refining capacity. By 1880 Standard Oil controlled 90% of US refining capacity, a monopoly that, along with a similar hold on oil pipeline networks (“iron arteries”), made Rockefeller the richest man (or woman) on the planet.

 

In contrast, “Colonel” Drake, the colourful character who started it all, died broke.

 

  1. Crude Oil Composition

Petroleum is composed of hydrocarbons, i.e., chemical compounds that consist of molecules made up of carbon and hydrogen atoms. Some of the hydrocarbons that make up petroleum do also contain atoms of Sulphur, Nitrogen or Oxygen, as impurities that are unwanted by refiners. The mixture of hydrocarbon molecules that make up petroleum range from those with 1 carbon atom (methane), to those with up to 100 carbon atoms.

 

Example of a Hydrocarbon

 

The composition of crude oil varies from one oil field to the other, resulting in variations in physical properties, such as viscosity and colour. Though crude oil is generally black and of such viscosity that allows it to flow without much difficulty, some varieties are as viscous as peanut butter, while some can be green or yellow in colour.

 

  1. Exploration

The modern search for oil is generally by seismic methods: Equipment are used to send vibrations (usually from explosives) into the earth’s crust; the reflections (and refractions) of these vibrations as they pass through and are bounced back by the various sub-surface rock formations are picked up by sensitive “listening” devices; the “listening” devices convert these returning vibrations into electronic signals that are fed into computers that analyse them and generate seismic profiles of the sub-surface rock formations of the area being surveyed.

 

Geologists and geophysicists examine these seismic profiles and associated data to determine which areas are likely to harbour oil reservoirs. After this likelihood is established, exploratory wells can be drilled to confirm the existence or otherwise of oil. Naturally, the commencement of a seismic survey of any area is preceded by the confirmation (by visual observation and the analysis of rock samples) of the presence of surface rock formations that are indicative of the possibility of a sub-surface oil reservoir.

 

Other methods that complement seismic surveys include the use of gravimeters that are sensitive to minute variations in the earth’s gravitational field, and magnetometers that are similarly affected by variations in the earth’s magnetic field.

 

Before the technology for these scientific surveys were developed, the use of divining rods and other, equally ineffective, supernatural methods were not uncommon in the search for oil.

 

 

  1. Some Petroleum Industry Terminology

The petroleum industry, like any other field of human endeavour, has a plethora of terms that are designed to scare off any layman that has the temerity to want to understand exactly what is going on. A few of such terms follow:

 

  • Organic compound: Carbon-based chemical compound (usually complex) produced by or from living or once-living organisms. Advances in science and technology enable such compounds to be synthesized without recourse to living organisms.
  • Inorganic compounds: Compounds that are not of organic nature – of course.
  • Hydrocarbons: Organic compound consisting of atoms of hydrogen and carbon.
  • Paraffinic compound: Hydrocarbon consisting of molecules that have their hydrogen and carbon atoms arranged in a ratio expressed by CnH2n+2. (Paraffinic crude oils are good for the production of lubricating base oils.)
  • Naphthenic compound: Hydrocarbon consisting of molecules that have their hydrogen and carbon atoms arranged in a ratio expressed by CnH2n. (Nigerian crude oils are generally naphthenic in nature.)
  • Aromatic compounds: Hydrocarbons consisting of molecules whose atoms are arranged cyclically, i.e., consisting of rings, e.g., benzene. So called by early chemists because such compounds tend to have a pleasant odour.
  • Fractions: A complex mixture of chemical compounds of a similar boiling point is known as a fraction.
  • Isomers: Compounds of the identical type and number of atoms, but with different structural arrangements. A molecule of 20 carbon atoms, for example, has over 100,000 isomers. Crude oil has compounds of from 1 to 100 carbon atoms. It would thus be a nightmare to even attempt to name all the compounds in the crude oil. Hence the resort to the term “fractions” to characterise crude oil components by their boiling ranges.
  • Barrel: Unit of measure of crude oil, which is equivalent to 42 gallons or 158.8 litres. The term has its origin in the practice of storing and transporting crude oil in whisky barrels, which was the norm for the early oil industry.

 

  1. Crude Oil Drilling

Oil wells have to be drilled to bring the oil up from the often-deep recesses of the earth’s crust to its surface.

 

The most widespread method of drilling for oil is the rotary method, for which a British patent was assigned to R. Beart in 1844. In rotary drilling, the oilrig consists of a series of connected pipes, known as a drill-string, supported by a derrick. At the lower end of the pipe-string is a drill-bit, which generally consists of three cone-shaped wheels with hardened teeth. At the upper end, the pipe-string is coupled to a rotating table on the derrick floor, which imparts the rotation required for the drilling. The force required for cutting into the earth comes from the weight of the drill-pipe itself and the rotation, which is derived from an engine. Additional lengths of drill-pipe are added as the drill penetrates further into the earth’s crust.

 

Drill cuttings are continuously lifted to the surface by means of a circulating fluid (usually a specially formulated mud), driven by a pump. Mud goes down through the drill-pipe, comes out through nozzles in the drill-bit, and returns to the surface via the space between the drill-pipe and the wall of the well-bore in the earth created by the drill-bit. This is possible because the diameter of the drill-bit is greater than that of the drill-pipe.

 

Oil Rig and Reservoir

 

 

 

With the method described above, depths of up to 6.4 kilometres (4 miles) can be reached. There is hardly a hiding place for the oil.

 

 

Oil Drilling Rig

Another method of drilling for oil is cable-tool drilling, which involves a jackhammer approach, where a chisel dislodges earth and hauls up the loose sediment. This method, which is hardly ever used today, works at much shallower depths than rotary drilling.

 

Offshore drilling is done using offshore platforms on which drilling rigs have been installed. These platforms either float or sit on legs planted on the ocean floor. They can operate in water depths of several hundred metres. Offshore wells produce up to 25% of world oil output.

 

 

 

 

 

 

 

Offshore Oil Platform

 

 

The drilling methods described above bring the well-bore into contact with the oil reservoir (if the prospector is lucky). The oil reservoir, as earlier explained, is oil that is trapped, in its buoyancy-driven upward migration through the earth’s crust, by an impermeable rock formation; otherwise it would rise to the surface and form oil pools. It is such oil pools that afforded the ancients their first contact with petroleum and its possibilities, limited as they were at that time.

 

 

  1. Oil Production

The trapped oil is usually under pressure. This is because the crude oil contains gases (mainly methane), which were formed along with it. A typical oil reservoir would consist a lower level of oil, saturated with dissolved gases, and an upper level of gas in equilibrium with the liquid, all trapped in at a high pressure exerted by the gas. The arrival of the well-bore introduces a low-pressure zone that is exploited to force the oil up through the well-bore and up to the surface, using the pressure of the gas.

 

When the well has been drilled, it is completed to provide an interface and a tubular conduit (a pipe) for the well fluids. A wellhead is the component at the surface of an oil or gas well that provides the structural and pressure-containing interface for the drilling and production equipment. It is a permanent steel fitting on the surface of the ground (or sea floor for offshore wells). The primary purpose of a wellhead is the provision the point of suspension and pressure seals for the casing-strings that run from the bottom section of the well to the surface pressure equipment.

 

In oil and gas extraction, a Christmas tree (distinct from a wellhead as it is sometimes incorrectly called) is an assembly of valves, spools and fittings used for an oil well, gas well, water injection well, water disposal well, condensate well and other types of wells. It is so named for its crude resemblance to a decorated tree at Christmas. The primary function of a Christmas tree is to control flow (usually of oil or gas) into or out of a well.

 

A wellhead must be present in order to utilise a Christmas tree; a wellhead is used without a Christmas tree during drilling operations.

Christmas Tree Diagrammatic

 

This gas pressure should be sufficient to recover some of the oil in the reservoir economically, depending on available gas volumes.

 

In many oil wells, as the pressure depletes with production, there is eventually not enough pressure for the oil to flow all the way to the surface through the well tubing. The produced oil has to be lifted to the surface using one of several methods known as artificial lift. To enable artificial lift, the Christmas tree has to first be removed. The most common artificial lift system is a sucker-rod pump. A Sucker Rod Pump is used on onshore sites to create a mechanical lifting motion. This motion is created by a series of valves, plungers, rod strings and rods that are assembled together as a pumping system.

 

 

Other methods of artificial lift include: air-balanced beam pumping system; gas lift; electric submersible pump (ESP); hydraulic pump.

 

Primary production, as brought about by the above methods, is the oil produced by the original reservoir drive energy. This depends on the type of reservoir drive, oil viscosity, and reservoir permeability but averages 30-35% of the oil in place, leaving a considerable amount of oil in the reservoir after the pressure has been depleted. For such reservoirs, enhanced recovery methods are considered.

 

The most popular of these is water injection. Water is injected into the reservoir through some of the several wells that might have been drilled into it. This water displaces the oil and lifts it upwards, thereby reducing the space available to the gas above it. The reduction of the gas volume increases its pressure, making it once more sufficient for oil recovery.

 

Another enhanced recovery method is steam injection. This warms up the oil in the reservoir, thereby making it less viscous and thus easier to move to the surface. This is especially applicable for reservoirs with heavy viscous crude oils.

 

The enhanced recovery methods can improve oil reservoir recovery up to about 60%. When the oil can no longer be recovered economically, the reservoir and all its wells are abandoned.

 

After production the crude oil undergoes treatment at the oilfield to remove solid sediments, water and incondensable gases such as methane and ethane co-produced with the oil. The gases are often gathered, compressed and sent through gas pipelines to power plants (for the generation of electricity), industries and homes (for heating and cooking). Alternatively, the gas can be re-injected into the oil or gas wells, if no economic use can yet be found for it. As a last resort, the gas can be flared, but this is undesirable for environmental reasons. After oilfield treatment, the oil is transported via pipeline to an oil terminal. For offshore oil production, the treatment is carried out on the oil platform, and the oil is loaded into ocean-going vessels (ships).

 

A crude oil terminal is an industrial facility for the storage of crude oil and from which the product is usually transported to end users (refineries) or further storage facilities by any of the means available: pipelines, ships, rail tanker or road tanker, or some combination of these.

 

A Typical Oil Terminal

 

Ships known as super-tankers carry out most of the sea transportation of crude oil. The super-tankers are roughly classified as Very Large Crude Carriers (VLCC) that can each carry up to one million barrels of crude oil, and Ultra Large Crude Carriers (ULCC) that can each carry up to two million barrels.

 

 

A Super-Tanker

 

 

  1. Oil Refining

On arrival in the refinery, the crude oil is stored in a number of very large crude oil storage tanks, where it is further de-watered by allowing it to settle, before it is pumped to process plants which, through a combination of physical and chemical processes, convert it to the end-use products that are familiar to the mass consumer market.

 

An Oil Refinery

 

The main process plant in any refinery is the fuels plant. Some refineries also have a lubricating oils plant, while others have a number of relatively small petrochemicals plants, which serve to upgrade the value of some refinery product streams, by converting them into high-value petrochemical products.

 

The process plants of refinery consist of sub-units known as process units. These process units carry out the basic processes that ultimately culminate in the final products of the refinery.

 

Fuels Plant

The process units of a fuels plant normally include the following:

 

Crude Distillation Unit (CDU)

The crude distillation unit, as its name suggests, employs the process of distillation, which exploits differences in boiling point, to separate the crude oil into its various fractions (compounds of similar boiling point).

 

The products of the unit, in the order of increasing boiling point, are: Liquefied Petroleum Gas (LPG or Cooking Gas); Naphtha (Raw Gasoline); Kerosene; Automotive Gas Oil (AGO or Diesel Oil); and Atmospheric Residue (Long Residue or LRS).

 

The crude oil feed for this unit is prepared by a Desalter, which employs electrolytic processes to remove inorganic compounds (salts) from the crude. These salts would otherwise pose severe corrosion problems to the downstream equipment of the refinery.

 

The distillation processes of this unit are carried out at slightly above atmospheric pressure, hence the unit is sometimes known as Atmospheric Distillation Unit. Some refiners also call it a Topping Unit, while the overall process is referred to as Primary Distillation.

 

Crude Oil Distillation Diagrammatic

 

Gas Plant

The Gas Plant treats the LPG from the Crude Distillation Unit to remove undesirable sulphur compounds. It also separates the LPG into propane and butane, for the market or for further processing in other process units of the refinery.

 

 

Catalytic Reforming Unit (CRU)

The Naphtha (Raw Gasoline) from the Crude Distillation Unit is not yet suitable for use in motorcars and other internal combustion engines because of its low Octane rating. The Octane rating of a fuel is the measure of the resistance of the fuel to spontaneous ignition when the piston of an internal combustion engine compresses it. Normally, the ignition should only be initiated by the spark-plug; untimely ignitions resulting from compression cause a phenomenon known as “knocking”, which damages the engine. For purposes of measurement, Iso-Octane is arbitrarily assigned an Octane Number of 100, while Normal-Heptane is assigned a figure of 0. A fuel which has, for example, the same “anti-knock” characteristics as a mixture of 90% Iso-Octane and 10% Normal-Heptane, therefore, has an Octane Number of 90.

 

The Catalytic Reforming Unit improves the Octane Number of the Naphtha from the Crude Distillation Unit, making it suitable for motorcars and other internal combustion engines. It achieves this by employing a catalyst to promote chemical reactions, which molecularly restructure the components of the Naphtha to increase its “anti-knock” characteristics. This high-octane product is known as Reformate, and is a very important blend component for Premium Motor Spirit (PMS or Petrol). Hydrogen is a by-product of these reforming reactions. The active component of the catalyst for this process is platinum, which is a precious metal; the catalyst is thus very expensive.

 

 

 

 

 

Naphtha Hydrotreating Unit (NHU)

The Naphtha from the Crude Distillation Unit contains impurities, chief of which are sulphur compounds that would poison the expensive platinum catalyst of the Catalytic Reforming Unit, if it were allowed to proceed straight to that unit.

 

The Naphtha Hydrotreating Unit catalytically removes these impurities by chemical reactions that use hydrogen derived from the reforming reactions of the Catalytic Reforming Unit already discussed. The catalyst employed is much less expensive than the Reformer catalyst.

 

The product “treated” Naphtha can then be safely fed to the Catalytic Reforming Unit, without fear of poisoning its precious and expensive platinum catalyst.

 

Kerosene Hydrotreating Unit (KHU)

The Kerosene from the Crude Distillation unit can be sent straight to the market, where it is sold as Household Kerosene for domestic use. Otherwise, it is sent for further processing in the Kerosene Hydrotreating Unit, where it is catalytically treated with hydrogen to improve its qualities. The hydrogen for this process is also derived from the Catalytic Reforming Unit. The hydrotreated Kerosene is marketed as Aviation Turbine Kerosene (ATK or Jet Fuel) for jet-engine aircraft.

 

Vacuum Distillation Unit (VDU)

Atmospheric Residue is the heaviest (highest boiling point) fraction from the Crude Distillation Unit. The components of this fraction consist of molecules with such long hydrocarbon chains as would break apart at the high temperatures (thermal cracking) that would be required to separate them by distillation at atmospheric pressure.

 

In the Vacuum Distillation Unit, advantage is taken of the fact that the boiling point of a liquid is directly proportional to the prevailing pressure, i.e., boiling point reduces with reducing pressure. The pressure of the main distillation column of this unit is therefore reduced to near-total vacuum, inducing the required distillation to occur at much lower temperatures than would normally have been required. Thermal cracking of the heavy molecules is thus avoided. The products of the resulting separation are Vacuum Gas Oil (VGO) and Vacuum Residue (Short Residue or SRS).

 

The Vacuum Gas Oil is sent for further processing in the Fluid Catalytic Cracking Unit (the celebrated FCC Unit), while the Vacuum Residue is blended with other heavy refinery fractions, that cannot be otherwise utilised, into Fuel Oil: (LPFO or Low Pour Fuel Oil; HPFO or High Pour Fuel Oil).

 

Fluid Catalytic Cracking Unit (FCCU)

Without the Fluid Catalytic Cracking Unit (FCC or Cat Cracker), Vacuum Gas Oil and some other heavy fractions of the refinery, which constitute up to 20% of the crude oil, would have to be marketed as low-value Fuel Oil. The FCC takes this low-value product and converts it into faster-moving high-value products such as gasoline and LPG. It is doubtful that any modern refinery could break-even, and make profit, without a functional FCC Unit or some other “deep conversion” unit.

 

The Fluid Catalytic Cracking Unit breaks up (cracks) the long-chain hydrocarbons, which make up the Vacuum Gas Oil, into lighter short-chain hydrocarbons. To achieve this, it employs a circulating catalyst that is in granular form. One of the by-products of the catalytic cracking process, which occurs at very high temperatures that are usually in excess of 500oC, is carbon in the form of coke. This coke tends to form a layer around the grains of the catalyst, thus limiting its contact with the Vacuum Gas Oil and thereby inhibiting its catalytic function. It is, therefore, necessary to regenerate the catalyst somehow. Burning the coke off the deactivated catalyst, and thus returning it to its active state, while simultaneously producing required the heat that drives the process, achieves this. The catalyst is continuously moved from the reaction stage to the regeneration stage and back to the reaction stage in a fluidised form, using steam and pressure differentials. This fluidisation of the catalyst, a departure from the fixed catalyst beds of most other refinery catalytic processes, gives the unit its name: Fluid Catalytic Cracking Unit.

 

Products from the FCC (separated from one another by distillation) include LPG, which is treated to remove undesirable sulphur compounds, then separated into Propane and Butane (and its isomers), for the market or further processing in the refinery; FCC Gasoline, which is another important PMS blend component (with an Octane Number of around 94). Heavier products from the FCC are Light Cycle Oil (LCO), Heavy Cycle Oil (HCO) and Decanted Oil (DCO), which are all usually blended out as Fuel Oil.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lubes Plant

The Lubes Plant is primarily for the production of Base Oils for the lubricating oils industry. By-products of the Lubes Plant include asphalts and waxes of various grades. Of the four refineries that currently straddle the Nigerian industrial space, only that of Kaduna has a lubes plant.

 

Crude oil, rich in the heavy paraffinic fractions that provide a good yield of lubricating base oils, is employed for the Lubes Plant. Nigerian crude oil is characteristically light, sweet (low sulphur) and naphthenic, and thus unsuitable for the production of lubricating oils. It is for this reason that Nigeria has had to import heavier crude oils from such countries as Venezuela (Lagomar), Saudi Arabia (Arabian Light), Iraq (Basra) and Russia (Urals) to run the Lubes Plant in Kaduna.

 

A separate Crude Distillation Unit is dedicated to the production atmospheric residue for lube oil production.

 

Typical process units of the Lubes Plant are as follows:

 

Vacuum Distillation Unit (VDU)

This vacuum distillation unit uses vacuum processes, similar to the earlier described vacuum distillation unit of the Fuels Plant, to separate Long Residue from the Crude Distillation Unit into four Waxy Distillate streams and a Short Residue stream which are further processed in downstream units.

 

Furfural Extraction Unit (FEU)

The feed to this unit consists of the four Waxy Distillate streams from The Vacuum Distillation Unit, and a De-Asphalted Oil (DAO) stream from the Propane De-Asphalting Unit (PDU, discussed later). The unit employs furfural as a solvent, in a solvent extraction process, to separate the unit’s feed into an aromatics-rich extract stream, and a paraffin-rich raffinate stream. Aromatics are hydrocarbons whose molecular structure is cyclic (consisting of rings), while paraffins are hydrocarbons whose molecules are arranged in straight or branched chains. The aromatics-rich stream, known as Furfural Extracts, is sent to the Asphalt Blowing Unit. The paraffins-rich stream is sent as Waxy Raffinates to the MEK De-Waxing Unit (MDU, discussed below).

 

 

MEK De-Waxing Unit (MDU)

This unit employs another solvent extraction process, using a mixture of Methyl Ethyl Ketone (MEK) and Toluene as solvent, to separate wax from the five grades of Waxy Raffinates from the FEU. The de-waxed raffinates are the Lube Base Oils, i.e., 100N, 150N, 250N, 500N and Bright Stock, the main products of the Lubes Plant, which are sent to the market. The leftover oily waxes are sent to the MEK De-Oiling Unit (MDOU, discussed below).

 

MEK De-Oiling Unit (MDOU)

The leftover oily waxes from the MDU, also known as Slack Waxes, is sent to the MDOU, where yet another solvent-extraction process, with an MEK/Toluene mixture as solvent, is used to remove oil from it.

 

Wax Hydro-Finishing Unit (WHU)

The De-Oiled Waxes from the MDOU is brought up to food/pharmaceutical grade by hydro-treating it in the WHU with hydrogen from the Fuels Plant. The three resulting grades of finished wax, A, B and C, are marketed.

 

Propane De-Asphalting Unit (PDU)

The PDU employs propane as the solvent in a solvent-extraction process that separates the Short Residue from the VDU of the Lubes Plant into De-Asphalted Oil (DAO) and PD-Asphalt. The DAO is sent to the FEU and subsequently the MDU, whence it ends up as Bright Stock, a lube base oil product. The PD-Asphalt is sent to the Asphalt Blowing Unit (ABU, discussed below).

 

 

 

Asphalt Blowing Unit (ABU)

PD-Asphalt from the PDU, Furfural extracts from the FEU and some Short Residue from the VDU serve as feedstocks to the ABU, which uses air to convert these products to the various grades of Asphalt (Bitumen), which include the 50/60, 60/70 and 80/100 penetration grades.

 

Flow Diagram of a Typical Refinery

 

 

 

 

Summary of Products from Nigerian Refineries

The products can be divided into three broad categories, namely, fuels products, lubes products, and petrochemical products.

 

Fuels Plant Products

  1. Liquefied Petroleum Gas (LPG for cooking gas and further processing to other products such as propane and butane).
  2. Petrol (Premium Motor spirits [PMS] for automobiles and light aircraft).
  • Kerosene (Dual Purpose Kerosene [DPK] for domestic and jet-aircraft fuel).
  1. Gas Oil (Automotive Gas Oil [AGO] for diesel engines and industrial fuel).
  2. Fuel Oil (industrial fuel and marine bunker oil for ships).

 

Fuels Plant Product Ratios

Typical product ratios for a fuels plant, which is at the heart of any oil refinery, and is often its only oil process plant, is as follows:

Note that Fuel & Loss is that percentage of the input Crude oil that is either lost during processing, or consumed as fuel for the processing.

 

 

Lubes Plant Products

  1. Lube Base Oils (lubricating oil formulation).
  2. Refined Waxes (food-grade waxes).
  • Asphalt (road surfacing).

 

Petrochemical Products

  1. Linear Alkyl Benzene (detergents formulation).
  2. Heavy Alkyl Benzene (transformer & other dielectric oils formulation, lubricating oil additives).
  • Kero Solvent (odourless industrial solvents).
  1. Benzene (further processing to other petrochemicals).
  2. Toluene (industrial solvent, further processing to other petrochemicals).
  3. Aromatic Solvents (industrial solvent).
  • Carbon Black (printer’s ink, automobile tyres).
  • Polypropylene (plastics).

 

 

 

  1. Petroleum Products Distribution and Marketing

There are also oil depots/terminals for the storage of finished products from the refineries (similar to the crude oil terminals earlier discussed), from which these products are usually transported (by pipeline, road tankers or rail tankers) to end users or further storage facilities. These depots can be part of the refinery complex or located closer to the target market, as convenient to the distributor.

A Service Station

 

 

  1. Some Petroleum Industry Costs

The industry costs can be divided into broad categories as follows:

 

Production Costs

These costs include costs of exploration and the costs of actually bringing the crude oil to the surface. This cost can vary from US$1 a barrel to up to US$10 a barrel, depending on how friendly or hostile the terrain or water in which the exploration and production is done. Hostile regions include Alaska and the North Sea, while relatively low-cost regions include Libya, Kazakhstan and Nigeria.

 

 

 

Refining Costs

The cost of refining crude oil is typically around US$2 per barrel. Refinery margins are thus very tight in a competitive market, making refineries just a necessary evil in the profits profile of the oil industry. In the US, the pump price of petrol is approximately as follows: Refining, 15%; distribution and marketing, 13%; federal, state and local taxes, 30%; crude oil, 42%.

 

 

 

Infrastructure Costs

  • $2 billion for a deep offshore platform;
  • $2.7 billion for onshore & offshore natural gas project facilities;
  • $540 million for refinery modernization or revamping;
  • $1.4 million for a new service station;
  • $2.7 million for a large above-ground distribution terminal storage tank;
  • $1 million per kilometre for a new pipeline constructed on land.

 

Transportation Costs

  • Road tankers: suitable for distances below 300 kilometres.
  • Rail tankers: suitable for distances above 300 kilometres, and is about half the cost of transportation by road tankers.
  • Pipeline: costs less than half the cost for rail tankers, at about US$2/ton/100km. It however requires high volume to justify high initial investment costs.

 

 

 

 

  1. Crude Oil Pricing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compiled by Ian G. Udoh

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