WHITE PAPER

Five Best Practices for Refineries:

Maximizing Profit Margins Through Process Engineering
Sandeep Ram Mohan, Sr. Product Marketing Specialist, Aspen Technology, Inc.

1 2 3 4 5
 Today, the complexity of the refining business is growing everyday with new markets, new
feedstocks, and new regulations in place. In addition, refineries worldwide are facing declining profit
margins. In order to sustain their profitability, refineries must focus on leveraging process simulation
technology and capabilities to achieve best-in-class operational excellence. Process simulation
technologies have advanced substantially to help refineries optimize a broad range of processes
spanning operational troubleshooting, crude selection, refinery planning, profit margin analysis,
turnaround planning and more.

While the world of crude oil refining has witnessed significant developments in process simulation,
many refiners are still leaving money on the table by not taking full advantage of the growing range
and sophistication of process optimization technology. To understand how your refinery and its
process engineers can better use process simulation to improve profit margins, it is important to
consider your companys level of maturity in leveraging process optimization technology. AspenTech
has a point of view on this
maturity spectrum, and
No Process Process Simulation Power of Process Simulation Process Simulation Technology Renery-Wide Process Simulation
Simulation
Technology
Technology Restricted
to Process Engineers
Technology Available to Process
and Plant Engineers
Integrated With Real-Time
Plant Data
Model for Rigorous Prot
Margin Analysis believes every refinery can be
broadly classified to fall in one
LEVEL 0 LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 4
of the following five maturity
levels.

Maturity Level Zero: These refineries do not yet have a culture of using process simulation
technology to support their operations.

Maturity Level One: These refineries have rigorous process models developed for specific units
that the process engineers use on an ad-hoc basis for operational troubleshooting.

Maturity Level Two: Process engineers in refineries at this level of maturity have process
simulation models set up so they can be leveraged by plant engineers through familiar interfaces
such as Microsoft Excel for operational troubleshooting or root-cause analysis. The process
simulation models are calibrated to match the actual refinery operations data from a point in its
recent past.

Maturity Level Three: These are refineries who are higher up the technological maturity ladder,
with process simulation models hooked up to real-time operations data. This allows them to monitor
Key Performance Indicators (KPIs) for their processes and equipment on an ongoing basis, and
enables engineers to make informed operational decisions. These refineries also have capabilities in
place to regularly update the models used by their planning tools, using rigorous process simulation
models, so that the refineries consistently produce the most optimal plans.

Maturity Level Four: At the pinnacle of technological maturity are these refineries who employ
refinery-wide process simulation models in a single flowsheet. Process engineers in these refineries
bring valuable insights into the planning and strategy divisions by bringing a more accurate
assessment of profit margins for operational improvements, strategic capital project evaluations, and
more.

An inevitable element of a refinerys journey to higher levels of technological maturity is its

partnership with technology providers who can equip them with state-of-the-art technology and

2 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
 industry best practices. Process engineers at these refineries should have access to technology
that can accomplish a wide variety of simulation and estimation capabilities. More importantly
they should have access to best practices and training materials that can help them become more
sophisticated in how they use and leverage the technology.

This paper will discuss five technological applications that are critical for refineries who intend to grow
their technological maturity in order to achieve best-in-class operational efficiency.

1. Heat exchanger maintenance & monitoring

2. Column operations troubleshooting
3. Integrated refining & gas plant analysis
4. Planning model update
5. Refinery-wide process analysis

1. Heat Exchanger Maintenance & Monitoring

Since refineries run continuous process operations at low profit margins, any operational
inefficiencies or outages have a huge impact on their bottom line. Heat exchangers are a critical part
of the refining process and play a crucial role in determining energy efficiency. Refineries employ a
number of heat exchangers of varied types, and the heat exchanger network layout can impact fuel
consumption quite considerably. The nature of process streams in a refinery causes frequent fouling
of heat exchangers, reducing their effectiveness. This also reduces energy utilization and increases
fuel consumption. To avoid this, heat exchangers must undergo routine cleaning and maintenance.
The challenge for refineries is in determining the right time to take out each of the heat exchangers
for maintenance so profits are not affected. The economic benefit from cleaning is different for each
heat exchanger unit. So in order to prioritize them, a rigorous simulation of heat exchanger operation
is essential.

Rigorous simulation of heat exchanger unit operations within the broader process model allow
refineries to determine the fouling level in each of the units and the economic impact they have
on the overall process. This helps refineries set up a prioritized maintenance schedule for the heat
exchanger network, designed to sustain refinery profits. Engineers are challenged by inefficiencies
that stem from the disparate tools used for process simulation and heat exchanger design. Most
often, the links between these tools (because they are supplied by different companies) are
nonexistent or weak, requiring users to manually enter data back and forth. This makes the workflow
followed to get a useful simulation of the heat exchanger network operation inefficient and time
consuming, and as a result, too tedious for refineries to pursue.

3 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
 To overcome this challenge, refiners should look for solutions with seamless integration between
process simulator and heat exchanger design and rating tools. This enables rigorous simulation of
heat exchanger operations within the broader process simulation model. The heat exchanger design
tool, needless to say, must be able to simulate all major heat exchanger types used in the refining
industry. Furthermore, process engineers can easily develop and integrate rigorous simulation for
their heat exchanger units as part of the refinery flowsheet without leaving their familiar simulation
environment. Also critical to success is a platform that enables operations data to be easily brought
into the simulation environment for improved operational decision-making.

AspenTech offers such a solution with its comprehensive integration of Aspen HYSYS (our
process simulation software) with Aspen Exchanger Design & Rating (also known as EDR, our heat
exchanger design and rating software). Aspen EDR is based on technology developed from over
40 years of heat exchanger research and can model all major heat exchanger types used in the
refining industry. Process engineers can easily develop and integrate rigorous simulation of their
heat exchanger units as a part of the refinery flowsheet without leaving their familiar Aspen HYSYS
environment. Process engineers can easily model rigorous simulation of heat exchanger units in their
process flowsheet by simply entering data from the specification sheet of the heat exchanger unit,
when it is available, or by letting the interactive design capability in the software develop the model.
Seamless integration of the simulation software with Microsoft Excel, through Aspen Simulation
Workbook, offers a well-integrated platform that brings together operations data and simulation
tools together to determine the fouling levels and the fouling trend for each of the heat exchanger
units, in addition to the economic impact each would have on the overall process profitability.
Hindustan Petroleums refinery in Mumbai, India saved over $250,000 (USD) on an annual basis, in
addition to a great deal of their plant engineers time, from an improvement in their heat exchanger
maintenance schedule using AspenTech software.

Similarly, while
considering process
changes or improvements,
refineries can easily
Process Thermal Mechanical
Engineer-EDR Specialists Specialists model different alternative
Conceptual Final Thermal Final Mechanical heat exchanger networks
Design Design Design
with rigorous models for
each of the units. The
EDR
solution set offers process
EDR
case file case file engineers, who might not
have expertise in costing
or equipment design,
the ability to conduct a
preliminary cost (both
capital and operating) evaluation for alternative network designs. They can also use the software to
predict the potential for mechanical equipment issues such as vibration, material erosions, etc. The
Tupras refinery in Turkey estimated a 20% reduction in their fuel consumption from an improved
heat exchanger network layout the refinery engineers developed using Aspen Technology software.

4 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
 Refineries who are at either maturity level zero, with no heat exchanger simulation model set up, or
at maturity level one, where it is set up for only process engineers to use heat exchanger simulation
models, stand to gain from considerable improvements in their profit margins by moving into
maturity level two and three where the simulation tools and plant data can be brought together
and made available to plant engineers via a more familiar Microsoft Excel interface. This way
plant engineers can make well informed maintenance schedules and set in place a more proactive
maintenance culture.

2. Column Operations Troubleshooting

When refinery operators observe issues with their column operations such as column weeping and
flooding, they usually have to resort to their past experiences to temporarily relieve the situation.
This is because, as mentioned before, the nature of the refining business does not allow for frequent
shutdowns for inspection or troubleshooting. However, these ad-hoc methods are available to only
those operators who have had years of experience with the unit. Furthermore, these operational
tweaks may only provide temporary relief and could lead to non-optimal functioning of the broader
process unit. Another issue is that this lack of insight into the internal operations of the column
forces refineries to operate columns very conservatively to meet product specifications. This causes
additional energy to be consumed in reboilers and reflux condensers, increasing costs.

The ideal solution is one which can shed light on the root cause of operational issues without
requiring a unit shutdown or expensive physical inspections. It would be ideal if the solution can offer
visualization into the operating point of the unit. Visual presentations can be very effective when
process engineers want to communicate their analysis to operators and plant engineers. In addition
to visualization capabilities, engineers can use the same solution to predict the impact of alternative
courses of actions and select the most optimal. In other words, this approach brings intelligent
insights to operators, helping them maintain optimal operation while considering thermodynamic
and hydraulic limitations. This solution calls for an integrated process simulator that can accurately
simulate the hydraulics of the column unit. The challenge with many types of process simulation
software is that they do not have the necessary rigor to provide enough information on column
operations. This rigor is needed to give the process engineers the confidence to make effective
operating decisions. Without this, engineers have to conduct their analysis through the tedious
workflow of switching back and forth between separate software tools for process simulation and
column analysis.

The process simulation software from AspenTech, Aspen HYSYS, enables users to accurately
simulate thermo-hydraulic functioning of columns based on their construction and operating
conditions. As a result, users can better understand the behavior of their columns and avoid
operational mishaps. Simulating the operation of the column unit in the broader setting of the overall
process enables users to identify root causes of the problems and figure out the optimal point of
operation for the overall process unit. Moreover, the visualization tools can provide insight into the
operating point of the column and impending breach of operational limits causing issues such as
jet flooding, weeping, down-comer backup and others. This capability provides refiners with the
confidence needed to optimize column capacity and operate columns closer to the limits.

This capability allows refineries who are in maturity level zero to move into higher maturity levels
and thereby build up a work culture of continual process optimization and preventive maintenance
by taking advantage of advanced process simulation technology.

5 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
3. Integrated Refining & Gas Plant Analysis
Petroleum refineries utilize many integrated complex processes that can make it difficult to maximize
margins while meeting production targets, product specifications and regulatory requirements. In
recent years, refinery crude slates have diversified significantly, as refiners try to increase margins by
lowering feed costs. As crude oils and unconventional feedstocks continue to get heavier and more
sour, increasing demand is being placed on processes in the downstream gas plant, such as acid gas
treating and sulfur recovery. Refiners must continue to meet the same emissions standards with
these challenging feeds. To do this, refiners need an accurate assessment of their downstream sour
gas cleaning capacities to determine the extent to which they can take advantage of sour crude.

A solution that rigorously simulates the entire gas plant, including acid gas treatment units, sulfur
recovery, tail gas units and flare systems, together with the mainstream refining process units,
such as distillation units and reactor units, would be ideal for refineries who are looking for ways
to maximize their profit margins by accommodating more sour crude. This would give the refiners
enough confidence to push the levels of sour crudes closer to the limit the refinery can process while
meeting all the regulations.

AspenTech offers the capability to accurately simulate the gas plant processes in conjunction with
refining processes using Aspen HYSYS. The combination of rigorous rate-based distillation modeling
capability for acid gas treatment, the industry standard sulfur recovery unit modeling technology
(Sulsim Technology), flare system analyzer and the mainstream refining process unit simulation
capabilities enables engineers to have an accurate simulation of the refining and gas plant operations
in one simulation environment. This allows refinery operators to assess whether or not they can

6 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
 accommodate increased levels of sour crudes in their refinery, and pre-emptively adjust operations
in the gas plant accordingly. Feed flexibility, capacity creep, and OPEX optimization enabled via
integrated refining and gas plant modeling can save refiners millions of dollars each year in operating
margins, while ensuring maximum reliability and plant on-stream time. In addition, the rigorous
simulation of the gas plant operation offers refineries visibility and ability to better document their
emission levels.

This capability is valuable to refineries in any of the maturity levels to progress in technological
maturity in order to boost their profit margins.

As many companies have continuous and batch processes, its critical to have data management,
visualization and analysis capabilities that cover the unique requirements of both. Look at
manufacturing master data management to simplify the integration of information across business
domains and workflows.

4. Planning Model Update

Refineries use planning tools to make decisions on how to run their operations. Decisions on
what crude oil to process, what product slate to produce and how to operate the refinery so as
to maximize profits, are made by considering the continually fluctuating global market and the
capacity constraints of the refinery. Traditionally linear programming (LP) models1 are employed
by these planning tools to analyze hundreds of alternative options in order to find the most optimal
plan. These LP models are relatively fast in analyzing the numerous scenarios that the planners are
required to process on a daily basis. One limitation of the LP models employed by these planning
tools is that they are accurate only within a specific operating range of the refinery. Over time
the refineries move away from that operating range, for example due to catalyst deactivation or
other operational changes. As a result, LP models get outdated. The outdated model reduces the
effectiveness of the planning tools in helping with the most optimal operational decisions, which
could potentially cost millions in lost profits. Many refineries are dependent on expensive external
consultants and experts to update their planning models, which costs more time and money. In
addition, any delay in updating the planning model can cost huge amounts in lost profit.

The ideal solution to this challenge is a technology that offers a streamlined workflow to update the
planning models, enabling frequent updates and when the models are observed to be out of sync
with the operating range of the refinery. The workflow needs to be one that can be followed by the
refiners themselves, rather than having to stay dependent on expensive outside consultants. Process
simulation software is a key part of this solution as they have the predictive capability that comes
with rigorous process analysis based on reaction kinetics and heat and mass balance.

1
Modern planning tools based on non-linear models, such as Aspen PIMS-AO from Aspen Technology, has been
making significant improvements to refinery plans recently.

7 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
 Aspen HYSYS helps refineries in ensuring that their planning models are always pertinent. The
integration between Aspen PIMS, the worlds leading refinery planning software, and Aspen HYSYS
enables a streamlined workflow to update planning models. Several points of integration between
the software, such as shared assay management tools, shared crude distillation models, and others,
combined with their seamless integration into Microsoft Excel, offer an easier way to update of
planning models. This enables refineries to maintain their planning models and sustain higher profits.
Japans Taiyo Oil Company increased their profit margin by 12.7% using Aspen HYSYS to improve
the linear programing (LP) models used in their planning and scheduling tools.

This application helps all refineries who are in maturity levels three or below to grow to maturity
level four, where there is a culture of true partnership between planners and process engineers in
maintaining planning and scheduling tools to maximize and sustain refinery profits.

5. Refinery-Wide Process Analysis:

The Pinnacle of Technological Maturity
The scale and complexity of refining processes poses a big challenge to refineries in their effort
to conduct a holistic analysis of their operation. LP models offer a feasible approach to such an
analysis. However, as discussed previously, their accuracy is limited to a specific operating range of
the refinery and they lack the necessary rigor for many applications outside planning. For instance,
when refiners need to make an accurate prediction of the effect of an unusual crude feedstock or a
new reactor catalyst on the overall process, make changes to the processes to meet new regulatory
requirements, or decide how to operate the refinery in face of an unexpected unit breakdown, the
linear programing tools might not be sufficient. The alternative option of a rigorous refinery-wide
process simulation model is often too cumbersome and expensive for any practical use.

In short, what refineries need is a manageable way to analyze the refining operation, in its entirety,
with sufficient rigor and flexibility. In other words, they need a solution that will provide the rigor of
a process simulator, but without the complexity and expenses entailed with a rigorous refinery-wide
process simulation model. The solution should be one that can be maintained in-house without
having to stay dependent on expensive consultants.

AspenTech offers a unique way of developing a refinery-wide process simulation model that is
both manageable and accurate. The integration between Aspen PIMS and Aspen HYSYS enables
refineries to develop a refinery-wide process model out of their refinery-wide planning model in a
relatively short period of time. The accuracy of the simulation model can be enhanced by selectively
incorporating rigorous models of reactor units to the refinery-wide flowsheet. In this methodology
users have full control over the level of rigor and flexibility of the model. The model can be used for
rigorous profit-margin analysis, when evaluating strategic reconfiguration options or operational
improvements to the refinery. This will also be a handy tool in evaluating responses to unexpected
operational events, and in determining turnaround and start-up plans.

8 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
 Refinery-wide process analysis is for every refinery who would like to reach the pinnacle of
technological maturity. Refineries using this refinery-wide model are at level four. They use the
model to accurately assess the economic impact of possible strategic reconfiguration projects. They
also use the same model to support planners for special cases when they need a more accurate
assessment than what is projected by their
LP tools.

A crucial element for refineries to grow Emissions Renery

& Utilites Reconguration
their technological maturity level is to have
Analysis
employees skilled in the latest technology
and abreast of industry best practices. With
more than 35 years of experience in the
field of process simulation and the widest Planning Operational
user base across the world, AspenTech Support Improvements
brings in a wealth of best practices and Renery-Wide
innovative technologies to users. Ambitious Process Model
process engineers can continually develop
their skill sets and process knowledge to
Turnaround Response to
become world-class engineers. AspenTech Unexpected
is the singular technology partner who can Planning
Events
present refineries with a comprehensive
end-to-end solution platform that they can New Unit
use to improve their technological maturity Startups
in order to achieve world-class operational
efficiency.

Solutions from AspenTech are set up to support any refinery irrespective of their maturity level. The
user-friendly interfaces in the software, coupled with training tools such as video viewlets, jump start
guides, and large collections of example models, are all available from within the product and enable
engineers in refineries who do not have experience using simulation software to quickly get up-to-
speed using them.

AspenTech will be taking our users on a journey where they will learn more about the applications
discussed here and train on how to leverage these best practices to boost refinery efficiency and
profits. If you would like to be part of this journey, please register for our upcoming webinar on how
to update your refinery planning models.

9 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816
AspenTech is a leading supplier of software that optimizes process manufacturing for energy, chemicals, engineering and
construction, and other industries that manufacture and produce products from a chemical process. With integrated aspenONE
solutions, process manufacturers can implement best practices for optimizing their engineering, manufacturing, and supply chain
operations. As a result, AspenTech customers are better able to increase capacity, improve margins, reduce costs, and become
more energy efficient. To see how the worlds leading process manufacturers rely on AspenTech to achieve their operational
excellence goals, visit www.aspentech.com.

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10 Five Best Practices for Refineries: Maximizing Profit Margins Through Process Engineering 2016 Aspen Technology, Inc. 11-8982-0816