Consulting case study: Value chain integration

Customer brief

A European refinery engaged us to evaluate its strategic options along the energy and chemicals value chain. The refinery is located near the coast, providing excellent access to domestic and international markets. The facility is equipped with modern technology and boasts significant capacity, enabling it to process a wide range of crude oil, and produce various refined products such as gasoline, diesel fuel, jet fuel and LPG (Liquefied Petroleum Gas).

Challenge

How to mitigate the risks to demand for its current product slate and net cash margin presented by the energy transition and sustainability policies, while increasing business resilience.

Outcome

We examined different commercial and technical options. Given the ongoing energy transition and changing climate regulations, we analysed how demand for refined products might evolve in a reduced fuel-consumption scenario.

We also investigated options for redirecting naphtha from the fuel pool to petrochemical feedstock, assessing the market and technology for bio-naphtha as a feedstock for low-carbon petrochemicals. Our evaluation explored whether naphtha would be the best feedstock for a potential new steam cracker and reviewed the necessary technological upgrades required to optimise petrochemical output e.g. a hydrocracker.

We determined the most suitable crude oil for processing, and the appropriate feedstock to maximise refinery integration using a steam cracker. We screened the chemicals that could be produced from the new mixed-feed steam cracker and proposed several optimal configurations for the refinery-petrochemical complex.

Our recommendations were based on an evaluation of the financial merits of each proposed configuration, taking into account the local context and resilience to different scenarios in which the speed of implementation of the energy transition varied.