Renaissance of Petrochemical sector in NE India through RP
PRANJAL CHANGMAI
Deputy General Manager, BCPL

SUBODH KUMAR
Deputy General Manager, BCPL

TAMAGNA GHOSH
Deputy Manager, BCPL

ROSELEEN AHMED
Deputy Manager, BCPL

Petrochemicals and refineries continues to grow in close co -operation and focus is on maximizing the synergies between the two technologies. In view of spiraling availability of the crude oil, associated -gas and Refineries, it has become almost inevitable to look for value-added opportunities to be integrated with the already existing upstream facilities through Petrochemical integration. With the advent of high-edge competitive market, price volatility of feedstock and products, and more stringent environmental regulations impacting the operating costs, it is necessary to identify and capture opportunities for more profitability through RPI which will moderate the risks related to raw materials while reducing the carbon footprint substantially. This article evaluates the level of integration achieved through BCPL, a key-driver in the petrochemical sector and the future potential of integration of refinery and petrochemical businesses bringing renaissance in NE India.

With outbreak of economic crisis in 2008-09 due to drastic change in crude oil prices, the refineries which are operating their plants at modest capacity and low operating margins have incurred losses in their profit margins. The idea of integration emerged for a desire of higher profitability in the competitive market and Experts and Researchers put their innovative ways to squeeze out costs and capture new opportunities to take advantage of close proximity to low-price feedstock source to make cost effectiveness in the result of Refinery and Petrochemical Integration.

Taking into account the risks associated with setting up a petrochemical in integration with refinery in North East India, it is imperative that the viability of the project be sufficiently ensured. This requires (i) reducing the level of investment (ii) confirmed feedstock availability at moderate price (iii) competitive finished product pricing considering remote location of the plant. The petrochemical business being cyclical in nature, the project financials must be sound enough to absorb the polymer price fluctuations.

The per capita consumption of plastic in the North-Eastern region is ~2.8 kilogram against a national average per capita consumption of ~9.7 kilogram, and global consumption of ~28 kilogram. Until recently, the entire NE region accounted for a share of around 9 percent of the polymer consumption whereas it has a share of 23 percent of the Indian population. Settingup of BCPL has provided the NE region the necessary fillip in feedstock sourcing in the polymer processing sector along with increased growth in End-user industries which would propel the growth of plastics in North-East India further.

BCPL-A result of RPI in NE India

Considering the geographical remoteness and logistics constraints in NE region- a collection of 7 sister states connected with mainland of India through a "Chicken-Neck", the dream of BCPL came into reality with the help of integration with the major players in Hydrocarbon sector in NE India. Natural gas from OIL & ONGC, Naphtha from NRL, if provided with moderate prices will give a strong economic advantage to BCPL in turning Natural gas and naphtha into intermediate chemicals and an array of finished polymer products.
Integrative optimization of BCPL
OIL, the main supplier for Natural Gas to BCPL, had taken steps to augment its natural gas production potential in Assam. The terminal gas production potential has been already increased and with the commissioning of the Baghjan-Madhuban gas pipeline, and substantial amount of associated natural gas is being monetized. Potential is also being explored for using of condensate byproduct of the LPG Recovery Plant as a cracker feed in BCPL. Further, possibility of utilizing the vented CO2 from BCPL Gas Sweetening Unit is being explored for the oil well blanketing which will help to lower down the global warming.

The C2 and C3 components present in natural are recovered in the Gas processing unit, in BCPL, with C2+Recovering technology, and the "lean natural gas", containing almost 99% methane is sent for use in downstream fertilizers. This lean gas can be used as a fuel replacing naphtha and fuel gas in both petrochemicals and refineries. Also, the additional saved naphtha can be used as a feed stock in Cracker unit for petrochemical complex.

What remains to be seen is that how the next decade will be different for the petrochemical and plastic industry from other previous decades as it relates to the prominence of these raw materials?

Propylene Integration

Figure 1: Proposed/ Existing integration at BPCL Complex Integration

Existing Refineries are planning to recover Propylene by proposed Propylene Recovery Unit along with the upcoming INDMAX FCC Units for increasing LPG Production. The process has been optimized to enhance propylene yield from reduced crude oil lighter fraction, with approximately 12-27% of the feed getting converted to Propylene. The heavy petroleum oils and low-value residues will be converted into high yields of propylene, ethylene and butylenes etc. In existing facility LPG produced in FCCU is mainly used for domestic purpose as a fuel. This future modification will enhance propylene indirectly contributing to mitigate the higher demand of polymers.

Refinery Off-gas integration

Refinery off-gas generally contain heavy hydrocarbon which is almost greater than 30 mole% C2. Refinery off-gases from different units of refinery may be used to extract petrochemical compounds like ethane, ethylene, propylene, butanes and propane etc. But it may not be cost effective for some time as the processing of such gas involves higher operating cost in comparison to the price of associated/non associated natural gas.

Future Butene-1 and HPG integration

Hydrogenated Pyrolysis Gasoline, a byproduct at BCPL, is unsuitable to be directly used as MS blend component due to high Benzene content. Also the inherent characteristics of HPG being carcinogenic and prone to adulteration in MS, a long term solution for safe and convenient evacuation of HPG is required. Looking into this, a Second stage hydrogenation plant of Pyrolysis -Gasoline is proposed, which will hydrogenate the Py-Gas followed by benzene saturation of C6 streams to convert benzene to cyclohexane. This resultant HPG is expected to meet a benzene specification of 1 Vol % (max) and Sulphur less than 10 ppm by weight, with a RON and MON value of ~95 and ~82 respectively, so as to blend it with Motor spirit.

A Butene-1 plant is proposed to be set up in BCPL for catering the needs of the Polymer Unit (PE Plant) with a typical ethylene dimerization process. The byproduct of this plant will be a C6 rich stream, which may be used for blending with MS in the nearby refineries.

New RPI based development concepts which are continuously growing-up need to be assessed, analysed and evaluated properly based on its potential and through CBA-cost benefit analysis. Anyhow, what is stated in this article clearly shows that there is potential for achievement of positive synergies between NE Oil & Gas players through RPI.

Figure 2: Recovery of Propylene from ICCU LPG Integration

Conclusions:

The main driving force for RPI is to enhance profit knowing that this integration is no longer a theoretical postulate and has already materialized in the Industrial practice in India resulted in enlarged profits bringing down the doubts, but it is still unexplored that to which degree of new integrations this RPI will be economically viable. In a country like India this viability has been calculated as a mixture of socio -economic interests keeping in mind that Technoeconomic feasibility and price forecasting for valorizing of exchange streams to the highest possible degree is important for increasing the overall revenues for the refinery -petrochemical integrated complex. BCPL is the latest addition to RPI in the NE region of India, will prove to be a potential game-changer in shifting the focus of plastic industry to eastern states of India and become the hub for future growth.

Figure 3 : Proposed Butene-1st & 2nd stage PG hydrogenation integration

BCPL being the only mega Petrochemical Industry in the entire NE region, it is expected to bring a renaissance in the polymer sector in NE India. With raw material readily available, numerous downstream polymer industries will be set up in the region, and polymer consumption will also rise. A plastic park in the nearby region is also coming up, for facilitating entrepreneurs for setting up new polymer industries. It is expected to house around 256 downstream plastic industries, and to market the products in South-East Asia including Myanmar, Bangladesh and Bhutan.

Indian petrochemical industry has unrealized potential and latest studies indicates that with adequate support from government and growth in end use demand, the market for plastic processing industry in India is expected to grow at a CAGR of 10.5% from FY15 to reach 22 MMTPA by FY20. Polymer import dependency remained high at 32% in 2015-16 and is expected to come down in next two years to ~30%. India's petrochemical industry, like the overall economy, faces near-term challenges, but the long-term growth outlook for the industry remains positive through refinery-petrochemical Integration.