Refinery Planning

[ChemStel]

This question is specifically related to refinery LP and pricing. Hopefully this is the right section to post it.

For our input prices for crude for the current month we use Brent Dtd + the differential on the crude at which the crude can be purchased today for delivery in M+1, 2 etc.. i.e. the so-called replacement value, and not the actual differential at which you purchased the crude.

Likewise, on the products, you use the current Platts price, with the spot premium / discount.

My question is, how do other refineries do it. If one uses the purchased differential you see different economics to the replacement value.

For the experienced LP planners, is there any generally accepted way of doing it?

 

[Pumpsonly]

Is this an engineering Isue???

 

[ChemStel]

Yes, chemical engineers plan refineries.
If you take issue with this post under this section, then stick to pumps only.

 

[owg]

My recollection is, say for a 100,000 b/d refinery, we might block in 80% of the crude types and volume, and fix 80% of the products required. This reflects long term commitments. The remaining 20% of crude and products could be variable reflecting the variability of the wholesale markets. For example there could be a mixed sweet crude and a mixed sour crude available depending on whether there was a pull on regular or low sulphur No. 2 Fuel Oil. Also hitest and most regular gasoline might be fixed volumes but regular or say a 70/30 mix could be for sale at a price. The LP would produce that mix if the cost made sense.

I suppose there are a few ways of setting up the LP. This is just one way. I recall setting it up for 4 quarters of production with inventories carried from quarter to quarter. Retail may be fixed while wholesale is variable. Probably some crude volumes are contracted for so they are fixed. A couple of crudes may be allowed to vary their volume based on product demand, and likely crude price and sulphur level. Refinery unit capacities would limit what can be run

HAZOP at

http://www.curryhydrocarbons.ca