One of the key challenges that Indian refineries must address in the near future is to maintain their refining capacity in the wake of lesser demand for fossil fuels and also evolve to match a shift in product mix to meet petrochemical demand. Refiners will need to find ways to make much less gasoline, marginally less diesel, and more jet fuel and petrochemical feedstocks.

In this context, the industry experts recently discussed the latest trends at the tenth session, ‘Oil to Chemicals (O2C): Future of Refineries’ of NextGen Chemical and Petrochemical Summit 2023 organized in Mumbai by the Indian Chemical News on July 13-14, 2023.  

The session was moderated by Alok Sharma, Executive Director, Centre for High Technology, Ministry of Petroleum and Natural Gas, Govt. of India.

Sharing his thoughts on the current scenario, Alok Sharma said: "We are passing through an energy transition phase and are hearing a lot of buzzwords such as green hydrogen, biofuels, de-carbonization, net zero and so many other things. As far as refineries are concerned, I can just mention that they are sure that refineries are going to stay and the crude oil production as well as processing is going to increase.

"The latest estimate by the Ministry indicates that by 2030 we will be touching around 320 million metric tonnes from the current 250 million metric tonnes and by 2040, we will be touching 400 million metric tonnes. There may be few dynamics which might change these figures but that’s the scenario currently. The fuel demand will be rising but the gasoline production may go down and overall energy will be increasing.

"At the same time, there is a demand for petrochemicals and a lot of companies are shifting gears towards it. As an example, a new refinery of HPCL is coming up and that will have a 26% petroleum intensity index. There are several processes that are being talked about such as Crude Oil to Chemicals (COTC), TFC, rapid gasification and hydro-cracking that are trending."

"The fossil fuel being hydrocarbons are adding to global warming and thus we have to do something about it. The world is approaching EVs at 15% and India at 2%. EVs are taking off in China, USA and EU, and it will happen in India too. There will be huge demand globally but the peak will be achieved in India a little later. The majority of pledges on net zero by oil majors is 2050, China is by 2060, India’s target is 2070. COTC means refining will focus on chemicals mostly and refining will become an afterthought. The reason this is important is because we want to sequester the carbon in the fossil fuels and chemicals via COTC. For net zero to happen in 2050, fossil energy has to decline from 83% today to 23%. The oil which is today 31% has to decline to 8%. The renewable energy which today is 9.5% will go up to 54%, primarily solar and wind. The low carbon hydrogen will account for 12% energy. The extras will be biofuels and circular at about 4%. The COTC means 69% oil becomes chemicals. There are roughly five new refineries in China which are producing 40% -50%. It is the ultimate integration in refining and petrochemicals, refining switches from fuels to chemicals and fuels become a niche product. Essentially the fittest of the refineries will survive and it will be sunset for standalone crackers because crud will be converted into chemicals," said Partha P. Maitra, President - Strategy & Initiatives, Reliance Industries.

 "When we started the Jamnagar refinery, we were asked that India doesn’t have any feedstock and crude, how come you are building a refinery to make fuel products? However, Jamnagar has shown that we can get crude oil from the Middle East or anywhere in the world and still be globally competitive in fuels. Similarly, there is no reason why we can’t be globally competitive in petrochemicals," added Maitra.

"The cracker design can take form. It can be single feed, gas, liquid or dual feed since all these combinations are possible. But the context is what kind of feed flexibility is available there in the longer run so that you can plan it that way. For Asia, the countries like Taiwan, India, Japan, Thailand and China, the perspective will be different from the rest of the region such as the Middle East, Kazakhstan and North America. The latter will have the flexibility to choose lighter feedstock like ethane which will be cheap. Whereas if we think of liquid and gas together such as naphtha and LPG, we can create a footprint of a larger product basket, setting forth a different kind of value chain than what can be thought of. Maximize the elastomers and fibres besides the olefins. Mixed feed crackers if not integrated with chemical plants is the good choice. Blending the feedstock and repurposing of any existing refinery, desrisking the assets and creating value, remain profitable. Partha Sur, General Manager – Technology, Haldia Petrochemicals.

"When the fundamentals of crude to chemical will change, it also changes the flow sheet of the entire process of refining. It is about simplifying. We look at the type of crude we are looking at for designing. If we start from light to medium and heavy to extra heavy, the last two definitely don’t give you that kind of opportunity because you need to then put in a larger number of converting processing units. In my opinion, any feed that is light and extra light will help but the availability of these is an issue. Hence the mix of these crude can help to achieve 70% of chemical conversion. It will maximize the value chain. The goal setting for the next 5 years with a proper roadmap addresses sustainability and gives us the chemicals we are looking at and at lesser crude processing," added Sur.

“We had been producing the chemicals but typically it is 8-10%. But we have changed the approach and going up to 20%. The refineries have been forced to think about crude to chemicals because we need to look at sustainability, profitability during operations and meet environmental mandates. At BPLC we have been continuously looking at improving our GRMs of our refineries. At the same time, we have made a commitment to achieve net zero by 2040.  First thing is how to improve refinery margins. The demand for petrochemicals is peaking by 2030. Typically the operational philosophy has been the more fuels and less chemicals whereas it has now changed to more chemicals and less fuels. We have made an investment of Rs 20,000 crore at Kochi plant to integrate the petrochemical complex and also Rs 45,000 crore at Bina plant site towards the petrochemical complex,” said Dr. Chiranjeevi Thota, Dy. General Manager, BPCL.

"On coal gasification, Thota added, “There is a great opportunity as we have got tremendous coal reserves in India  but we didn’t develop a proper infrastructure for conversion of syngas and further to chemicals.  As of today it is not an encouraging scenario but the policy push from the government could make it happen."

NextGen Chemical and Petrochemical Summit 2023 themed,  ‘Innovation, Self reliance and Sustainability’ witnessed attendance by a huge number of stakeholders from the chemical and petrochemical industry across India.

The Summit was supported by the Department of Chemicals and Petrochemicals, Ministry of Chemicals and Fertilizers and co-partnered by DCM Shriram. The Gold Partners of the event were Premier Tech, Ingenero, Rieco, ABB, PIP, Deepak Group, Dassault Systemes, Moglix and Siemens. Associate Partners were Tata Chemicals, Anupam Rasayan India, Sealmatic, Godavari Biorefineries, Huntsman, Tranter, Source.One, IPCO, and Aeroflex. The Lanyard Partner was Jakson Green.

Industry Association Partners were AMAI, Gujarat Chemical Association, Croplife  ndia, Chemicals and Petrochemicals Manufacturers Association , India and, AgroChem Federation of India.