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Essar Oil to Invest $6B to More than Triple Refining Capacity at Vadinar

India’s Essar Oil plans to more than triple the capacity of its refinery at Vadinar from 10.5 million tonnes (220,000 bbls per day) to 34 million tonnes per annum (700,000 bbls per day).

The US$3-billion refinery was commissioned in November 2006 and has been operating at approximately 7.5 million tonnes per year. The Fluid Catalytic Conversion Unit (FCCU) and Diesel Hydro De-sulphuriser Unit (DHDS), which will be fully operational shortly, will enable the refinery to reach its full capacity—i.e., 10.5 million tonnes. These units will enable the Company to process heavier crudes and meet Euro 4 and Euro 5 norms.

The company will be expanding its capacity progressively to 34 million tonnes per annum by 2010. The first stage of expansion will involve de-bottlenecking and the addition of more sophisticated bottom upgrading units such as a  delayed coker. The second phase of expansion will see a new set of distillation units, including addition of all secondary units and another coker.

Basic engineering design for the expansion has been completed. The equipment will incorporate the latest in technology from well renowned international suppliers. With the expansion, the refinery will be able to handle a wide range of crudes from light to heavy and take advantage of the market differential between heavy and light crudes.

The Nelson Complexity Index of the refinery after the expansion to 34 million tonnes per annum will be approximately 12.8.

The Nelson Complexity Index assigns a complexity factor to each major piece of refinery equipment based on its complexity and cost in comparison to crude distillation, which is assigned a complexity factor of 1.0. The complexity of each piece of refinery equipment is then calculated by multiplying its complexity factor by its throughput ratio as a percentage of crude distillation capacity. Adding up the complexity values assigned to each piece of equipment, including crude distillation, determines a refinery’s complexity on the Nelson Complexity Index.

The Nelson Complexity Index indicates not only the investment intensity or cost index of the refinery but also its potential value addition. Thus, the higher the index number, the greater the cost of the refinery and the higher the value of its products.

In the second edition of the book Petroleum Refinery Process Economics (2000), author Robert Maples notes that US refineries rank highest in complexity index, averaging 9.5,  compared with Europe’s at 6.5.

The Oil and Gas Journal calculates refinery complexity as measured by by the Nelson Complexity Index annually.


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