An integrated refinery

GlobalData’s latest thematic report Integrated Refineries evaluates the advantages of integrated refineries for long-term sustainability, especially in the aftermath of the Covid-19 pandemic.

An integrated refinery, where refining and petrochemical units are interconnected, is an approach designed to make refinery operations more sustainable. With declining transportation fuels demand, standalone refiners find themselves at risk of closure in the long run. However, petrochemicals demand is anticipated to remain steady, following the economic recovery from the present downturn. This could benefit those refiners that have invested in the integration of refinery with petrochemicals plant.

Adding steam cracker and / or aromatics complex to a refining unit enables operators to take advantages of the synergies between the two units. Naphtha, liquefied petroleum gas (LPG), hydrogen and other feedstock can be monetised to produce a wide range of high-value products. Moreover, the facility can derive efficiency gains from shared resources, including land, power plant, water and wastewater treatment units, storage facilities and secondary conversion units. This also makes it relatively easier to optimise workforce deployment at the facility. All these advantages enable an integrated refinery to deliver better returns over a standalone unit, which can be critical during a downturn.

Globally, the competitive landscape for integrated refineries is dominated by the Chinese national oil companies (NOCs), Sinopec and PetroChina, and oil majors such as ExxonMobil, Royal Dutch Shell and Total.

Integrated refining capacity for key companies, 2010–2020

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In terms of refining capacity, Sinopec and PetroChina are the two leading players with a capacity of 6.1 million barrels per day (mmbd) and 4.1 mmbd respectively in June 2020. This accounts for approximately 19% of the world’s total integrated refining capacity.

Globally, by 2024, a total of eight integrated refineries are about to come online, of which four are in China, three in the Middle East and one in Africa. Among these upcoming projects, the Lianyungang II project is expected to come online in China by 2021 with a capacity of 320,000 barrels per day (mbd). Another key project – the Jieyang integrated refinery is scheduled to start operations by 2022. In Nigeria, the Lagos I integrated refinery is expected to come online by 2022 with a capacity of 650 mbd.