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Automation Modernization Opportunities in the US Refinery Market

  • January 2014
  • 71 pages
  • Frost & Sullivan
Report ID: 2003739


Table of Contents

Varying Crude Oil Grades to Bolster Growth for Refinery Retrofits

An incremental rise in domestic crude oil production in the United States along with the potential inflow of Canadian heavier crude is poised to disrupt the dynamics of the oil and gas downstream market. As end users invest in upgrades, retrofits, and new greenfield refinery projects, there is ample opportunity for automation vendors to enhance their solution offerings to cater to the pressing needs of control, safety, utilization, and productivity. This strategic market insight provides automation vendors a detailed analysis on regional market dynamics, required key retrofit units, current and future automation tools mapping, benefits of implementation, and a heat map of projects depicting total share for automation systems.

Executive Summary

1. Business Insight
A diversified inflow—Domestic US crude oil supplies coupled with the anticipated Canadian oil sands are inciting refiners to blend varying crude oil grades.

2. Growth Insight
Unscrambling complex infrastructures— The process of blending requires agile refinery operations, which in turn drive automation opportunities for retrofit units.

3. Profit Insight
A $X million total opportunity by 2015—Brownfield Projects is instigating the development of augmented toolsets as refiners upgrade and expand their foundation capabilities to optimize throughput.

What Are Mega Trends and Micro Booms?

Mega Trends
Mega Trends are global, sustained, and macroeconomic forces of development that impact business, economy, society, culture, and personal lives, thereby defining our future world and its increasing pace of change. Time frames for Mega Trends are 10 to 15 years.

Micro Booms
Contributing to these Mega Trends are many smaller but compelling trends that are defined in time frames of 1 year and can offer immediate opportunities for companies that know how to identify and capitalize on them. These are Micro Booms, and the Frost & Sullivan Industrial Automation and Process Control team is showcasing a series of Micro Boom opportunities in 1 to 2 years.

Micro Booms—What Will We Be Looking Into?

Business Insight: What is it? This segment details the following:
• What is the market/business about?
• Why invest in the business?
• Which issues and challenges should I be aware of?
• What is the current market state, and where is it headed?
• What are the critical attributes of success within the market?

Growth Insight: Why should I care? This segment details the following:
• What is the market potential and its growth trajectory?
• How is the competitive landscape situated?
• What are the pockets of growth opportunities?
• What are the near-adjacent areas of opportunity that solution providers can leverage?

Profit Insight: What should I do about it? This segment details the following:
• What are my near-adjacent market opportunities?
• How should I package my products to achieve improved margins?
• What should the go-to market and service strategy be?

Market Definitions

Oil Refining
Refining is the process of converting raw crude oil into useful products such as gasoline, distillates, kerosene, and heating oil, which are used for commercial, industrial, and retail use.

PADD is an abbreviation for the Petroleum Administration for Defense Districts; classification of petroleum products are obtained from specific district regions.

Brent Crude Oil
Brent crude oil, a light sweet crude oil, is used as an index predominantly around the North Sea (Europe, Middle East, and Africa).

WTI Crude Oil
West Texas Intermediate (WTI) is a light sweet crude oil that is used as an index predominantly in the Western hemisphere.

WCS Crude Oil
Western Canadian Select (WCS) is a heavy crude oil that originates from the heavier oil sands of Western Canada and is used as an index for trading.

Keystone Pipeline
This pipeline transfers oil starts from Canada, cuts across the regions of the United States, and continues down to the Gulf Coast.

Refinery Operable Capacity
This capacity is the maximum crude oil distillation unit capacity that can be used at a given instance.

Capacity Expansion
This term could imply that either the capacity of the crude oil distillation unit is increased or retrofits such as coking units, cracking units, or desulphurizers are added to tackle varying crude oil grades.

Crude Distillation Unit
This is the single most important constituent of an oil refinery. As the crude oil consists of various hydrocarbons with differing boiling points, the distillation unit separates these components that are further sent to individual retrofit components to obtain the desired by-products. It is important to note that the capacity of US refineries is measured by the capacity of the distillation unit and not the other external retrofit components listed below.

Reformer Unit
The reformer unit allows for the combination of smaller hydrocarbons at lower temperatures to produce by-products such as petrol and other gas products.

As varying grades of crude contain different sulphur content, the primary purpose of a desulphurizer is to reduce the sulphur content to ensure that higher product yields are obtained.

Cracking Unit
After crude distillation, the resulting high-boiling-point products are sent to a cracking unit to convert higher-molecular-weight hydrocarbons present in the crude oil to produce fuel oils such as diesel and heating oil.

Coking Unit
After crude distillation, the resulting high-temperature residual oil is sent to a coking unit to convert it into low-molecular-weight heavy oils and coke.

Alkylation Unit
This retrofit component used in refineries converts the lower-molecular-weight alkenes present in the crude oil into alkylates using an acid catalyst.

Vacuum Distillation Unit
The residue and asphalt that is obtained from the crude distillation unit is sent to the vacuum distillation unit where it is further distilled at lower pressures.

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