In crude oil refining
business, modernization is one of key factors allowing to considerably improve
its performance results, cope with severe competitive pressure, and secure its
business perspective. This not just a shiny facade of the company. A big part
of this process is invisible to the eye, the innovations include not only new
buildings, but also new conditions of processes, new catalysts, choosing the
right direction for the renewal process, and much more. In this chapter, you
will be introduced to the vision of technological development in ORLEN Lietuva.
Taking into account ORLEN
Group strategy 2035, the main areas of ORLEN Lietuva technological development
are as follows:
- Increasing the
value of existing assets.
- Decarbonization
of existing assets.
- Production of
petrochemical feedstocks.
- Production of
synthetic fuels and green hydrogen.
- Production of
biofuels.
- Renewable
energy.
Increasing the value of existing assets
Besides the optimization of
feedstock, production mode and production output, the greatest impact on the
implementation of this area will be achieved through implementation of the
Bottom of the Barrel Project by building a new residue hydrocracking unit. The
current residue reduction process produces a considerable amount of heavy
fraction (fuel oil), which has a negative margin, declining global demand and
value, while the quality requirements are getting stricter. For these reasons,
the crude oil refinery must minimize the production of high-sulphur fuel oil in
order to remain competitive. For AB ORLEN Lietuva, such a possibility will
present itself after constructing and commissioning a new residue hydrocracking
unit. It is expected that the implementation of this project will significantly
increase the yield of light petroleum products. Products from the residue
hydrocracking unit will further be processed at the Refinery's units; all the
existing units will continue in operation. The new residue hydrocracking unit
will significantly increase the complexity of the Refinery, bring the Refinery
closer to the world's best refineries, and increase the Company's financial
results. With this deeper conversion technology, ORLEN Lietuva will be able to
considerably improve its performance results, cope with severe competitive
pressure, and secure its business perspectives. Construction of the new unit is
crucial not only to the Refinery of ORLEN Lietuva, but to the entire economy of
the region and energy security. Over 1 billion euros will be invested in the
construction of the new residue
hydrocracking unit.
This area includes projects
for increasing the production of products in demand on the market, production
of new products in demand, also implementing projects for increasing the
flexibility of the factory in terms of feedstocks.
This area also includes
other projects for ensuring business continuity in two aspects: the possibility
to sell products, taking into account future changes in quality parameters, and
the possibility to continue operations, e.g. obtaining Integrated Pollution
Prevention Control (IPPC) Permit with account to future pollution requirements.
Decarbonization of existing assets
ORLEN Lietuva is taking
part in a benchmarking study of oil refineries since 2006. Energy consumption
is one of the areas analyzed in the study. Over the past twenty years, energy
consumption has been reduced by more than 30% through organizational measures
and the implementation of relatively small-scale investments and short payback
projects. Current energy consumption is lower than the industry average,
placing ORLEN Lietuva in the top
quartile in the region. Despite considerable progress, decreasing energy
consumption further is crucial not only for reducing energy costs but also for
minimizing the environmental impact of current activities.
This area includes projects
for heat exchange efficiency, process electrification, low-potential heat
utilization, and others.
Production of petrochemical feedstocks
From the 2nd quarter of
2019 the Company began operating its first unit producing feedstock for
petrochemical plants – PPF Splitter. Produced high quality propylene is further
used for production of propylene oxide or polypropylene, and the latter—for manufacture
of plastic parts, packing materials, greenhouse films, etc.
- This helps
diversify the production in order to reduce dependence solely on oil
product market, increasing the stability of financial results at the same
time. There is no direct correlation between the price of oil, its
products and petrochemical feedstock.
- This ensures
business continuity, taking into account global trends in oil product
consumption and the electrification of vehicle fleet.
Company’s future plans
include analyzing various chemical waste processing technologies, such as
pyrolysis, gasification, etc., and the attractiveness of products made as a
result of it. This area is quite new to our Company, however, we see great
potential in developing it.
Production of synthetic fuels and green hydrogen
This area is recent in the
entire world, as some markets for synthetic products are still in development
and the first pilot units are emerging. This area is crucial as our Company
moves in the direction of transformation, producing energy from renewable
energy sources while making use of the existing infrastructure and the human
know-how. This area includes production of green hydrogen by electrolysis, and
other synthetic fuel, such as aviation fuel, methanol and ammonia.
Production of biofuels.
This area is also crucial
as our Company moves in the direction of transformation, especially since the
technologies are sufficiently mature and the products are widely used. This
area includes production of biofuel such as hydrotreated vegetable oil and
sustainable aviation fuels from the corresponding biomass category.
Renewable energy
Currently various
means of further ORLEN Lietuva development to reduce impact on the environment
are being considered. Additional income from the new residue hydrocracking unit
will be specifically used for further decarbonization of the company and
development of renewable resources in order to achieve the goals set out in the
ORLEN 2035 strategy. This area includes generating electricity from solar and
wind power plants. This is crucial to the production of green hydrogen and
synthetic fuel, also biofuel. Access to cheap, stable renewable energy supplies
(feedstock for future products) will be a key competitive advantage and managed
risk in the transition to a low-carbon business sector.