Petrochemicals-a Growth Area for Hydrocarbons

As alternative energy sources and energy storage technologies continue to advance, will the decrease in transportation fuel demand be mitigated by the growth in petrochemical demand? At CERAWeek 2018, Emerson’s Jamie Froedge joined a panel, Petrochemicals: Future pillar of growth for hydrocarbons?, to explore the role downstream hydrocarbons will play in overall demand. The panelists included leaders from Dow Chemical, ADNOC and IHS Markit moderator, David Witte. Here was the description for the panel session:

The refining/petrochemical interface is once again becoming increasingly important for both refiners and petrochemical producers. The demand growth of transportation fuel is forecast to slow (and potentially decline) driven by a continued push for higher fuel efficiency combined with the onset of the electric vehicle as a replacement to the internal combustion engine. At the same time, global markets are seeing changes in oil and gas based feedstock supply for the chemical industry resulting in investment decisions that have introduced non-conventional (on-purpose) technologies to the latest wave of new capacity.

These changes have significant implications for both the refining and petrochemical industries and has resulted in an increased focus on developing integrated complexes that capture the synergies of co-location and meet the needs of a changing market in the future. Steady growth in chemical demand for consumer products is seen as an offset to slowing fuel demand, while refinery based feedstocks for conventional petrochemical production provide the full range of products needed by the chemical industry.

This panel will be exploring strategies to capture value down the refining/petrochemical value chain, taking key issues into consideration such as production cost competitiveness, investment and facility scale, feedstock costs and evolving technologies that increase refining output to petrochemical products.

The panel opened feeling optimistic about growth in the petrochemicals industry. As the substitution occurs from internal combustion engine cars to electric vehicle impacts transportation fuel growth, petrochemicals will grow as plastics and other lightweight materials are substituted in, in place of steel. Plastics remain the fastest growing segment of the petrochemicals business now and likely well into the future. The issue is to better manage the end of life for plastics from a sustainability perspective.

At CERAWeek 2018, Jamie Froedge describes the desire by petrochemical producers for greater flexibility that can be enabled through a digital transformation

Jamie opened noting that the refiners and petrochemical producers he’s spoken with have the common need for increased flexibility to respond to quick demand changes and changing economic conditions. When thinking about digital technologies, they play both a significant role in capital projects as well as ongoing safe, efficient and reliable operations. From an operating standpoint, there’s a big difference between top quartile and bottom quartile producers.

When taking advantage of the digital technologies to improve business performance, it’s critical to look at the people in the organization. Look at the existing workflows and what can be automated or streamlined. Often opportunities exist to apply additional measurements or connect siloed data sources to improve reliability or improve throughput. One of the most important aspects is the visualization of this data to better understand relationships and optimization opportunities.

Jamie was asked about the biggest challenges companies undertake in digital transformation. It starts with the status quo. People are comfortable with their existing work practices. Having technology without changing work practices means the value of the technology likely will not be realized. Simulation can help in being able to test out different work processes to get hands on and comfort with the new work practice.

Virtualization allows the training systems to be more easily kept up and maintained—and put to use to maintain skill sets. Workforce upskilling has been a constant theme at the sessions this week at CERAWeek.

Visit the Petrochemical section of the site to learn more about technologies and solutions to help in your path to business performance improvement.

Posted Tuesday, March 6th, 2018 under Chemical, Event.

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