NZR
17/06/2014 14:17
GENERAL
REL: 1417 HRS The New Zealand Refining Company Limited
GENERAL: NZR: Hydrocracker upgrade on track to lift NZR profitability
Hydrocracker upgrade on track to lift refinery profitability
Results from the first in a series of efficiency upgrades to Refining NZ's
hydrocracker unit show that the refiner is on track to improve its diesel
processing and lift refining margins.
In March the Company refitted its Mild Vacuum Column (part of the
Hydrocracker unit) with structured 'packing' - a honeycomb shaped series of
corrugated metal plates that make separation of gasoil (the component of
diesel) in the first stage of processing more efficient, and improves the
yield of higher value products from the hydrocracking process.
Chief Executive officer, Sjoerd Post said the Company had forecast the
step-up in separation efficiency from the column refit to lift margins by USD
0.13 per barrel. Early results show that separation efficiency of the new
packing is better than had been forecast, having already lifted efficiency by
around 3.5 percent.
"It's clear that we're getting far better gasoil separation from the column
refit, and with a 'cleaner cut' we're able to pull more gasoil out of the
column without it being recycled to a second stage of processing, where
conversion to less valuable, lighter products occurs."
"In the current weak margin environment the forecast step-up in efficiency
equates to around USD 0.11 per barrel. With better than forecast separation
and the team continuing to work on optimisation, we expect to see even better
efficiency from the column refit and with it, a further uplift in yield and
margins going forward."
Post said that the column refit is also expected to improve energy use with
gasoil separation achieved at lower temperatures, and less hydrogen being
required in the process.
"While this is just one component stream in our processing, it is an
important first contribution to the series of initiatives aimed at lifting
the performance on the hydrocracker which taken together, are expected to add
USD 0.66 per barrel to Refining NZ's Gross Refining Margin."
Other efficiency upgrades of the hydrocracker undertaken by the Company
include the replacement of catalyst, completed during the March shutdown; the
installation of a pipeline to route 'MVC bleed component' to the Butane
De-asphalting Unit due to be finished in the next two weeks; and the
increased use of natural gas in the refinery, instead of fuel gases which can
be made into products.
Post confirmed that the Company is monitoring the progress of the upgrades
and expects to have more to report when all results are in and have been
analysed.
"A key part of the Company's business strategy is to maximise the generation
of more valuable fuel products. This column refit along with the other
upgrades to the hydrocracker will lift our profitability by making us even
more efficient at producing the high quality diesel that New Zealand needs",
he said.
ENDS
Notes to editors:
Together, the improvements to the hydrocracking process are expected to
contribute a structural uplift in the Company's Gross Refining Margin (GRM)
of USD 0.66 per barrel, comprised of the following: hydrocracker catalyst
replacement (USD 0.29/barrel); Mild Vacuum Distillation column revamp (USD
0.13/barrel); MVC bleed to BDU (USD 0.13/barrel); additional natural gas (USD
0.11/barrel).
The expected GRM uplift for these initiatives is based on margin and price
assumptions at the time the business case for each initiative was approved by
the Company. The actual GRM achieved for each initiative is dependent on
future margins and prices and may vary to that set out in the initiative
business case.
The MVC bleed component 'stream' contains impurities produced by the
hydrocracking process that render catalyst less effective, and is routed to
less valuable fuel oil. This upgrade takes the stream to the Butane
De-asphalting Unit for purification before routing to the hydrocracker for
processing into higher value products.
For further information:
Greg McNeill, Communications & External Affairs Manager
T: (09) 4325115; M: 021 873623; E: [email protected]
End CA:00251691 For:NZR Type:GENERAL Time:2014-06-17 14:17:48
