Sustainable growth is a big issue as the Asian economies continue to grow at a breathtaking pace. Accelerating the flow of fuel without accelerating greenhouse gas emissions is hard, but possible. Taiwan-based Chinese Petroleum Corporation (CPC) takes action by investing USD two billion in a five year upgrading plan.
Old facilities and production methods must give way to new and more sustainable ones as CPC is going to build ten new plants and revamp two of its existing facilities. In a series of moves to meet increased competition and future privatisation, the CPC will invest heavily in order to build cost effective refineries that adhere to more stringent environmental demands, such as the Kyoto protocol.
Mr. Ching-Chi Hwang, CEO of CPC’ refining business division says, “We have now been granted funding from the Taiwanese government and the Congress to go ahead with our proposed five year upgrading plan. This will enable us to design our refineries and processes from scratch. This way we can design our facilities to integrate sulphur reduction, and buy cheaper oil that we can process in a way that takes international environmental standards into account.”
Grand scale. Reduced sulphur emissions have a significant effect on air quality, particularly on the grand scale where CPC operates. Importing more than 220 million barrels a year, CPC is a major purchaser of crude oil and has its own fleet of tankers. To meet environmental demands, CPC has steadily increased the use of low sulphur crude oil. However, this oil is much more expensive, so CPC intends to build crackers to remove sulphur from the crude. This allows CPC to buy the cheaper, normal crude and then reduce the sulphur levels themselves.
“We are looking forward to get started with the upgrading programme. A simple and well laid out facility will improve the efficiency and output considerably, while at the same time enabling CPC to lower its production costs. This is exactly what we must have in place in order to meet increased competition and prepare for future privatisation,” says Mr. Hwang.
Deal with Chinese Steel.
Another measure to meet the demands of the Kyoto protocol is to re-use steam from the production of Chinese Steel. Again, operating on a grand scale gives grand results. CPC estimates it will save energy equivalent to one of the refining plant’s output by doing this.
Increasing the use of LNG (Liquefied Natural Gas) is another measure CPC takes to reduce its emissions. “The petroleum and petrochemical industries here in Asia are now taking action. In many ways, we are responsible for meeting energy demands in a manner that is as efficient and sustainable as possible,” says Mr. Hwang.
Growing with the market.
Throughout his almost 40 years in CPC, Mr. Hwang has seen massive growth and changes at CPC close-up. Today, the refining business of CPC has a minimum capacity of 770.000 barrels a day, ensuring a profit of more than USD one billion a year. CPC is now targeting international growth as the Asian market is booming and CPC is gearing up accordingly. Currently, CPC exports amount to 30% of its production.
DNV has assisted CPC with Risk Based Inspection (RBI) tools to extend the period between shutdowns. In addition to improved reliability, avoiding pipe leaks and so on, the RBI methods will help CPC extend time between costly shutdowns from two to three years for all its plants.
“We are very pleased with DNV’s contribution to our operations. We have always been pleased with Primalux, and now that it is integrated in DNV we look forward to see more comprehensive services. We would very much like to draw on DNV with its international reach and breadth of services. In particular, we would like to see DNV participate with its experience on the environmental side as we start our upgrading programme,” concludes Mr. Hwang.