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Digitalization and Internet of Things to Sustain Refining

The global refining industry is challenged with maintaining profitability in the face of oil market volatility, shifting refined product specifications and demand, evolving regulatory compliance requirements (e.g. compliance with the IMO's 0.5%-sulfur bunker requirement effective on Jan. 1, 2020), and the coronavirus (COVID-19) pandemic since late 2019.

The virus outbreak posts the most daunting task to refiners since it has devastated transportation fuels demand worldwide as shelter-in-place orders are issued in many parts of the globe. Furthermore, if working from home and remote meetings have become the norm even after the pandemic subsides, it could deal a major blow to transportation fuels demand in the future. Meanwhile, poor refining margins have prompted many refineries to either turn down their operations or completely closing units.

To sustain business, operators are feverishly seeking ways to improve plant productivity and efficiency in addition to operating safely and reliably by turning to the latest computer and multi-media technologies such as the Industrial Internet of Things (IIoT). The strategy is to focus more on remote operations through automation and digitalization and less on employee intensive operations.

BP CEO Bernard Looney added digital solutions were previously being implemented across the oil and gas sector prior to COVID-19, but the pandemic is accelerating the implementation of these technologies.

Kevin Wetherington, US energy services firm Baker Hughes Chief HSE Security & Quality Officer, noted, "With any crisis comes an opportunity for improvement, along with opportunities for technology and business advancement…We need to make sure that we don't miss the opportunities…to implement certain [helpful digital] technologies and to evolve our business practices. We have to make sure we learn, advance and improve."

Despite behind the upstream sector in implementing digitalization, refiners are catching up. Here are some of the cases.

  1. Independent US refiner Phillips 66 (P66) is working with Accenture and AT&T to install private 5G wireless towers at its Belle Chase, LA (US) refinery. P66 will use the private 5G wireless towers to enable a network of wireless sensors to operate throughout the refinery, allowing P66 to monitor various units throughout the plant while also implementing IIoT solutions using the data captured by these wireless sensors.
  2. In early Dec. 2019, Austrian energy firm OMV said that it will utilize US software giant Microsoft's cloud technologies, including Azure and its Hybrid Cloud platform, to help OMV with its digital transformation. OMV says the use of Microsoft's cloud technologies "will allow scalability and ubiquity in both data storage and processing."
  3. Spanish refiner Cepsa has selected Amazon Web Services (AWS) to provide cloud services as part of its ongoing digital transformation strategy that the company aims to help it enhance decision-making and increase operational efficiency. Cepsa plans to utilize the cloud services provided by AWS to innovate new analytics and Internet of Things (IoT) solutions. Cepsa will also migrate all of its serves and IT operations onto the AWS cloud, which Cepsa claims will result in a minimum 25% annual costs savings.
  4. In Nov. 2019, Abu Dhabi National Oil Co. (ADNOC) signed a 10-year contract to utilize US oil and gas technology firm Honeywell's Forge Asset Monitor and Predictive Analytics solutions at its Panorama Command Center in its Abu Dhabi headquarters for improved asset and machinery management across its upstream and downstream assets. ADNOC says the installation of Honeywell's Forge Asset Monitor and Predictive Analytics solutions will allow it to utilize a number of advanced technologies (artificial intelligence [AI], digital twins, machine learning) for real-time monitoring of 2.5K critical assets and rotating equipment across its businesses "to identify impending machinery issues earlier and shift from reactive and preventative maintenance practices to a predictive maintenance approach."
  5. According to a report in April 2020, South Korean's largest refiner SK Energy plans to utilize smart technology, such as big data and artificial intelligence (AI), at its 850K-b/d Ulsan refinery as part of its "Digital Transformation" initiative. The AI technology will be used to clean wastewater at the plant. SK Energy has been aiming to transform its business model, which at the moment heavily depends on its refining segment.

There are four key components of the digital technologies as presented in our quarterly technology study, Worldwide Refinery Processing Review.

This study is an ongoing program to monitor and analyze the latest development of digitalization and IIoT in refining applications. It presents unique and comprehensive discussions focusing on the impacts and implications of the latest innovations and revealing the insights that let you stay ahead of the competition.

Hydrocarbon Publishing Company has been publishing Worldwide Refinery Processing Review since 1998. Over the past 20 years, our quarterly technology newsletter has become the most authoritative and comprehensive publication of the latest refining technologies around the world. The Review monitors commercial technology developments and competition, plant operation improvements and troubleshooting, R&D trends, latest global installed capacity, and constructions for all processing units—from the front-end to the back-end—in a single source. To start your subscription, please visit here or contact us.