1
An oil refinery production optimization
Marko Kancijan#1, Marin Ivanjko#2, Perica Ilak#3, Slavko Krajcar#4
#
Department of Energy and Power Systems, University of Zagreb, Faculty of Electrical Engineering and Computing
Unska 3, Zagreb, Croatia
1
4
Abstract—This paper describes the structure of a complex oil
refinery and its optimization model. The refinery has six
distillation stages and ability to produce eleven products which
can be sold on the market. Revenues are made by product
trading. The production of oil refinery is optimized during one
year period by taking into account the price of market products.
The plants whose profitability will be considered are H2 and
CLAUS. Profitability of unit construction is evaluated over a
period of 25 years. The refinery uses a crude oil obtained from its
own sources (fields) or the oil purchased on the market. This oil
has a price and it is assumed that the marginal cost of oil price in
the market is equal to marginal cost of production from its own
resources. Refinery elements, distillation stages and all
characteristic parameters are described and included in the
mathematical model. Mathematical model is made from elements
and connected to overall model where multiple scenarios and
simulations are made for finding the best solution.
Index terms: oil, oil production, production
profitability, refinery
I. NOMENCLATURE
Variables and tags used in this article are explained below:
B1, B2, B3 splitters before gasoline blender [%]
bbl oil barrel
CF conversion factor (MMbbl into kt) [kt/MMbbl]
kt kiloton
maxtržište upper market limit
mintržište lower market limit
MMbbl one million barrels
MM$ one million dollars
P profit [MM$]
Q quantity [kt]
Qinput crude oil quantitiy [MMbbl]
S energy source consumption
S1, S2, S3, S4, S5 splitter parameters [%]
T gasoline property
П market price [$/kt]
Ω income made from market trading [$]
II. INTRODUCTION
O IL was formed from the remains of plants and animals
that existed a few hundred million years ago. The process
took place in several stages: deposition of debris on the ocean
Copyright notice: 978-1-4673-7172-8/15/$31.00 ©2015 IEEE
marko.kancijan@fer.hr
2
marin.ivanjko@fer.hr
3
perica.ilak@fer.hr
slavko.krajcar@fer.hr
floor, which were covered with sand and mud. After that,
under high pressure and temperatures, formation of gas and
crude oil has started.
The process of oil processing begins by geological and
geophysical research of areas that are potentially rich with oil
[1]. If the existence of oil is determined, exploitation starts
with drilling through the thick layers of sand, silt and rocks.
After that, the extraction and transport to the refinery are
performed. Transportation can be done in different ways: by
tankers, by rail, road or simply with oil pipeline which is the
cheapest option [1]. There is also the option to buy crude oil
on the market by market price, and manage risks to achieve
maximum profit.
The process of crude oil procurement (purchased on the
market or obtained from own fields) is not overly significant.
What is important is the price of procurement and market
products which are made in refinery by refining crude oil.
optimization,
Depending on the market price of products, it is necessary to
adjust the parameters of the refinery in order to gain the
maximum profit. Mathematical model of each segment of
refinery will be described and connected in overall model of
complex oil refinery. Furthermore, different simulation
scenarios will be presented. Important factor in oil production
belongs to ancillary units (H2, CLAUS). Additionally, long
term profitability for these units will be evaluated.
III. REFINERY ELEMENTS
Oil Refinery (Fig. 1) is an industrial plant where the crude
oil is transformed to refined products (LPG, diesel, petrol,
kerosene, etc.) by using the process of distillation. In the
remainder of this paper, the components of oil refinery will be
described, along with the parameters for optimization model
of every component.
Fig. 1. Schematic diagram refinery production [5]
 2

A. CDU (Crude Distillation Unit) needs to be extracted from final products. LN HDS unit
The first step of oil production is distillation of crude oil to extracts sulphur from lighter compounds.
more fragments (Fig. 2). Products from CDU are later TABLE III
processed in other units of the refinery [1]. Maximum capacity LN HDS UNIT PRODUCTS [5]
of CDU is 10000 kt/year. CF factor is used for conversion Product Output (wt%) Destination
from MMbbl to kt (1). Fuelgas 0,80 Heating
LPG 3,00 Market (LPG)
Light naphtha 96,13 LN HDS
H2S 0,07 HN HDS
Losses 0,20 -
TABLE IV
OPERATING EXPENSES FOR LN HDS [5]

Energy source Consumption

Fuel 650 GJ/kt
Electricity 7,36 MWh/kt
Cooling water 3,3 m3/t
Catalyst 250 $/kt
Fig. 2. Schematic diagram of distillation [2] Hydrogen 0,2 wt%
141,5 C. LNI (Light Naphtha Isomerisation Unit )
CF = ⋅ 0,159 ⋅103 (1)
APIgravity + 131,5
After sulphur extraction from LN HDS, it is necessary to
The following tables contain the required values for CDU enrich product with saturated hydrocarbons. Enrichment is
model (Tables I and II). Negative sign in energy consumption necessary to achieve the required quality of the fuel for the
means that the unit produces this item and it can be used later market (e.g. the relative octane number (RON)> 95) [4].
in the production. The components of refinery which produce
TABLE V
lubricants (bitumen, paraffin, coke, etc.) are not modelled and LNI UNIT PRODUCTS [5]
not included in the simulation model. It should be noted that
this is a standard component of each refinery, but it was not Product Output (wt%) Destination
taken into account because of relatively little significance in Fuelgas 2,90 Heating
the past 25 years. Isomerate 83,00 Gasoline Blending
or Base gasoline
TABLE I PCN 15,00 Market (PCN)
CDU PRODUCTS [5]
Losses 0,10 -
Product Output (wt%) Destination
Fuelgas 0,02 Heating
TABLE VI
LPG 1,16 Market (LPG) OPERATING EXPENSES FOR LNI [5]
Light naphtha 2,92 LN HDS
Medium naphtha 6,52 HN HDS Energy source Consumption
Heavy naphtha 7,30 HN HDS Fuel 3000 GJ/kt
Kerosene 7,60 Market (Kerosene) Electricity 40 MWh/kt
GO HDS or market Cooling water 25 m3/t
LAGO 14,53
(PCH&HO) Catalyst 500 $/kt
HAGO 7,30 GO HDS Hydrogen 1 wt%
LVGO 7,81 GO HDS
HDS/MHC or
HVGO 26,04
market (LFO) D. HN HDS (Heavy Naphtha Hydrotreater)
This component has a similar purpose as LN HDS. The
TABLE II only difference is separating sulphur from heavy distillation
OPERATING EXPENSES FOR CDU [5]
compounds. The oil in the third distillation step contains more
Energy source Consumption sulphur, so sulphur extraction requires the higher temperature,
Fuel 650 GJ/kt pressure and amount of hydrogen than in the step above [3].
Electricity 7,36 MWh/kt TABLE VII
Cooling water 3,3 m3/t HN HDS UNIT PRODUCTS [5]
Steam -23 GJ/kt
Product Output (wt%) Destination
Fuelgas 0,40 Heating
B. LN HDS (Light Naphtha Hydrotreater) Heavy Naphtha 99,55 CCR Reformer or
Market (PCN)
Crude oil contains sulphur which remains in all products H2S 0,15 Burning or CLAUS
after distillation. Due to legal and market regulations, sulphur Losses 0,20 -
 3

TABLE VIII Electricity 15 MWh/kt

OPERATING EXPENSES FOR HN HDS [5] Cooling water 5 m3/t
Energy source Consumption Catalyst 300 $/kt
Fuel 300 GJ/kt Hydrogen 0,75 wt%
Electricity 6 MWh/kt
Cooling water 8 m3/t
Catalyst 200 $/kt
G. HDS/MHC
Hydrogen 0,3 wt% Sixth distillation stage needs vacuum distillation and
catalytic process of separating sulphur [4]. Separation of
sulphur is done with HDS/MHC + catalyst unit: it removes a
E. CCR significant amount of sulphur and converts a large amount of
Catalytic reforming is a process where the value of the heavy components into useful products.
octane number is increased. Reforming is based on the The capacity should be determined depending on the needs
principle of changing the structure of chemical bonds in the of the market (quantity and price), costs and production.
hydrocarbon aromatic structure. Larger molecules are broken TABLE XIII
into smaller to insert complex structures that have a higher HDS/MHC UNIT PRODUCTS [5]

octane number [4]. Side-effect of this process is releasing

significant amounts of hydrogen. For this reason CCR Product Output (wt%) Destination
produces hydrogen (Table IX).
Fuelgas 0,70 Heating
TABLE IX LPG 0,60 Market (LPG)
CCR UNIT PRODUCTS [5] Naphtha 5,4 Market (PCN)
Product Output (wt%) Destination HDS Gasoil 21,0 Market (Diesel)
HDS Raffinate 71,20 FCC or market
Fuelgas 4,30 Heating
(LFO)
LPG 4,40 Market (LPG)
H2S 1,70 Burning or CLAUS
Reformate 88,00 Gasoline Blending
Losses 0,60 -
or Base Gasoline
Hydrogen 3,10 Other processes
Losses 0,20 - TABLE XIV
OPERATING EXPENSES FOR HDS/MHC [5]

TABLE X Energy source Consumption

OPERATING EXPENSES FOR CCR [5] Fuel 300 GJ/kt
Energy source Consumption Electricity 36 MWh/kt
Cooling water 4,5 m3/t
Fuel 3000 GJ/kt
Steam 250 GJ/kt
Electricity 95 MWh/kt
Catalyst 1,2 wt%
Cooling water 14 m3/t
Catalyst 500 $/kt
Capital costs for these units depend on the required
capacity (Table XV). The amount of crude oil capacity of the
F. GO HDS (Gasoil Hydrotreater) plant will be determined depending on the input.
Sulphur content in diesel is very strictly regulated. In order TABLE XV
to produce a diesel that can be placed on the market, it is CAPITAL COSTS FOR HDS/MHC UNIT [5]
necessary to extract sulphur [4]. Element GO HDS extracts Capacity Cost (MM$)
sulphur from 5th distillation stage products. 2000 kt 200
TABLE XI 2600 kt 230
GO HDS UNIT PRODUCTS [5] 3300 kt 270
Product Output (wt%) Destination
Fuelgas 1,00 Heating
H. FCC (Fluid Catalytic Cracking Unit)
LPG 0,50 Market (LPG)
Naphtha 3,70 Market (PCN) After distillation, product has a very small octane number.
Diesel 94,45 Market (Diesel) For this reason, the product must go through catalytic cracking.
Burning or There are two important factors for catalytic cracking:
H2S 0,90
CLAUS temperature and catalyst. The catalyst initiates the required
Losses 0,20 - action, accelerates it and it comes to structure change in order
to improve the octane number at temperatures from 400°C to
500°C. [3]
TABLE XII
OPERATING EXPENSES FOR GO HDS [5]

Energy source Consumption

Fuel 300 GJ/kt
 4

TABLE XVI sulphur is performed with a catalyst and hydrogen so the result
FCC UNIT PRODUCTS [5]
product is hydrogen sulphide (H2S). This gas can be burned in
Product Output (wt%) Destination the plant with large emissions of sulphur dioxide into the
Fuelgas 3,80 Heating atmosphere. According to the law regulations, the fine for this
Propylene 4,50 Market (Propylene) action is 30 MM$/kt. Another solution is building a plant that
LPG 16,40 Market (LPG) converts hydrogen sulphide to sulphur. This sulphur can be
FCC Gasoline 50,03 Gasoline Blending or placed on the market and their sales generate the revenue [5].
Base Gasoline
LCO 12,07 Market (PCH&HO)
TABLE XXI
HCO 3,00 Market (LFO)
CLAUS PLANT PRODUCTS [5]
MCB 4,50 Market (HFO)
Losses 4,80 - Product Output (wt%) Destination
Sulphur 84,8 Market (Sulphur)
TABLE XVII
OPERATING EXPENSES FOR FCC [5] Losses 15,2 -

Energy source Consumption

Fuel 160 GJ/kt TABLE XXII
OPERATING EXPENSES FOR CLAUS [5]
Electricity 50 MWh/kt
Cooling water 25 m3/t Energy source Consumption
Steam -250 GJ/kt Fuel 810 GJ/kt
Catalyst 300 $/kt Electricity 100 MWh/kt
Cooling water 40 m3/t
The total capital cost for FCC unit construction is Steam -3500 GJ/kt
380 MM$. Catalyst 1200 $/kt

I. H2 plant
TABLE XXIII
Hydrogen is used in most of the production units. There are CAPITAL COST FOR CLAUS PLANT [5]
two possibilities: buy it on the market or product it in the Capacity Cost (MM$)
plant [5]. Price of the hydrogen on the market is 20 MM$/kt.
20 kt 69
In a scenario where hydrogen is produced in the plant, the 40 kt 92
necessary data for modelling is given below. 60 kt 110
TABLE XVIII 80 kt 124
H2 PLANT PRODUCTS [5] 100 kt 136
Product Output (wt%) Destination
Hydrogen 23,8 production units K. Gasoline blender
Losses 76,2 -
In order to produce the gasoline which can be sold on the
market (market petrol), it is necessary to fulfil the legal
TABLE XIX
OPERATING EXPENSES FOR H2 [5]
regulations and market requirements (Table XXIV) [4].
TABLE XXIV
Energy source Consumption GASOLINE REQUIREMENTS [5]
Fuel 6000 GJ/kt
Electricity 60 MWh/kt Property Min Max
Cooling water 10 m3/t ρ (kg/dm3) 0,73 0,77
Steam -1800 GJ/kt RON 95
Catalyst 780 $/kt MON 85
RVP (kPa) 45 60
Olefin (%) 18
TABLE XX Aromatics (%) 35
CAPITAL COST FOR HDS OR HDS/MHC PLANT [5]

Capacity Cost (MM$)

20 kt 36 Gasoline obtained from different stages of distillation
40 kt 63 (Fig. 3) and various processing procedures has different
60 kt 86 properties (Table XXVI). To produce the gasoline with
80 kt 108 required quality, separators S1, B1, S2, B2, S4, S5, and B3
100 kt 129 have to be in the optimal position. If the petrol does not meet
all the criteria, it can be sold as Base Gasoline product.

J. CLAUS plant
As previously mentioned, crude oil and distillation products
contain high amounts of sulphur. The process of separation of
 5

A. First distillation stage

The first stage of distillation produces pure LPG. The
income made from the first step of distillation is equal to the
product of the quantity of produced LPG and market prices (3).
Considering that there are no further processing (costs), this
revenue is equal to profit.

Ω1 = wLPG _ CDU ⋅ Qinput ⋅ Π LPG = P1 (3)

Fig. 3. Schematic diagram of components for gasoline production
B. Second distillation stage
TABLE XXV
GASOLINE BLENDING COMPONENTS AND THEIR PROPERTIES [5] The second stage of distillation contains LN HDS and
ρ RVP
splitter S1, LNI unit and splitter B1 (Fig. 5). Each unit has its
RON MON Olefin Arom. own efficiency and different products so the revenue gained in
(kg/dm3) (kPa)
Isomerate 0,68 90 85 80 1% 0% this stage is composed of several elements.
Reformate 0,83 103 92 30 0% 81 %
FCC 0,75 93,5 82,5 56 27 % 26 %

For the properties of market gasoline are calculated from

volume fraction of each component (FCC, Reformate,
Isomerate).
IV. MATHEMATICAL MODEL OF REFINERY
Mathematical model is constructed by modelling each
element or distillation stage separately. At the end of
modelling process, all elements are connected into the general
model where simulations scenarios can be created. Initially,
crude oil goes to the CDU where the distillation starts.
Products of the distillation stages are (Fig. 4): LPG, Light
Naphtha, Middle + Heavy Naphtha, Kerosene, LAGO +
HAGO + LVGO, HVGO. The amount of input crude oil in the
CDU depends on the market price and energy consumption of
CDU unit. In this chapter, the products labelled with green
colour are presented as products which can immediately get
sold on the market, and the black ones have to go through
further processing in order to be placed on the market.
Fig. 5. Second distillation stage
1) LN HDS: Passing through LN HDS, Light Naphtha is
desulfurized. After that process, some products can be placed
on the market immediately, where some products need
additional processing. LN HDS creates a Fuelgas which can
be used as an energy source. This process is based on the
assumption that Fuelgas can be sold for a market price.
wFG _LN ⋅ Q2
wLPG _ LN ⋅ Q2
Q2

wLN ⋅ Q2
wLPG _ CDU ⋅ Qinput

wLN ⋅ Qinput
wH 2 S ⋅ Q2
( wMID + wHEV ) ⋅ Qinput
Qinput
wKER ⋅ Qinput Fig. 6. LN HDS unit products

( wLA + wHA + wLV ) ⋅ Qinput Costs of LN HDS unit depend on the input quantity of the
product Light Naphtha and costs of energy used for this
wHVGO ⋅ Qinput process (Table IV) (4):

Fig. 4. CDU products CLN _ HDS = Q2 ⋅ ∑

LN HDS
S Energent ⋅ Π Energent (4)
CDU unit costs depend on the input amount of crude oil
which is purchased on market or produced by refinery’s own
resources: (Table II) (2). The income is made by selling Fuelgas, LPG and other
products that are coming out of the LN HDS, and which can
be immediately placed on the market (5):
(2)
CCDU = Qinput ⋅ Π crude +Qinput ⋅ ∑ S Energent ⋅ Π Energent
CDU Ω21 = wFG _ LN ⋅ Q2 ⋅Π FG + wLPG _ LN ⋅ Q2 ⋅Π LPG +
(5)
(1 − S1 ) ⋅ Q2 ⋅Π PCN
 6

2) LNI: The quantity of Light naphtha comes into LNI,
which is then desulfurized in LN HDS and passed through a
splitter S1 (6).
Q2 S1 = S1 ⋅ wLN ⋅ Q2
1) HN HDS: Passing through the HN HDS unit, Middle
and Heavy Naphtha are desulfurized under higher
temperatures and pressure. LN HDS creates a Fuelgas which
is used as an energy source. This fact is accounted in the
(6) model, so Fuelgas is sold at the market price (buying price).

wFG_ LNI ⋅ Q2 S 1
wFG_ HN ⋅ Q3

Q2 S1 Q3
wISO _ LNI ⋅ Q2 S 1 wHN_ HN ⋅ Q3

wPCN _ LNI ⋅ Q2 S 1 wH 2 S ⋅ Q3

Fig. 7. LNI unit products Fig. 9. HN HDS unit

Costs of LNI unit depend on the input quantity of Light A total costs of HN HDS unit depend on input quantity of
Naphtha and operating expenses (Table VI) (7): desulfurized Heavy Naphtha and costs of energy for
desulphurization (Table VIII) (12):
CLNI = Q2 S1 ⋅ ∑ S Energent ⋅ Π Energent
LNI
(7) CHN _ HDS = Q3 ⋅ ∑
HN HDS
S Energent ⋅ Π Energent (12)

Products from LNI unit which do not require further

processing are: Fuelgas and PCN. Their contribution to The income made by selling of Fuelgas (it can be sold
income at second distillation stage is (8): without further processing) (13):

Ω 22 = wFG _ LNI ⋅ Q2 S1 ⋅ Π FG + wPCN _ LNI ⋅ Q2 S 1 ⋅ Π PCN (8) Ω31 = wFG _ HN ⋅ Q3 ⋅ Π FG + (1 − S2 ) ⋅ Q3 ⋅ Π PCN (13)

2) CCR: The CCR takes into the account quantity of

The amount of Isomerate product depends on the market desulfurized Heavy naphtha which is passed through the
price of gasoline and the required properties of gasoline. This splitter S2 (14).
regulation can be fulfilled by changing the parameters of
splitter B1. The revenue in this case depends on the amount of Q3S 2 = S2 ⋅ wHN ⋅ Q3 (14)
Isomerate, market price for products and splitter B1 values (9):

Ω23 = B1 ⋅ wISO _ LNI ⋅ Q2S1 ⋅ΠG + (1− B1 ) ⋅ wISO _ LNI ⋅ Q2S1 ⋅ΠBG (9) wFG _ CCR ⋅ Q3S 2

The revenue in the second stage of distillation is the sum of wLPG _ CCR ⋅ Q3 S 2
all revenues generated in all production units at this stage (10): Q3S 2
wREF ⋅ Q3S 2
Ω2 = Ω 21 + Ω 22 + Ω 23 (10)
The profit in the second stage of distillation is the
difference between total income and costs in the same stage. wH 2 S ⋅ Q3 S 2

Fig. 10. CCR unit

P2 = Ω 2 − CLNI − C LN _ HDS (11)
CCR Reformer costs depend on the quantity of input
desulfurized Heavy Naphtha and operating costs (Table X)
C. Third distillation stage (15):
The third distillation stage consists of HN HDS, splitter S2,
CCR unit and splitter B2 (Fig. 8). The income received in this
stage is composed of several elements.
CCCR = Q3S 2 ⋅ ∑ S Energent ⋅ Π Energent (15)
CCR

Products that do not need further treatment are Fuelgas and

LPG so they contribute to revenue by (16):
Fig. 8. Third distillation stage
 7

Ω32 = wFG _CCR ⋅ Q3S 2 ⋅Π FG +wLPG _CCR ⋅ Q3S 2 ⋅Π LPG (16) Q5 S 2 = S3 ⋅ ( wLA + wHA + wLV ) ⋅ Qinput (22)

The product Reformate makes income depending on the wFG _ GO ⋅ Q5 S 3

settings of splitter B2:
wLPG _ GO ⋅ Q5 S 3
Ω33 = B2 ⋅ wREF _ CCR ⋅ Q3S 2 ⋅Π G + Q5 S 3
(17)
(1 − B2 ) ⋅ wREF _ CCR ⋅ Q3S 2 ⋅ Π BG wNAP ⋅ Q5 S 3

wDIS ⋅ Q5 S 3
The revenue in the third stage of distillation is equal to the
sum of all revenues in the third degree: wH 2 S ⋅ Q5 S 3

Ω3 = Ω31 + Ω32 + Ω33 (18) Fig. 12. GO HDS unit

GO HDS costs depend on the input quantity of products

The profit in the second distillation stage is equal to the and operating costs:
difference between total revenue and operating costs in this
stage (20). CGO = Q5 S 3 ⋅ ∑ S Energent ⋅ Π Energent (23)
GO

P3 = Ω3 − CCCR − CHN _ HDS (19)

Products Fuelgas and LPG generate income (24):

D. Fourth distillation stage Ω51 = wFG _ GO ⋅ Q5 S 3 ⋅ Π FG + wLPG _ GO ⋅ Q5 S 3 ⋅ Π LPG (24)

The product in fourth distillation stage is kerosene. The
received income is equal to product of quantity and market Products Naphtha (sold in the market as PCN) and Diesel
price (20). There are no further processing costs, so this make following income (25):
revenue is equal to profit.
Ω52 = wNAP ⋅ Q5 S 3 ⋅ Π NAP + wDIS ⋅ Q5 S 3 ⋅ Π DIS (25)
Ω 4 = wKER ⋅ Qinput ⋅ Π KER = P4 (20)
The profit in the fifth stage of distillation is equal to the
difference between total revenue and cost at the same stage
E. Fifth distillation stage
(26).
Fifth distillation stage produces the largest quantity of
products (29.64% out of the CDU unit). This step is
constructed with the distillation splitter S3 and GO HDS unit. P5 = Ω51 + Ω52 − CGO (26)

F. Sixth distillation stage

Sixth distillation stage is made of splitter S4, HDS/MHC
plant (with catalyst), splitter S5, FCC unit and splitter B3.
Fig. 11. Fifth distillation stage

HVGO
If the splitter S3 is set that the LAGO, HAGO and LVGO S4 Catalyst HDS/MHC S5 FCC B2 Gasoline
Base
products are sold in the market as PCH & HO, the income that LFO
Gasoline

can be achieved is (21): Fig. 13. Sixth distillation stage

The income that can be made if the splitter S4 is set so that

Ω51 = (1 − S3 ) ⋅ ( wLA + wHA + wLV ) ⋅ Qinput ⋅Π PCH &HO (21) the HVGO is sold as LFO is (27):

1) GO HDS: Input quantity for GO HDS depends on the

parameter settings of splitter S3 (22). Ω61 = (1 − S4 ) ⋅ ( wHV ) ⋅ Qinput ⋅Π LFO (27)
 8

In the remainder of the chapter, the equations for both

plants will be described, but the profitability analysis and wFG _ FCC ⋅ Q6 S 5
selection of plant will be covered in the next chapter.
wPRO ⋅ Q6 S 5
1) HDS / MHC: input amount of HDS unit is the amount
of product passed through a splitter S4 (28). wLPG ⋅ Q6 S 5

Q6 S 4 = S4 ⋅ Q6 (28) Q6 S 5 wFCC _ GAS ⋅ Q6 S 5

wLCO ⋅ Q6 S 5

wFG _ HDS ⋅ Q6 S 4 wHCO ⋅ Q6 S 5

wLPG _ HDS ⋅ Q6 S 4
wMCB ⋅ Q6 S 5
Q6 S 4 wPCN _ HDS ⋅ Q6 S 4
Fig. 15. FCC unit
wDIS _ HDS ⋅ Q6 S 4
wRAF _ HDS ⋅ Q6 S 4 The cost of the FCC unit depends on the quantity of input
wH 2 S ⋅ Q6 S 4 product from splitter S5 and operating expenses (Table XVIII)
(34):
Fig. 14. HDS/MHC unit products
CFCC = Q6 S 5 ⋅ ∑ SEnergent ⋅ Π Energent (34)
FCC
Costs for HDS / MHC unit depend on the quantity of input
product and operating expenses (Table XIV) (29): Products Fuelgas and LPG generate following income (35):

CHDS = Q6 S 4 ⋅ ∑ S Energent ⋅ Π Energent (29) Ω 65 = wFG _ FCC ⋅ Q6 S 5 ⋅ Π FG + wLPG ⋅ Q6 S 4 ⋅ Π LPG (35)

HDS

Products Fuelgas and LPG by sales are making revenue Products propylene and LCD are making the following
(30): income (36):

Ω62 = wFG ⋅ Q6 S 4 ⋅ Π FG + wLPG ⋅ Q6 S 4 ⋅ Π LPG (30) Ω66 = wPRO ⋅ Q6 S 4 ⋅ Π PRO + wLCO ⋅ Q6 S 4 ⋅ Π LCO (36)

Products Diesel and PCN sales generate following income Products HCO and MCB are making the following income
(31): (37):

Ω63 = wPCN ⋅ Q6 S 4 ⋅ Π PCN + wDIS ⋅ Q6 S 4 ⋅ Π DIS (31) Ω67 = wHCO ⋅ Q6 S 4 ⋅ Π HCO + wMCB ⋅ Q6 S 4 ⋅ Π MCB (37)

In the case where HDS raffinate is not processed further, it
is sold in the market as an LFO in amount that is determined
by the splitter S5 (32).
Ω64 = (1 − S5 ) ⋅ wRAF _ HDS ⋅ Q6 S 4
2) FCC unit: The amount that enters the FCC unit is the
actually raffinate quantity produced in HDS/MHC plant (33).
The product FCC gasoline is making the following income
(38):
Ω68 = B3 ⋅ wGAS _ FCC ⋅ Q6 S 5 ⋅ Π G +
(38)
(32) (1 − B3 ) ⋅ wGAS _ FCC ⋅ Q6 S 5 ⋅ Π BG
The profit in the sixth stage of distillation is equal to the
difference between the total income and the cost in the same
stage (39).

Q6 S 5 = S5 ⋅ wRAF _ HDS ⋅ Q6 S 4 P6 = Ω61 + Ω62 + Ω63 + Ω64 + Ω65 + Ω66

(33) (39)
+ Ω67 + Ω68 − CHDS − CFCC
 9

G. Total profit, hydrogen consumption and H2S production
In this paper each distillation stage is modelled separately.
Additionally, the profit calculation in made for each stage.
Total profit is the sum of all profits in distillation stages, with
deducted inputted crude oil price (40).
P = P1 + P2 + P3 + P4 + P5 + P6 − Qinput ⋅ Π crude (40)
The refinery has an option to purchase the hydrogen from
market or to build a plant to satisfy its needs. If it is more
profitable to produce it in own facility, it is important to
properly calculate the capacity of the plant because every
oversizing or undersizing will result in lower profit. The total
production of hydrogen in the refinery is the sum of all units
that are using hydrogen (41).
QH 2 = ∑S
Units
hydrogen (41)
• VISO is the volume of Isomer which is passed
through splitter B1. Variable wISO depends on
decision variables S1 and B1
• VREF is the volume of Reformate which is passed
through splitter B2. Variable wREF depends on
decision variables S2 and B2
• VFCC is the volume of FCC gasoline which is
passed through splitter B3. wFCC depends on
decision variables S4, S5 and B3.
• V is the input volume for Gasoline Blender and it
is equal to sum of the VISO, VREF, VFCC
The limits are set in a way that the volume fraction of
individual components is multiplied with the required
properties of that component (TISO, TREF, TFCC). The properties
of the components are given in Table XXVI. Their sum should
fulfil market requirements (maxmarket i minmarket) which are
listed in Table XXV (43) (44).

V ISO V V
⋅ TISO + REF ⋅ TREF + FCC ⋅ TFCC ≤ max market
(43)
Refinery processes of sulphur separation have a H2S gas V V V
(hydrogen sulphide) as by-product. Refinery has an option to
burn that gas, but due to the CO2 emission into the atmosphere,
V ISO V V
they will need to pay a fine of 30 MM$/kt. Furthermore, there ⋅ TISO + REF ⋅ TREF + FCC ⋅ TFCC ≥ min market (44)
is a possibility to build a plant that converts H2S gas into V V V
sulphur, which can be sold on the market. The amount of
hydrogen sulphide produced by refineries is equal to the sum
of production amount for each unit. C. Market prices
Product prices may vary in the market, so they are
QH 2 S = ∑
Units
SH2S modelled as assumption to the triangular distribution.
(42) Distributions are described with the minimum, most likely and
maximum price (Table XXVI).
TABLE XXVI
V. OPTIMIZATION PARAMETERS MARKET PRICES FOR REFINED PRODUCTS
The optimization was performed using the software tool Product Min [$/t] Most probable Max
MATLAB and all given parameters and restrictions are set in [$/t] [$/t]
there. LPG 830 880 960
Propylene 1080 1210 1440
A. Decision variables PCN 630 800 940
In the model, the decision variables are: Gasoline 880 940 1010
• splitter values (S1, S2, S3, S4, S5, B1, B2, B3) Base Gasoline 610 850 1010
• input quantity of crude oil which depends on the Kerosene 880 970 1060
market price (Qinput). Diesel 830 960 1120
PCH&HO 740 860 950
Splitter values can be set between 0 and 1 (0% and 100%).
LFO 520 680 780
The profit is affected by the settings of the splitter and its
HFO 410 530 640
position in the production system. The main goal is to find Sulphur 56 64 73
the optimal case in which the profit will be maximized with
all conditions fulfilled. Input amount of crude oil in a
Price of crude oil (Crude Oil) is considered as an
distillation unit affects the profit because it is necessary to
assumption with a triangular distribution:
buy it on the market or produce in own resources, which
creates a certain cost. • Minimum price: 98,05 $/bbl
• Most likely price: 109,09 $/bbl
B. Constraints • Maximum price: 120,69 $/bbl
All market requirements should be satisfied for market
gasoline production. In the process of production it is VI. SIMULATION RESULTS
necessary to mix the exact amount of fuel from the second, The simulation was done by MATLAB software. The
third and sixth distillation stage. Volume share of individual model was set to run 10000 simulations, in order to make it
components is used for calculation: easier to get the real simulation results in real conditions. In
the simulation it was necessary to solve 9 non-linear
 10

constraints. Furthermore, the simulation consists of 12

presumed prices for the products that are bought or sold on the
market.
For entered parameters and corresponding model, the
optimal solution produces a profit of 6492.22 MM$ in one
year. For the above ruling, the parameters of gasoline (Table
XXVII) are satisfied and it can be placed on the market.

TABLE XXVII
GASOLINE PROPERTIES OUTCOME

Property Min. Max. Result

ρ (kg/dm3) 0,73 0,77 0,76 Fig. 16. Profit density probability function
RON 95 95,22
MON 85 85,20 A. CLAUS unit profitability analysis
RVP (kPa) 45 60 53,66 Since the production of H2S gas is a big problem, its
Olefin (%) 18 16,23 disposal can be solved in two ways: by burning and paying a
Aromatics (%) 35 35 fine of 30 MM$/kt or building a CLAUS unit. In the case of
building the CLAUS plant, NPV was evaluated. In the event
The value decisive variables are also presented in the that leads into the project burning H2S gas, the NPV for the
simulation results. They simulate settings for splitters, period of 25 years was -320,243.29 MM$. For the second case
production system and input amount of crude oil. The optimal under consideration, which builds CLAUS unit, NPV depends
settings are (Table XXVIII): on the amount of H2S gas that the production processes at the
refinery produces and the market price of the product that
TABLE XXVIII CLAUS unit produces. Due to the variable cost of sulphur for
SPLITTER SETTINGS a period of 25 years (Table XXVII), the value of NPV was
Variable Result negative. Value NPV after 10000 conducted simulations
S1 1 ranging between -66.67 MM$ to -54.90 MM$ (Fig. 17).
B1 1
S2 0,35
B2 1
S3 1
S4 1
S5 1
B3 1
Qinput 72,37

According to the simulation results, the conclusion is that

the gasoline price is very high and that production will be
profitable. In the second distillation stage 100% of Isomerate
is released in gasoline production. In the third stage of
distillation, due to market constraints for gasoline properties, it
is necessary to mix 35% of the amount of the CCR reformer
unit. For the 5th distillation stage, the splitter should be set to
100% so everything should go to GO HDS (unit for diesel
production). In the sixth distillation stage it is necessary to set
all splitters to 100%, so all input amount goes to gasoline
production.
The goal was to maximize the optimization objective
function, which is profit. Results are obtained in the range of
5940.15 MM$ to 7118.85 MM$ (Fig. 16).
Fig. 17. NPV_CLAUS density probability function
A negative NPV value shows up in both cases, but it is
necessary for the production technology to choose one of them.
By results, it is more profitable to build CLAUS unit due to
less negative NPV value. In case of the sulphur price increase
on the market, NPV_CLAUS is moving towards more positive
values.
B. H2 unit profitability analysis
Due to the technological requirements of the production
process at the refinery, there is a need for hydrogen. The
market price of hydrogen is 20 MM$/kt. Two cases were
considered: long-term contract purchase of hydrogen or
production from own plants. In the first case, NVP for the
period of 25 years is -13,026.43 MM$. In the case of
construction of the facility, NVP is 2732.08 MM$.
If hydrogen price on the market was below
0.33266 MM$/kt, it is cost-effective to bind to a long-term
contract for the purchase of hydrogen, because NPV value for

long-term purchase exceeds the value of NPV for the
construction of H2 plant.
VII. CONCLUSION
Crude oil purchased on the market or obtained from own
fields is not overly significant. What is important are products
which obtained by the procedure of processing of crude oil,
because those products can be placed on the market.
Depending on the market price of certain products, it is
necessary to determine how to adjust the parameters of the
refinery in order to make the higher profit and be competitive
in the market. For better market competitiveness it is crucial to
build model for production process in oil refinery. The
distillation of the crude oil was carried out at 6 degrees and
was set up in a mathematical model. Each stage distillation is
described separately, and they were merge into the general
pattern of the refinery production process. Given the
technological processes, refinery consumes and produces by-
products that need to be properly disposed.
The mathematical model was set up in a way that, the
potential profile was determined for each stage of distillation.
Total profit is equal to the sum of profits in all levels minus
purchase cost or production of crude oil. The refinery has the
ability to produce 11 products. This paper describes the
structure of a complex oil refinery and its optimization model.
The refinery consists of 6 degrees of distillation and has the
ability to produce a product 11, where there is only the
commercial blend of diesel products from 2nd, 3rd and 6th
stages distillation. In order to satisfy market requirements,
products must have certain properties. They are set as
constraints in the optimization problem. The objective
function is the total profit and the decision variables are set-
splitter.
The simulation of the mathematical model was done in the
programming tool MATLAB. The limits determined by the
objective function where set in the program. The prices of
products on the market are subjects to change, so they are
modelled as assumptions in the MATLAB. Given that this is a
Monte Carlo analysis, the initial program was configured to
conduct optimization in 1000 simulations. Simulation results
are decision variables values (splitter parameters) with all
regulations and constraints fulfilled in production process of
oil refinery.
Through the paperwork, CLAUS and H2 plant profitability
were also evaluated on 25 year period. Although, the NPV
value for CLAUS project is negative, it is much larger than the
value of NPV for the H2S burning. In the H2 plant project,
NPV value is positive while for the project of hydrogen
purchase from the market NPV value is negative. In
conclusion, it is more profitable to build both plants than
purchase hydrogen from market or pay fine for H2S burning.
VIII. REFERENCES
[1] A. Chang, K. Pashikanti, Y.A. Liu, "Refinery Engineering: Integrated
Process Modeling and Optimization", Wiley-VCH, Germany, 2012.
[2] http://www.pavementinteractive.org/article/asphalt-production-and-oil-
refining/ (accessed: 8.05.2014.)
[3] http://powerlab.fsb.hr/enerpedia/index.php?title=ENERGETSKE_TRA
NSFORMACIJE#Rafiniranje_nafte (accessed: 26.05.2014. )
11
[4] I. Šepić, S. Barić, S. Jakovac Šepić, "Production of gasoline and diesel
fuels according to European standards with current technological
capabilities of Rijeka Refinery", Petroleum and Lubricants, 42, 2: 117-
137, 2003.
[5] Refinery simulator manual, MOL freshhh2014 program, 2014.
IX. BIOGRAPHY
Marko Kancijan is student at University of
Zagreb, Faculty of Electrical Engineering
and Computing. His specialization is power
system engineering. His fields of interest are:
power system economics, energy economics,
mathematical modeling and optimization
problem solving. As a student he gained a
lot of experience by participating or leading
student projects (Cost Effect Analysis of Wind Farms on
Power System, Analysis of Croatian Electricity Market and
Ancillary Services with PLEXOS Software). He has a
professional proficiency in English and limited proficiency in
Chinese.
Marin Ivanjko is student at University of
Zagreb, Faculty of Electrical Engineering
and Computing, Croatia. He received the
Bachelor of Science in Electrical engineering
and information technology degree in 2013
and he is currently pursuing the MSc degree.
His interests include power system
protection, renewable sources, mathematical
modeling and optimization problem solving.
Perica Ilak received the Master of Science in
Electrical engineering and information
technology degree from the University of
Zagreb, Faculty of Electrical Engineering
and Computing, Croatia in 2012, where he is
currently pursuing the Ph.D. degree. His
research of interests includes development
of optimization methodology for modeling
large-scale problems with stochastic elements and
quantification of risk in hydro power systems and finance.
Slavko Krajcar received Ph.D. degree from the University of
Zagreb, Faculty of Electrical Engineering
and Computing, Croatia in 1988. Became
associate professor in 1997, full professor in
2002. His research of interest includes large
scale energy systems with narrow field of
development of methodology for modeling
complex electricity market structures and
development of optimization methodology
for planning and development of distribution networks. He
was the dean of the Faculty in two mandates. He was the
president of the Governing Council of the Institute Ruđer
Bošković and SRCE, member of the supervisory board of the
national electricity company Hrvatska elektroprivreda d.d. and
several other companies.