The Pros and Cons
In recent years, modular refinery construction has become an alternative to conventional or “stick-built” construction. Pre-fabricated refinery modules can be designed just once, then assembled or reproduced in fabrication yards and pieced together at refinery sites all over the world.
The advantages are considerable. Modules can be scaled for individual projects. They require smaller work crews. They take less time to build.
“Modular refineries have a niche market and can be more cost-effective in some cases, such as in developing countries or areas that lack infrastructure,” says Mahmoud El-Halwagi, chemical engineering professor at Texas A&M University. “If there’s stranded gas located far away from large infrastructure, then it’s more cost-effective to put a modular unit at the source. That same unit can be moved if the supply runs out or there’s no demand for the product. These modular units offer more flexibility to keep pace with fluctuations in supply and demand.”
Customisable, Sometimes Unpredictable
Because stick-built projects are designed individually from scratch, each is designed to the customer’s specifications in order to guarantee desired product output and quantity. But conventional construction requires more time and money upfront to secure a large tract of real estate and for engineering and design. Parts and materials are sourced and staged close to the construction site, where an on-site contractor manages the project construction. Once construction problems with work crews or inclement weather can affect schedules. The same factors can send construction costs soaring.
Big Efficiencies, Bold Logistics Manoeuvres
Modular refineries are comprised of discrete pieces that are assembled off-site. There’s less ramp-up time for construction because workers at fabrication yards are generally experienced at building the parts. Once modules are delivered to the refinery site, they are connected easily and quickly; there’s little guesswork about the schedule since prefabricated designs are known entities in terms of assembly time.
The added wrinkle is the movement of the modules. Planning for a modular build necessitates planning for a modular move. To maximize the cost savings of prefabrication over on-site, stick-built construction, a customer needs to ship the fewest modules possible to the refinery site.
Module size is influenced by two major factors: the refinery output and the path to its location. A facility built to produce 5,000 units of refined product per day will be smaller than one cranking out tens of thousands of units. A refinery located near a port can be assembled from larger modules because the move involves fewer trips — assuming that a large enough vessel is available for transport. Getting modules from their fabrication point to an inland refinery site is a challenge. Will canals be wide enough? Roads? It can take months to secure an appropriate vessel and plan over-the-road transport, getting permits, planning for weight restrictions on bridges, and taking down power poles, street lamps, trees or any other obstacles in the module’s path.
El-Halwagi says there are additional benefits in reliability and safety. “If you have two modular units instead of a large single refinery and one unit fails, you only lose half your production. And you keep risk in check by handling smaller quantities of flammable, toxic or explosive material.”
One additional consideration: A more compact modular refinery on a smaller parcel of land presents challenges when it’s time for repairs or upgrades. Customers might find themselves temporarily relocating modules off-site for maintenance.
Modular mini-refineries are typically available in units producing from 4,000 to 30,000 bpd (barrels per day).
A wide variety of refining needs can be met by a modular configuration, including: propane, butane, petrochemical feedstock, gasolines (naphtha specialties, aviation gasoline and motor gasoline), distillates (jet fuel, diesel, kerosene, and intermediate fuel oil), and heavy fuel oil. Potential benefits:
- improves engineering quality
- faster construction
- close to markets
- low capital
- flexible to meet demand (add modules)
Getting Refinery Components from China to Netherlands
Agility is managing one of its largest oil and gas module shipments ever, moving several giant modules and structural pipe racks weighing more than 6,500 tons from China to the Netherlands. The modules are to be integrated into a client’s existing hydrocracker unit as an upgrade. The project, handled by Agility Project Logistics Rotterdam, shows the importance of collaboration among stakeholders.
Modular refinery construction is growing in popularity, but it requires movement of massive sea loads so entails considerable challenges. The appeal of modular construction is cost and time savings: Fabrication gets outsourced to regions with cheaper labor, and finished modules are joined together on-site at greater speed than conventional or “stick-built” construction. The challenge arises from the size of the modules.
The movements required one and a half years of preparation and countless conversations with the client, the engineering procurement construction management (EPCM), the fabricators in China, the ocean carrier, and the port at the receiving end.
Challenges emerged throughout the preparatory period. Because the client’s refinery is active and inaccessible by water due to low draft, the cargo couldn’t be discharged directly at the site. The engineering specifications for the modules have shifted frequently during planning. Every engineering change to a module (such as pieces being added or the centre of gravity being altered) affects how the cargo is to be transported — and when it will be ready for the voyage. Project timelines have remained in flux throughout.
To ensure compliance with sea-fastening specifications and safe roll-on operations, Agility has been deeply involved in detailed conversations with the fabricators. Working as the go-between for the carrier and the client, Agility is serving as freight forwarder and as project manager to keep the client apprised of all developments with engineering and cost implications.
The longest of the modules is the length of 1.3 basketball courts at 37.7 meters. The pieces are so large that Agility has arranged for use of semi-submersible vessels to assist with loading each shipment. Cargo must be sequenced to allow several days of loading time for each vessel in succession. The cargo will spend more than a month at sea before reaching the Netherlands. Once at port in Rotterdam, unloading requires four to five days for each vessel, using every means of discharge possible to lift the staggeringly heavy loads.
In many cases, refinery operators and EPCMs that have attempted such moves on their own are now turning to specialists, realising that mistakes are costly and that they lack the expertise and manpower to deal with vendors and intricate aspects of shipments. For the China- Netherlands move, Agility is adding value for the customer by managing all stakeholders in the project and running a seamless supply chain from the fabricator to delivery at port, including handling customs process to minimise duties.
“As a project logistics partner, we don’t just offer the means to transport our client’s equipment,” said Michael Giling, Director, Global Business Development Oil & Gas for Agility Project Logistics. “We are there to protect its interest, making sure the logistics operation is run safely and on time, meeting project requirements and managing the process from inception to delivery.”