Types of Refinery & Nelson's Complexity

Topping

Crude is a mixture of petroleum products. The topping refinery just separates the crude into its constituent petroleum products by distillation, known as Atmospheric Distillation. Topping Refinery produces naphtha but no gasoline.

Hydroskimming

The hydroskimming refinery is defined as a refinery equipped with Atmospheric Distillation, naphtha reforming and necessary treating processes. Hydroskimming refinery is more complex than a topping refinery and it produces gasoline.

Hydroskimming refinery produces a surplus of fuel with unattractive price and demand.

Cracking

The cracking refinery is, in addition to the above, equipped with vacuum distillation and catalytic cracking. The cracking refinery adds one more level of complexity to the hydroskimming refinery by reducing fuel oil by conversion to light distillates and middle distillates.

Coking

The coking refinery refers to the one which is equipped to process the vacuum residue into high value products using the Delayed Coking Process. The coking refinery adds further complexity to the cracking refinery by high conversion of fuel oil into distillates and petroleum coke.

Catalytic Cracking, Coking and other such conversion units are referred to as Msecondary processing units. The Nelson Complexity Index, captures the proportion of the secondary conversion unit capacities relative to the primary distillation or topping capacity. The Nelson Complexity Index typically varies from about 2 for Hydroskimming refineries, to about 5 for the Cracking refineries and over 9 for the Coking refineries.

Refineries, with high Nelson Complexity Index have the necessary flexibility in processing a wide variety of crudes and are capable of achieving higher value addition.

Reliance's Jamnagar refinery has Catalytic Cracking and Coking as the main secondary processing Units, and has a Nelson Complexity Index of 9.93. This excludes the Aromatics Complex, which is set up under RIL. If the Aromatics Complex is also included for the Jamnagar Refinery then the Nelson Complexity Index is over 14.0.

In the Refining Industry, a common index termed as "EDC" - Equivalent Distillation Capacity is defined to calculate the benchmark of manpower requirement.

Calculation of EDC is a two-step process. The first step is the multiplication of the capacity of each unit in the refinery with the Nelson's complexity factor and the second is the sum of these products to arrive at the EDC for the refinery in total.

Nelson Complexity Index :

Nelson Complexity Index is a measure of secondary conversion capacity in comparison to the primary distillation capacity of any refinery. It is an indicator of not only the investment intensity or cost index of the refinery but also the value addition potential of a refinery.

The index was developed by Wilbur L Nelson in 1960 to originally quantify the relative costs of the components that constitute the refinery. Nelson assigned a factor of one to the primary distillation unit. All other units are rated in terms of their costs relative to the primary distillation unit also known as the atmospheric distillation unit.

Following are the factors for the various Processing Units :

The Nelson Complexity Index method uses only the Refinery Processing Units or the " Inside Battery Limits " ( ISBL ) Units, and does not account for the costs of Offsites and Utilities or the " Outside Battery Limits " ( OSBL ) Costs, such as Land, Storage tanks, terminals, utilities required etc.

The Nelson Complexity Index provides insight into refinery complexity, replacement costs and the relative value addition ability and allows different refineries to be ranked.

The Nelson Complexity Index for the Reliance refinery is 9.93 and for the overall Jamnagar Complex is over 14.0.

Essentially a high Nelson Complexity Index as the Reliance Jamnagar Refinery is, points to the following characteristics .

• Ability to process inferior quality crude or heavy sour crudes. For example the Jamnagar Refinery generally processes crudes which are 5?API lower and 0.7wt% sulphur higher compared to Indian peers.
  
  
• Ability to have a superior refinery product slate comprising of high percentage of LPG, light distillates and middle distillates and low percentage of heavies and fuel oil. For example the Jamnagar Refinery produces no fuel oil which is unmatched by the Indian peers.
  
  
• Ability to make high quality refinery products such as Bharat 3 gasoline or diesel. For example the Jamnagar Refinery can make Euro 3 grade gasoline unmatched by the Indian peers.