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The Oil and Gas industry is commonly divided into the three major sectors: Upstream, which includes oil and gas exploration and production; Midstream, which includes the transportation and storage of oil and gas; and Downstream, which refers to the refining and processing of crude oil and natural gas, as well as the marketing and distribution of petroleum-based products, including gasoline, diesel, jet fuel, natural gas liquids, and many others.

Oil companies around the world extract over 90 million barrels of crude oil per day, but it is largely unusable until it’s further refined. Petroleum refining is the process of converting crude oil into a variety of useful petroleum products via a series of physical and chemical processes that separate the different hydrocarbon fractions in crude oil. These processes include distillation, cracking, and reforming, among others.

Petrochemical manufacturing is commonly lumped in with Downstream O&G as the chemical products derived from hydrocarbons during the refining process (e.g., ethylene, propylene, benzene, etc.) are broken down into a multitude of derivatives that can be used to produce thousands of products that we use every day.

The Refining Industry

Oil refining is a vital part of the global energy industry, responsible for producing the fuels and other petroleum-based products that power transportation, generate electricity, and enhance many other aspects of modern life. Global refining capacity is currently more than 100 million barrels of crude oil per day, with roughly 18 million of that coming from the U.S. and its 130 operable refineries. 

Refineries range in size from small, simple operations to large, sophisticated facilities capable of processing hundreds of thousands of barrels of crude oil per day. The largest refinery in the world is Reliance Industries’ Jamnagar Refinery in India, which is capable of processing 1.24 million barrels of crude oil per day. Regardless of size, refinery owner-operators are subject to a wide range of economic, political, and environmental pressures, including fluctuations in the price of crude oil, changing government regulations and policies, and growing concerns over climate change and environmental sustainability. To stay competitive in this dynamic and challenging environment, refineries must continually invest in new technologies and process improvements, optimize their operations to minimize costs and environmental impact, and maintain a strong focus on safety, mechanical integrity, and equipment reliability.

Oil Refining Process

The oil refining process is a complex operation that transforms crude oil into various products such as gasoline, diesel fuel, jet fuel, and lubricants. Here is a brief description of some of the primary steps involved:

  1. Separation: The first stage in modern oil refining is typically separation through the distillation process, where crude oil is heated in an atmospheric distillation column, or tower, until it begins to separate into different component hydrocarbons based on their boiling points. The lighter hydrocarbons condense at higher points in the distillation tower, while heavier hydrocarbons condense lower in the tower. These hydrocarbons (e.g., naphtha, kerosene, diesel and gas oil) are then moved out of the tower through different streams at various heights and sent to other units at the refinery for further processing or blending. The heaviest hydrocarbons that do not vaporize are drawn from the bottom of the distillation tower and sent to the vacuum distillation unit to be further refined.

  2. Conversion: After the distillation process, certain heavier fractions obtained from crude oil will undergo further processing to transform them into intermediate components that eventually become finished products like gasoline. One of the most commonly used methods for this conversion is cracking, where heat, pressure, catalysts, and sometimes hydrogen are employed to break down the complex molecules of heavy hydrocarbons into simpler, lighter ones. This process takes place in cracking units, which typically consist of tall, thick-walled reactors, along with a network of furnaces, heat exchangers, and other vessels. Complex refineries may house different types of cracking units, such as fluid catalytic cracking units and hydrocracking/hydrocracker units

    It is important to note that cracking is not the sole method of converting crude oil though. Refineries employ various other processes that involve rearranging molecules rather than splitting them to enhance their value and usefulness. Alkylation, for example, makes gasoline components by combining certain gaseous byproducts produced during cracking. Alkylation takes place in a series of large, horizontal vessels and tall, skinny towers, which provide the necessary environment for the reactions to occur. Reforming, on the other hand, utilizes heat, moderate pressure, and catalysts to transform naphtha, a light, relatively low-value fraction, into high-octane gasoline components.

  3. Treating: Refined oil products typically require treatment before further processing and/or distribution. They often undergo treatment processes to remove impurities, adjust the feedstock characteristics, or add additives like detergents, anti-foaming agents, and antioxidants to enhance their quality and performance. To make gasoline, refinery operators carefully combine a variety of streams from the processing units, with octane levels, vapor pressure ratings, and other special considerations determining the gasoline blend. One important treatment step is desulfurization, where sulfur compounds are removed from oil to reduce air pollution and improve the performance of catalysts used in subsequent processes. 

References

  1. The Refining Process: Oil and petroleum products explained, U.S. Energy Information Administration, https://www.eia.gov/energyexplained/oil-and-petroleum-products/refining-crude-oil-the-refining-process.php.

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Michael Heard, Risk Engineering Advisor, Process Safety / Technical Safety / Environmental at Hess Corporation recently spoke with marcus evans about key topics to be discussed at their upcoming Facility Siting and Risk Mitigation for Processing...

March/April 2015 Inspectioneering Journal

Today, many managers are finding that they can address the reliability of all types of assets by combining RBI and Reliability Centered Maintenance (RCM) processes together into one comprehensive reliability management process.

Authors: Walt Sanford
March/April 2015 Inspectioneering Journal

Refractory materials have significantly evolved during the past 15 years, testing technology is much more sophisticated, and the need for test technicians to be properly trained and experienced to use that technology is much more important than it...

Authors: Jeremy Wimberly
March/April 2015 Inspectioneering Journal

The tubes of heat exchangers (HX), whether for a shell and tube bundle or an airfin, are typically subject to some form of nondestructive examination (NDE) to try and quantify the remaining wall thicknesses and corrosion rates to help a plant to...

Authors: A.C. Gysbers
March/April 2015 Inspectioneering Journal

With the advancements in today’s technology and improvements to Enterprise Asset Management (EAM) systems and Computerized Maintenance Management Systems (CMMS), if we deploy them properly and in line with best practices, it is possible to reach...

Authors: Matt Midas
Partner Content

Lessen downtime by enhancing your plant infrastructure, ensuring mechanical integrity, and extending equipment lifespan. Contact us for on-demand engineering expertise in assessment, problem-solving, specialized testing, and preventative solutions.

March/April 2015 Inspectioneering Journal

Weld inspection using lasers is not new, but doing it 75 meters inside a pipe or streaming inspection data wirelessly is new. As laser technology has improved, more industries such as oil & gas are beginning to require laser inspection as part of...

March/April 2015 Inspectioneering Journal

The ability to gain this unique perspective has recently become easier and safer with today’s technological advancements. This new technology comes in the form of a miniature flying machine, better known as a drone or small Unmanned Aerial System...

March/April 2015 Inspectioneering Journal

An issue that arises frequently in the oil and gas industry is poor or missing documentation of pressure vessels. It is common in the industry to repurpose old equipment, bring equipment back into operation after a long period of time out of...

Authors: Paolo Torrado
March/April 2015 Inspectioneering Journal

This article provides a discussion of a recent inspection performed at a U.S. refinery. Industry HF lines are experiencing piping failures in increasing numbers due to the presence of residual elements entrained within their carbon steel components.

Blog

The 2015 API Spring Refining and Equipment Standards Meeting will be held at the Seattle Sheraton during the week of April 13-16, with plenty of interesting meetings for Inspectioneers.  You do not need...

Authors: John Reynolds
January/February 2015 Inspectioneering Journal

Avoiding cracking under pressure when managing high-energy piping systems is common subject matter in the power industry. Just as high-energy piping can give way to pressure, stress and fatigue, so can the people in charge of operating them when...

Authors: Pamela Hamblin
January/February 2015 Inspectioneering Journal

Reliability engineering tools and concepts can be used to avoid or delay failures, thus increasing product service life. Design or maintenance teams use reliability engineering techniques to identify failures and their causes.

January/February 2015 Inspectioneering Journal

Epoxy products have gone through extensive research and development over the years, and have reached the point that when specified for the correct environment, they should perform exactly as intended.

Authors: Clint Rupert
January/February 2015 Inspectioneering Journal

Engineered Composite Repair (ECR) systems are moving into mainstream usage at a faster pace than ever. This increased usage and exposure is working to push them into new frontiers and commands a more demanding understanding of their basic functions.

Authors: Matthew Green
January/February 2015 Inspectioneering Journal

Challenges abounded in 2014 for the process industries, and it does not look like they will let up soon. But then again, that’s life, as they say. After 40 years in the industry the old adages still ring true, “there is nothing new under the...

Authors: Greg Alvarado
Blog

There are a number of important stories affecting the Oil & Gas industry right now, but one that hits particularly close to home is the standoff between the United Steelworkers (USW) union and several major oil refiners in the United States. As of...

Authors: Jeremiah Wooten
Online Article

Inspectioneering recently had the opportunity to sit down and chat with Ray Konet, the Fixed Equipment Reliability Director at Valero Energy, and who also happens to be the Chairman of the Planning Committee for the 2015 API Inspection Summit.

Authors: Jeremiah Wooten
November/December 2014 Inspectioneering Journal

Based on my 45+ years of experience working with fixed equipment mechanical integrity (FEMI) issues in the refining and petrochemical processing industry, this article summarizes what I believe are the top 10 reasons why pressure vessels and piping...

Authors: John Reynolds
November/December 2014 Inspectioneering Journal

One of the major challenges inspectors and plant operators face after each turnaround is to ensure that all repair and scope work is and was completed in accordance with the client’s requirements. Sometimes that verification will be to ensure work...

Authors: Scott Corey
November/December 2014 Inspectioneering Journal

Today, more than ever, refinery operators are focused on maintaining safe operations for their employees and extending the life cycle of valuable operating equipment to optimize efficiencies and avoid expensive unforeseen shutdowns. When process...

November/December 2014 Inspectioneering Journal

The introduction of PAUT is a challenging effort initially, but can have a very positive impact on your first TAR and become a routine inspection for future TARs. When fully implemented, radiation safety boundaries can be reduced significantly or...

November/December 2014 Inspectioneering Journal

Steam reformers are critical assets for the successful operation of hydrogen, ammonia, and methanol plants. The steam reformer is also one of the most expensive assets in these facilities. Catalyst tubes inside the reformer are one of the most...

Authors: Kelsey Hevner
July/August 2014 Inspectioneering Journal

One difficulty new company inspectors typically have is becoming comfortable in their new role. This is due to the fact that they have received little guidance about where they fit in with the "team." Where are they on the organization chart?

Online Article

The bolted connection is a critical and complex component in any pressurized system, on typical Oil and Gas projects there will be many thousands of joints all of which need managing through Design, Fabrication Completion, Commissioning and...

Online Article

While the supply of expensive, easy-to-refine light sweet crude peaking in the US, Colombia is finding newer sources of crude which are of lower API, heavy crudes (API less than 20o). Reficar, Refinería de Cartagena S.A. has recognized this...

March/April 2014 Inspectioneering Journal

High temperature sulfidation is probably the most well- known corrosion mechanism in the oil refining industry because it occurs in large sections of the refinery.

March/April 2013 Inspectioneering Journal

Steam reformers are critical assets to many refining and chemical manufacturing plants and facilities, and it is well known that the reformer is one of the most challenging assets to maintain and operate. Common problems in reformer operations...

July/August 2010 Inspectioneering Journal

Inspection intervals for equipment have in the past been defined in a prescriptive manner. However, industry is now embracing the Risk Based Inspection (RBI) approach which in contrast prioritises inspections based on an assessment of the risk to...

July/August 2007 Inspectioneering Journal

Degradation of materials with time during service is a common phenomenon for all engineering components. Hence periodic inspection is required to ensure structural integrity and availability for service. During in-service inspection (ISI), wall...

November/December 2006 Inspectioneering Journal

This series of articles describes the elements for a successful fixed equipment reliability program in a petrochemical facility. These articles will address management systems, engineering practices, preventive/predictive maintenance/inspection...

Authors: F. Walter Pinto
September/October 2006 Inspectioneering Journal

This series of articles describes the elements for a successful fixed equipment reliability program in a petrochemical facility. These articles will address management systems, engineering practices, preventive/predictive maintenance/inspection...

Authors: F. Walter Pinto
July/August 2006 Inspectioneering Journal

The Shell Martinez Refinery has been in operation since 1915, and is located 30 miles northeast of San Francisco on about 1,000 acres of land. The refinery combines state-of-the-art facilities and equipment to convert approximately 165,000 barrels...

Authors: Greg Alvarado
September/October 2002 Inspectioneering Journal

John has primary responsibility for NDE consulting and troubleshooting for BP around the world in the refining, chemical and gas processing industries. We at the IJ thought it might be valuable to spend some time chatting about his background,...

Authors: Greg Alvarado
September/October 2000 Inspectioneering Journal

In part 1 of this article we covered the importance of quality assurance of UT data, that is, understanding for each particular application, the accuracy required of the UT data, and new ways/graphical program to analyze and show the...

January/February 1999 Inspectioneering Journal

One of the greatest challenges facing many of refining, fossil power, and pulp and paper industries is: How to effectively examine their insulated piping?

September/October 1997 Inspectioneering Journal

This is the fourth in a series of articles on piping inspection that I'm writing for the Journal. One of the previous ones dealt with improving thickness data taking accuracy with digital ultrasonic methods. This article is a "sister article" that...

Authors: John Reynolds
March/April 1997 Inspectioneering Journal

This is the second in a series of articles on piping inspection. In the last article, I enumerated four inspection issues that I believe contribute to inadequate piping mechanical integrity in the hydrocarbon process industry.

Authors: John Reynolds
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