Refinery Planning Best Practices

Refinery Planning

Short and long-term planning is one of the most critical activities that a refinery undertakes; it is a multi-million decision-making process that involves feedstock selection, product slate, and refinery scheduling, which impacts the longevity and profitability of a refinery. While this process defines how a refinery should operate to achieve specific optimization objectives, it often lacks the attention and cross-functional review that it requires – especially considering today’s refining margins. So, what does an industry’s best planning cycle look like and who are the key stakeholders that should be involved in this process?

Planning Cycle

First and foremost, there must be a structured and recurring planning calendar that is consistent each month. Unless there is a unit upset that either impact the refinery personnel’s health and safety or the environment, all meetings and business activities should be planned outside the planning discussions.

A best-in-class planning cycle begins with Inputs – ideally, it is provided to the Planner at month end or at least three days prior to the Inputs and Assumptions meeting. Inputs include items such as crude and product pricing, freight, demands, unit availability/capability, maintenance schedule, etc. Responsible parties must provide the necessary information to the Planner in a standardized format and retain ownership throughout the planning cycle.

During the Inputs and Assumptions meeting, which should be scheduled in the first week of the month, individual stakeholders must speak on behalf of their own area of expertise. For instance, Technical / Process Engineering must speak on behalf of unit constraints and Traders / Commercial must discuss prices. During this meeting, all inputs should be open for discussion and debated amongst key stakeholders. Once all inputs and assumptions have been agreed to, they should not be revisited, absent any material changes.

Depending on the complexity of the refinery, in addition to the number of periods being evaluated, two to three linear programming (LP) output review meetings should be held. At a minimum, a Preliminary Review meeting should be conducted mid-month to review the initial LP outputs. The purpose of this meeting is to identify any gross errors and optimization opportunities, and the Planner must summarize key findings.

A Final Plan Review meeting should be held late month for the last review of LP outputs. Changes at this point should be minimal if the preliminary processes are conducted appropriately; minor tweaks may be incorporated, but inputs should not be adjusted at this point unless significant new information has fundamentally changed the market or refinery operations.

It is imperative that this is a cross-functional exercise. In other words, Planning, Technical, Operations, Traders, and Commercial are present at a minimum to ensure the right information is used in LP and optimization opportunities are realistic. While it may not be feasible for all Unit Engineers or Business Leads to be present, a senior representative such as the Technical Manager should be in attendance.

Separately, LP backcasting and lookback processes should also be implemented to ensure sub-models are evaluated and execution to plan are assessed for continuous improvement.

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This blog is authored by Kevin Kim, an Associate Principal at Trindent Consulting.