Optimizing the Hydrocarbon Value Chain

Overview

Refining companies have a multitude of lucrative coordination opportunities in their efforts to turn hydrocarbon resources into finished products.

In recent years, refiners have suffered with skills shortages, where crucial skillsets left the organization. At the same time, there has been a proliferation of data that makes decision-making more complicated, and after constant reorganization, the inter-departmental siloing of responsibility makes optimization across the total value chain more difficult to achieve.

Any hydrocarbon value chain improvement initiative must first have a clear set of objectives. Some companies seek to optimize working capital, and deployment of liquid inventories. Others seek to configure for optimal margins, while others are most interested in operational flexibility, and ensuring maximum throughput from refining assets.



Organizational Participants

In our view, there are as many as ten discrete departments that must work together to maximize the total hydrocarbon value chain.  In general terms, they are:

Trading – Product exchange for alternatives to production, and getting the right crudes and feedstocks to maximize added value.

Planning – Identifying decision drivers through optimization including crude selection, operating conditions, stream dispositions, product blending and demand allocations;

Scheduling – Translating the planning decision drivers into a feasible and achievable set of execution instructions while minimizing logistics cost;

Process Engineering – Providing rigorous, technical process insight and direction that informs operations and planning and scheduling modelling requirements;

Refinery Operations & Maintenance – Executing safe, reliable and optimal production and providing current information that enables well informed plans and schedules;

Logistics – The movement of refined products to their final destinations efficiently and by the lowest practical cost.

Distribution – Placing product in quantity into the highest margin markets;

Production Accounting – Managing hydrocarbon losses and providing quality reconciled “actual” data;

Master Data Management – Providing a unified quality data for performance analysis;

Performance Analysis – Providing measurement and visualization capabilities that facilitate collaborative enterprise optimization and management of past, present and predicted performance.


The Functional Landscape

Below is a map of the functional landscape that illustrates some of the opportunities that are available for optimization at any given time:



Starting Points

Ensuring a uniform, latent and accurate set of data is helpful. Often outdated prices, incentives, and inventory positions make ‘optimizing for yesterday’ a phenomenon. We typically will commence an improvement project with a focused effort on making the refinery material balance more accurate and trustworthy. Further, there are number of techniques to improve the physical visibility of crudes and products in transit, giving them more of a real-time.

The planning process and cycle is also very important. Does manufacturing disregard aspects of the plan? Are changes to the plan adjudicated swiftly, with clear roles and accountabilities? When market opportunities present themselves, how long does it take to amend the plan? Does manufacturing chase day-to-day economics, or look to optimize over the longer term?

Better communication around maintenance events and upsets is also a common starting point. Although no one can accurately predict when an asset or unit will resume operation following a period of unplanned downtime, better focus on progress communication can help to mitigate maintenance changes to the plan. While a lot of focus has been placed on maintenance backlog reduction, overall expense reduction and reliability improvements, there needs to be an acute focus on mean time to repair (MTTR) and how status updates are provided beyond the refinery fence line.


Emerging Considerations

Carbon accounting will undoubtedly become a more important consideration in optimization. With carbon pricing, carbon capture and storage, green hydrogen, and renewables of all forms are becoming part of the equation to optimize, value chain optimization professionals need to at the total bottom-line.  Recent changes instituted by the US Inflation Reduction Act only make these considerations more financially relevant.


The Payoff

In our experience, the optimization benefits available will include hundreds of millions of dollars in free-flowing cash from better working capital management and decisions. The achievement of a sustainable cost reduction across the value chain equivalent to between fifty and one hundred fifty cents is also entirely achievable. A well-oiled hydrocarbon value chain is also less susceptible to shocks, more responsive to capturing general interest economics, as well as delivers a more robust supply to ensure that refining assets perform at their optimal rate.

Looking to connect? Reach out to our team on LinkedIn.

This article was written by Adrian Travis, President of Trindent Consulting

 


Trindent Consulting President Named Finalist EY Entrepreneur Of The Year

We're thrilled to share the exciting news that our very own President, Adrian Travis, has been recognized as a finalist in the prestigious EY Entrepreneur Of The Year® 2021 program for Ontario. This esteemed accolade celebrates visionary entrepreneurs who are reshaping industries with innovation and growth. Adrian's remarkable leadership has propelled Trindent Consulting to the forefront of the management consulting landscape, earning us a spot among the top performers in North America.

EY Entrepreneur Of The Year is the world's most prestigious business awards program for leading global entrepreneurs. Each year, EY recognizes business leaders across the country that are transforming our world through unbounded innovation, growth, and prosperity.

"I am deeply honoured and humbled to have been named a finalist of this globally recognized award," says Adrian. "I founded Trindent with a vision to empower companies to be able to achieve top performance without having to rely on expensive software or capital investment. I am grateful for all who believed in us along the way, especially our dedicated and hard-working employees, and our clients who trusted us with their most complex business problems."

Since founding Trindent in 2008, Adrian has championed a vision of excellence, guiding our firm to deliver unparalleled results for our clients. Under his direction, Trindent has become renowned for its specialized services, offering tailored solutions in sectors such as energy, healthcare, and financial services. Adrian's commitment to excellence has enabled us to consistently exceed expectations and drive transformative change for our clients.

"Our success has always been built on our firm's values - perfection with urgency, character before skill, and a passion for solving complex problems. More than ever, clients are looking for targeted, sustainable financial improvements, and Trindent's track record of delivering a 500% or higher return on investment has really resonated in our three focus industries," says Adrian. "Being recognized and named as a finalist for the prestigious Entrepreneur Of The Year award is a testament to the rapid growth trajectory we have maintained since 2008. I am looking forward to what the future holds for Trindent Consulting."

 

About EY Entrepreneur Of The Year®

EY Entrepreneur Of The Year® is the world's most prestigious business awards program for unstoppable entrepreneurs. These visionary leaders deliver innovation, growth, and prosperity that transform our world. The program engages entrepreneurs with insights and experiences that foster growth. It connects them with their peers to strengthen entrepreneurship around the world. EY Entrepreneur Of The Year is the first and only truly global awards program of its kind. It celebrates entrepreneurs through regional and national awards programs in more than 145 cities in over 60 countries. Winners go on to compete for the EY World Entrepreneur Of The Year title.

About Trindent Consulting

Trindent is a global management consulting firm specializing in solving complex business problems and achieving top performance in the Energy, Healthcare, and Financial Services industries. Since 2008, our unique approach to generating bottom-line improvements has yielded ROI of 500-1,500% in the first year for more than 100 clients across the globe and our results give Trindent the reputation of a firm that Makes It Happen™.

It is ranked as one of Canada's Fastest-Growing Companies by Canadian Business and PROFIT/Growth List for seven consecutive years from 2014 to 2020. Trindent was also named one of the Fastest-Growing Consulting Firms by Consulting Magazine from 2015 to 2020.

Source: Newswire


Marathon Supplier Recognition Award

Trindent Consulting is thrilled to announce that we have been honored with the prestigious 2019 Supplier Recognition Award from Marathon Petroleum Corporation. This esteemed accolade, presented in the category of Innovative Partnership, serves as a testament to our unwavering dedication to excellence and collaboration.

During the award ceremony held in San Antonio TX, Trindent's President, Adrian Travis, and Senior Manager, Anas Dabbakh, proudly accepted this recognition on behalf of the entire firm. Their presence at the event highlighted our commitment to fostering strong partnerships and delivering exceptional results.

This significant achievement further solidifies Trindent's position as a leader in the consulting industry. We are immensely grateful for this recognition from Marathon Petroleum Corporation and remain steadfast in our commitment to driving innovation and success for our clients. Here's to continued collaboration and success!