How can optimisation software help GCC industry?
The Middle East’s refining and petrochemicals market has no choice but to optimise, as AspenTech’s John Hague tells Construction Week
Optimisation is no longer an option. It is now a commercial necessity. The fluctuating marketplace for feedstock and energy prices means that the competitive advantage for Middle East refining, petrochemical, and chemical production is being squeezed. Many companies can no longer rely on cost advantage, so there is little room for error.
For the region’s leaders today, the imperative is to meet customer needs and be commercially profitable. Before they can achieve these goals, regional firms have many business challenges to overcome, including optimising complex operations, efficiently designing facilities to provide greater energy and capital cost savings, and maximising manufacturing effectiveness through efficient supply-chain management.
A fluctuating market
The Middle East is a major player in global oil markets in terms of production and available capacity. It holds over 48% of global oil reserves, as well as 40% of global gas reserves. However, the region’s refining and petrochemical industry has reached a turning point due to global changes in feedstock availability and price, and this has created a more challenging market. Middle East companies will need to excel in their pursuit of commercial and operational excellence in order to remain competitive and preserve global market share.
Many Middle East projects are in the process of being constructed and commissioned. This presents growing pains for regional operators as these new operations supplement the current operating facilities.
Each new operational process must be designed to be both safe and reliable. In addition, the region suffers from a shortage of skilled and experienced indigenous engineers across all areas of the industry.
Feedstock and product prices have fluctuated dramatically in recent times, and consequently, have affected supply and demand. With global competition and regional imbalances, the need to implement more stringent safety and environmental regulations is equally essential for companies to mitigate risk against unplanned events. The potential effect of this on local producers is significant, as margins are reduced and production capacity shifts to embrace new feedstock sources. The US shale gas and shale oil industries are already putting tremendous pressure on operators across the markets.
To encourage high-quality, low-cost manufacturers, therefore, the region needs to encourage more indigenous expertise, and new technologies to help bridge the skills gap and address operational challenges.
In today’s market, it is vital to squeeze as much value as possible from the operation, where costs and risks are high. In order to deliver this, companies need to adopt best practice using integrated software to achieve superior cost results across a selection of key disciplines.
In the commercial sphere, the Middle East region is focused on the development of world-class mega refineries and integrated petrochemical plants. Companies need to work hard to establish what to produce, how or when to ramp up production, where to sell products, how to distribute them, and quickly determine the return on investment. By standardising on optimisation software, companies will improve margins, increase yields, meet customer demand, and gain competitive advantage.
In the pursuit of operational excellence, companies are implementing flexible and integrated software to bridge the gap between strategic planning and scheduling. Using integrated software to avoid silo practices will help empower engineers to improve feedstock planning, operational efficiency, energy optimisation, and safety analysis.
Capital expenditure (CAPEX) efficiency is also vital. Together with better analysis, the ability to easily evaluate capital investment projects earlier in the design process, helps engineers understand the economic implications of their decisions. Crucially, the project scalability, improved workflow, and the ability to achieve better predictability and accuracy during FEED, reduces the total project life-cycle.
Within the arena of compliance and sustainability, the efficient design of facilities is vital in achieving outstanding health, safety and environmental (HSE) performance, a reduction in operational risk, and maximised injury prevention. Excellence in process safety starts by ensuring facilities are designed, operated, and maintained in a way that minimises the potential for process safety incidents. Risk is also managed by quickly identifying hazards, assessing consequences, and implementing prevention and mitigation measures.
Finally, when it comes to skills development, the Middle East is focused on addressing a shortage of indigenous chemical engineers. With integrated software, new and occasional users become proficient faster and experienced users can do more.
The use of integrated, automated software delivers accurate, real-time information and significantly helps operational decision-making be more efficient with fewer resources and time to complete tasks. Sustainability is, therefore, enhanced through more efficient use of energy and reduced raw materials wastage, whilst quality is improved. Companies such as AspenTech offer software that optimises process manufacturing for energy, chemicals, engineering, and construction, not to mention other industries that manufacture products through chemical processes.
Outfits that take advantage of such offerings can track usage whilst adjusting when and where the software is used. As priorities change, this flexible software model transforms the way companies conduct business.
The model for success
The Middle East oil and gas sector and supporting industries like engineering, design, and construction, are deploying a growing number of mega sites to improve regional infrastructure. This trend covers not only refineries, but also large integrated petrochemical plants.
Navigating uncertainty, therefore, is essential in today’s market. The companies that will thrive must be leaner, more efficient, and able to adapt quickly. Better integrated planning, scheduling, and execution also optimise the manufacturing operations and supply chain. The avoidance of silo practices with integrated software will help empower indigenous engineers to be better decision-makers for addressing feedstock planning, operational efficiency, energy optimisation, and safety analysis.
As economic storm clouds continue to threaten, standardising optimisation software will allow businesses to achieve commercial competitiveness and operational excellence, which will help to conquer complexity and drive efficiency.
John Hague is senior VP and MD – Middle East and North Africa at AspenTech.