As a result of its privatization strategy, YPF S.A. has a major program under way to improve refinery level management, operations, and maintenance.
The company is also taking a close look at expanding further in basic petrochemicals, a business it is already engaged in and one now open to any company, domestic or foreign. This contrasts with most of Latin America, particularly Mexico and Venezuela, where the production of basics, such as olefins, is restricted to state-owned enterprises.
Because YPF's two major refineries went through an $800 million modernization during the 1980s, its refinery network is well equipped with the capacity and upgrading units to crack deeply and produce all its 85 research octane number regular gasoline and 60% of its super and ultra grades, respectively 95 and 96 RON unleaded. But because the next step is to go totally unleaded and meet other international standards by the end of this year or early in 1996, octane enhancing units are under study, in engineering, or under construction.
Other high priority work is directed at improving the environment at La Plata. Along with this, emphasis is being put on improving operating and maintenance practices and strategies and reorganizing refinery management. An indicator of the complexity of this task is the fact that the refinery has reduced the number of employees from some 5,000 to 720.
Julio Cesar Morat, refinery general manager, says that historically YPF had nine levels of management between the area manager and the operator. The objective now is to flatten that to three or four layers.
An interesting aspect of this quest for efficiency at La Plata is a management training contract with Chevron Co. U.S.A. for its operating and maintenance expertise,
Before going into detail on the La Plata refinery projects and strategy, an overview of YPF's current configuration and operations are in order.
STRUCTURE AND OPERATIONS
As mentioned in a related article in this report (p. 45), YPF has sold all or part of its interest in three refineries. The company now has three wholly owned units: Plaza Huincul, near the major oil fields in the Neuguen basin; Lujan de Cuyo, near Mendoza; and La Plata, which is on the La Plata river in metropolitan Buenos Aires. Their combined capacities give YPF a total of 325,000 b/d, or right at some 50% of Argentina's 635,000 b/d of capacity.
Table 1 (15759 bytes) shows the distillation and downstream unit capacities at the three refineries. Table 2 (24853 bytes) lists the regions that produce these crudes and the yields of various products at each refinery. The commercial names of these crudes along with some of their important properties, are discussed on P 51 of the related article.
Somewhat unusual about this crude supply situation is the reconstituted crude (Table 2) (24853 bytes) that the La Plata refinery gets from the distant Plaza Huincul topping refinery. This "recon" crude, totaling about 9,000 b/d and included in the Neuguen - Rio Negro category of Table 2 (24853 bytes), is a mixture of the atmospheric residual bottoms produced at Plaza Huincul plus condensate, including hexanes and pentanes from the nearby Loma de La Latta operation, to lower the viscosity.
It is piped to the La Plata refinery via Puerto Rosales as described in the related article.
PROJECTS
Capital investment programs now going on in the YPF refining network can be divided into three categories:
- Cost and loss reduction. The emphasis here will be on analysis with pinch technology, and introduction of energy integration, installation of preheaters, insulation, and replacement of turbines with electric motors.
- Product quality improvement. This is driven by the move to unleaded gasoline. The program calls for a coker gas oil hydrotreater and pentane/hexane isomerizer at La Plata. Another isomerization unit is on the agenda for Lujan de Cuyo, while alkylation and methyl tertiary butyl ether (MTBE) units are being built there.
The 6,300 b/d isomerizer at La Plata will use UOP technology, and it and the hydrotreater, which will employ IFP technology, are expected to be on line by the end of this year.
- Safety and environmental projects are going on at all three refineries. The company is investing a total of $150 million in the environmental and efficiency project.
For a variety of reasons, the most pressing environmental problems are at La Plata. Most were inherited from the days of state ownership. A case in point is a canal system that surrounds the refinery.
The refinery, which was established in 1925, is located in a metropolitan setting with high population density. The original builders dug 6 miles of canals to drain the low lying site. Parts of the canals, which make a rectangle around the refinery, are visible along each side of the refinery in Fig. 1. The water is covered with oil because for years the primary separators have overflowed.
New aboveground primary separators are being built and should begin to solve the problem when completed next month.
The refinery is also being spruced up with a renovation of its headquarters, the restoration of an older building with some elegance to house an environmental education program, an ambitious tree and shrub planting, and the creation of a park on the refinery grounds. Fig. 2 shows part of the nursery stock at the refinery.
Also process related are projects for solid waste treatment, a new scrubber for the fluid catalytic cracker, a sulfur recovery unit, and a system to burn coke fines. The latter is under study and will not only eliminate but collect and burn the small particles of coke that are released when the coke is moved. This is much more than a dust suppressant project.
YPF AND CHEVRON
Another sign of YPF's push to move the company quickly into advanced operations and maintenance is its temporary employment of five Chevron specialists at La Plata. They are actually working as superintendents and advisors at the refinery and assisting in management, operations, and maintenance. One member of the team is a rotating equipment specialist who is forming an inspection group. Another is a technical coordinator. His job is to coordinate the technical needs of the La Plata refinery with Chevron or other technology suppliers who can help improve the profitability of the refinery.
A Chevron team member at La Plata says that Chevron has not formed a new business unit to offer such team services but believes the company as a result of its own experience has a lot to offer in the area of refinery efficiency.
There is also a technology transfer and technical service agreement between YPF and Chevron.
MAINTENANCE COSTS
YPF management says refining and maintenance costs are too high at La Plata.
One reason is a voluntary arrangement. In order to help its former employees create a viable outside maintenance company, the La Plata refinery helped set up a maintenance cooperative and gave it a fixed price contract for a year. A fixed price not tied to work done is not conducive to efficiency. Therefore, a new strategy of incentives is being introduced into the contract, which is expected to improve work quality and reduce costs.
REFINERY COSTS
The La Plata refinery poses an interesting dilemma. In the quest to cut costs and improve margins. A rather aggressive reconfiguration of the refiner-y was necessary.
La Plata was essentially a two train refinery with everything repeated. This gave high flexibility and the ability to process anywhere from 80,000 to 250,000 b/d of crude. But this kind of flexibility costs money. The first step was to shut down units. They were two topping units, an alkylation unit, which had reached the end of its economic life, a polymerization unit, a vacuum unit, and a coker.
The surviving units are shown in the flow diagram (Fig. 3) (41917 bytes).
The questions now under consideration are at what feed rate to operate the refinery and whether to employ one or both the fluid catalytic crackers, which are first class units. Market forces play a major role in this, of course. Ironically, nearby Brazil is one of Argentina's major trading partners but is not a customer for gasoline or cat cracker feed because a large number of its automobiles are built to run on alcohol.
But whatever option is chosen, it must keep operating expense in the range of $2-3/bbl, which is considered competitive by world class standards.
Three modes are under study, ranging from the operation of one FCC with a refinery rate of from 100,000 to a Mode 3 utilizing two crackers and running at 180,000 b/d. There is even a Mode 4 that calls for low crude throughput and purchase of FCC feed.
At this.writing, the refinery was running at about 130,000 b/d and the recommendation is to go up to the 150,000 to 180,000 b/d range using one FCC. The other would be mothballed. The existing crude units will have to be revamped to reach the higher rate.
PETROCHEMICALS
As Fig. 1 indicates, there is a stand alone petrochemical company, Petroquimica La Plata, within the refinery making benzene/toluene/xylenes with its own catalytic reformer. Operations also include an oxoalcohols complex. This wholly owned YPF subsidiary also has a 40,000 ton/year MTBE plant.
YPF is also a partner with Shell in a company making polypropylene. The refinery supplies the propylene feedstock for the plant which is rated at 100,000 ton/year.
There are no world scale olefins plants in Argentina. The closest is rated at 245,000 ton/year ethylene and is owned by Petroquimica Bahia Blanca S.A.I.C. The state still owns the majority of the shares in the company but it is slated for privatization. It gets its LPG feed from the General Cerri gas processing plant at Bahia Blanca.
There is plenty of LPG remaining in Argentina's natural gas streams. Argentina's stake in basic petrochemicals may grow if a "mega project" now being studied by YPF shows promise. It calls for a state-of-the art gas processing complex that would add some 600,000 tons/year of LPG to Argentina's current output of 1.2 million tons/year.
This is of course more than enough feedstock for a world scale olefins plant.
Dr. Eduardo Petazze, vice-president of YPF's downstream business unit, which runs the refineries, says Argentina's consumption of plastics is very low. The country in 1992 consumed about 15 kilograms per person compared to about 85 in Germany and 65 in the U.S.
The market therefore appears as bright as the potential for feedstock.
Copyright 1995 Oil & Gas Journal. All Rights Reserved.
