306M USD Recouped by European Refiner
Solomon identified an additional 10M USD in savings from its Q1 Day 1™ refinery expansion analysis.
An Eastern European refinery needed more efficient operations and higher production of Euro 5 fuels to be competitive with its EU counterparts.
Using benchmarking, its Performance Excellence Process™, Workforce Optimization Consulting, and Q1 Day 1™ service (Capital Investment Analysis) to address refinery construction challenges, Solomon identified millions of dollars in cost savings and potential revenue.
Seven years on from these initial assessments, the refinery has realized 306M USD in benefits.
READY TO COMPETE AT THE NEXT LEVEL
A mid-sized refinery in Eastern Europe wanted to be more competitive with its peers in the European Union (EU). The country in which it stood was soon joining the EU, and the refinery needed to become more efficient with both its personnel and production to keep pace. The refinery also needed to increase its production of Euro 5 fuels. It had previously contracted technical consultants to create a model for improved operations, but the results did not produce actionable information for the refinery. At this time the refinery turned to Solomon for assessment.
FINDING THE “QUICK HITS”
Solomon began with a benchmarking study, offering an objective view of the refinery within its market and clearly defining industry best practices. Many of the findings were previously unknown to the refinery, which then contracted Solomon to perform an assessment of work processes and practices to compare with known industry best practices in the areas of:
- Energy Management
- Reliability and Maintenance
- Advanced Process Control
- Organization Effectiveness
- Technical Services
- Automation and Control
- Planning and Economic
- Quality Control (Lab)
- Blending
- Hydrocarbon Loss Control
- Greenhouse Gas Emissions
- Process Unit Operations
The process units included in scope were:
- Crude and Vacuum
- Naphtha Reformer
- MTBE
- Hydrotreating
- Sulfur Recovery
- Sour Water Stripper
- Hydrogen Production
- Amine
- FCC
- Coker
EXCEEDING EXPECTATIONS
Based on the benchmarking results, Solomon estimated they would identify benefits totaling 15M USD/yr in savings or additional revenue for the refinery. However, after sending nine subject-matter experts to the refinery three times over the 6-month assessment period, the team re-estimated the potential benefit to 41M USD/yr in benefits.
For the next 3 years, Solomon assisted the refinery in implementing the recommended improvements it laid out based on its Performance Excellence Process and Workforce Optimization assessments. For the first 18 months, Solomon predicted achieved benefits of 35M USD/yr and a cumulative benefit of 100M USD over the next 4 years.
In reality, the refinery achieved a self-reported 186.5M USD cumulative benefit. In the 7 years since the assessments were completed and recommendations implemented, the refinery has reached an annual savings and revenue of 60M USD/yr, totaling 306M USD over the first 7 years.
EXPANDING, BUT SAVING
When it came to improving and equipping the refinery to be more efficient and to accommodate production of more Euro 5 fuels, Solomon used its proprietary Q1 Day 1 process to identify needs, set KPI targets, review models, and assess operations. This process led to 2.6M USD in capital savings due to design improvements and eliminating unnecessary items from the scope of work. Solomon also identified potential savings in future operational costs totaling 7.5M USD/yr (see Figure 1 for cost savings breakdown).