(56d) Optimization Approach for Managing Integrated Petrochemical Business Planning

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Managing an integrated petrochemical business that utilizes liquid feedstock in its upstream process (ethylene plant) poses extra challenges in comparison to process that utilizes gas feedstock due to wider range of products it produces.  The main products can be classified as olefins and aromatics.  Some of these products are often processed further in downstream plants to produce higher value polymer products such as polyethylene and polypropylene.  With volatility of commodity product prices, product planning to produce overall highest product value with respect to feedstock price is critical to achieve profitable outcome.

Feedstock accounts for the majority of production cost in an ethylene business.  Besides the process operation condition, the properties of the feedstock have great influence on the product yields.  Liquid feedstock cracker produces roughly half of its products as olefins, the decision on managing its by-products through recycle stream, internal consumption (as utility) and managing its main products for further processing in the downstream processes will greatly affect its profitability.  Therefore, the challenge in business planning is to make the most profitable decision across its entire product chains, from upstream to downstream process units.  The business planning to produce optimal decision requires a sophisticated business model to represent the process as well as the market accurately.  The model needs to represent accurately the yield for each component in the upstream unit and product grades for the polymer units, process constraints as well as business practice such as pricing structures and contracts.  This requires a nonlinear model that can represent materials as blended components in gas/liquid stream and product grades as solid.

Here, we present rigorous modeling and optimization approach that allows us to model the upstream and downstream processes (Polyethylene, Polypropylene and Styrene monomer) as integrated model that produce optimal planning solution for upstream and downstream business decisions.  These decisions addresses issues such as optimal feedstock purchases, additional fuel purchases, recycle streams, portion of product to be sold versus processed further in downstream processes.

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