How Cosmo Oil implemented process digital twin to enable real-time optimization and savings of $2 million per unit of crude oil per year.
Cosmo Oil is the third largest refining company in Japan where it imports crude oil and supplies various petroleum products for the domestic and global market. The company operates three refineries in Japan (Chiba, Yokkaichi and Sakai) with a total CDU capacity of 363,000 BPD.
Cosmo Oil needed to keep pace with other refiners in Japan’s highly competitive market and improve operations though real-time process optimization to make the best operational decisions when processing a high variety of crudes.
The company launched a multiyear optimization project to transform its operations and selected AVEVA to develop a Process Digital Twin. The solution enables Cosmo Oil to optimize operations in real time with closed-loop process control and auto-tuning that factors economics and plant configuration to maximize margins.
Cosmo Oil deployed real-time optimization (RTO) on four crude units at two refineries and saw a payback from investment in less than one year with annual savings of more than $2M per year for each unit.
Digital twin: the basis of real-time optimization
In considering available optimization solutions, Cosmo Oil was aware that other refiners in Japan had specifically deployed AVEVA which was regarded as the leading real-time optimization solution in the market.
Cosmo Oil had previous experience with AVEVA Engineering (Process Simulation) and AVEVA Unified Supply Chain Management. Based on the strong history and relationship with AVEVA and broad use of AVEVA Process Optimization in refining, the team selected AVEVA over other software solutions.
AVEVA Process Optimization delivers the ability to generate precise operating information to improve performance and enable operators to make informed decisions at an expedited rate. Whereas advanced process control (APC) is widely used to reduce process variability and optimize plant operation close to constraints, AVEVA Process Optimization incorporates economic conditions into the optimization to maximize profits. As a result, companies deploying AVEVA Process Optimization historically see improvements of $0.05 to $0.25/bbl
Competition, margin drive roadmap for operational improvement
Cosmo Oil operates in a highly-competitive domestic refining market, the result of industry consolidation and a shrinking domestic market. In addition, market shocks introduce further complexity to the business and increase pressure to make optimal decisions.
Several oil majors in Asia had previously deployed real- time optimization (RTO) solutions to gain a competitive edge. To keep pace with competitors, Cosmo Oil wanted the ability to quickly adapt operations in real time to push operational limits while maintaining safe and stable operating conditions.
The company faced several challenges in its daily operations:
- Frequent crude feedstock switching due to changing prices and availability leading to frequent changes in optimum operating points.
- Optimal operating points were based on results from past test runs and did not represent real-time operating conditions, risking loss of margin due to suboptimal operating control.
- Manual operations opened the potential to lose margin through manual error.
Longer term, the company wanted to implement optimization technology to surpass competitors’ capabilities. Towards the short- and long-term goals, Cosmo Oil launched a three-year Crude Distillation Unit Real-Time Optimization System Implementation Project to deploy real-time process optimization to its refining operations.
Goals
- Cosmo oil needed the capacity to quickly adapt operations in rel-time to improve production efficiency retaining safe and stable operations.
- Using a digital twin to generate precise operating information to enable teams to improve performance and make informed decisions and an accelerated pace.
- To manage and optimize operations to respond to frequent crude feedstock switching and to target fluctuating prices and optimum operating points.
Challenges
- Need to remain competitive in a fiercley crowded market where other refineries were already deploying real time optimizations.
- Team wanted to leverage real time optimizations based on auto-tuned, live data drawn from first-principle rigorous simulation technology.
- Need to optimze plant operations by factoring product prices, utility costs, and equipment constraints through closed-loop real-time optimization generating precise operating information, aligning operations with optimum targets.
Solutions
- AVEVA™ Engineering
- AVEVA™ Unified Supply Chain Management
- AVEVA™ Process Optimization in Refining
Results
- Cosmo Oil achieved $2.3M/year of benefits from its CDU process optimization through more efficient processes and yield improvement.
- Overall, the optimization initiative saw payback in less than one year.
- As a next step, the team is looking to use the real-time optimization process to improve energy efficiency and boost sustainability in their operations
“AVEVA solutions are regarded as the gold standard for real-time process optimization. Our experience with AVEVA’s team on the initial CDU deployment confirmed their expertise and that AVEVA was the right partner to work with to transform our operations.”
Mr. Masayuki Yamamoto, Assistant Manager, Operation Group, Refining &Technology Dept. Cosmo Oil Co., Ltd.
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