Abstract The examination of the concept of economy of scale as it applies to the petroleum refining industry is the topic of this paper. The task is accomplished by exploring the three major factors which influence the economics and size of refineries: Capital costs.
Operating costs.
Market growth.
Our discussion touches on equipment and construction limits and on problems of manpower and materials.
An economic case study of a hypothetical hydroskimming refinery is chosen to illustrate the impact of size on overall refinery economics.
In addition, the many non-technological factors which influence refinery size are briefly discussed.
Résunié L'objet de cette communication est d'examiner l'application à l'industrie du pétrole de la proposition qui fait de la taille un facteur de rentabilité. L'auteur procède à l'analyse des trois éléments principaux qui déterminent l'économie et la taille des raffineries: Le coût des investissements.
Les coûts d'exploitation.
La croissance du marché.
L'auteur étudie également les limites imposées par le matériel et les techniques de construction et les problèmes que soulèvent la main d'oeuvre et les matières premières.
I1 procède ensuite à l'étude économique d'un cas, celui d'une raffinerie d'hydrotraitement imaginaire qui illustre l'incidence de la taille sur la rentabilité d'une raffinerie.
De plus, l'auteur prend brièvement en considération de nombreux facteurs qui ne sont pas d'ordre technologique mais qui influencent néanmoins la taille d'une raffinerie.
1. INTRODUCTION The history of the petroleum processing industry shows a steady trend to larger process units and refineries. These changes have occurred due to the growth of the market and the pressure to produce more efficiently and competitively. Large refineries generally turn out products at lower unit cost than their small competitors. The term "economy of scale" is used to describe this economic advantage of the larger refinery.
In this paper we will touch on the "n"-factor relationship between unit capacity and capital cost, examine some of the factors which have led to an increase in the size of new refineries, and look at the growth trend of the refining industry in the recent past and immediate future. We then will explore the current limits of major refining equipment and see how they affect the size and cost of large, single-train refinery process units.
This will be followed by a brief discussion of construction limits for large equipment and possible manpower and material limitations. In the concluding sections, we will discuss some of the advantages and disadvantages of single-train refineries, present an example of an economic analysis of a simple hydroskimming refinery at different capacity levels, and present our interpretation of what lies ahead for the refining industry in th