Trend’s exclusive interview with Head of the SOCAR Turkey Refinery and Petrochemicals Business Unit and General Manager of Petkim Anar Mammadov
How 2021 started for STAR Refinery
“Some refineries throughout the world had to suspend their operation, while some had to reduce their capacity due to the COVID-19 pandemic in 2020. Nevertheless, STAR Refinery, which was commissioned in October 2018 and operates in synergy with Petkim petrochemical complex, reached records in production. Alongside with supplying naphtha to Petkim, STAR Refinery made a significant contribution to reducing Turkey’s current account deficit with sales in domestic market,” he said.
Mammadov noted that STAR Refinery’s advanced technology, its integration with Petkim, its model suitable for digital transformation, effective production planning and optimization processes enabled it to successfully cope with challenges in this period.
“We were able to rapidly convert our jet fuel production capacity into diesel and continue uninterrupted production. Starting from the second half of 2020, we have increased our annual crude oil processing volume to 10.5 million tons, thereby exceeding our design capacity,” he added.
He went on to add that the recovery observed in the markets in the last quarter of 2020 is in the spotlight in Q1 2021 with the start of vaccination process.
“STAR Refinery, one of the biggest suppliers of the domestic market, continues to operate at high capacity in the first quarter of the year. When the jet fuel demand fell due to restrictions on both national and international flights, we quickly converted our 1.6 million tons of jet fuel capacity to diesel. We are following the current developments in order to turn this capacity back to jet fuel with the start of a serious developments in flights,” said Mammadov.
Expansion of STAR Refinery’s storage capacity
SOCAR Turkey began to invest in expanding the STAR Refinery’s storage capacity and operational flexibility last year and is still continuing, he said.
“In this context, we launched the Improving Refinery Flexibility, Operability and Profitability Project (IFOP), which has an investment budget of approximately $45 million. We plan to complete our new investments in 2022. The total value of these investments stands at $600 million, including the IFOP project with the major part accounting for creating additional storage capacity,” noted Mammadov.
STAR refinery’s digitalization projects
All the digital projects implemented at the STAR Refinery created $35 million worth value in 2020, Mammadov said.
“Thanks to the value created by its digital technologies, STAR Refinery was selected for the World Economic Forum's (WEF) Global Lighthouse Network, which includes production facilities with most advanced technology. This network is extremely prestigious and important, as it creates a bechmarking among companies in terms of innovative and digital applications standard in the world and consists of companies that apply Industry 4.0 technologies best to their processes,” he said.
Mammadov noted that SOCAR Turkey’s Petkim petrochemical complex and STAR Refinery were among 69 companies from different countries, which stand out with their digital applications.
“We started intensive digitalization process at Petkim in late 2017. Petkim was our first company to join this global network in 2020. The knowledge and experience gained in our digitalization journey accelerated STAR Refinery's operation at every stage since the day of commissioning.
STAR was the first refinery in the world to join the Global Lighthouse Network and the only one from Turkey in 2021. This proves that STAR Refinery has an exemplary digital functioning worldwide. Our $70 million worth investment in equipping the STAR Refinery with advanced technology was the most important step towards entering this important network,” said Mammadov.
He went on to add that with these critical investments, which include digital monitoring of the performance management of the assets in the refinery, including maintenance processes, the creation of a digital twin of the facility, and machine learning, STAR Refinery's diesel and jet fuel production increased by approximately 10 percent.
Natural gas consumption was reduced by 6 percent in 2020 compared to the previous year, while carbon emission fell by 178,000 tons and 406,000 tons of saving was achieved in water consumption, he said.
Mammadov went on to add that very important milestones were achieved in all stages of STAR refinery’s commissioning and switching to production at full capacity.
“Taking into account the power of technology, Industry 4.0 principles and best industry practices, we have implemented very important projects for digital transformation, and we will continue this way. In this context, with the digital transformation we planned specifically for STAR Refinery, our applications such as 'high quality product', 'speed', 'high efficiency', 'least environmental impact', 'flexible production capability' come under the spotlight.
Now we are talking about a process management in which all business processes are integrated using digital systems. We consider the new generation industry, i.e. the Industry 4.0 as a process management where we put the concepts of "digital factory" and "digital way of thinking" in the center and integrate all our business systems using digital technologies,” he said.
Mammadov pointed out that in addition, the company has implemented many advanced analytical projects aiming to increase the efficiency of its facilities, throughput, energy efficiency and product quality by improving optimization and estimation capabilities with advanced analytical and machine learning applications, and the company is advancing many new projects.
“In this way, our ability to act based on data in the decisions we make, to evaluate millions of options that we cannot evaluate, and to make more accurate and fast decisions or to predict possible results increases, and we achieve end-to-end efficiency. In addition to the projects we carried out in operation, we also achieved efficiency and improvements in the way corporate units in finance, procurement and human resources do business. We see that these improvements reflect more positively on our financial results every year. Thanks to the digitalization projects we have implemented so far, I can say that we will make a financial contribution of approximately $43 million in the coming years,” he added.
“As a matter of fact, the flexibility and speed provided by these steps give us a significant competitive advantage in the market. We have involved digital assistants called Robotic Process Automation (RPA) to reduce our employees' operational burden and enable them to focus more on strategic business. These digital assistants started doing routine, rule-based, high-volume activities on our behalf in various applications.”
Mammadov pointed out that with the pandemic, remote access to operational data came to the fore in line with safe and reliable data collection mechanisms.
“Thus, technical teams can remotely monitor production environments and take necessary actions. Likewise, making sense of this data with correct decision-making mechanisms is important for the continuity of production operations under pandemic conditions. Another important pillar of our digital transformation program that we started before the pandemic was to strengthen decision mechanisms with the support of algorithms by processing data with advanced analytical applications such as machine learning or leave it completely to software.
With these practices, we had the opportunity to back up and improve human-based information and decision-making structures learned over many years. Thus, we laid the foundations of the infrastructures that will support our teams in difficult times such as the pandemic. As a result, thanks to the investments we have made in technology and digitalization processes for a long time, we have been able to meet these changing needs during the pandemic process in an agile manner. Similarly, we will develop this transformation in the upcoming processes,” he said.
Mammadov noted that STAR Refinery, which aims to become a reliable, innovative and sensitive to life and nature company, has implemented a number of projects in the sphere of digitalization.
“SAP S/4 HANA and IRIS are among them. The STAR SAP S / 4 HANA system includes the procurement, planning, production, sales, maintenance, finance and cost management in line with the STAR Refinery's operational needs, as well as the IS-OIL module, which includes best industry practices developed for refineries,” said Mammadov.
He pointed out that the SAP system prepared for STAR Refinery is the first greenfield refinery installation in Europe operating on the S / 4 HANA platform.
“As a matter of fact, the STAR Refinery's SAP S / 4 HANA IS-OIL project was chosen as an exemplary project at the SAP S-KOM meeting held in Frankfurt with the participation of more than 3,000 projects from more than 50 countries.
The consumption of natural gas used as fuel in the refinery decreased by 6 percent in 2020 compared to the previous year, while carbon emission was reduced by 178,000 tons and 406,000 tons of water was saved a year.
Being aware of its responsibilities towards today's world and future generations, we integrate the vision of being sensitive to life and nature into all our business processes in STAR Refinery, which operates based on the principle of sustainability awareness in operation and production,” he added.
While many petrochemical plants were experiencing raw material shortages due to the coronavirus-caused disruptions in the global supply chain, Petkim continued to receive naphtha it needed from the STAR Refinery without any problems, said Mammadov.
“One of the reasons for the STAR Refinery’s establishment was to meet Petkim’s need for naphtha. STAR Refinery, an extremely strategic investment project implemented in the context of SOCAR Turkey’s refinery-petrochemical integration vision, is located in Aliaga, Izmir, in the same area as Petkim.
Petkim regularly receives naphtha at high quality via a pipeline. We realized the importance of integration between the two facilities during the pandemic.
Thanks to the integrated operation of Petkim and STAR Refinery, domestic producers didn’t face any problems in raw material supplies and thereby SOCAR Turkey once again proved to be a reliable producer in Turkey,” said Mammadov.
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