“Otherwise they cancel our license” - TUPRAS’s Former Technical Services and R&D Director On Survival In Downstream industry
Ziya Gürün has 30 years of experience in management, operations, design, and construction of refineries and product terminals including STAR Project, terminals of Opet, and TUPRAS refineries. In the interview for BGS Talks, he explains why being sustainable equals surviving for refineries and why he does not consider Turkey to be dependent on Russian crude supply. Watch the interview, read the highlights and subscribe to BGS Talks YouTube channel for new episodes!
Last year at PRC Russia you said that TUPRAS invests about 230 to 250 mln dollars just to survive. What do you mean by “survival”?
The regulations and the product specifications change, IMO 2020, for example, is one of them. December 5, 2018, a new specification on the LPG was issued by CEN, European Committee for Standardization. Sulphur level went from 50 ppm to 30 ppm. Since LPG is used as an autogas in motorized vehicles instead of gasoline, it requires a certain octane number. CEN wants the minimum propane concentration to be 20%, in 2022 it's going to be 30%. So, we are now investing in improving our process plants to meet this 20-30 ppm sulphur level and we're investing in lowering the propane content in LPG. If you don't make these kinds of investments, you won't have any market to sell your LPG product to. The government says that your sulphur plant has to recover 99.5% of your sulfur intake into the unit, and we are investing in new sulphur plants, wastewater treatment plants. Then the government says “Now we’re going to monitor your emissions from the refinery stacks”. It means you're going to install proper analyzers. Otherwise, these guys cancel our refining license. That's survival.
Your company recently got an award for energy efficiency increase. Can you give us more details?
Natural gas is very expensive in Turkey, about $6-8 per 1 MBTU. Every time we save energy in our refining operations, we're making money. Gas turbines are the latest technology to make electrical power, so we're installing more of them. We used to have steam turbines. In steam turbines, you burn fuel oil but we have tax on it in Turkey, and it's more expensive and environmentally difficult to burn. It's got high sulfur content. We try to do a lot of energy heat recovery projects in our existing process units; we call it Energy Intensity Index, EII, that we're trying to lower. Now we are below 90. Based on the current energy costs, reducing this EII just by one point means so many million dollars per year. We're also installing wind turbines, we have this project in Izmir refinery. And we're looking at solar power at Batman refinery.
There are sanctions on Iranian oil in Turkey. Does it increase your dependence on Russian oil?
We do receive some Iranian crude oil to the extent that we are allowed to process. It's a political issue. We're happy with Russian crude oil, we always get good yields out of it and we would like to process more of it. But I don't think they are able to sell all of their product to us. As far as I know, our crude oil diet is about 20-30% Russian crude oil.
On the European market, they try to decrease their dependence from Russian crude and gas but in Turkey there is TurkStream which is increasing this dependence. Why is there such a difference?
I wouldn't call it dependence because TUPRAS refineries are capable of processing many different kinds of crude oil. During the last 3 years, we have processed 40 different kinds of crude oil in our refineries. The criteria to select a certain crude oil is more economic rather than technical. We have LP models of our refineries and we look at the market situation, at product specifications, crude oil prices, product prices, and demands. Based on the current market conditions, we end up with a certain optimum.
Watch the full interview to know what Ziya thinks about the competition of STAR with TUPRAS refineries, how to choose the right technology, and about TUPRAS’s Horizon 2020 projects.