Asset Integration & Optimisation Case Study

The Challenge: Our client, a subsidiary of a major crude oil producer, was in the preliminary stages of building a world scale refinery and petrochemical complex. However, in order to satisfy its lenders that it could fully meet its obligations, the client needed to prove that they would be able to profitability integrate the new facility into their portfolio and secure buyers for the refined product and petrochemical offtake in both the local and international market.

The Solution: JBC developed a marketing plan to support the business case for the new refinery and petrochemical complex. This included a detailed market entry strategy for each of the petroleum products forecast to be produced by the refinery, analysis of competitors in the market and their likely responses to refinery, and the building of financial model to forecast potential profitability. The report also framed the contractual terms to be used by the refinery in the purchase of crude oil and the sale of product, counterparty analysis and policy, and the logistics that would be required to deliver product into the refinery’s domestic and international markets.

Our Approach: In order to successfully build the marketing plan JBC first needed to fully understand the refinery and petrochemical complex. The consultants, supported by the client’s technical advisors, were able to calculate the configuration of the refinery. Given the refinery configuration together with the assumed crude feedstock, the product offtake was able to be calculated. The next stage was to identify the outlook for these products when the refinery was scheduled to come online. This was done by utilising JBC’s proprietary supply, demand and pricing model that allow us to model a country’s import or export requirement on a product by product basis. The result of this analysis allowed us to forecast where each product would command the greatest premium. This allowed us to identify customers both in the local and international market.

The Outcome: The client’s lenders approved the marketing plan and released the funds to the client. The refinery and petrochemical complex is currently under construction and should start operations by 2016.