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IoT is the key

Published by , Senior Editor
Hydrocarbon Engineering,

Industry 4.0 is an encroaching reality that is increasingly blurring the boundary between the digital and physical worlds. As a result, technologies such as predictive analytics, artificial intelligence and the Internet of Things (IoT) stand to transform a range of industrial processes.

For the petrochemical industry, which is continuing to face squeezed margins and heightened levels of competition, any technology that can help improve asset usage and overall economic competitiveness offers a welcome opportunity to boost bottom line performance. Companies from across the sector are therefore starting to investigate how Industry 4.0 tools can create a more connected and co-ordinated operation that can help curb costs and maximise the use of existing infrastructure and equipment.

Unfortunately, progress to date has been slow. A recent survey by IFS, a global enterprise applications company, revealed that only 19% of oil, gas and petrochemical companies consider themselves informed enough to adopt new digital technologies such as big data analytics, enterprise resource planning and IoT.1 This, and the highly commoditised nature of petroleum products, make the downstream petrochemical sector one of the most commercially challenging parts of the oil and gas value chain. The biggest challenge for petrochemical companies wanting to capitalise on Industry 4.0 remains a lack of understanding of the types of technology that are available.

Enhancing tank storage with IoT

Before embarking on an Industry 4.0 journey, petrochemical companies need to address some fundamentals including identifying what parts of their business would best benefit from, say, predictive analytics. This will help shape decisions around the types of technology to be implemented and the capabilities it will need to include.

This can appear daunting, so it is important to choose a suitable technology partner from the outset. IoT is no longer a proof concept but a mature framework that can help automate, monitor and analyse information from a wide range of sources to fully optimise use of assets.

By applying an advanced solution based on an IoT model, such as smart planning software, petrochemical companies can better account for the usage and spare capacity of storage tanks, as well as monitor fluctuations in demand, in real time. This information, when paired with long-term trend analysis, can help ensure continuity of supply while optimising tank usage and helping to reduce costs.

For example, tanks for residual products – such as heavy fuel oil – need to be heated. By having the ability to accurately predict storage requirements, it might be possible to switch off surplus tank capacity, reducing energy consumption.

Making the availability of tank storage easier to predict also means that petrochemical companies can better synchronise multiple process stages to maximise the efficiency of the entire production chain. For example, when scheduling a batch of jet fuel, a refinery will need to know what storage resources will be available to cater for this production. By combining IoT feedback with historic data, it is possible to apply predictive analytics to understand how tank availability might impact other stages of production.

Liberating legacy limitations

Despite the promise of Industry 4.0, there are still some basic principles of petrochemical storage that do not change. In a warehouse, extra space results in extra storage capacity that is immediately available. However, in a tank, it does not. Before reuse, tanks must be emptied and cleaned to avoid contamination before accommodating new products or different batches.

Current scheduling systems often involve manual content measurement, which can provide a false sense of resource availability and typically only alerts petrochemical producers of capacity shortages when it is too late. This can result in missed business opportunities, potential wastage, and the allocation of resources away from critical tasks to fix problems that could have been avoided.

By being able to accurately predict reduction in demand, based on long-term trend analysis, it is possible to avoid these types of production bottlenecks, as well as improve the programming of routine maintenance inspections. This can additionally help cut costs by optimising maintenance crew’s work schedules.

Another common constraint on tank operation is the associated pipework, as it can often only transport one product at a time. Furthermore, depending on how tank pipes are configured, operators can find they are limited to only certain routes as some connections may not be appropriate for certain products, such as pressurised gasses. By leveraging a centralised IoT platform, these types of routing and product constraints can be easily controlled and optimised, simultaneously sending and receiving information, connecting and mitigating product-dependent constraints, while also managing multiple flow rates.

Reducing risk and eradicating error

Across all industries, human error is a significant cause of financial loss. In the petrochemical sector, examples of human error can be as simple as failing to enact a contingency plan for when the actual processing time deviates from the planned scheduled time. In this instance, quality control may send a batch for rework because it does not meet the quality standards.

Typically, one does not plan on the necessity of doing rework, which can result in a race against the clock to quickly move petrochemicals between tanks in order to avoid certain products spoiling, losing properties or being discarded altogether. Through IoT insights and automation, tank-scheduling systems can actively monitor and respond to delays during real time production, recalculate all the consequences and, if needed, adjust the schedule to the new situation – bringing the potential cost of error right down.

Additionally, by having constant communication between connected systems, IoT can better detect and even predict factors that are invisible to the human eye – or simply unsafe for direct human observation.

AkzoNobel, a leading producer of specialty chemicals, faced the challenge of reducing downtime and errors throughout its operations. Due to a lack of visibility, the company was facing the problem of very high inventory levels, sub-optimal utilisation of plants, inconsistent service levels and matching customer demand with the production capacity of its different plants. By adopting an IoT framework, AkzoNobel was able to optimise its throughput, validate availability of materials for planned batches and create detailed sequences for dispersing, mixing and filling tanks during production processes. This resulted in a reduction of cycle times, improved delivery performance and productivity, and decreased usage of chemicals in line with the company’s sustainability values.

Additionally, the new system enables real time reaction to changing market demand, identifies appropriate and available tanks during production processes, and adjusts scheduling plans accordingly to avoid complications at either end of its supply chain.

Generating new revenue streams

The combination of slowing demand worldwide, and rising competition from new petrochemical facilities in the Middle East and Asia, means the European downstream sector must explore new areas of optimisation and extend their value beyond the refinery. In the new era of Industry 4.0, petrochemical producers can use IoT to expand tank visibility across the supply chain and use predictive analytics to forecast order fluctuations, which can help schedule overall plant operations.

Rather than processing and managing customer orders individually, which takes more time, money and resources, IoT enables petrochemical producers to better identify existing products in various tank storage of the same type, combine different customer orders, and apply different packaging configurations to meet multiple requirements.

Industry 4.0 promises a lot. However, models such as IoT must not be adopted for the sake of it – the business case needs to be established and a solid strategy put in place. Deployment must be tailored to an organisation’s specific tank equipment, meet their unique business and operational requirements, incorporate best practices and provide end-to-end petrochemical process planning. By performing this due diligence, petrochemical producers can start to take into account the characteristics and constraints of all products, processes and resources – not just tanks – and understand how these connect and interact with one another. Armed with this essential information, petrochemical producers can generate schedules and strategies that maximise efficiency, throughput and profits.

While the benefits and opportunities presented by Industry 4.0 are exciting, the perceived difficulty of implementing the right technologies to capitalise on these might appear off-putting for petrochemical producers. By starting on smaller scale projects, and looking at improving processes overseeing existing equipment like tanks, petrochemical producers not only experience the immediate benefits discussed, they also gain the confidence and experience to expand and experiment with other emerging technologies that can give them a competitive edge.


1. 'Petchem industry positioned for digital transformation', Petrochemical Update, (25 August 2017),

Written by Dennis Ostendorf, Quintiq, the Netherlands.

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