INTRODUCTION

Petroleum refinery industry is not a new but a major sector in the world. In Malaysia itself, this
sector contribute 20 to 30 percent to the countrys Gross Domestic Product (GDP). This is
because, Malaysia has invested heavily in refining activities and now has nearly 539,000 barrels
per day (bbl/d) of refining capacity at eight facilities fulfilling most of its demand for petroleum
products domestically. With four facilities around the country and four other set to operate, not
a surprise Malaysia can compete with oil refining and storage hub in Singapore. The biggest and
most recent one is Pengerang Integrated Petroleum Complex (PIPC) that estimated will operate
completely in 2019-2020. As of January 2013, two major catalytic projects have been committed
within the PIPC area. The RM5 billion Pengerang Independent Deepwater Petroleum Terminal
(PIDPT) is a joint-venture between DIALOG Group of Malaysia, Royal Vopak of Netherlands and
Johor State Secretary Incorporated (SSI). Construction of Phase 1 of the project has already
started and is scheduled for completion by Q1 2014 and Phase 2 land reclamation is in progress.
The total storage capacity available at PIDPT is planned for five million cubic metres by the year
2020. The second mega-project within PIPC is PETRONAS RM60 billion Refinery and
Petrochemical Integrated Development (RAPID) Project. The RAPID project site preparation is in
progress and is expected to be commissioned by 2016. RAPID will have a 300,000 bbl. per day
refining capacity while additional petrochemical plants will generate value to petroleum products
produced in RAPID
The function of oil refinery or petroleum refinery is where crude oil is processed and
refined into more useful products such as petroleum naphtha, gasoline, diesel fuel, asphalt base,
heating oil, kerosene, and liquefied petroleum gas. Basically, distillation process is one of the
most important in petroleum refinery industry. Various components of crude oil have different
sizes, weights and boiling temperatures; so, the first step is to separate these components.
Because they have different boiling temperatures, they can be separated easily by a process
called fractional distillation. Fractional distillation done by heat up mixture of two or more
substances with a high temperature. The substances in the mixture will separate naturally due to
difference in boiling point. Substance with lower boiling point will change its phase to vapor
phase and move upward while the other substance will remain at the bottom as a liquid. Trays
are needed in order to extract a mixture with a various type of substances such as crude oil.
Adding a reflux or known as rectification is a process to increase the purity of the distillated
product to fulfill the demand.
ROUGH COST FOR PETROLEUM REFINERY
Utility requirements for each process are usually presented on a per-barrel unit feed or product basis and
correspond to average characteristics associated with the mid-point of the construction cost curve. Wide
variability in utility values can result, depending upon the capacity of the unit and other process-specific
factors.

For example, if a crude distillation unit of 100,000 b/d capacity cost $10 million to build, then the unit
cost/daily barrel of throughput would be $100/b/d. If a 20,000 b/d catalytic reforming unit cost $10 million
to construct, then the unit cost is $500/b/d of throughput and the complexity of the catalytic reforming
unit would be 500/100 = 5.