Infrastructure development trends and digital-based supply chain integration

Digitalisation is and will continue to be a key element for the growth and development of the refining and petrochemicals industry, and for other sectors also, comment Ekaterina Kalinenko and Konstantin Stezhko

Ekaterina Kalinenko is project director at Euro Petroleum Consultants.
Ekaterina Kalinenko is project director at Euro Petroleum Consultants.
Konstantin Stezhko is advisor at Euro Petroleum Consultants.
Konstantin Stezhko is advisor at Euro Petroleum Consultants.

The MENA region remains very active – the last few months have seen a series of announcements with regards to new projects. These projects aim to increase the scope of hydrocarbon production – refining, petrochemicals, production of high-marginal innovative products, and also the development of LNG as a standalone industry.

These projects generate the requirement for important activity in a number of sectors – construction, logistics, shipping, bunkering, transfer and ensuring environmental integrity. Nowadays, a common and important service in all investment projects and business processes is digitalisation. When embarking on a new project, it is important to analyse whether real experience in digitalisation for the oil and gas industry will be important throughout the project execution stages.

The best practices in the digital industry

Newly developed projects have an extremely diverse structure of shareholders (clients), contractors (technology licensors and engineering companies) and vendors. In manufacturing and construction, the focus is generally on the expertise from previous projects and the application of the best practices and the lessons learned.

With digitalisation, the situation is different and much more exciting – simply because the evolution in digital technologies has been and is very rapid. We all see electronic products emerging on the market, and then just as fast as they appear, they become outdated. The customer is often unable to grasp the endless possibilities he/she can get from his/her product. And also, digital development experts have difficulty keeping up with up-to-date solutions.

When we talk about Industry 4.0, we can include a large spectrum of technologies and sectors – 3D Printing, Artificial Intelligence (AI), Augmented Reality (AR), Virtual Reality (VR), Blockchain, Drones and Robots, right through to the Internet of Things (IoT).

Digitalisation project structure: Lower level – 1. Data collection and wrangling; 2. Communication and data transfer channels; 3. Data centre; Upper level – 4. Cloud-based storage; 5. Statistics and its processing; 6. Visualisation; 7. Analytics and optimisation; 8. Predictions and forecasting; 9. Reliability analysis.

Integration opportunities

Key megatrends of process transformation are: (i) connectivity creates information links between system nodes, increases transparency and general awareness; (ii) intelligence automates the understanding of the systems and provides subsequent decisions; and (iii) flexible automation.

Planning the supply of petroleum products, based on the analysis of all internal and external market factors, in real time, offers the best route from the point of view of minimising costs, indicating the recommended amount and type of transport (railway, oil pipeline, or car). This approach also allows selling surplus products and purchasing raw materials from other marketers, exchanging them without financial transactions (known as SWAP transactions), selling part of the raw materials on the exchange, taking into account the law requirements.

Speaking of the many advantages of digitalisation, we should not forget to mention the need to integrate the ‘historical heritage’, i.e. already existing infrastructure, facilities and industrial facilities ‘as is’.

Today, digitalisation is present in all aspects of life and in every sector. In the industrial sector, application of digitalisation goes even further. Digitalisation enables customers to solve any issues, or problems, not only through the particular product/software developed for the customer group, but also via proper data handling, data analysis and data processing.

This approach allows for data collected on one object, or market, to be used by other players who, according to past traditional approaches to segmentation, are in no way connected with each other.

Let us try to highlight this evolution through an example. Many years ago, 2D design technologies were developed and implemented. Today, 3D design technologies are being developed, in which digital information can be transferred to dynamic parts.

As a result, there is a merger of automation and digital technology, and a ‘digital twin’ of the enterprise can be created. Working with a digital copy of an enterprise makes it possible to solve many problems at the level of predictive analytics.

At one of our recent conferences focusing on Operational Excellence, we asked our delegates the following question: What do you see as the most important activities for 4.0 technology implementation in refining and petrochemical plants?

The majority answered that they see new technology application in process control and simulation as the key area of the development. Other areas of importance were maintenance, planning and scheduling of operations, and supply chain optimisation.

Advantages of reliability and safety

Here, of particular note is the role of digitalisation in predicting, evaluating and preventing the development of emergency situations, accidents and industrial incidents. This mechanism includes: monitoring equipment states – both static and dynamic; analysis of the state of linear objects; analysis of personnel actions during operations, for example, repair, loading, and unloading; environmental monitoring; and efficiency in terms of operating costs and project life.

As a result, costs for personnel, for order repairs, and for analysis of equipment condition can be reduced. The availability of big data allows carrying out a comprehensive analysis of the object’s activity.

What we can see is that there is a need for standards at the regional level and/or the industry of the region. For existing facilities, an audit of opportunities to achieve the best practices and/or industry of the region can be useful to explore the positive effect of synergy. To achieve best results from the optimisation decisions taken, it is important to have every element of the system infrastructure in place.

Ekaterina Kalinenko is project director and Konstantin Stezhko is advisor at Euro Petroleum Consultants (EPC), which is a leading independent consulting company in the oil, gas and petrochemical sectors, as well as a producer of specialised annual international conferences and training seminars, focusing on market trends, technological advances and business strategies for the petroleum industry, including the Gulf Safety Forum 2019, and OPEX MENA 2019 – Operational Excellence in Oil, Gas & Petrochemicals – which will take place in Bahrain during 25-28 March. EPC has offices in Dubai, London, Moscow, Sofia and Kuala Lumpur. For further details, please visit and

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