Refinery yields are an important measure of refinery performance indicating the outputs that running a particular crude through a refinery configuration will produce. When these outputs are matched against refined product prices, the relative financial performance of different refinery configurations in different locations can be compared. Refinery yields are also important inputs to the optimization calculations that refiners use to determine the best mix of crudes to process. Today we review how refinery yields are determined and the part they play in refinery optimization.
In the past few weeks we have posted several blogs covering US refining prospects and the actual process of refining. Refiners measure the performance of their refineries by calculating either refining margins or a variation of the margin that is called a netback. The refining margin can be calculated in a “seat of the pants” way – by using a crack spread like the 3-2-1 we used in our Bakken analysis (See The Bakken Buck Starts Here – Part IV) or a 6-3-2-1 crack like the one we used in our calculation for an LLS blend crude (see Heaven Sent Blend - A Mars Eagle Ford Mix). Crack spreads give us a general idea of refining margins for a particular crude using a simplified, generic refinery.
A more sophisticated approach to calculating refinery margins is to use customized refinery yields for each crude being analyzed. As we have noted previously every crude is different and every refinery is a custom combination of processing units built up over time. There are no cookie cutter refineries. Refinery yields are simple lists of the refined products that a refinery expects to produce from a given crude, expressed as percentages of the input crude barrel. The table below shows a refinery yield for West Texas Intermediate (WTI) crude processed in a complex refinery such as the one we described in our recent two part series (see Complex Refineries – Part 1 and Part 2). WTI has an API Gravity of 39 and a sulfur content of 0.3 percent.
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