Page 24 - Cost_Competitiveness
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The Institute of Cost Accountants of India
Piped gas has to be transported all the distillation column.
way from the production site to the
fnal customer (power stations, industry, Refning is a global, highly cyclical business
domestic and commercial uses etc.), in which proftability is sensitive to marginal
using multiple types of pipelines and changes in product supply and demand.
pipeline networks along the way. By The principal measure of proftability is
adjusting the degree of compression in the gross refning margin (GRM), which
the pipelines, they can also be used as is calculated as the difference between
additional storage facilities. the revenues received and the cost of
feedstock plus other cash costs such as
labor, maintenance and working capital.
3.3 Refning and marketing
Marketing refers to the distribution and
Crude oil almost always needs to be refned sale of refned products, whether through
into oil products prior to consumption, wholesale or retailing in petrol stations.
with the main product categories being
fuel oil, gas oil, jet/kerosene, gasoline,
naphtha and liquefed petroleum gases 3.4 Gas processing and marketing
(LPG). Gasoil and jet/kerosene are often
described as middle distillates, gasoline The technical process of LNG involves
and naphtha are light distillates. The three stages: frst, the processed natural
three main energy-related uses for oil gas is progressively cooled to minus 160˚C
are transportation, power generation when it becomes liquid at atmospheric
and heating. There is also non-energy or pressure and shrinks to one six hundredth
process use, for example as feedstock of its gaseous volume. The liquefaction
for the petrochemicals industry. The process is done in dedicated LNG
different end uses differ markedly in plants close to the wellhead and gas
their vulnerability to fuel substitution. The processing plant. The LNG is then stored
transportation and non-energy markets in insulated tanks before being loaded
have a low vulnerability, making them into dedicated cryogenic tankers for
relatively captive markets for oil. shipment. At arrival in the destination, it
is received at an LNG receiving terminal,
Oil refning is the process of separating where it is re-gasifed and injected into
the hydrocarbon molecules present in the local gas grid. LNG projects are
crude oil and converting them into more highly capital intensive and it is common
valuable fnished petroleum products.25 practice to enter into at least 20-year
Refneries can consist of a number of supply contracts in order to reduce
different process units that undertake project risk and to justify the investment
separation, conversion and treatment budget. Traditionally, ownership of the
of oil. The initial stage of a refnery run LNG plant and export terminal used to be
involves the heating and separation with the upstream petroleum company,
of crude into its constituent parts in a whereas the import terminal and tankers
www.icmai.
The Institute of Cost Accountants of India
Piped gas has to be transported all the distillation column.
way from the production site to the
fnal customer (power stations, industry, Refning is a global, highly cyclical business
domestic and commercial uses etc.), in which proftability is sensitive to marginal
using multiple types of pipelines and changes in product supply and demand.
pipeline networks along the way. By The principal measure of proftability is
adjusting the degree of compression in the gross refning margin (GRM), which
the pipelines, they can also be used as is calculated as the difference between
additional storage facilities. the revenues received and the cost of
feedstock plus other cash costs such as
labor, maintenance and working capital.
3.3 Refning and marketing
Marketing refers to the distribution and
Crude oil almost always needs to be refned sale of refned products, whether through
into oil products prior to consumption, wholesale or retailing in petrol stations.
with the main product categories being
fuel oil, gas oil, jet/kerosene, gasoline,
naphtha and liquefed petroleum gases 3.4 Gas processing and marketing
(LPG). Gasoil and jet/kerosene are often
described as middle distillates, gasoline The technical process of LNG involves
and naphtha are light distillates. The three stages: frst, the processed natural
three main energy-related uses for oil gas is progressively cooled to minus 160˚C
are transportation, power generation when it becomes liquid at atmospheric
and heating. There is also non-energy or pressure and shrinks to one six hundredth
process use, for example as feedstock of its gaseous volume. The liquefaction
for the petrochemicals industry. The process is done in dedicated LNG
different end uses differ markedly in plants close to the wellhead and gas
their vulnerability to fuel substitution. The processing plant. The LNG is then stored
transportation and non-energy markets in insulated tanks before being loaded
have a low vulnerability, making them into dedicated cryogenic tankers for
relatively captive markets for oil. shipment. At arrival in the destination, it
is received at an LNG receiving terminal,
Oil refning is the process of separating where it is re-gasifed and injected into
the hydrocarbon molecules present in the local gas grid. LNG projects are
crude oil and converting them into more highly capital intensive and it is common
valuable fnished petroleum products.25 practice to enter into at least 20-year
Refneries can consist of a number of supply contracts in order to reduce
different process units that undertake project risk and to justify the investment
separation, conversion and treatment budget. Traditionally, ownership of the
of oil. The initial stage of a refnery run LNG plant and export terminal used to be
involves the heating and separation with the upstream petroleum company,
of crude into its constituent parts in a whereas the import terminal and tankers
www.icmai.
