Chemical Engineering Industries #1: Oil and Gas
Chemical engineering, as discussed before, is a branch of engineering established as a division from chemistry — specifically industrial chemistry. Take note: chemistry itself is defined as a science that deals with the composition, structure, and properties of substances and with the transformations that they undergo. Therefore, because of chemical engineering’s relation to chemistry and because chemistry comprises virtually everything, this discipline is going to be relevant in a lot of industries. So much in fact we can divide the industries in ten: oil and gas, petrochemical, oleochemical, EPC, bioprocess, bioenergy, FMCG, electrochemical, chemurgy, and pharmaceuticals.
Let’s start with oil and gas. The prima donna of Industrial Revolution, alongside steam and coal.
This industry is all about the mining of crude oil, transporting it to refinery, and then refining of said oil into products separated by weight and volatility.
The crude oil is a black liquid comprising many hydrocarbon molecules — from methane to heavy molecules with more than 30 carbon atoms (C30+). The products, meanwhile, are methane for gas fuel (when liquefied becomes liquefied natural gas — LNG), propane and butane for liquefied petroleum gas (LPG), gasoline (C5-C10), kerosene, jet fuel, diesel fuel (C14–C20), and the heaviest being tar. Some other non-fuel usages being ethylene, propylene, and aromatics for petrochemical… later in this series.
While some of us might be of the impression that the products (or the crude oil) are pure products, they are actually not. They don’t have to! However, to ensure quality, these mixtures — which are usually called assays — are tested for a lot of parameters, such as composition, boiling points (initial, final, 5%, 95%), vapor pressure, sulfur content, acid number, specific gravity, and octane number. I’m not going to talk about them just yet, lest this writing becomes a two-hour lecture in and of itself. The components inside can be categorized in four: paraffin (alkane), olefin (alkene), naphthene (cycloalkane), and aromatics. To remember: PONA. Generally, ONA’s are better for gasoline engines while paraffins are better for diesel engines.
Now, we have established at this point that oil and gas industry is comprised of three units, streams as the people call it, being the mining stream (upstream), the transportation stream (midstream), and the refinery stream (downstream). For our purposes, upstream or exploration or mining is not a part of chemical engineering even though careers in this field are open for chemical engineering graduates. The other two, now that’s our jobs, especially downstream or refinery. Henceforth, I would focus my writing on that particular stream.
Refineries started independently in North America and Europe since 1830 by several people such as Jan Józef Ignacy Łukasiewicz, Samuel Kiel, and Abraham Gessner with the first refinery locations being in Romania, Poland (by that Łukasiewicz), and Germany. In Indonesia, this industry began in 1871 with Wonokromo as its first exploration project base and in 1908 with Palembang as its first refinery location under the intervention of Dutch East Indies’ Bataafsche Petroleum Maatschappij (lit. Batavian Petroleum Company). This industry would then grow massively, with one of the reasons being internal combustion engines developed by Diesel and Otto and other people. Nowadays, there are 697 refineries with 7 of them in Indonesia which help fulfill the need for 100 million barrels per day throughout the world (2019)
This development can’t be separated from the players: oil companies (OC) and oil service companies (OSC). The former comprise the project execution (mining, transportation, and refinery) whereas the latter comprise the services needed before and during project execution, especially upstream work.
On the global theatre, Sinopec, Saudi Aramco, CNPC, Shell, BP, ExxonMobil, Total, Gazprom, and Chevron become some of the key players in the OC category while In Indonesia, we know Pertamina and its subsidiaries — relevant ones in this text being Pertamina Hulu Energi, Kilang Pertamina Internasional, Elnusa, Perusahaan Gas Negara, and Badak LNG.
Hold up. A lot of these companies are state owned. Aramco owned by Saudi, Gazprom under Russia, CNPC and Sinopec are Chinese, Petronas serving Malaysia, and Pertamina in Indonesia. Which, to think about it, are good moves considering the strategic interest of the nations and the C H O N K Y scale of these operations with CAPEX’s reaching billions of USD.
Moving on to the OSC category — we have Schlumberger, Halliburton, Baker Hughes, and Pertamina Drilling Services Indonesia among others. These companies gain profit through partnerships with OC’s, such as Schlumberger partnering with Elnusa for reservoir characterization, drilling, surface production facilities, and integrated services.
To wrap up, the oil and gas industry is an industry specializing in oil and gas mining, transportation to refineries, and refining said oil into separated products by volatility and weight. The first refinery was in Europe around 1850s and spread to Indonesia via Dutch rule. Nowadays there are 697 refineries around the world run by key players such as Pertamina for oil company and Pertamina Drilling Services for oil services in Indonesia. Many of these companies are state-owned for strategic and economic purposes.
