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Energy Efficient Design

Topic last reviewed: 1 February 2014

Sectors: Downstream, Midstream, Upstream

Energy efficiency in the oil and gas sector primarily relates to the efficient use of energy – heat and power – in industry segments including, but not limited to, upstream and offshore oil and gas production, processing, transmission, and refining. Efficiency may be defined in different ways depending on the process or equipment under consideration; however, it may be generally defined as the energy of the outputs (e.g., fuels, chemicals, energy – heat and power) of a process or facility divided by the energy of all inputs (e.g., fuels, chemicals, energy – heat and power).

Energy efficient oil and gas processing begins with efficient facility design. Central to this are integrated design practices. These consider the facility as a single system and aim to minimize overall energy use across the expected range of operating conditions, while maximizing production.

IPIECA energy efficiency modules dealing with energy optimization at the facility/process level include:

The selection of equipment, heat, and power sources must also be taken into consideration when designing an energy efficient facility. Relevant IPIECA modules for energy equipment, heat, and power selection include:

Application of Technology

Energy efficient design typically involves design for the optimization of three components within an oil & gas facility/process [Reference 1], [Reference 2]:


  • Minimize any feedstock losses by making use of all feedstock components.
  • For example, in oil refineries the entire oil barrel is used now to produce refined products and process energy, with only two sub-products – petcoke & asphalt.


Minimize the amount of refined fuels imported to the process through use of efficient combustion equipment and by using low-value products produced from the feedstocks as energy sources.

  • For example, in gas processing there is no outside fuel usage in plants, except for electricity. The natural gas product itself is used for any internal fuel needs

Heat and Power:

  • Minimize heat and power demand through process optimization
  • Minimize heat and power losses through design optimization
  • In most oil and gas processes there is extensive potential for heat losses from steam systems, fired-heaters (furnaces & other flue gas exhausts), flares, inadequate insulation, insufficient heat recovery, etc.

The optimization of plant as an integrated system is typically carried out using software tools, such as:

  • ASPEN HYSYS – process design & optimization for oil refineries and gas treatment
  • PRO/II - process simulation designed to perform heat & material balances for a wide range of chemical processes & equipment
  • GateCycle – performs system & equipment process design for coal & gas-fired power generation, including cogeneration
  • GT Pro – process design of combustion turbine & combined cycle plants, develops heat & material balances, system performance & equipment sizing

Technology maturity

Commercially available?:   Yes
Offshore viability: Yes 
Brownfield retrofit?: No 
Years experience in the industry: 21+ 

Key metrics

Range of application:  All oil and gas industry facilities and processes
Guideline capital costs: Energy efficient equipment and facilities may command a price premium over less efficient designs. This needs to be weighed against future savings in fuel inputs and possible charges for pollution outputs, such as through Net Present Value (NPV) calculations and scenario planning.
Guideline operational costs: Maintaining EE design requires adherence to operating & maintenance procedures
GHG reduction potential: Reductions in GHG emissions are directly related to savings in power, heat, and fuel inputs, according to the GHG intensity of the input. Highly efficient plants will use less energy and therefore emit less greenhouse gases
Time to perform engineering and installation: Designing facilities for high energy efficiency is more complex than traditional design approaches, which may make for a slower design phase. However, leading engineering design firms are experienced and efficient in implementing EE techniques
Typical scope of work description:

Because EE design can be applied across all O&G processes, the potential scope of work is very broad and can vary widely between situations.

It can include:

  • Design of a process with low power and heat demand
  • Design and selection of efficient system components (e.g. boilers, heat exchangers, reactors, distillation columns, piping, fittings, control architecture). This involves consideration of new technologies and comparison of the life-time energy savings of different alternatives.
  • Modeling of system components using computer software [Reference 3]
    • Performing experiments on components or pilot systems to refine model parameters and design
    • Defining model constraints, goals and optimization parameters
    • Exploring the system-level design space and using mathematical optimization techniques to identify optimal trade-offs of design parameters
    • Performing further modeling and pilot testing of the optimized design to confirm its validity
  • Designing O&M procedures to maintain efficient performance

Decision drivers

Technical:   With a new plant (greenfield), the overall system optimization allows for the general arrangement of equipment & interconnecting piping to not be constrained by the optimization process. The general arrangement can be determined by the most efficient design available. Efficiency gains from upgrading existing faciltiesfacilities, however, can be constrained by the arrangement of existing equipment. Also note that maximizing system efficiency can involve trade-offs with system flexibility and performance robustness
Operational: O&M staffing requirements are similar to facilities designed with traditional approaches
Commercial: The use of equipment or systems that do not have several years of operational experience may pose a risk of poor reliability or poor availability of equipment or support services/parts. The potential gains from EE design must be evaluated against these risks
Environmental: Emissions reduction is directly related to EE design
Economic rule-of-thumb: EE design savings may be justifiable if the return-on-investment (ROI) period is short enough. Feedstock yield-related revamp designs are dependent on market fluctuations (i.e., price differentials for the product slate) and may require a shorter payback period. Energy pricing tends to be more stable than oil & refined market pricing and can have a longer payback period

Alternative technologies

Facilities may be designed to various energy efficiencies depending on design choices and tradeoffs.

Operational issues/risks

 The key operational risk for maintaining EE is poor equipment reliability & maintenance.

  • Reliability – equipment sparing is typically key for reliability
  • Operation – complexity of modern automated control systems
  • Maintenance – process equipment performance can be degraded by fouling, corrosion, and erosion. Highly efficient equipment may require more careful maintenance to maintain its high level of performance.


Opportunities/business case

 Review old systems for application of new equipment & sub-systems to increase efficiency. Examples include [Reference 4]:

  • Feedstock – best byproduct utilization of bottom of the barrel (i.e., pet coke), to produce H2 & power
  • Fuel – distillation improvements since it is the largest energy consumer
  • Heat – Perform energy audit, assessing most wasteful areas first
  • Utility Energy – Perform energy audit, assessing most power demanding processes first
  • Implementing utility optimization tools (e.g. monitoring heat and electricity production and usage) can be maximize the efficiency of the whole system. Refer to the Performance and Efficiency Monitoring module.

">Industry case studies

1. Valero Energy Corporation – Energy recovery from the FCC process output at Houston refinery

An early example of EE design is Valero Energy’s use of a turbo-expander to recover waste energy from the exhaust gas of the regenerator in its Fluid Catalytic Cracking (FCC) unit.

One of the most important process stages in an oil refinery is Fluid Catalytic Cracking (FCC), also called the ‘Cat’. This process breaks down low-value, heavy hydrocarbons into lighter and more valuable hydrocarbon products. It uses a fluidized bed of fine catalyst to promote hydrocarbon cracking reactions. As the reactions proceeds, the catalyst particles become coated with carbon. This carbon is then burnt off in the regenerator. Exhaust leaves the regenerator at approximately 40 psig and 732°C.

Valero decided to recover the energy in this exhaust stream by directing it into an expansion turbine, after separating out any entrained catalyst particles.

Thermal energy and pressure in the flue gas are converted by the turbo-expander into mechanical power, which is used to drive a 24,000-hp axial compressor. This compressor, which is commonly referred to as the air blower, provides both combustion and fluidizing air to the regenerator. Exhaust from the turbo-expander is close to atmospheric pressure but is still around 500°C, so it is directed to a waste heat boiler to generate steam.

By recovering energy from the hot flue gases the refinery saves up to 22 MW in electricity. The turbo-expander is designed to generate more energy output than the air blower needs, so in certain operating situations, it can export additional power (up to 4 MW) for sale to the grid.

1. Source: Valero Energy Corporation, Tour Guide Book Houston Refinery, 2003. Retrieved 12 Nov. 2013


  1. Energy efficiency Road map for Petroleum refineries in CA, California Energy Commission, April 2004
  2. IPIECA, “Saving Energy in the Oil and Gas Industry”, 2007. Retrieved 8 Nov. 2013
  3. Rodriguez HM, Cano A, Matzopoulas M, “Improve Engineering Via Whole-Plant Design Optimization”, Hydrocarbon Processing, Dec. 2010, pp. 43-49. Retrieved 6 Nov. 2013
  4. US Dept. of Energy Lawrence Berkley National Laboratory, “Energy Efficiency Improvements and Cost Savings Opportunities for Petroleum refineries”, Feb. 2005. Retrieved 8 Nov. 2013