Schneider Electric: Big data eases economic downturn impact on GCC petchems

By Ghassan Barghouth, Vice President, Middle East, Schneider Electric

Since the first petrochemical joint venture in the Middle East in 1981, the industry has rapidly expanded with mega projects still underway, especially in Saudi Arabia, the UAE and Kuwait. The Gulf Cooperation Council (GCC) petrochemicals industry manufactured 136.2m tons (MT) of products in 2014 – 13% of global output – and generated $87.4bn in revenue, according to the Gulf Petrochemicals and Chemicals Association.

With oil prices sinking since mid-2014 to a 12-year low in early 2016 at just below $30 a barrel, GCC national oil companies (NOC) are following a wise strategy and redirecting their budgets into the more profitable downstream sector.

Growing competition from a sanctions-free Iran and a tightening economic outlook are refocusing Gulf petrochemical producers’ attention on big data analytics. Companies are exploring how to integrate big data into their daily operations in a way that can cushion the inevitable budget pitfalls and establish improved benchmarks of performance…but is that enough?

Big data is a term for data sets – structured, non-structured, relational, non-relational – that are so large or complex that traditional data processing applications are inadequate. Such data is usually generated from sensors and machine-to-machine (M2M) technologies within a facility.

The number of M2M technologies in use in the oil and gas sector could rise from the 423,000 in late-2013 to 1.12m by 2018, according to analyst firm Berg Insights. Each ‘dialogue’ between the machines feeds into the wider Internet of Things (IoT).

The greatest value of this data gathering lies in the compounding impact; building an organized portal of useful data today places a company at the forefront of innovation in five, or ten years. These systems have evolved and matured to operate alongside today’s IT systems and standards.

Looking ahead, the refining and petrochemical industry can benefit from technologies that are able to gather data from field devices and instruments and then integrate the information into the electrical distribution system and automation. Process automation and safety systems on a single platform can manage and standardise the visualisation of the data within an organisation.

On top of this data management, software applications have been developed to provide real-time simulation and optimisation. These can then be integrated to create the necessary workflows for crude planning, production scheduling, yield accounting, dispatch billing and regulatory filing, for example.

However, while it is necessary to maximise the performance within the process of a facility itself, producers can reach a saturation point, or technical bottlenecks that make further improvement a challenge. It is imperative that producers move to the next level of productivity in their supply chain, using marketing and distribution to maximize their profitability.

For example, refineries and petrochemical producers can now accesses energy market data from prominent international energy exchanges, along with a wide variety of spot and futures prices, historical data, news and weather information. This enables the operators to hedge their risk and initiate immediate trades to optimise the cost of their feedstock, or blending requirements.

Big data can also make a difference at terminals, as operators can have access to timely and accurate insight of terminal inventory positions after any product movement. Operators are then able to integrate it into the corporate network. An aggregated and standardized inventory process gives operators a more accurate picture of daily product positions.

This empowers supply teams to make optimal decisions on the finished products, prevent run outs and increase profits. Looking ahead, technology advancements, web application developments and increased collaboration platforms will also help significantly boost productivity.

To see the economic benefits, the petrochemicals industry must tread carefully around the temptation to curb their investment into such technologies and their application. Lower oil prices threaten to stymie energy companies' innovation plans, according to 76% of survey respondents to Lloyds Register Energy’s 2015 Oil and Gas Technology Radar research report titled ‘Innovating in a New Environment’.

As global competition grows, the adoption and application of big data analytics, IoT and cloud services across the supply chain and distribution networks is vital for the survival and streamlining of the GCC’s petrochemical market. Big data gives producers the tools to shrug off the growing number of downward economic pressures.