How much does it cost to build a small refinery?

Finally, the North American Industry Classification Codes (NAICC) identifies the construction costs for small oil and gas structures at below $33.5 million. However, the smallest refinery currently under construction, a 20,000 b/d refinery in North Dakota, reportedly will cost $350 million.

What makes a refinery profitable?

The profitability of a refinery comes from the difference in value between the crude oil that it processes and the petroleum products that it produces. Most of a refiner’s margin comes from the higher-value “light products” (i.e., gasoline, diesel, and jet fuel) that it makes.

Are modular refineries profitable?

On the one hand, there is the argument that profit margins in the oil and gas drilling industry are so low that most modular refineries may not be economically viable. As of January 2020, the average net profit margin for the industry was 6.8 per cent, according to data from NYU Stern School of Business.

How much does it cost to set up a modular refinery?

Specifically, how much does it cost to have a modular refinery? It depends on if you want to refine 1, 000, 2, 000, 3, 000 barrels per day. The more you want to refine at a given time the costlier the refinery will be. However, they range from $100m to $200m depending on the specification of what you need.

How much do you need to build a refinery?

Oil refining is a capital-intensive business. Planning, designing, permitting and building a new medium-sized refinery is a 5-7 year process with costs ranging from $7-10 billion, not including land acquisition.

How profitable are oil refineries?

As always, note that all data used in visualizations below is publicly available from the U.S. Energy Information Administration. What does the chart above tell us? Refining 3 barrels of crude oil to produce and sell 2 barrels of gasoline and 1 barrel of diesel nets profit averaging $17.50 per barrel of crude oil.

What are refining margins?

Refinery margins are a measure of the value contribution of the refinery per unit of input. Typically this is per barrel of crude oil processed, but it could also include other feedstocks as inputs.

What is refinery yield?

Refinery Yield. Represents the percent of finished product produced from input of crude oil, hydrogen, and other hydrocarbons, and net input of unfinished oils.

What is the profit margin for crude oil?

The average net profit margin for oil and gas production was 4.7% in 2021 and 31.3% in Q4 2021.

How long does it take to build a modular refinery?

Construction timelines for a modular refinery can range from 15 to 18 months from the start of a project to the first barrel of oil processed.

How much does a refinery cost?

Planning, designing, permitting and building a new medium-sized refinery is a 5-7 year process with costs ranging from $7-10 billion, not including land acquisition.