Sasol: Innovative Decision Support in a Petrochemical Production Environment
The Problem
Declining fossil fuel reserves, stricter clean fuel specifications, fluctuating oil and gas prices, a recessionary world economy, and a myriad of unique developing world issues are some of the challenges for Sasol. A passion for developing innovative solutions to deal with the issues of the day and the future has driven the company to surge ahead and become a world leader in the application of unique technologies.
Historically, the petrochemical industry based decisions on average production limits. This approach ignored any time-based variability in production, hence requiring the addition of a design margin and more expensive production facilities.
The Analytics Solution
Stochastic simulation models were developed in direct response to a critical need to include this key factor in decision making. The brainchild of Sasol Technology’s Operations Research team, the models are reflective of an industry “first,” in which production facilities have been simulated dynamically.
The simulation models are used for decision support in the business cases developed for gas and liquid production facility changes, to highlight risks, and to assist strategic decision making. They are also used to analyze the impact of changing market needs, product composition, operations efficiency, operating philosophies, schedules, and proposed future projects. In addition, the models support shorter-term questions on operations that ensure that production is sustained and improved.
The Value
As a major producer of fuels and chemicals, Sasol has relied on these models for the last 10 years to reflect production variability. Ownership of stochastic simulation models has led to an estimated value addition for Sasol of over $230 million since 2000. Although not audited, this is in fact considered a conservative estimate because it does not account for the improvements in energy efficiency, greenhouse gas emissions, general risk reduction, and the overall understanding of Sasol’s complex and integrated systems.
According to the general manager of business development at Sasol Synfuels, the largest business unit in the Sasol Group, stochastic operations model results are embedded in the decision-making process for both strategic decisions at Sasol Synfuels and for technical operations planning. No capital proposal is submitted to the Sasol board by business unit senior management unless the stochastic operations model results (where models exist) are reported as part of the business process. The stochastic operations model results provide the Sasol Synfuels site with integrated information, a clear identification of bottlenecks and commensurate risks.
Sasol’s stochastic simulation models are a perfect example of this solution-oriented mindset. These models are a unique application of analytics in real life that has radically improved Sasol’s decision-making capability.
