The Value of an Annual Health Check for Your Refinery LP Model

In the fast-moving world of petroleum refining, Linear Programming (LP) models are the backbone of decision-making. These models guide production planning, crude selection, and optimization strategies to maximize profitability. However, an LP model is only as good as its accuracy and alignment with real-world operations. Over time, market conditions, operational constraints, and process efficiencies evolve—leading to potential misalignments between the model and actual plant performance.

That’s where an annual health check comes in. A structured, independent review of your refinery LP model can uncover hidden inefficiencies, data inconsistencies, and misrepresentations that may be costing your refinery millions in lost opportunities.

Why Your Refinery LP Model Needs Regular Evaluation

Refineries change—whether due to shifts in crude slates, equipment upgrades, new environmental regulations, or market shifts. If the LP model is not updated or validated regularly, it can lead to:

• Suboptimal feedstock choices. Incorrect crude assays or outdated yield structures can distort optimization results.
• Inaccurate process unit modeling. Yield shifts, efficiency losses, and catalyst deactivation may not be reflected in model coefficients.
• Missed profit opportunities. Outdated constraints or incorrect pricing assumptions can steer refiners toward suboptimal production plans.

Regular monitoring and maintenance and independent assessments of the LP model ensure it remains a reliable tool for strategic decision-making.

The Benefits of an Annual Health Check

While in-house teams are capable of maintaining the LP model, an independent assessment adds unique value. Here’s why refineries should invest in an independent annual review:

1. Unbiased model validation: Independent experts bring fresh perspectives and benchmarking insights, identifying gaps that internal teams might overlook due to familiarity or organizational inertia.
2. Improved model accuracy: An external independent review verifies that refinery operations and model assumptions are in sync. This includes updating process constraints, feedstock properties, and product blending rules to reflect real-world performance.
3. Enhanced Economic Optimization: A well-maintained LP model helps refineries capitalize on market shifts, including seasonal pricing dynamics, demand fluctuations, or new product specifications.
4. Identification of Systemic Errors: Small modeling errors—like incorrect mass balances, overlooked process constraints, or mis-calibrated pricing relationships—can add up to significant financial losses. An independent health check ensures data integrity and consistency.
5. Regulatory Compliance & ESG Alignment: With increasing environmental regulations and sustainability goals, an LP model review ensures that emissions constraints, energy efficiency parameters, and carbon compliance costs are correctly integrated into the optimization framework.

What Does a Third-Party Health Check Involve?

A comprehensive LP model health check typically includes:

• Model structure validation: Reviewing process flow representation, constraints, and yield correlations.
• Model performance: Testing the model’s capability to reach fast, accurate solutions without errors or warning messages.
• Data consistency analysis: Ensuring alignment between model inputs and actual refinery performance data.
• Crude assay verification: Checking crude properties and yield estimates for accuracy.
• Pricing and economics review: Validating margins, pricing assumptions, and blending economics.
• Scenario stress testing: Running sensitivity analyses to test model robustness under various market conditions.

Final Thoughts

An LP model is a refinery’s financial and operational blueprint. Keeping it in peak condition through an annual health check is not just a best practice—it’s a strategic investment. By ensuring accuracy, improving optimization, and unlocking hidden value, refineries can enhance profitability and maintain a competitive edge in an evolving industry. Investing in a structured LP model review today could mean the difference between operational excellence and missed opportunities.

Becht’s Strategic Business Planning Division, Value Chain Optimization Team, has decades of experience assisting clients with their annual LP model health check through the Refinery Optimization Model Assessment program. Schedule your assessment today and enjoy the benefits of enhanced optimization performance.