Nelson complexity index

<h2 id="history">History</h2>
<p>It was developed by Wilbur L. Nelson in a series of articles that appeared in the <i><a href="/facts/Oil_%2526_Gas_Journal/5Jn8yzyX">Oil & Gas Journal</a></i><a class="footnote-ref" id="fnref:4" href="#fn:4"><sup>4</sup></a> from 1960 to 1961 (Mar. 14, p. 189; Sept. 26, p. 216; and June 19, p. 109). In 1976, he elaborated on the concept in another series of articles, again in the <i>Oil & Gas Journal</i> (Sept. 13, p. 81; Sept. 20, p. 202; and Sept. 27, p. 83).
</p>
<h2 id="formula">Formula</h2>
<p>
  
    
      
        
          NCI
        
        =
        
          ∑
          
            i
            =
            1
          
          
            N
          
        
        
          F
          
            i
          
        
        ⋅
        
          
            
              C
              
                i
              
            
            
              C
              
                CDU
              
            
          
        
      
    
    {\displaystyle {\text{NCI}}=\sum _{i=1}^{N}F_{i}\cdot {\frac {C_{i}}{C_{\text{CDU}}}}}
  
<a class="footnote-ref" id="fnref:5" href="#fn:5"><sup>5</sup></a>
</p><p>Where:
</p>
<ul><li>
  
    
      
        
          F
          
            i
          
        
      
    
    {\displaystyle F_{i}}
  
 is a complexity factor</li>
<li>
  
    
      
        
          C
          
            i
          
        
      
    
    {\displaystyle C_{i}}
  
 is a unit capacity</li>
<li>
  
    
      
        
          C
          
            CDU
          
        
      
    
    {\displaystyle C_{\text{CDU}}}
  
 is a capacity of crude distillation unit</li>
<li>
  
    
      
        N
      
    
    {\displaystyle N}
  
 is a number of all units</li></ul>
<p>The NCI assigns a complexity factor to each major piece of refinery equipment based on its complexity and cost in comparison to crude distillation, which is assigned a complexity factor of 1.0. The complexity of each piece of refinery equipment is then calculated by multiplying its complexity factor by its <a href="/facts/Throughput_(business)/pzN4FDct">throughput ratio</a> as a percentage of crude distillation capacity. Adding up the complexity values assigned to each piece of equipment, including crude distillation, determines a refinery’s complexity on the NCI.
</p><p>The NCI indicates not only the investment intensity or cost index of the refinery but also its potential <a href="/facts/Value_added/TCDUk1bH">value addition</a>. Thus, the higher the index number, the greater the cost of the refinery and the higher the value of its products.
</p><p>In the second edition of the book <i>Petroleum Refinery Process Economics</i> (2000), author Robert Maples notes that U.S. refineries rank highest in complexity index, averaging 9.5, compared with Europe's at 6.5. The <a href="/facts/Jamnagar_Refinery/4f3sfJss">Jamnagar Refinery</a> belonging to India-based <a href="/facts/Reliance_Industries_Limited/4aPz6JEV">Reliance Industries Limited</a> is now one of the most complex refineries in the world with a Nelson complexity index of  21.1.<a class="footnote-ref" id="fnref:6" href="#fn:6"><sup>6</sup></a>  
</p><p>The <i>Oil and Gas Journal</i> annually calculates and publishes a list of refineries with their associated Nelson complexity index scores.
</p>
<h2 id="complexity-factors">Complexity factors</h2>
<p>Some factors for various processing units:
</p>
<table><tbody><tr><th>Unit</th><th>1998 Reports</th><th>Older Reports</th></tr><tr><td>Distillation capacity</td><td>1.0</td><td>1.0</td></tr><tr><td><a href="/facts/Bitumen/tW6EqphW">Asphalt</a></td><td>1.5</td><td>1.5</td></tr><tr><td><a href="/facts/Vacuum_distillation/ep7NsYJ0">Vacuum distillation</a></td><td>2.0</td><td>2.0</td></tr><tr><td>Thermal processes</td><td>2.75</td><td>5.0</td></tr><tr><td>Catalytic hydrorefining</td><td>3.0</td><td>3.0</td></tr><tr><td><a href="/facts/Catalytic_reforming/2ybErEUI">Catalytic reforming</a></td><td>5.0</td><td>5.0</td></tr><tr><td><a href="/facts/Catalytic_cracking/F8cpnstx">Catalytic cracking</a></td><td>6.0</td><td>6.0</td></tr><tr><td><a href="/facts/Catalytic_hydrocracking/EBLtwW4g">Catalytic hydrocracking</a></td><td>6.0</td><td>6.0</td></tr><tr><td><a href="/facts/Alkylation/1rd5SNbt">Alkylation</a> / Polymerization</td><td>10.0</td><td>10.0</td></tr><tr><td>Oxygenates</td><td>10.0</td><td>10.0</td></tr><tr><td><a href="/facts/Aromatics/3EXq8Tgf">Aromatics</a> / <a href="/facts/Isomerisation/sxv23uKl">Isomerisation</a></td><td>15.0</td><td>15.0</td></tr><tr><td>Lubes</td><td>60.0</td><td>10.0</td></tr></tbody></table>
<h2 id="example">Example</h2>
<p>If an oil refinery has a crude distillation unit (100 kbd), vacuum distillation unit (60 kbd), and catalytic reforming unit (30 kbd), then the NCI will be 1*(100/100) + 2*(60/100) + 5*(30/100) = 1.0 + 1.2 + 1.5 = 3.7.
</p>

<h2 id="external-links">External links</h2>
<ul><li><a href="http://www.ogj.com/articles/print/volume-94/issue-12/in-this-issue/general-interest/refining-report-complexity-index-indicates-refinery-capability-value.html">Oil and Gas Journal, Nelson Complexity index</a></li></ul>

<h2 id="references">References</h2>

<ol>
<li id="fn:1"><p>"Nelson Complexity Index" (PDF). pakpas.org. Retrieved 3 November 2016. <a href="http://pakpas.org/0.REFINERY%20LIBRARY/2.EDC-business_petroleum_refiningmktg_lc_ncf.pdf" target="_blank">http://pakpas.org/0.REFINERY%20LIBRARY/2.EDC-business_petroleum_refiningmktg_lc_ncf.pdf</a> <a href="#fnref:1" class="footnote-back-ref">↩</a></p></li>
<li id="fn:2"><p>"Nelson Index". investopedia.com. Investopedia. Retrieved 3 November 2016. <a href="http://www.investopedia.com/terms/n/nelson-index.asp" target="_blank">http://www.investopedia.com/terms/n/nelson-index.asp</a> <a href="#fnref:2" class="footnote-back-ref">↩</a></p></li>
<li id="fn:3"><p>David C. Johnston; Daniel Johnston (2006). Introduction to Oil Company Financial Analysis. PennWell Books. p. 199. ISBN 9781593700447. Retrieved 3 November 2016. <a href="9781593700447" target="_blank">9781593700447</a> <a href="#fnref:3" class="footnote-back-ref">↩</a></p></li>
<li id="fn:4"><p>Johnston, Daniel (March 18, 1996). "Refining Report Complexity index indicates refinery capability, value". ogj.com. Oil and Gas Journal. Retrieved 3 November 2016. <a href="http://www.ogj.com/articles/print/volume-94/issue-12/in-this-issue/general-interest/refining-report-complexity-index-indicates-refinery-capability-value.html" target="_blank">http://www.ogj.com/articles/print/volume-94/issue-12/in-this-issue/general-interest/refining-report-complexity-index-indicates-refinery-capability-value.html</a> <a href="#fnref:4" class="footnote-back-ref">↩</a></p></li>
<li id="fn:5"><p>"PMI-Oman 2014". pmioman14.wordpress.com. 17 June 2014. Retrieved 3 November 2016. <a href="https://pmioman14.wordpress.com/2014/06/17/w3_s-algheilani_nelson-complexity-index/" target="_blank">https://pmioman14.wordpress.com/2014/06/17/w3_s-algheilani_nelson-complexity-index/</a> <a href="#fnref:5" class="footnote-back-ref">↩</a></p></li>
<li id="fn:6"><p>"Reliance's refinery complexity index rises to 21.1", Economic Times, 26 July 2019, archived from the original on 2019-10-12, retrieved 2019-07-26 <a href="https://web.archive.org/web/20191012062659/https://economictimes.indiatimes.com/industry/energy/oil-gas/reliances-refinery-complexity-index-rises-to-21-1/articleshow/70397204.cms" target="_blank">https://web.archive.org/web/20191012062659/https://economictimes.indiatimes.com/industry/energy/oil-gas/reliances-refinery-complexity-index-rises-to-21-1/articleshow/70397204.cms</a> <a href="#fnref:6" class="footnote-back-ref">↩</a></p></li>
</ol>

Nelson complexity index open-in-new

Nelson complexity index