Nelson Complexity Index - NCI

What Is the Nelson Complexity Index?

The Nelson Complexity Index (NCI) is a measure of the complexity of a oil refinery, where more complex processing plants are able to deliver lighter, all the more intensely refined and valuable products from a barrel of oil.

Processing plants that are higher on the Nelson Complexity Index are valued higher relative to their friends in light of their ability to handle lower quality crude oil or produce more value-added products. Due to their greater complexity, high NCI treatment facilities are more costly to build and operate.

Nelson Complexity Index Explained

The Nelson Complexity Index was developed in 1960 by Wilbur Nelson. Since the subtleties of how a refinery operates are hard to understand without particular industry information, the Nelson Complexity Index gives a simple measurement to evaluating and positioning the complexity and complexity of various processing plants.

As indicated by the Oil and Gas Journal, Nelson really developed the complexity index to measure the relative cost of parts that make up a refinery. A pure cost index gives a relative measure of the construction costs of a specific refinery in light of its crude and overhauling capacity. The NCI compares the costs of different updating units to the cost of a pure crude refining unit. Calculation of the index is an endeavor to measure the relative cost of a refinery in view of the added cost of different updating units and the relative redesigning capacity.

The NCI is measured on a scale from 1 to 20, where low numbers address treatment facilities that are simple in nature and produce low-quality fuel, like stream fuel and heating oil, and high numbers address more complex and costly processing plants that produce high-quality light fuels, like gasoline and lamp oil.

Which Refineries Will Thrive?

Bain and Company, a management counseling firm, has developed a proprietary model that shows which oil treatment facilities around the world are probably going to succeed and which are probably going to fail in light of their refining capacity and Nelson Complexity Index rating. The interactive realistic shows by geographic region where these processing plants are found. In view of the Nelson Index, on average, U.S. processing plants are the most complex in the world. In any case, there is a rising number of highly complex processing plants situated in different countries.

Refining assumes an imperative part in keeping up with the nation's fuel supplies. In Europe, for instance, numerous processing plants have closed in light of the fact that they are too costly to upgrade and are unable to deliver the quality fuel modern consumers demand. In the OPEC countries, then again, a critical number of new investments are set to happen somewhere in the range of 2016 and 2021, with very nearly 8,000,000 barrels each day of potential new refining projects.

Highlights

• The Nelson Complexity Index (NCI) assesses what types of petroleum products an oil refinery can deliver.
• Measured on a scale from 1 to 20, the higher the value on the NCI, the more sophisticated and complex products the refinery can deliver.
• Higher-valued processing plants on the NCI will quite often be more costly to build and operate, yet additionally produce more profitable results.