Nelson's Complexity Index. This is the index through which the level of complexity of a refinery is measured worldwide. Higher the index, higher is the complexity. The complexity signifies the ability of a particular refinery to alter its product-mix in response to the availability of the type of feedstock and also the change in the demand pattern of the finished products. It indicates large secondary processing capacity, leading to higher value addition, and higher refining margins, as compared to less complex refineries. For e.g. lighter distillates command a premium over middle and heavy distillates and middle over heavy distillates. Also different types of crude oil produces different distillates in different proportions. But the more complex refinery would be able to achieve product mix desired on different variety of crude input. This enables the refinery to optimize its output
Refinery size usually is measured in terms of distillation capacity. Relative size, however, can be measured using refinery complexity--a concept developed by W.L. Nelson in the 1960s. Nelson developed the complexity index to quantify the relative cost of components that make up a refinery. It is a pure cost index that provides a relative measure of the construction costs of a particular refinery based on its crude and upgrading capacity. The Nelson index compares the costs of various upgrading units--such as a fluid catalytic cracking (FCC) unit or a catalytic reformer--to the cost of a crude distillation unit. Computation of the index is an attempt to quantify the relative cost of a refinery based on the added cost of various upgrading units and the relative upgrading capacity. A review of complexity calculations, and an explanation of how indices have changed, provide a simple means of determining the complexity of single refineries or refining regions.