Revolution in Small Refinery Business; Smart Refinery Technologies
This article aims to present particular information and my conclusions on the ICO regarding Smart Refinery Technologies blockchain platform that will allow for increase in the economic efficiency of the platform participants, by means of automation of business processes, reducing operational and transaction costs, and ensuring transparency and quality of data.
We have been observing that a lot of ICO projects come out every day. Unfortunately, many of them fails during ICO or post-ICO stage. According to Token Data, 46% of the ICO’s held in 2017 was failed by March 2018. It is important to understand the reasons for such failures to invest in ICO’s smartly. There are four main reasons for such failures; lack of need to the product, brand creation failure, unrealistic targets and budgets and lack of audit. One needs to check if these are considered well and handled successfully to ensure the ICO would not fail. Apart from these, market conditions affect the success of the ICO, which is an uncontrollable variable. An ICO would fail although it worked out each item perfectly in a bearish market.
There are huge benefits of blockchain technology to the industries applied. One of them is that it provides benefits to the participants of the process. These benefits are cost savings, time savings, improved security etc. Another benefit is that it makes the processes more effective and transparent than before. Overall, blockchain is capable to bring many benefits to the traditional industries.
Although there exist scam projects which harm the crypto ecosystem, crowdfunding via ICO’s is still the most favourite investment tool so far. Total amount of funds raised in 2018 up to October in 1131 ICO’s is approximately 7,1 Billion USD. Despite the ongoing bear market this figure is well above 6,2 Billion USD raised in 875 ICO’s in 2017.
Blockchain is ready to disrupt the industries exist. Most of the traditional industries still have antiquated and inefficient processes. There are many projects still in ICO phase that have potential to replace such processes. I believe mainstream adoption of cryptocurrencies will start with such real industry projects. Smart Refineries Technologies is one of those projects with such potential. SRT provides small refineries with efficient equipment or modules which make up the refinery. SRT provides these with long term leasing instead of selling. SRT will enable implementation of small oil refineries to distant places which will in turn lower fuel costs. It will also implement payment processes on blockchain which will enable partners to cut leasing and royalty costs.
- High prices of fuel because of logistics complexity to regions with low level of refining
- Low efficiency and environmental pollution in developing countries due to obsolete refineries
- No exchange for medium and small volumes of fuel. Expenses of oil traders when they try to find the right batch of oil products, complex calculation schemes and high risks.
- Payment in petrol stations can’t be done by cryptocurrency
- Decentralised network of small oil refineries creation with high speed of organisation and commissioning of Smart Refinery facilities
- Modernized refineries will become more efficient and eco-friendly EURO-5 class fuel production based on manufacturing modules of SRT Group
- Blockchain-based decentralized petroleum exchange: KYC of trading participants in blockchain, smart contract-based clearing, AI-system to help traders, payment of commissions of SRT tokens
- Issuance of a SRT international fuel card with the possibility to receive discounts on fuel up to 20% and pay for refueling both with fiat money and with cryptocurrency
In 2012, a team of enthusiasts led by Alexey Ognev launched a project to develop zeolite catalysts and refinery equipment for mini oil refineries. The studies and works gathered under the roof of Smart Refinery Technologies Group. Combining the developed catalysts and equipment tests have been performed under real operating conditions with successful results fully conforming to both the technical and marketing concepts of the project between 2014–2017. Developed equipment and modules include the following:
- ‘Gasoline Catalytic Isomerisation Module’ which Ensures production of marketable high-octane gasoline from straight-run gasoline.
- ‘Catalytic Diesel Fuel Paraffin Removal Module’ produces Arctic diesel fuel from summer diesel lowering the freezing point to -55C.
- ‘Catalytic Fuel Oil Cracking Module’ enables preparation of light petroleum products (gasoline and diesel fuel) from fuel oil. It increases the depth of oil processing at small oil refineries up to 85%, and raises the levels of business profitability.
SRT have developed the modules to be used to build small capacity refineries with an annual capacity of 10,000–100,000 tons of processes raw materials utilizing Lego construction concept. Besides, it is possible to provide individual modules to be introduced into the infrastructure of existing mini oil refineries with a capacity of up to 1 million tons per year of processed raw materials, for their modernization.
SRT Blockchain Platform
SRT Platform will be composed of two main components namely, Proof-of-Authority (PoA) consensus protocol and Industrial Internet of Things (IIoT).
SRT Platform will operate on the basis of Ethereum blockchain, using the PoA consensus mechanism which is based on the confirmation of transactions by Validators — independent participants, whose identity is confirmed publicly. The independent participants (owners of SRT-coin tokens), oil processing companies, technological partners (equipment suppliers), and Agents will be the Validators in the SRT blockchain platform. PoA consensus mechanism will reduce delays and costs as a result the network will function more efficiently than PoW consensus. The speed and reliability of Ethereum based private PoA networks are fully compliant with the requirements of the oil processing industry, and allow unlimited scaling of operations in accordance with the increase in number of participants, and the amount of data on the network.
IIoT on the other hand, is a distributed network of infrastructure, integrated with automatic process control system (ASU TP) of industrial equipment. It will allow the automation of collection of data about the equipment’s operations, license fees payments, and provision of global service support by the equipment supplier’s engineering centre.
SRT blockchain platform will be able to monitor the beginning and performance of obligations, to pay royalties, throughout the entire network of oil refineries. SRT equipment on existing partners’ sites need to regularly updated crypto-keys to be operated of which validity is 14 days. In the event of termination of payments by the refinery, validity of the crypto-keys expires and the equipment switched off remotely.
SRT Token is created as a utility token. SRT token will be used mainly as a payment means for the agreements or obligations between partner facilities and SRT Group of companies. Such utilities of the token are as follows:
- Payment of licence fees in the SRT platform: All production partners of SRT will be able to obtain SRT equipment on long term lease conditions. They will be obliged to pay royalties based on the actual volume of raw materials processed. Production partners will be able to get 20% discount from the sum of payment if they do the payment in SRT Token.
- Payments for lease of equipment and other SRT Group services: Production partners will be offered equipment and related services to be paid with SRT Token.
- Possibility of purchasing the goods and services of the platform participants: Platform participants can accept SRT Coin as payment for their goods and services delivered to SRT Group Company.
- The possibility of supporting the development of blockchain community and participation in the development of SRT blockchain platform.
- The possibility to use SRT-coin Tokens to support charity, research and other socially useful projects
- The possibility to become a member of the Club of Active Participants of SRT Coin project and be rewarded for active participation in the project. Details could be found in whitepaper.
Oil refineries or their agents will have an option to make payment to SRT Group via SRT Coin. If they prefer this option, they will pay 20% less to SRT Group. In order to achieve this, they need to buy SRT Coin from exchanges which will automatically raise the demand to coin and increase its’ price. It is expected that every year the number of refineries with SRT Group equipment will increase which will increase the value of token persistently. In addition to this, 80% of the tokens received as licence payment via SRT Blockchain platform will be burned which will result in decrease the number of tokens. This will also increase the value of token.
Team is composed seasoned professionals on the field of operation and design of oil refineries, petrochemicals, IT, software development. Research Supervisor of the project Alexander Gaile is a Professor at the Department of Technologies of Petrochemical and Coal Chemical Industries of Saint Petersburg Institute of Technologies since 1977. Author of more than 400 scientific works, including 30 monographs and manuals, 70 copyright certificates and patents, and received many state awards. Alexander Ponomarev, (Co-founder, Business Development Director) is a highly experienced professional in project management and business development in manufacturing and IT. Nickolay Vyazovick is the Head of Blockchain Platform development. Nickolay has more than 15 years of managing IT projects related to software development and implementation of IT Platforms in business processes of manufacturing companies. He also have blockchain development experience since 2014. Vitaly Kuzik, Technical Director, has more than 20 years of experience in oil processing including supervision of 5 mini refinery construction. Mikhail Ratasep is the Chied Design Engineer of SRT Group. Mikhail has more than 10 years of professional experience in the development of oil processing equipment.
Team has started working on the project in 2012 to develop technological solutions for secondary refinery processes for small oil refineries. Throughout the years, they have developed catalysts, performed laboratory and real production unit tests, created mobile unit-containers, improved catalysts and modules previously developed, developed a blockchain platform and supplied modernization equipment of partner oil refineries in Russia and Kazakhistan.
SRT ICO has got the best ratings from most of the ICO review sites where the ratings range from 80% to 98% over full rating.
There will be 3 stages of token sales in every year till 2020. Each one will have different token prices which was determined according to the assumptions made on the circulating supply and anticipated token price in the circulation. Since SRT coins are based on ERC20 standard, individuals who have intention to buy SRT need to have their own Ethereum compatible wallets. Then the buyers need to transfer desired amount of Ethereum to the contract address provided on official token sale site. Participation for token sale would be done by the official token sale web page:
There is no KYC at the moment but investors will need to complete KYC in order to withdraw their tokens to their wallets.
If there are unsold tokens left from the current crowdsale, those tokens will be sold in the upcoming token sales in 2019 and 2020. Price per token in those sales will be 5 and 10 USD respectively.
Starting in the year 2012, project completed successfully various milestones up to now. Upon completing ICO, SRT will launch oil refineries in Russia, submit patent applications, conclude contracts with partners and start buying tokens in 2018. In 2019, oil refineries in USA, Kazakhistan, Iraq and Bangladesh will be implemented. In 2020, creation of global oil refineries network will be done.
Fossil fuels are still the weapon of choice and will be for a couple of decades for industries like vehicle and transportation. Therefore, oil refineries will still be the major economic power of countries during that period. This makes the projections of SRT achievable in my point of view.
The equipment developed (refinery modules, catalyst etc.) and the technology to be implemented (PoA & IIoT) combines to create a unique system. The industry segment where this blockchain will be applied needs high process safety so switching off remotely needs to be performed considering safety but, I am sure that the team is composed of industry professionals so this has been considered while implementing the system.
Focusing on small to medium oil refinery industry makes project unique. Business model introduced gives a real use case for the SRT token. When long term leasing of equipment, which is the only way to use SRT Group equipment, and royalty to be paid based on the volume of raw materials processed preferred to be paid in SRT token partners get 20% discount on the total amount to be paid. Oil refineries and their agents would like to pay in SRT so the demand will grow everyday with new partners on board. Furthermore, since 80% of the royalties paid in SRT will be burned, token supply will decrease everyday which will add value to the tokens also.
Team is composed of seasoned professionals and they have already developed and optimized their products. Unlike most of the ICO projects, team has implemented working products. There is no doubt about the team in the sense of compatibility.
According to the roadmap it seems that the only things left unimplemented are very few. Most of the time-consuming hard work have already been completed. Remaining milestones for 2018 are all revenue generating items. This means that the value of the SRT token will start to increase independent of the market sentiment bear or bull.
Being able to pay with SRT at gas stations is a great idea which would help cryptocurrency adoption to be accelerated.