Oil 101 – Nelson Complexity Index


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What is the Nelson Complexity Index?

In this brief 2-minute podcast, we discuss the Nelson Complexity Index as it pertains to refinery complexity in downstream oil and gas.

Listen to Oil 101 – Nelson Complexity Index below or view all Oil 101 podcast episodes:

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Relevant Links:

Oil 101 – A FREE introduction to the oil and gas industry

What is Refining?

What is the difference between Upstream and Downstream?


Nelson Complexity Index

A refinery's complexity is assessed based on a concept known as the Nelson Complexity Index, or NCI.

This concept, developed by W.L. Nelson in the 1960s, 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.

Under the Nelson Complexity Index, the most simple refinery that only distills crude oil, called a topping refinery, is considered to have a complexity factor of 1.0.

All other processing units are rated in terms of their cost relative to this unit.

For example, a catalytic hydrotreating unit has a complexity of 2.0 while a coking unit is assigned a complexity of 6.0.

As more processes are added to a refinery, its complexity factor increases.

While the complexity factor is independent of the refinery capacity, multiple units of the same process – multiple hydrotreaters for example – do increase complexity.

A deep conversion refinery, with numerous and varying processes has the highest complexity factor of all, typically 9.0 or higher.

As an example, Marathon Petroleum's most complex refinery is its Galveston Bay Refinery which had a Nelson Complexity Index factor of 15.3 as of 2013.

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