What is the Nelson Complexity Index ?

[Nasir Hussain]

The Nelson Complexity Index (NCI) is a measure of the complexity of an oil refinery, where more complex refineries are able to produce lighter, more heavily refined and valuable products from a barrel of oil.
Refineries that are higher on the Nelson Complexity Index are higher valued and complex with more processing units relative to their peers. These refineries have more ability to process lower quality crude oil or produce more value-added products. Refineries with their high NCI refineries are costly and complex to operate.

NCI is measured on a scale from 1 to 20, the higher the value on the NCI, the more sophisticated and complex products the refinery can produce.
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.
More about Nelson Complexity Index can be viewed on the following links;
1.Nelson Complexity Index at Investopedia
2. Nelson complexity index at Wikipedia

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