CRUDE LOGISTICS

ByMiraj KumarSajin MadhavSchool of Petroleum Management, Gandhinagar

Midstream

Transportation (by pipeline, rail, barge, oil tanker or truck), storage, and wholesale marketing of crude or refined petroleum products.

Pipelines can be used to move crude oil from production sites to refineries

andrefined products to downstream distributors

Across WaterShips/ Oil tankers

Across LandPipelinesRailTrucks

Chartered Ships Freight Rate – Tonne Basis

– Worldscale points Worldscale points: Reference to a Standard Vessel on a round trip voyage

from one or several load ports to one or several discharge ports. Includes expenses associated with ports, transit fees, port, voyage time and

vessel bunker costs assessed in relation to the Worldscale Standard Vessel basis of calculation in order to produce a comparative nominal freight scale reported in dollars per tonne. Its principle is to provide the same net return per day irrespective of voyage performed for the Worldscale Standard Vessel at WS100.

Standard vessel: Total capacity 75000 Speed 14.5 knots Bunker consumption:

○ 55t/d at sea; plus 100t/voyage, 5 t/d in port Port time 48 hours per port for one to one voyages plus 12 hours for

additional port(s) Fixed hire element USD 12,000 per day

Rates are revised annually using updated Bunker Prices, Port Costs and Exchange Rates.

Market levels of freight are expressed in terms of a percentage or Worldscale equivalent of the nominal freight rate

Charter Party: Contract depicting rate, time, duration of charter

Time charter equivalent Lightering Mooring

Challenges

Choke points Port Specifications and Limitations Tanker availability Insurance & Reinsurance Oil Spill, Fires, Explosion Pirates

Pipelines

Crude Pipeline

Crude Pipeline in India Naharkatia-Nunmati-Barauni Pipeline:

This was the first pipeline constructed in India to bring crude oil from Naharkatia oilfield to Nunmati, Assam

Mumbai High-Mumbai-Ankleshwar-Kayoli Pipeline: This pipeline connects oilfields of Mumbai High and Gujarat with oil

refinery at Koyali. A 210 km long double pipeline connects Mumbai with Mumbai High

Salaya-Koyali-Mathura Pipeline: An important pipeline has been laid from Salaya in Gujarat to

Mathura in U.P. via Viramgram. This is 1,256 km long pipeline which supplies crude oil to refineries at Koyali and Mathura.

Kandla-Bhatinda Pipeline: This 1,331 km long pipeline is proposed to be constructed for

transporting crude oil to the proposed refinery at Bhatinda. It is to be constructed by IOC at the estimated cost of Rs. 690 crore.

Gas Pipelines

Gas pipelines in India Hajira-Bijapur-Jagdishpur (HBJ) Gas Pipeline:

This pipeline has been constructed by Gas Authority of India Limited (GAIL) to transport gas. It is 1,750 km long and connects Hazira in Maharashtra to Bijapur in M.P. and Jagdishpur in U.P.

Jamnagar-Loni LPG Pipeline:This 1,269 km long pipeline has been constructed

by Gas Authority of India Limited (GAIL) at the cost of Rs. 1,250 crore. It connects Jamnagar in Gujarat to Loni near Delhi in U.P. and passes through the states of Gujarat, Rajasthan, Haryana and U.P. This is the longest LPG pipeline of the world.

The Competing Gas Pipelines IPI

Iran–Pakistan–India TAPI

Turkmenistan–Afghanistan–Pakistan–India NABUCCO

Turkish-Bulgarian border to Austria South Stream

Russian to Austria through the Black Sea to Bulgaria and through Serbia, Hungary and Slovenia further

Blue StreamRussia into Turkey

Product Pipeline

BPCL Pipelines

MMBPL (Mumbai Manmad Bijwasan Pipeline - 1384 KMs.)

BKP (Bina Kota Pipeline257 Km)

Flow in the pipeline follows a Cycle which is as follow:

HSD III

HSD IV

HSD III

SKO MS III

MS IV

SKO

Important Terms

Transmix Hard cut

When fifty percent of the product is retained and fifty percent is supplied further then we call the process as hard cut

Challenges

Pressure drop Water content in products Theft Scheduling Operations

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