crude oil quality group meeting september 27, 2001 … · 9/27/2001 · 6 crude oil quality...

1

CRUDE OIL QUALITY GROUP MEETINGSEPTEMBER 27, 2001

Topic:

Crude Oil Quality ProgramsWhat is Involved & Why is

Quality Important ?

Presenter

Aaron L. DillardConoco Inc.

Director Commercial SystemsHouston, Texas

2

Crude Oil Quality Programs What is Involved & Why is Quality Important

Outline

OverviewU.S. Industry ActivitiesCrude Quality Oversight ProgramsConoco’s Crude Quality InitiativesWhat Else Is NeededBenefits of Crude Quality Monitoring

3

Crude Oil Quality ProgramsWhat is Involved & Why is Quality Important

Overview

What is Crude Quality?The ability to understand the characteristics of the crude oil that is delivered to the refinery gate.

Why do we need to know about Crude Quality?To predict the yields of the product streams

GasolineJet FuelKeroseneFuel Coke

To improve refining economics

To Get What You Pay For

Reduce the risk of contamination

4


Overview

What are the biggest challenges to crude quality?Complexity of pipeline distribution systems that transverse the country.

Lack of cooperation from common carrier pipelines to address crude quality issues.

Ability to truck crude oil to many different locations on pipeline systems.

Ability to blend sweet and sour crude oil together to gain an economic market advantage.

Other unauthorized blending such as Natural Gas Liquids and Heavy Sour crudes for a pricing advantage in the market place.

Contamination at the well head.

5

Crude Oil Quality ProgramsIndustry Activities

Crude Oil Quality Group

COQG - Mission Statement:The Crude Oil Quality Group (COQG) is dedicated to the belief that maintaining the integrity and consistency of the refining characteristics of crude oil is of importance to all partiesinvolved in crude oil activity, from production locations to the refinery.

The COQG believes the commonly used industry standards of gravity and sulfur do not adequately define crude oil quality, and should be expanded to include other characteristics such as Simulated Distillation and metals.

The COQG is opposed to the alteration of crude oil streams, such as the injection of processes gas liquids, without the knowledge and consent of the parties involved.

6

Crude Oil Quality Programs Industry Activities


To promote these beliefs, the COQG will strive to:Communicate the information to the oil industry at large.

Create and sponsor forums for open communications and sharing of information and ideas to better educate the crude oil industry.

Be-proactive in the advancement of our belief with all areas of the supply chain such as producers, transporters, traders and refiners.

Improve the overall quality of crude streams through the promotion of crude quality programs on common carriertransportation systems.

Be closely involved with various industry associations to further promote crude quality initiatives.

7



COQG sponsored several successful industry endeavors promoting crude oil quality.

A refiners sponsored sampling and testing program on the CaplinePipeline System in Louisiana resulted in specifications for API Gravity, Sulfur, Vanadium and Nickel, Microcarbon Residue and Distillation points effective 10/1/98.

Commissioned an industry crude oil quality survey by Ernst & Young-Wright Killen in 1997 which represented over half of the U.S. refining capacity.

Sponsored Basin Pipeline sampling and testing program for WTI and West Texas Sour crudes. COQG members spent over $400,000 over 3 ½ years.

Basin Pipeline instituted gravity and sulfur specifications on 1/1/2000 on their system based on the COQG sampling and testing information and it has received industry acceptance.

8



Some current crude quality initiatives include:Expanding the crude quality specifications on pipelines in the West Texas/New Mexico areas to include Simulated Distillation and Metals.

Sponsoring a Water in Crude subcommittee to identify more accurate methods of water determination and recommendation for industry acceptance.

Participating in methanol and salts in crude industry forums.

Working with the NYMEX to establish the appropriate specifications for the streams covered (i.e. WTI & WTS) in their upcoming eNymex roll-out.

9



Some current crude quality initiatives - Continued

Survey on the effects of additives on refining and pipeline operations

Member companies have established an in-line methanol analyzer currently in use on the Capline system

A laboratory Round Robin for crude oil analysis was formed and attracted 40 responders each quarter.

10

Crude Oil Quality ProgramsIndustry ActivitiesCOQG - Producers

Jointly working with other industry parties on issues such as:

Methanol based products for down hole well treatment.

Organic Chlorides based material used for well work.

How to handle high acid crudes.

11

St. James

Midland, TX

Cushing, OK

Patoka, Ill.

Basi

n Pi

pelin

e

Cap

line

Guernsey, WY

Express Pipeline

COQG- Crude Supply Pipeline Flow Example

Enbridge Pipeline

JAL

12

CAPLINE SYSTEM LIGHT LOUISIANA SWEET STREAM SPECIFICATION

Property

Recommendations

Minimum

Maximum API Gravity 34 41 Sulfur % wt. 0.40

Metals (Vanadium + Nickel) – PPM 8

Light Ends (C1 – C5), Vol. % 6

Microcarbon Residue 2.5

20% HTSD Point, ºF 280 380


1020 Degrees + HTSD -WT. % 4 12.5

13

BASIN PIPELINE SYSTEM STREAM SPECIFICA TIO N PROPOSAL

DOM ESTIC SW EET

Property Recommendations

M inimum

M aximum

M etals (Vanadium + Nickel) –PPM 11 Light Ends (C1 – C5), Vol. % 8



1020º + HTSD, Vol. % 4 12

Domestic Sweet Existing Stream Specifications

M inimum

M aximum

API Gravity 37 42 Sulfur % wt. 0.40

14

BASIN PIPELINE SYSTEM STREAM SPECIFICATION PROPOSAL

WEST TEXAS/NEW MEXICO SOUR

Property

Recommendations

Minimum

Maximum API Gravity 29 37 Sulfur % wt. 2.1

Metals (Vanadium + Nickel) – PPM 20

Light Ends (C1 – C5), Vol. % 6



1020º + HTSD, Vol. % 7 18

15

eNymex Crude Streams & Locations

West Texas Intermediate -Midland, TX

West Texas Sour - Midland, TX

Light Louisiana Sweet - St. James, LA

Mars Blend – LOOP - Louisiana Offshore

Brent Blend - Foreign Crude

16

EXAMPLE: Grade and Quality Specifications (WTI Midland)

(A) Stream Designation: Light Sweet crude oil must conform to the industry quality specifications for Domestic Sweet Crude.(B) Sulfur: 0.40% or less by weight (C) Gravity: Not less than 37 degrees API, nor more than 42 degrees API (D) Viscosity: Maximum 100 Saybolt Universal Seconds at 100 degrees Fahrenheit(E) Reid Vapor Pressure: Less than 8.6 pounds per square inch at 100 degrees Fahrenheit (F) Sediment & Water: Less than 1% as determined(G) Pour Point: Not to exceed 35 degrees Fahrenheit from October through March, and not to exceed 55 degrees Fahrenheit at any time, as determined by the accepted A.S.T.M. Standard.

eNymex - DRAFT CONTRACT TERMSWest Texas Intermediate (WTI)

Midland Crude Oil Futures Contract

17

Crude Oil QualityOversight Programs

Crude Quality, “what’s involved and why it’s important”, is a major issue in the petroleum industry today.

A crude quality oversight program is designed to monitor the ongoing quality of a crude supply by measuring certain key properties that correlate to quality. The benefits of this type of program are:

keeps suppliers honestallows ongoing valuation of individual crude streams used in trading decisionssupports refinery operations/optimization effortsidentifies possible contamination sources

supports regulatory compliance efforts

18

Crude Oil Quality ProgramsUnderstanding the Supply and

Distribution System

A successful quality oversight program begins with understanding the crude supply and distribution system. Crude Oil is distributed in a variety of ways:

Foreign Crudes into the U.S. are typically transported by ship or barge and are received at a port location that has additional distribution capabilities (Tankage, Pipelines, Trucking).

Domestic Crudes from North America are typically collected then injected into a pipeline system which moves it to it’s final destination. Production of these crudes can range from very small to very large volumes and may be handled in several ways before being put into a pipeline.

Domestic crudes can be collected in the pipeline gathering system tankage, transported by truck, or injected into a major pipeline system for delivery to a refinery .

19

Crude Oil Quality ProgramsUnderstanding the Supply and

Distribution System

Crudes can be distributed as segregated batches or similar crudes can be commingled if they meet certain common quality specifications.

The pipeline distribution system is an expansive network of pipelines, with: gathering systems, holding facilities, and blending operations. This network of interconnected pipeline systems can be company owned, jointly owned or independently owned and operated.

As crude moves through the distribution system and custody changes takes place, monitoring it’s quality becomes very important.

Understanding where the crude is at any given point and time in the distribution system and who has custody of it, allows the product to be sampled at specified sampling locations then analyzed for quality

characteristics.

20

Crude Oil Quality ProgramsSampling Process

Where to sampleSample points are locations where a physical sample of a particular crude stream is collected. Sample points should be established at points of custody transfer and at points along the distribution system in which a potential for product

degradation could occur.

Types of samples:Samples should be as representative of the crude as possible, and come in many different forms: grab sample, tank composite (Top, Middle, Bottom), and in-line composite.

Scheduling and frequency of sample collection:Stream quality should be monitored on an ongoing basis. The frequency should be determined based on the stream volume, contamination potential, environmental compliance and the ability to efficiently manage the process.

Shipping/Transporting samplesSamples that are to be sent off site for analysis, should be properly packaged in approved containers, and shipped according to DOT (U.S. Department of Transportation) regulations.

21

Example of a Good Sample Container

22

Example of a Poor Sample Container

23

Crude Oil Quality ProgramsAnalytical Analysis of Crude Samples

Determining what to test for

Typically crude is valued based on its yield of intermediate andfinished products, and on it’s sulfur content.

The two most common properties that gauge quality and should be measured are API Gravity (Density) and Total Sulfur content.

A high API gravity indicates a lighter crude which would yield ahigher percentage of the lighter fraction components such as light gases, gasoline, kerosene, and diesel.

Another measurement of quality typically performed in the field is Basic Sediment and Water (BS&W) which has no value but can cause processing problems in the refinery and results in lost dollars.

24

Crude Oil Quality ProgramsAnalytical Analysis of Crude Samples

Determining what to test for (Continued)

Historically high sulfur (sour) crude is valued lower than low sulfur (sweet) crude. This is because that high sulfur crudes have special processing requirements in the refinery.

Additional quality monitoring tests may be required for specific or unique applications:

metalsorganic chloridesSimulated DistillationRVP

Selecting a testing laboratoryA certified petroleum testing laboratory should be used when analyzing the crude oil samples.

25

TBP Distillation

0

200

400

600

800

1000

1200

0 25 50 75 100

Volume %

Tem

p. D

eg. F

Blend

Straight Run Gasoline

Naphtha

Kerosene

Gasoil

Heavy Distillate

1050 + Resid

26

Crude Oil Quality ProgramsAnalytical Results into Usable Information

Validating analytical resultsBecause crude quality oversight can involve the monitoring of many streams, the ability to effectively manage large volumes of data is critical.

Results should be reviewed and validated by someone familiar with analytical methodology and must be able to translate the data into useful information.

Managing/Storing resultsAnalytical data should be stored in user friendly databases which allow for interfacing with other software tools.

The end user will need a quick, highly functional way to view the crude quality data and be able to look at quality trends over time.

27

Crude Oil Quality ProgramsAnalytical Results into Usable Information

Significance of Information

Quality information about individual crude streams allow for:

Historical comparisons

Evaluation of crude supply stability

Comparisons of one stream to another.

28

Conoco Inc.Crude Oil Quality Program

Conoco has a crude oil sampling and testing program to monitor the characteristics of crude to the four U.S. refineries which process approximately 550,000 BPD.

The program covers;50 major locations such as Cushing, Oklahoma and Guernsey, Wyoming.40 sampling points such as Equilon Pipeline or Express Pipeline.60 truck points250 crude oil streams

29

Conoco Inc.North America Refineries

Billings Refinery

•Refinery Capacity

•TOTAL: 55 MBBLS/day

Denver Refinery•Refinery Capacity

•TOTAL: 55 MBBLS/day

Ponca City Refinery

•Refinery Capacity

•TOTAL: 185 M/day

Lake Charles Refinery

•Refinery Capacity•TOTAL: 255 MBBLS/day

Billings, Montana

Denver, CO

Ponca City, OK

Lake Charles, LA

30

Conoco Inc, Crude Assay; General Format. For details contact: ETN 639-4600 Pat Morgan Commercial Support Intranet Site

Crude Oil Supply and Trading, Commercial Support

Crude: Canadian Rangeland Sour

Common Name: Rangeland Sour Detailed Name: Canadian Rangeland Sour Assay Type: Whole Crude Crude Number: Q000382 Crude Type: Light Base Assay: C970114 Sample Date: 10-May-00 Crude Sulfur: Low Sour Country of Origin: Canada Testing by: Conoco

TBP DISTILLATION SUMMARY CRUDE PROPERTIES LIGHT COMPONENTS Cut Point Temp, °F Gravity, API 34.2 C1, Vol. % 0.00 C5 Gravity, Specific, 60/60°F 0.8540 C2, Vol. % 0.08 155 Sulfur, Total, Wt. % 1.04 C3, Vol. % 0.49 185 Sulfur, Mercaptan, Wt. % 0.008 iC4, Vol. % 0.36 210 H2S, Wt. % - nC4, Vol. % 0.99 335 Nitrogen, Total, Wt. % 0.08 neo-C5, Vol. % 0.00 380 Acid Number, mg KOH per gram 0.09 iC5, Vol. % 1.07 450 Vanadium, Wt. ppm 8.9 nC5, Vol. % 1.44 510 Nickel, Wt. ppm 4.2 Cyclo C5, Vol. % 0.00 580 Iron, Wt. ppm 5.7 Total C5 and Lighter, Vol. % 4.43 635 Copper, Wt. ppm 0.1 Total C6 and Higher, Vol. % 95.57 725 Con. Carbon Residue, Wt. % 2.50 Benzene, Vol. % 3.75 785 Salt (Chlorides as NaCl), lb/1000 bbl 15.0 Benzene Precursors, Vol. % 3.75 830 Water & Sediment (S&W), Vol. % 0.3 900 Viscosity @ 60 Deg F, cs 15.70 Resid Properties 970 Viscosity @ 80 Deg F, cs 9.90 1050+°F Resid, Vol. % 12.0 1050 Viscosity @ 100 Deg F, cs 6.72 1050+ API 5.8 1050+ Pour Point, °F 38.0 1050+ Tot Sulfur Wt. % 3.19 Reid Vapor Pressure, psi - 1050+ Conradson Carb, Wt. % 30.7 Coke Yields and Properties (Reg Coke

1050+ Vanadium, Wt. ppm 61.8 Coke, Tons/ 10,000Bbl of Crude Watson Characterization Factor 11.8 1050+ Nickel, Wt. ppm 29.1 Coke Sulfur, Wt. %

1050+ Asphaltenes, Wt. % 17.0 Coke Vanadium, Wt. ppm Coke Nickel, Wt. ppm

Straight Run Refinery Products Coke Iron, Wt. ppm Gas (Butane & Ltr), Vol. % 1.9

T B ili P i t D t C di R l d S

31

Straight Run Refinery Products Coke Iron, Wt. ppm Gas (Butane & Ltr), Vol. % 1.9 Straight Run (C5 to 210°F), Vol. % 9.2 Naphtha (210 to 380°F), Vol. % 19.5 Kero (380 to 510°F), Vol. % 14.2 Heavy Dist (510 to 725°F), Vol. % 22.4 Gas Oil (725 to 1050°F), Vol. % 20.8 1050+°F Resid, Vol. % 11.9

Total 100.0 750+°F Topped Crude, Vol. % 24.9

True Boiling Point Data

0

200

400

600

800

1000

1200

1400

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0Volume %

Tem

pera

ture

, F

Canadian Rangeland So

0

5

10

15

20

25

Yiel

d, V

ol. %

Refinery Product Streams

Gas St. Run GasolineNaptha KeroseneHeavy Dist Gas OilResid

32

Long Name: Canadian Light Sour, Rangeland PL at Cut Bank (BL)Area Name: Cut Bank Assay No. Q000382 Comments: Hartell North + Raven SouthUnit Name: Rangeland Pipeline Base Assay No. C970114 BATCHSample Pt: Canadian Rangeland Light Sour Nom Vol,b/d: 14,000

This Data All Pts RecentNum Pts 54 12

Assay OffsetAverage #REF!

UCL 38.31LCL 33.65Min 33.60Max 39.10

Start Date 01/01/99End Date 08/31/01

Recent Date 02/01/01

Assay Value 34.20

Specification Values Error Count

Upper Spec - -Lower Spec - -

Historical All Pts Assay OffsetCount 127

Average 34.75 0.55UCL 37.03LCL 32.47

Legend for single selection

Old Points −−−−−−−−−−−Recent Points −−−−−−−−−−−Control Limits

Trendlines

AverageAssay

API Gravity

38.31 38.31

33.65 33.65

35.9835.98

34.2034.20

33.00

33.50

34.00

34.50

35.00

35.50

36.00

36.50

37.00

37.50

38.00

38.50

39.00

39.50

40.00

01/01/99 04/02/99 07/02/99 10/01/99 12/31/99 03/31/00 06/30/00 09/29/00 12/29/00 03/30/01 06/29/01

deg

API

Which Control Limits

Historical Current Calculated

33

Long Name: Canadian Light Sour, Rangeland PL at Cut Bank (BL)Area Name: Cut Bank Assay No. Q000382 Comments: Hartell North + Raven SouthUnit Name: Rangeland Pipeline Base Assay No. C970114 BATCHSample Pt: Canadian Rangeland Light Sour Nom Vol,b/d: 14,000

This Data All Pts RecentNum Pts 54 12

Assay OffsetAverage #REF!

UCL 1.188LCL 0.636Min 0.670Max 1.250

Start Date 01/01/99End Date 08/31/01

Recent Date 02/01/01

Assay Value 1.040

Specification Values Error Count

Upper Spec - -Lower Spec - -

Historical All Pts Assay OffsetCount 76

Average 0.853 -0.187UCL 1.053LCL 0.653

Legend for single selection

Old Points −−−−−−−−−−−Recent Points −−−−−−−−−−−Control Limits

Trendlines

AverageAssay

Specifications

Sulfur Content

1.188 1.188

0.636 0.636

0.9120.912

1.0401.040

0.60001/01/99 04/02/99 07/02/99 10/01/99 12/31/99 03/31/00 06/30/00 09/29/00 12/29/00 03/30/01 06/29/01

Sulfu

r, w

t%

Which Control Limits

Historical Current Calculated

34

Crude Oil Quality ProgramsWhat Else is Needed in the Industry

More overall involvement by Refiners

More commitment and acceptance of crude oil quality issues by Common Carrier Pipelines

More involvement by Producers

35

Crude Oil Quality ProgramsBenefits of Crude Quality Monitoring

Crude Quality Oversight Programs Benefits

Crude Quality Oversight provides:A reminder to shippers and producers that the quality of the crude supply is being monitored on an ongoing basis.

Any dumping of off specification material, blending, or contamination will be detected and documented to support any corrective action.

Crucial information to enable more informed trading decisions

Compliance with regulatory programs

36


Trading Decision Benefits

Money can be made or lost when trying to secure crude for

refinery supply depending on the actual crude yields.

Crude quality monitoring provides information for making competitive trading decisions because it reflects the true value of a crude to the refinery.

Provides a better understanding of the relative value of one crude versus another crude you are considering to purchase.

37


Refinery Supply Benefits

The value of crude quality monitoring covers many areas, but thetwo most important are the areas of refinery optimization and crude valuation for refinery supply.

Crude Quality monitoring allows refineries to:

maximize crude rates

make on-spec products

minimize downtime

secure suitable low cost feedstock

38


Industry Crude Quality Benefits

Improved economics in the range of $0.10 to $0.25 per barrel based on Wright-Killen 1997 industry study of actual crude receipts versus refinery projections.

Based on 15 million barrels per day of U.S. refinery runs the overall refinery yield improvements are:

Daily: $1.5 Million to $3.8 MillionAnnually: $550 Million to $1.37 Billion

The economic prize is very large!

39


Conclusion

The North America refiners want to have an effective industry wide Crude Quality Program that monitors the quality of a crude stream, at any given point and time along the supply chain, and provides valuable information and support for the areas of Trading, Supply, and Manufacturing.

crude oil quality group meeting september 27, 2001 … · 9/27/2001 · 6 crude oil quality...

Documents