The meeting agenda was distributed to those in attendance. There were 34 attendees of which 11 paid the attendance fee.

Legal Review of Anti-Trust - Harry Giles, COQA Facilitator, reminded all attendees to review the Standard Setting Rules prior to each meeting. The Rules can be found on coqa-inc.org under "Information".

Update on Low Dosage Hydrate Inhibitors - Mr. Mike Zetlmeisl of BakerPetrolite updated us on the studies conducted to date on LDHI and its possible impact on refining. During laboratory simulations, it was concluded that, at the low dosage levels it is predicted a refinery will actually see, there were little or no adverse affects on refining operations. Baker has demonstrated significant advantages of LDHI over methanol and are convinced that it is more cost effective overall. A paper on the LDHI refining evaluation is available; please contact the COQA Facilitator for a copy.

Expanding Quality Banks for Deep Water Wells – Mr. Max Cummings of Allocation Specialists Inc. (ASI) and Mr. Tom Walters of Marathon Ashland Petroleum talked to the group about Gravcap and possible future directions. Tom is the president of Gravcap, which ASI manages. Gravcap is a quality bank that was founded over 30 years ago by shippers of common stream crudes in the Bonito, Whitecap, Ship Shoal and Capline pipeline systems. The purpose of a quality bank such as Gravcap is to make monetary adjustments to shippers to level the impact of specified differences in a common stream crude.

Gravcap is considering expanding its area of coverage to include the Poseidon, Mars and Amberjack systems. The current table of remuneration would need to be addressed, which is easily accomplished. Gravcap also solicited input from members as to the possibility of a quality bank on, for example, the Basin system. Again, the table could be easily adjusted to make the blending of sour and sweet crudes economically accountable. Max also noted that other parameters, such as metals or High Temperature Simulated Distillation, could be included in the economic adjustments. Gravcap, as the quality bank on any of these systems, has advantages in that it is shipper owned and operated and, therefore, has the shippers’ interest in mind. Also, the operator, ASI, has a great deal of experience in quality banks. There was interest shown in expanded Gravcap operations by certain COQA members. Max will be in touch to further pursue the means of any expansion. Please feel free to contact Max or Tom if you have comments or input.

TEPPCO Operations and Organization - Mr. Doug Arrick of TEPPCO enlightened the COQA about TEPPCO’s crude operation. TEPPCO is a leading supplier of pipeline transportation, storage and terminaling services to the petroleum and petrochemical industries. Their crude oil business includes gathering and transportation with a fleet of approximately 60 trucks. TEPPCO also has an extensive pump-over business in the Cushing and Midland areas. TEPPCO operates Seaway crude pipeline and is a part owner in the Basin and Rancho pipeline systems. Seaway uses Karl Fischer for its Texas City-Pasadena-Galena Park system and for local deliveries at Freeport. The Seaway 30 inch Freeport-Cushing system uses centrifuge. All TEPPCO pipelines use centrifuge.

TEPPCO has a quality manual for their Seaway system that includes approval procedures for new crudes. It is primarily an operating manual but does include specifications for BS&W, gravity, pour point and viscosity.

TEPPCO Operations - View this Document****
**(Requires free Adobe Acrobat Reader)

Producers’ Perspective on Crude Quality - Mr. Bill Lywood of Crude Quality, Inc. filled us in on the status of quality in the Canadian oil industry. There has always been a communication gap between producers and refiners. Some of those miscommunications are based on different perceptions of quality versus value and quality versus consistency. The quality of a crude should be objectively measurable, while the value is subjective. Also, crude as it is produced at the well head is always consistent. However, when it hits the complicated supply chain, that consistency can be disrupted. The producer in general is willing to supply a quality stream but requires that its value be returned. Refiners need to establish what quality parameters are of value to them and ensure that the producers know this information.

CrudeMonitor is relatively new and will require the cooperation of refiners to succeed. Feedback to the producers is necessary as well as the consideration of monetary return on their quality investment, i.e. equate quality with value. Also, by encompassing all players, it is envisioned that consistency will begin to be more manageable and deliverable.

Update on the CCQTA – Mr. Bruce Kennedy of Petro-Canada updated us on the quality initiatives of the Canadian Crude Quality Technical Association. Phosphorous deposition continues to be an issue, even with the availability of the recently developed Phosphorous free gelling system. The next issue for the project to address will be how to increase awareness and usage of the new system. The Canadian Association of Petroleum Producers (CAPP) has assumed the crude testing program. All data is available on www. crudemonitor.ca. Work continues on the heavy crude oil BS&W issue and on the additive screening techniques. Details on each project can be found on www.ccqta.com.

Update on Capline Quality Parameters - Ms. Patti Edens of Equilon Pipeline reported that Equilon Pipeline had been requested to consider tightening the existing specifications for metals and MCRT. The MCRT has been trending upwards, but is still below the proposed new limit, which may be feasible. Equilon will monitor the data for an additional six months before making a final decision. However, after analyzing the metals data, the proposed new specification was found to be too stringent (too many excursions), and will not be implemented.

Capline Metals Analysis - View this Document**

Capline MCRT Analysis - View this Document****
**(Requires free Adobe Acrobat Reader)

Mid-Continent Subcommittee Update - The connecting carriers are cooperating very well with the 0.4% sulfur specification on Basin Pipeline. Due to start up systems problems, NYMEX has not yet begun trading at Midland, but hopes to do so in the near future. On October 15, 2001, a letter was sent to all Basin Pipeline connecting carriers requesting that they implement the Basin specifications for gravity and sulfur immediately and also consider implementing standards for other parameters such as metals and distillation. Response from some of the connecting carriers has been favorable, with them including quality language in their tariffs or their operating procedures to match Basin Pipeline specifications. Mr. Aaron Dillard of Conoco informed the general audience that the Mid-Continent subcommittee has served its purpose to promote specifications on Basin Pipeline and would no longer meet as a group. It will be disbanded in favor of a subcommittee devoted to quality and trading. Anyone interested in heading the new trading subcommittee should please contact the COQA Facilitator.

COQA Water Measurement Subcommittee – At the subcommittee meeting, Harold Osborne of LOOP shared their experiences with Karl Fisher measurement. Also, Kim Mohajer of KAM Controls talked a bit about the solvent disposal issue. Doug Arrick of TEPPCO Crude announced that the API / ASTM water measurement committee is looking for volunteers to assist in recalculating precision for some of the water test methods. Interested parties can contact Doug at darrick@TEPPCO.com.

Report on Additives Meeting – Final comments on the Chemical Component Survey were solicited. The Survey Summary will be emailed to all COQA members as soon as the latest comments are incorporated.

COQA Web Site and Budget Report – The Facilitator reviewed the annual financial report for 2001. You may review past minutes, our Retrospective Review and Mission Statement and a complete membership listing (name, company, email, phone) on coqa-inc.org. A forum page has recently been added to our web site.