Summary
Crude Oil Quality Association
New Orleans , LA
January 29, 2004

Details on the meeting presentation can be found on www.coqa-inc.org or by contacting the COQA Director, Harry Giles, at dir.COQA@verizon.net.  Please note that this is a NEW Email.  The Director will also provide an attendance roster, upon request.

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

Synthetic Crude Update
Mr. Tim Blackmore of Omnicon Consultants presented the group with definitions and descriptions of synthetic crudes.  Synthetic crudes typically refer to crude that has been created from full or partial upgrading of oilsands or very heavy crude.  “Oilsands derived crude” is the formal name for Canadian synthetic crudes exported to the US .  Oilsands derived crudes come with a variety of differing properties:  

·        Fully hydrotreated bottomless crudes

·        Fully hydrotreated heavy crudes

·        Partially upgraded crudes (typically only the naphtha cut might be hydrotreated)

o       with or without bottoms

·        Synbits (bitumens diluted with a light synthetic crude)

o       Conventional Canadian heavies are “dilbits” (bitumens diluted with condensate)

Distillation, sulfur, acidity, etc, will vary in any of these types of crudes dependent on the source of the oilsands and hydroprocessing techniques.

SYNTHETIC CRUDE  - OMNICON CONSULTANTS - View this Document****
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Ashok Anand shared the experiences of Enbridge Pipeline in moving synthetic crudes.  Enbridge operates 9500 miles of pipelines in the US and Canada .  There are sixteen lines in the system and, over those lines, Enbridge moves 70 different types of natural gas liquid, refined products and crudes, including synthetics.  It is projected that oilsands derived crudes will account for about half of the crude moved over the lines within ten years.  Enbridge has controls in place to maintain the integrity of all of the shipped commodities.  The controls vary, depending on the properties of the synthetic crude.  For example, fully hydrotreated heavy crudes generally move as regular heavy crude oil, but partially hydrotreated crudes require buffers and segregated breakout tankage.  Fully hydrotreated bottomless sweet synthetic light crudes are transported in segregated lines or with only light sweet / medium crude.  Also, as noted in Tim’s presentation, synthetic crudes have a variety of properties just like naturally produced crude oil.  This means that certain synthetics may require flush batches for high TAN, or other parameters, even if classified as a fully hydrotreated heavy.  There are many types of synthetic crudes available and methodologies to handle them need constant innovation.

SYNTHETIC CRUDE  - ENBRIDGE - View this Document****
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Aaron Dillard continued the discussion with details on some of the specific synthetic grades available.  Synthetic crudes are an emerging crude supply for North American refiners and, as such, are a good opportunity to help balance supply and demand.  In many cases, suppliers can customize a blend to meet a refiner’s specific requirements.  There are, however, issues to be addressed; as is the case in any new supply.  Synthetic crudes act differently than crude oil.  Predicting properties and behavior is more difficult when tried and true correlations do not necessarily apply.  This has ramifications for processing and transporting.  Existing LP models may need to be revised.  Some synthetic crude contains cracked material which could be an issue for refining processing and pipeline interface.  Pipeline interfaces may require extra attention, in addition to the normal care pipelines take for segregation of sweet / sour, high / low metals, heavy / light, etc.  A sweet, light partially upgraded synthetic crude may still require buffering, for example, when traveling next to a sweet, light crude oil.

SYNTHETIC CRUDE  - CONOCO PHILLIPS - View this Document****
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SPR Crude Quality Initiatives
Mr. Harry Giles of the US D.O.E. presented an update on the SPR program.  Acquisition specifications for SPR crude were originally developed in 1975 and have been revised several times throughout the years.  At a minimum, gravity, sulfur and BS&W are performed on every cargo receipt with a complete inspection done periodically.  Two segregations are maintained at each site; one sweet and the other sour, with both of medium gravity.  Each SPR cavern undergoes comprehensive sampling and assay testing every 7 to 10 years.  Only standardized test methods are used and participation in the ASTM crude oil crosscheck program is mandatory for all labs.

The SPR is also currently involved in a mercury study.  Mercury is becoming an area of environmental concern and, to date, there are not reliable analytical techniques available for use by most laboratories.  Mercury can contribute to increased corrosion rates and emissions can pose a severe health hazard.  NIST, a government agency, has developed a promising methodology for mercury detection.  The SPR is working with NIST on a comprehensive study to define the mercury content of crude oils refined in the U.S.

Long term storage facilities can have a unique set of issues.  However, detailed studies have confirmed that the long term storage does not adversely affect the quality of the crude oil.  Elevated vapor pressure can be a problem but is minimized by periodic degassing and the use of heat exchangers during drawdown.  Hydrogen sulfide may also need to be managed during drawdown and tests are underway to determine the extent of possible hydrogen sulfide emissions.  The SPR enjoys a long-term relationship with LOOP for sharing information on cavern stored crude oil. The SPR is also represented in an international stockpiling committee, which encompasses 18 other countries.  The SPR program welcomes, and responds to, comments and input from the industry, API and the NPRA on its sampling program and assay procedures.

SPR QUALITY INITIATIVES - US DOE - View this Document****
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An Overview of Valero Energy Corporation was presented by John Mauer.  Valero started out in the 1980’s in the natural gas industry and expanded into the refining business through building (their Corpus Christi refinery is one of the most complex refineries in the world) and acquisition (Gulf Coast Refineries from Basis Petroleum; Paulsboro, NJ from Mobil; Benicia, CA from ExxonMobil; Corpus Christi from El Paso; St. Charles from Orion).  The natural gas assets were sold and Valero launched into retail marketing in the late 90’s and early 2000.  In 2001, Valero acquired Ultramar Diamond Shamrock which included 6 refineries, interests in pipelines and terminals and additional retail sites.  Today, Valero has more than 20,000 employees, revenue of $38 billion and total assets of $14 billion.  Valero has a strong marketing presence with 4500 retail sites.  Their 14 refineries have a combined throughput of more than 2 million BPD and can process substantial sour crude oil.  Valero L.P. operates 4100 miles of pipelines, 18 refined product terminals and 8 crude oil storage facilities with over 14 million barrels capacity.  Valero is committed to safety and the environment.  Community involvement and treating employees well (no layoffs in the company history) is an integral part of Valero’s corporate culture. 

VALERO OPERATIONS - View this Document****
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Canadian Crude Quality Initiatives - Mr. Tim Blackmore of Omnicon Consultants represented the Canadian Crude Quality Technical Association.  

·        Phosphorous in crude continues to be an active concern in many refineries.  A letter from sweet crude refiners calling for the removal of phosphorous chemistries from sweet streams will be sent to the Canadian Association of Petroleum Producers (CAPP).

·        The Heavy Oil S&W Project is concentrating on sediment known to be a source of refining problems.  Work on isolation and identification of unknown organic sediment is being delayed.

·        The new project on TAN is underway.  The scope will include a review of testing procedures to determine the best method to use for TAN results in heavy oils and bitumen, studying TAN/NAN in individual cuts as compared to whole crude results and determining the predictability of TAN profiles while blending crudes.

·        The Tank Cleaning Project is currently surveying refineries for best practices with the goal of establishing a protocol for use by participating refineries and pipelines to minimize the impacts of pipeline tank cleaning on refinery operations.

·        The Alberta Research Council has proposed a project on improving the measurement of viscosity of heavy oils.

The next CCQTA meetings are scheduled for March 30 and 31, 2004 in Calgary .  Interested parties should contact Bruce Kennedy at (905) 469-3696 or Tim Blackmore at (780) 915-7912.

Mr. Bill Lywood of Crude Quality, Inc reported that CAPP will continue the crude quality monitoring program for 2004 (CrudeMonitor.ca).  Quality assurance programs are in place to help ensure data confidence.  Also, CAPP is currently evaluating the possibility of incorporating crude quality variance into the Incentive Toll Agreement with Enbridge Pipeline.  This program would put a dollar value on prescribed quality with the producer, shipper and carrier sharing in the cost and the incentive for success.  Stream consolidation continues to be discussed, with industry wide costs savings expected through operating efficiencies and reduced capital costs.  

CANADIAN UPDATE - CRUDE QUALITY INC - View this Document****
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Report on the Water Measurement Subcommittee – Mr. Harry Giles of the US DOE shared data from the ASTM Crosscheck program.  Mr. Chip Westaby of Agar Corporation updated the group on inline water measurement techniques.  

ASTM CROSSCHECK UPDATE - View this Document****
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INLINE WATER MEASUREMENT - AGAR - View this Document****
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Report on the Communication Forum – The Education Forum for pipeline personnel is final.  A pdf version will be posted on coqa-inc.org.  Anyone wishing a copy in PowerPoint should please contact the COQA Director.  A draft format of the crude oil quality training program for non-technical personnel is available for comment.  The forum for refining personnel was discussed and will be ready in draft format at the next COQA meeting.

Report from the COQA Steering Committee - A listing of websites that have crude quality data has been posted on coqa-inc.org.    Data on crude oil quality incidents was collected at the general meeting and will be posted (in a consolidated, anonymous format) after legal review.

COQA Web Site and Budget Report - The facilitator presented the final financial report for 2003 and the budget for 2004.

Many thanks to our 2004 Financial Supporters:

            Associate Members: BakerPetrolite, Giant Refining, ITS Caleb Brett, Nalco, Saybolt / Core Labs, US DOE

            Funding members: BP, Conoco Phillips, Gary Williams, LOOP, Marathon Ashland, Navajo, NCRA, Shell Pipeline, Sun Oil Company

Details of each of these presentations are available at coqa-inc.org along with past minutes (with detailed attachments), our Retrospective Review and Mission Statement and a complete membership listing (name, company, email, phone) on coqa-inc.org.  All members are encouraged to take advantage of our forum page.

Next Meeting - The next meeting will be held in Houston on May 27, 2004.

Harry Giles, COQA Director

PLEASE NOTE THE NEW EMAIL ADDRESS:   harry.angela1@verizon.net