Summary
Crude Oil Quality Association
New Orleans , LA
February 23, 2006

Details on the meeting presentations can be found on coqa-inc.org or by contacting the COQA Director, Harry Giles, at dir.coqa@verizon.net.

A complete attendance listing is also available from the Director.

Legal Review of Anti-Trust - Harry Giles, COQA Director, 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”.

Hurricane Operations Discussion Panel: 

Mr. David Carrere presented the Shell Pipeline Company LP (SPLC) perspective on the impact of the 2005 hurricane season on the oil and gas industry in the Gulf of Mexico (GOM).  SPLC operates an extensive pipeline infrastructure in the GOM, providing crude oil export logistics for offshore platforms and crude oil supply for Gulf Coast and Midwest refineries.  Hurricanes Katrina and Rita caused damage to SPLC facilities that can be placed into the following three categories: 1) flooded and/or wind damaged facilities with significant structural and electrical damage, 2) toppled third party platforms affecting boarding & departing pipelines, and 3) dented, cracked or separated pipelines caused by drifting mobile offshore drilling units dragging anchors and mooring chains.  These two storms caused unprecedented damage in the GOM, and resulted in the greatest impact to domestic offshore production in the history of offshore operations in the GOM.  Joint industry efforts, particularly around the HLS onshore logistics infrastructure in southeastern Louisiana , were pursued to restore production as quickly as possible.  Many of the companies operating in this area cooperated with shared equipment, lines, personnel and expertise to get the oil moving.  Although the past two hurricane seasons have resulted in almost unimaginable devastation to the GOM pipeline infrastructure, the experience gained by SPLC and other companies working through these issues has resulted in the industry being better prepared to respond to these kinds of events in the future.  

Nancy Marland of the US DOE discussed the efforts of the Strategic Petroleum Reserve during this hurricane season. The SPR's objectives are to keep undamaged refineries at maximum capacity to assure enough product for relief work and to meet demand.  Thirteen million barrels of oil were committed to six refineries; ultimately 9.8 million barrels were actually loaned.  In addition, an emergency sale was conducted and 11 million barrels of crude sold.  Hurricane Katrina hit New Orleans on August 29, 2005; loaned barrels were available on September 2 with sold barrels available late September.  The readily available crude helped to restore market confidence and minimize supply disruptions.  

SPR Hurricane Operations       View this Document******************
**(Requires free Adobe Acrobat Reader)

Bruce Carlile and Scott Fenwick, both of Intertek Caleb Brett, shared personal experiences of living through Hurricanes Katrina and Rita.  Intertek Caleb Brett immediately dispatched supply trailers to the area with food, water, clothes and generators. 260 employees in the Louisiana region were safely accounted for.  The Caleb Brett laboratories had little damage and were operational within two days.  A large challenge faced was the logistics of transporting and tracking hydrocarbon samples to complete jobs for customers.  Several areas were inaccessible and the usual couriers offered limited service.  Scott and Bruce shared several pictures of the damage inflicted on the New Orleans area.  They thanked their own company and the many others around that cooperated to keep things running and people supplied with necessities. 

 ITS Caleb Brett Hurricane Operations       View this Document********************
**(Requires free Adobe Acrobat Reader)

Removing Acid from Crude Oil was presented by Mr. Norman Kittrell of Merichem.  High Acid Crudes are defined as having a Total Acid Number (TAN) greater than 1.0.  TAN is the industry measurement standard for acidity but is of limited use in predicting problems in refineries.  Naphthenic acids, which are the most problematic, have hundreds of different species, with different boiling points.  High Acid Crudes can lead to corrosion, and cause concern for both jet fuel and kerosene and in the desalting process.  Current methods of removing acid from crude include destruction, adsorption and extraction.  Each of these methods has specific, usually patented, processes.  High Acid Crude production is increasing and is predicted to be 10% of the world’s supply by 2010.  Merichem has developed proprietary technology to better remove acidity, at the source.  Norman welcomes your input on how important lowering the acid content of crude really is.  He can be contacted at NKittrell@merichem.com.  

Removing Acid from Crude Oil       View this Document********************
**(Requires free Adobe Acrobat Reader)

Canadian Crude Quality Initiatives - Mr. Ron Fisher of BP presented the update on the CCQTA projects, which include:
  ·     Heavy Oil BS&W Project
  ·     Phosphorous in Crude
  ·     TAN  Project
  ·     NGL Contamination Project
  ·     Heavy Oil Emulsion Viscosity Project
  ·     Heavy Oil Methods Manual Project
  ·     Additive Impact Project

CCQTA Update       View this Document**********************
**(Requires free Adobe Acrobat Reader)

Report on the Canadian Subcommittee – CrudeMonitor.ca will continue in 2006 but will evolve to coordinate with the Incentive Tolling Agreement instituted between the Canadian Association of Petroleum Producers (CAPP) and Enbridge Pipeline.  Canadian crude production is predicted to be entering a dramatic growth phase.  There are many approved and pending pipeline projects underway as a result.  New Oilsands projects and new upgrader announcements are also pending.  Canadian production is expected to rise from 2.2MMBD in 2005 to 3.2MMBD by 2010 and 3.9MMBD by 2015.

Report on the Domestic Trading Center Subcommittee – The DTCS is considering initiating a sampling and testing program to establish a baseline for Domestic Sweet in Cushing.  All interested parties should contact John Maurer of Valero.  If any companies already have data they are willing to share, would you also please contact John.  A Mission Statement was crafted by Don Hamilton and is available on coqa-inc.org.  

COQA Web Site and Budget Report - The COQA Director presented the final financial report for 2005 and the 2006 budget.  Many thanks to our financial supporters.

Next Meeting - The next meeting will be held in Houston on May 25.  An ASTM training course on Sampling, Testing and Evaluating Crude Oil (run by Harry Giles and Clifford Mills) will be held in Houston on May 23 and May 24.  Interested parties should contact Harry.  Attendees at the training course are welcome to also attend the COQA meeting.  The course attendees will not be charged the COQA attendance fee.

Harry Giles, COQA Director