Meeting Archives

New Orleans, LA, November 9, 2006

The Crude Oil Quality Association met at the Astor Crowne Plaza Hotel in New Orleans, LA on November 9, 2006.

Subcommittee Meetings, 8:45 – 11:30 a.m.

Canadian Crude Quality Subcommittee

The Canadian Crude Quality Subcommittee met in the morning and convened at 8:45. There were two presentations that provided insight into the main transportation routes from western Canada into continental United States.

Norm Rinne of Kinder Morgan Canada introduced us to the former Terasen Pipelines systems recently acquired by Kinder Morgan. These include:

            a) the common carrier Trans Mountain system taking crude oils of all grades, refined products, and iso-octane from Edmonton, Alberta to the Vancouver and Puget Sound terminals, dock and refineries,

            b) the contract service Corridor Pipeline transporting diluent from Ft. Saskatchewan (20 miles NE of Edmonton) to the Ft. McMurray oilsands and returning diluted bitumen back to a Ft. Saskatchewan upgrader and to Edmonton terminals, and

            c) the contract service Express-Platte system stretching from Hardisty Alberta to Patoka, IL delivering and gathering crude oil along its length.

Norm's presentation highlighted the market influences and reservations in the current need for system expansion, including some insight into past, present and future expansion plans within Kinder Morgan Canada. The complete presentation will be made available on www.coqa-inc.org. Further information on Kinder Morgan Canada operations can be obtained directly from www.terasenpipelines.com.

 

Ashok Anand of Enbridge provided an overview of the current delivery options available through the Enbridge Pipeline systems. Ashok made a presentation explaining some of the details regarding the quality metrics employed in the 2005-09 Incentive Tolling Settlement on the Enbridge mainline common carrier system. Some key points include:

            a) that the agreement with CAPP is a five year incentive/penalty program based on the performance of Enbridge in reducing not only the outlet versus inlet quality differentials, but also outlet consistency,

            b) that the metrics are weighted more highly on consistency than differentials, in response to refiner feedback,

            c) that both differentials and consistency are required to improve by 50% over the five year term of the agreement,

            d) that Enbridge direct investments have been made, and will be necessary in the future, to achieve the targets outlined in the ITS,

            e) Enbridge Pipelines website, www.enbridge.com/pipelines, contains all of the documentation associated with the Incentive Tolling Settlement, including the  characteristics to be quantified, the grades tested, all of the metrics formulae, and “Table 5” which details which crude streams are transported in which pipeline(s), and which streams may come in contact with others during the transportation process [editor's comment: all COQA members shipping on or receiving from Enbridge common carrier systems should download, understand, and request updates of Table 5].

●      Though not yet part of the Canadian Crude Quality Subcommittee, Michael West of NCRA, Dennis Sutton of Marathon, and Aaron Dillard of Conoco-Phillips provided their views into the challenges of refining Canadian crudes during the afternoon presentations. Each was insightful, and will provide a platform for future discussions within the Canadian Crude Quality Subcommittee.

Report on Canadian Crude Quality Initiatives

●      Canadian Association of Petroleum Producers (CAPP) Crude Quality Subcommittee activities include:

■          the Phosphorus in Crude specifications have been set by CAPP and communicated to the producing community. The compliance date has been set for January 2007. Commingle feeder pipelines are currently testing battery connections for phosphorus levels, and have committed to advise non-compliant producers in writing of their “off-spec” status.

■          there are a number of plans underway to bring diluent into western Canada, where diluent has been, is, and is forecasted to be in short supply. The CAPP CQ Subcommittee has developed specifications for any diluent that is destined for, or may come in contact with the domestic condensate pool. These specifications are ~90% through the approvals process and are expected to be implemented early in 2007. The specifications include, but are not limited to density, H2S, mercaptans, metals, oxygenates, and aromaticity.

●      The CrudeMonitor.ca project is now working in conjunction with the Enbridge Incentive Tolling Settlement sampling program in the interest of sampling efficiencies. This means that CrudeMonitor.ca will now be testing Light Sour Blend (LSB) directly and no longer through the surrogate SouthEast Saskatchewan (SES) stream. The same is true for MSO, SO replacing Gibson Sour (SOG). CrudeMonitor.ca will “backfill” data from the Enbridge ITS to ensure continued levels of testing and results reporting. HTSD has been replaced by True Boiling Point (TBP) testing, and a “mini-assay” program will supplement the historical HTSD data. The “mini-assay” program will be released and announced within the next couple of weeks.

Respectfully submitted,
Bill Lywood
Crude Quality Inc.

Domestic Trading Center Subcommittee (DTCS)

On behalf of John Maurer, I attended  the COQA, DTCS Meeting.  I presented a brief overview of the issues surrounding the collection of samples relating to the subcommittee request for data collection around the characterization of Domestic Sweet Crude.  Originally, TEPPCO (Doug Arrick ), had been approached about making a presentation, but was unable to attend.  The concern from TEPPCO was that we may not collect good representative data.  We agreed to postpone the testing of Cushing Light Sweet Crude until an agreement was reached on the sample source protocol.  The objective was to reach such an agreement at the November DTCS meeting.

An open discussion took place on the qualities needed once the sampling protocol had been agreed to.  Parameters discussed included:

     Nickel
     Vanadium
     TAN
     10% HTSD Point
     90% HTSD Point
     MCRT

Originally, MCRT was not included.  The overall reaction from the group in New Orleans was to add this to the scope of the project.

Two important reasons were noted, reproducibility of the test, and availability of test equipment.

To expedite the efforts of collecting samples and thereby gathering data, several attendees offered to submit receipts from the Cushing facility.  This collection strategy will be considered, if needed.

Valero, Ardmore, had already agreed to the testing program.  The sample frequency was set at 100 samples or roughly 2 samples per week over the next year.  Data will be presented at subsequent DTCS meetings as available.

Additional attempts to gain a commitment from TEPPCO will continue.

Other sources of samples, such as receipts delivered from the Cushing facility, may need to be considered.

The next meeting of the Domestic Trading Center Subcommittee (DTCS) will be February 8, 2007 in San Antonio.

Wallace T Floyd Jr.
Lab Manager
Valero St. Charles

General Meeting, 1:00 – 5:00 p.m.

Report from The Steering Committee.  In opening the general meeting, Harry Giles reported on the Steering Committee meeting that took place on the evening of November 8, 2006.  Among the items of business discussed was accepting credit cards for payment of meeting registration fees.  Both a merchant banking account and PayPal have been looked into, but the fees associated with these would result in an unacceptable loss of revenue for the COQA, and the matter has been tabled for the time being.

A number of topics were discussed for possible inclusion in 2007 programs.  Among these are the fate of heavy metals in the refinery and their impact on product quality; techniques for determination of Wax Appearance Temperature; the impact of additives and contaminates on desalting of crude oil; and presentations by various companies on their operations.  These latter would include pipeline operators, and E&P companies and new production they are about to bring on stream.

It was suggested at the meeting that the Group should consider having a meeting in Canada, perhaps in conjunction with one of those of the Canadian Crude Quality Technical Association.  This will be looked into further for possibly taking place in 2008.

The Steering Committee chose San Antonio, TX for a meeting on February 8, 2007, and Chicago for a meeting on June 7, 2007.  No destination for the Fall/Winter of 2007 meeting was decided on.

ASTM “Crude Oil Course” Update. Harry Giles and Clifford Mills presented their course at the Crowne Plaza hotel on November 7^th and 8^th.  The course was fully subscribed and included participants from the U. S. and several foreign countries as well.  Those attending represented a broad cross-section of the petroleum industry, including pipeline companies, additive manufacturers, refinery laboratories, and service companies.

In 2007, the courses will be offered in Linden, NJ on February 27^th and 28^th, in Chicago on June 5^th and 6^th in conjunction with the COQA meeting, and in San Francisco on November 13^th and 14^th.  The course is also being offered in Hong Kong in conjunction with the Haverly Asian Technical Conference the week of March 12^th.

Presentations.

MRA Crude Oil Solutions.  Eric Gildea, Invensys Process Systems.  Process Magnetic Resonance Analysis (MRA) has proven useful for determining key chemical and physical properties of refining and petrolchemical process streams.  It is a field-proven technique that has been used on crude unit feeds and rundowns and in product blending applications.  The technique has value for feedstock selection and management and crude and product blend optimization.  In crude oil applications, MRA systems have been used successfully for determination of API, H2O, sulfur, TBP curves, and viscosity.  Other potential applications under study are measurement of PNA, concarbon, asphaltenes, and TAN.  Data was presented for several crude oils having a range of API gravity showing the close correlation between MRA and TBP curves.  In crude oil supply applications, the techniques may be suitable for controlling blending in the on-shore fields and on platforms, at terminals and in the refinery.  Potential applications include flash assay updates, refinery inventory valuation, and optimization of process unit operations.

Navarik’s Services – Cargo Inspection Systems.  Alex Murray, Navarik Corp.  Navarik has developed and markets a number of Web-based software systems for cargo inspection, voyage management, and vessel screening and reporting applications.  Their systems provide an integrated approach to managing crude oil quality from load ports to the refinery.  This involves an inspection system that uses input from users and inspectors worldwide on cargo custody transfer schedules, quantity and quality, crude losses, and marine and non-marine losses.  These data go into a network where traders, refiners, and importers have real-time access to data on in-transit and historical cargoes.  Off-spec system alerts allow users to specify new tests or retests before a cargo arrive.  The system also provides a means for aggregating company-wide quality data, separating anomalies from trends, and identifying root causes and persistent patterns.  These data are useful as evidence in negotiations, they enable better informed decisions on vessel/company selection, and are suitable in audits, crude selection, and in making assay and modeling decisions.  An on-line demonstration graphically illustrated the system’s capabilities and applications.

 

Kinder Morgan Canada Inc.  Norm Rinne. Kinder Morgan Canada, provided a summary of his detailed presentation earlier in the day at the Canadian Crude Quality Subcommittee meeting (see above).

Impact of Canadian Crude on U.S. Refining – Roundtable.  In the opening presentation, Mike West, NCRA, spoke on “Impacts of Canadian Crude Oil on U. S. Refining.”  NCRA operates a single refinery and have been processing Canadian crude since 2001.  The large number of Canadian crude oils is confusing, and comparisons of the different streams can be difficult.  Although the cost of transporting crude from Canada is high, it is more reasonable than importing crude from Africa, for example.  NCRA is interested in heavy, viscous grades, high in sulfur land MCR.  In recent years, NCRA has doubled its desulfurization capacity making the Canadian streams more attractive.  Desalter operating problems and coker heater fouling have been experienced but cannot be unequivocally related to Canadian crude supplies.  Blending of Canadian crude with Kansas crude has helped reduce the incidence of problems.  In general, NCRA has had good experience with Canadian crude oils.  Supply is a concern, as deliveries have been historically been taken from the Platte pipeline which is now prorated.  Now that Canadian crude is moving into Cushing, supplies may be more secure.

 

Next, Dennis Sutton, Marathon Petroleum LLC, discussed “Challenges and Choices.  A Refiner’s Perspective on Western Canadian Crude.”  Producers and refiners have markedly different perspectives on crude oil quality.  The producer commonly considers gravity and sulfur to be adequate quality parameters, while the refiner requires data on numerous other properties.  The refiner also wants consistency in quality.  Producers tend to view synthetic crude as being the same as virgin crude.  To the refiner, on the other hand, synthetic crude oils are partially processed, reconstituted blends that can vary in quality, and can present challenges in crude units.  In illustrating the talk, data was presented comparing whole crude and related yield properties of various virgin crude oils with synthetic blends having similar gravity and sulfur .  These comparisons clearly showed that gravity and sulfur alone are inadequate for characterizing quality from a refiner’s standpoint, and assessing value of certain product streams.

In the final presentation in the session, Aaron Dillard, ConocoPhillips, discussed deliveries of Canadian crude oil through the Spearhead Pipeline system to Cushing, OK and then to ConocoPhillips' Ponca City refinery. The wide variation in density (i.e. API Gravity) of the Canadian crude oils transported through the pipeline causes concerns and challenges for maintaining quality of the receipts to the shippers.  Spearhead ships the heavier Canadian crude grades in laminar flow whereas the light and medium crude grades are shipped in turbulent flow. This causes some commingling of the crude oils in the interface zone when batching the different crude oil grades. Spearhead does utilize "Batch pigs” on the system which are used to separate the heavier crude grades from the lighter crude oils and thereby minimizing interface mixing.  Limited breakout tankage and two-day residency time for batches at Cushing creates other scheduling challenges for shippers. Enbridge conducted a Spearhead Pipeline Shippers meeting on October 31, 2006 to discuss the shipper's concerns, provide a system overview and future plans. I am grateful to Ashok Anand of Enbridge Pipeline who kindly provided me his presentation on “Quality Management” from the meeting for my use in this presentation. Currently, ConocoPhillips and other shippers have agreed to work with Spearhead Pipeline on reducing the variability of the Canadian crude grades being delivered to Cushing.    

Well Blend Optimization with H/CAMS, OMNI, and HS/LP.  Fred Pu, Haverly Systems, Inc.  This system is intuitive, easy to use, and designed for producers with little LP experience.  It was developed for use in optimizing blending of crude oil from different wells to meet  a set of product yield and quality criteria.  The system can optimize several blends simultaneously land is able to process up to 100 wells, 50 blend stations, or 200 cuts.  An son-line demonstration was provided to illustrate some to the systems functionality and features.
 

Phosphorus in Crude Update for the COQA.  Bruce Kennedy, KBW Process Consultants, Inc., reviewed the history of the problem which dates from 1995, aw well as how it was responded to by a project group of the CCQTA beginning in 1996.  A phosphate ester (DAPE) used as a gelling agent in well stimulation was identified as the agent responsible for fouling in a number of refinery process units  The problem is most egregious at the 400°F drawoff (jet fuel) on crude towers.  To help mitigate the problem, workover companies have proposed using low volatility phosphorus-based gellants.  Processes to treat/remove residual gellants from crude oil have been offered by some companies.  Most importantly, the Canadian Association of Petroleum Producers has proposed a 0.5 ppmw specification on volatile phosphorus to become effective Jan. 1, 2007.  The specification is to be enforced at 1.5 ppmw, due to test method limitations.  Producers failing to comply with the specification may continue deliveries but must provide a remediation plan for meeting the specification within a defined period.  Otherwise, they must discontinue deliveries until the specification is achieved.  The CCQTA will continue to provide technical assistance as requested.

 

Subcommittee Reports.  The general meeting concluded with summary reports on the morning’s meetings of the Canadian Crude Quality Subcommittee by Bill Lywood and the Domestic Trading Center Subcommittee by Wallace Floyd.  Detailed reports on these meetings were provided at the beginning of this report.

Harry N. Giles
Director, COQA