Meeting Archives

Minutes, Crude Oil Quality Association Meetings

San Francisco, CA, 31 October 2007

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

Canadian Crude Oil Quality Subcommittee

Convened by Bill Lywood, Crude Quality, Inc., and Ron Fisher, BP

 Canadian Crude Quality Association –

In opening the subcommittee meeting, Tim Blackmore of Omnicon Consultants made a presentation on the CCQTA, a sister organization to the COQA.  In this, Tim provided a brief history of the CCQTA, their goals, organizational and fee structures, and operating guidelines.  He then went into a more detailed presentation on how CCQTA projects are initiated, funded, and managed.  Tim closed his presentation by listing CCQTA’s active projects and provided contact information for their President and Secretary.

 

Harry Giles then introduced Dennis Sutton, a long-standing member of COQA, who is also CCQTA’s newly-elected Director of Refining.  Dennis then provided a detailed update on the status of currently active CCQTA projects.  These are:

            ●          Heavy Oil Manual
            ●          Iron Fouling
            ●          NGL Contamination
            ●          Phosphorus in Crude
            ●          Oilsands Bitumen Processibility
            ●          TAN Phase III

Dennis’ presentation included the project’s objective, current status, and a list of participating companies.

 

Study Groups

Ron Fisher (BP) and Bill Lywood (Crude Quality Inc, CQI) provided background on efforts made in Chicago in June 2007 to formulate action items consistent with COQA principles using subgroups focused on Branding, Logistics, Synthetics, and Processing. Smaller groups were formed again and were directed to discuss relevant industry level issues related to their topics, and to formulate short, medium and long term strategies and deliverable action items. There were several committed outcomes from each of these discussions:

1)      Branding

1.      development of a quick reference card by June 2008 incorporating essential quality data, crude stream source, and “brewmaster(s)” for all Canadian crude streams on all pipeline systems delivering to the US,

2.      consolidation of publicly available crude stream quality data onto the COQA website by March 2008, and

3.      development of a “prospectus” formatted template for Canadian crude producers and shippers containing key and essential data related to the qualities of individual streams and contacts for communication with quality responsible upstream personnel/departments. This template program was discussed as tentatively beginning at the June 2008 CCQTA/COQA joint meeting.

2)      Logistics

1.      the focus on intermixing and commingling of crude streams and crude grades while in the pipeline delivery systems is a longer term, larger issue, and

2.      intermixing and commingling issues need to assessed and evaluated in terms of continuous improvement and management techniques, and

3.      further work is required before medium and long term strategies can be developed.

3)      Processing

1.      focus on TAN determination methods

1.      development of a summary “cheat sheet” of all TAN testing methods including general description of the methods, and the pros/cons/applicability of each method (considered as a one year project), and

2.      consolidation of TAN determination methods and conduct a round robin testing program to establish the most reliable testing methodology (considered as a second year project).

4)      Synthetics

1.      the Synthetics group discussions were similar to those of the Logistics group in that the Synthetics group recognized that there exists a need to control the quality of the synthetic products during shipping to retain their respective values in the market, that value loss is a function of distance from point of manufacture, and improvements towards a stable quality supply would benefit all segments of the industry, and

2.      that the points above are not just a Canadian issue, but also apply to other globally sourced synthetics supply, and

3.      that continued discussions, potentially in harmony with the Logistics concepts, are necessary to develop strategies in the medium and long term.

Follow up items were delegated to smaller groups of four to five individuals, with the expectation that efforts will be ongoing towards the next and future meetings.

Other Items

The Canadian Subcommittee used all available time in the CCQTA and Study Group sessions. Intended to be presented at the subcommittee meeting was an update on the Canadian Association of Petroleum Producers (CAPP, www.capp.ca) including the following information items:

1)      CAPP has approved funding of the Crude Quality Monitoring Programs (www.crudemonitor.ca) through 2008 and 2009,

2)      CAPP's Crude Quality Working Group (CQWG) is an ad hoc industry subcommittee that has been developing responses to industry level requests for technical support on policy and specifications issues. The CAPP CQWG is currently discussing matters related to:

1.      condensate/diluent specifications for feeders to the aggregate, commingled CRW market stream (will affect Southern Lights commodities, except those under sole use disposition),

2.      diluent and bitumen (dilbit) compatibility, and the impact of aromatics content on blended stream stability (potentially an aromatics minimum could be included in the condensate/diluent specifications),

3.      merchant tankage management and blending issues relating to quality and quality variance,

4.      clarification of the Enbridge Commodity Approval Process,

5.      olefins specification management and enforcement policy,

6.      interfacing with CCQTA on Phosphorus in Crude Specifications established by CAPP through the CQWG, and

7.      other matters as requested by the CAPP Crude Oil, Pipeline, and EPG committees.

CAPP has contracted Crude Quality Inc. and has restarted the TAN Project (jointly funded by CAPP and the Alberta Energy Research Institute (AERI), and supported by NCUT, Florida State University, Fluor Canada and others. CQI has assessed progress on the project and has made presentations to the TAN Project Steering Committee with respect to research direction and outcomes. At the San Francisco meeting, CQI did ask for COQA members' support of the TAN Project through co-ordination of African and North Sea high TAN crude sample collection. CQI will be following up with individual offers in the immediate future.

Next Meeting

Our next meeting will be in the morning session of the March COQA meeting in New Orleans, LA.

Respectfully submitted,
Bill Lywood
Crude Quality Inc.

Domestic Trading Center Subcommittee (DTC)

Convened by John Maurer, Valero

The group agreed to changes to the mission statement in the area of cut point versus percentage.  The following is the new Mission statement:

We believe that crude oil designated as Domestic Sweet needs a few basic parameters in addition to gravity and sulfur in order for crude to fall within this designation.  These additional parameters are necessary to better define Domestic Sweet, while at the same time reducing its variability.  This will allow refiners to better determine the actual value of Domestic Sweet to them as they can with other, well defined crude types.

Additional Parameters:

High Temperature  Simulated Distillation (HTSD): Recovery at 380ºF and 1050ºF cut points

 Nickel, Vanadium, TAN and Micro Carbon Residue (MCRT)

John reported that sample collection and testing continue to determine the typical values and provide data for this group to determine the acceptable variation level on parameters identified in the mission statement.  Sulfur and gravity testing are also being performed.

A brief overview of the existing data was presented with applied statistical charts to provide the group an example of how the data could be analyzed.  The distillation data quality were unacceptable and John and Clifford Mills agreed to work with the lab to identify the cause.  Existing HTSD data will be re-integrated to yield the new cut points identified in the mission statement.

The COQA director agreed to post the data on the COQA website and update the file as it becomes available.

Harry Giles indicated the DTC efforts are of interest to staff at the Oil Daily and they would be contacting John to gather information for one or more articles in their publication in 2008.

John Maurer indicated no further interest has been expressed by Dan Brusstar at NYMEX to present to the COQA about NYMEX and become involved in the DTC discussions.  John and Harry asked the group if anyone would contact Dan to squeak the wheel a bit using folks at their respective companies who may know Dan.  His contact information is as follows:

Mr. Dan Brusstar
Director, Energy Research
New York Mercantile Exchange 
212-299-2000

The group was also solicited to contact any of the following and ask if they would be interested in making a presentation at future meetings.

·        ConocoPhillips:  Bill Brown Pipeline VP

·        Plains Pipeline: Jerry Monier

·        SemGroup: 918-388-8100  is main number.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

General Meeting, 1:00 – 5:00 p.m.

Following is a summary of the presentations made at the General Meeting the and business transacted at the Steering Committee meeting.  Links are provided for copies of the presentations in PDF format.

Technical Presentations

·        Southern California Crude Oil Outlook.  Dileep Sirur, Baker & O’Brien.  Earlier this year, Baker & O’Brien completed this study for Plains All American Pipeline, L.P.  Plains graciously agreed to allowing a presentation on this study to be made at this COQA meeting.  A number of key assumptions were made in preparing the projections included in the report.  Among these were that production of both ANS and California crude oils will continue to decline and that refinery runs will increase at a modest rate.  Another key assumption was that incremental imports of Canadian and West African crude oils will be high TAN and heavy.  Mr. Sirur presented a number of graphs showing historical and forecast data supporting the study.  In closing, he observed:

●    “Future Southern California crude supplies will be increasingly dominated by imports; and

●    “ANS use will decline steadily and be eliminated by 2015.”

 

·        VSEP Solutions for Produced Water, Desalters, & SSW.  Mark Galimberti, VSEP.  Vibratory Shear Enhanced Process (VSEP) is a unique membrane filtration system that employs vibrational oscillation of the membrane surface to improve the relative throughput per area of membrane used.  This oscillation is used to prevent colloidal fouling of the membrane surface.  The technology has been applied to treating water co-produced with crude oil at a field at Santa Maria, CA, making it clean enough to be fed to boilers used for producing steam for flooding the oil bearing formation.  The co-produced water contained nearly 30,000 ppm TDS, but filtration achieved an overall recovery of 70% of the wastewater as clean boiler feed.  In his presentation, Mr. Galimberti discussed the technology behind the process, provided data on the Santa Maria installation, and noted some other current applications of the technology.

 

·        Research on the Effect of Oil Chemistry on Heavy Oil Recovery.  Invited presentation by Prof. Louis Castanier, Stanford University, Petroleum Engineering Department (SUPRI-A).   SUPRI-A, in addition to its educational responsibilities, conducts a wide spectrum of research related to increasing the recovery from heavy oil and other unconventional hydrocarbon resources.  In his presentation, Dr. Castanier, discussed one of their ongoing projects involving a two-phase study exploring the role of heavy oil chemistry on 

-         Solution gas drive, and

-         In-situ combustion.

The presentation included discussion of the experimental setup, oil properties, and some of the results for each of these related studies. 

 

·        Western States Petroleum Association.  Invited presentation by Dennis Bolt, Manager, Bay Area Region, WSPA.  Founded in 1907, WSPA is the oldest petroleum trade association in the nation.  It presently has 26 member companies, representing six western states, involved in exploration, production, transportation, refining, and/or marketing of petroleum.  Mr. Bolt provided an overview of four major areas of concern to the association:

-         California Production
-         Supply & Demand
-         Infrastructure & Permitting
-         Climate Change

For each, he provided background information and supporting data – mostly from the perspective of the California industry.

 

·        Panel discussion on issues related to crude oil production and refining in California and Washington State.  Panel members:  Paul Cannizzo, Tesoro; Ron Fisher, BP; Sam Lordo, Nalco; Anne Shafizadeh, Chevron ETC.  Prior to this meeting, COQA had not staged a “Question & Answer” panel.  Once San Francisco was selected as a meeting venue, it was suggested that, as this would be our first meeting on the West Coast, we should try to address some regionally-specific issues.  Certain COQA members with West Coast affiliates or operations were then asked to poll their colleagues for issues of concern to them.  Responses were compiled into the linked document.

For many of the questions, the consensus of panel members and the group at large was that the questions were specific to a given refinery, company, or operator and not of broad interest to the membership as a whole.

Selecting replacement crude oils for California production can be difficult.  Many California refineries were constructed and configured to process these or similar production.  They are used to “a steady diet”, and “unfamiliarity (with other crudes) breeds contempt” – especially with so-called “opportunity crudes” which may not be all that opportune.

For many of the questions related to quality determination, the consensus was that existing test methods, procedures, or treatment options more than suffice and that the company or operator is well advised to consult with knowledgeable laboratories or vendors.

Discussion of limits set on certain contaminants such as Se and Hg generated the most discussion.  Comments on these ranged from the fact that limits may have been set by NPDS without scientific basis or with little or no supportive data.  In the Bay Area in particular, contaminants such as Hg are a legacy issue dating back to gold mining in the 19^th century and have little or no relation to petroleum refining.

COQA Director’s Note:  As noted earlier, this was the first Q&A Panel staged by the Group.  The consensus was that it should be done again.  However, as Director, I need to devote more study and thought into proper staging of future panels. 

 

The general meeting concluded with a Report from the COQA Steering Committee  by Harry Giles, COQA Director.  The steering committee met on the evening of October 30, 2007.  The Hydrocarbon Publishing Company was welcomed as a new supporting member.  Changes being made to the COQA Website were discussed.  Among these is updating and revising the listing of members to delete inclusion of e-mail addresses and provide only name, company affiliation, and telephone number to help prevent spam mining. This change is now complete.  Also, a search capability is being added to the site to facilitate finding information, especially in the meeting archives.  And, a new page is to be added to provide more visibility to our corporate sponsors and supporters.  This will include their corporate logos and a Web address.

A number of topics for presentations at future meetings were considered, some of which are:

o       Safe handling of crude oil containing hazardous substances such as H₂S
o       Crude oil valuation
o       Changing face of U.S. crude oil imports
o       New production coming on-stream from areas such as the deep Gulf of Mexico and offshore Angola

The Hydrocarbon Publishing Company approached COQA about jointly organizing a conference on Opportunity Crudes 2008:  Challenges, Benefits, and Processing.  Harry Giles will work with Hydrocarbon Publishing Company on the conference scheduled for Houston, TX on May 1 – 2, 2008.

Next meetings:

• March 6, 2008 in New Orleans, in conjunction with the ASTM Crude Oil Course.
• June 2008 in Calgary, AB, Canada in conjunction with CCQTA.
• October 23, 2008 in San Antonio, TX.

→     Thanks to their continued financial support, corporate sponsors will be allowed two complimentary registrations and corporate supporters one complimentary registration at each meeting beginning in March 2008 in New Orleans.

Harry N. Giles
Director, COQA