Meeting Archives

Minutes, Crude Oil Quality Association Meetings

San Antonio, TX, 23 October 2008

COQA graciously acknowledges Valero Energy Corporation for providing a continental breakfast for all attendees prior to the meeting.

 Subcommittee Meetings, 8:30 – 12:00 noon

Canadian Crude Oil Quality Subcommittee

Bill Lywood (Crude Quality Inc.) led a review of the active and proposed projects the sub-committee has worked on over the past year.  This was followed by a short presentation by Phil Heaton (Maxxam Analytics) on a CCQTA project proposal to develop an on-line technique to test for crude contaminants.  The slide packs used by Bill and Phil are attached separately.  The following minutes include key decisions and discussion items that came out during the meeting.

TAN Methodology:  It was decided that the COQA need not prepare a white paper on alternative methods for measuring TAN in heavy oils.  It was also decided that a COQA laboratory round robin was not needed.  It was suggested that a group from the COQA propose the CCQTA method modifications to ASTM D664 be presented to the ASTM for consideration as a new ASTM method.  Dan Carlson (Core Labs), Clifford Mills, and Anna Shafizadeh (Chevron) volunteered to move this subject forward with ASTM.

Sweet Syncrude Quality Assurance:  It was agreed that the COQA membership would like to collate the quality assurance initiatives of Canada’s sweet syncrude producers in to one document.  This means we would like to know how the producers control the final blend recipes and quality of their outgoing products, including what testing they do and how much variance is allowed in the product quality as the material leaves the upgrader.  Bill Lywood and Randy Segato (Suncor, CAPP) volunteered to identify contacts for each syncrude producer, and they may try to arrange a panel discussion on the topic of syncrude quality if they can get producer representatives to attend one of our 2009 meetings.  Ron Fisher (BP) volunteered to make a draft questionnaire that we can send to each syncrude producer.

Heavy Oil Production Techniques and Their Implications for Refinery Processing:  Presenters have touched on this subject at previous meetings, particularly at the Calgary meeting.  Aaron Dillard (ConocoPhillips) agreed to review the presentations and pull together a summary if warranted.  We plan to discuss this topic at the next COQA meeting to decide if any further effort is needed on this topic.

Canadian Heavy Oil Reference Guide:  Bill Lywood reviewed the process that will be used to gather data on Canadian heavy oil within the COQA.  PDF forms have been circulated by email and will be made available on the COQA website.  COQA members are asked to fill out these forms to submit data electronically to Crude Quality Inc. where the data will be collected in a database, run through error checking and outlier removal processes, and reports will be prepared for COQA showing the average quality of different grades at different locations.  Crude Quality Inc. will not share the original data and details about who sent what data.  Anna Shafizadeh asked for a spreadsheet form be created for bulk data entry, Bill Lywood agreed to provide such a form.  Reminders and notifications of how much data is being sent in will be circulated through the COQA membership in order to encourage data sharing.  It is expected that the first reports from this work will be presented at the February 2009 meeting.  It was also agreed that we should submit data going back to 2000.  Data cleansing procedures will then remove any old data that interferes with giving an accurate picture of what the current quality looks like.

Heavy Oil Diluent Specs:  Randy Segato gave an update on the methodology being used to protect the heavy oil diluent pool (CRW) in Canada.  A combination of hard specs, quality bank penalties, and listed ‘typical properties’ are being published to manage CRW quality going forward, these standards will also apply to diluents shipped on the Southern Lights pipeline.  These standards will not apply to privately managed diluents heavy oil producers acquire on proprietary systems; it only applies to the common stream CRW pool managed by Enbridge Pipeline.  Ron Fisher and Anna Shafizadeh volunteered to send Randy data on mercury and selenium contents in CRW from their company’s assay programs.

Grade Consolidation on Enbridge Pipeline:  Bill reported that Enbridge pipeline has ‘run out of tanks’ to keep all of the different grades segregated.  Enbridge has decided that the high TAN dilbits will be consolidated into one segregation, and the high TAN synbits will be consolidated in another segregation.  The COQA has discussed the potential benefit to the refiners of consolidating grades so this is a timely development.  CAPP had asked Enbridge for a plan on how additional grade consolidations might be handled.  A preliminary report from Enbridge back to CAPP was completed in mid October.

Respectfully submitted,
Bill Lywood

Crude Quality Inc.

 

Domestic Trading Center Subcommittee (DTC)

In opening the meeting, the chairman, John Maurer, iterated the Subcommittee’s mission, then presented the specifications for “Domestic Sweet” as posted on the Nymex Web site.  John then reviewed the data obtained to date on samples collected from Cushing, OK, and analyzed at Valero’s Ardmore, OK laboratory.  These included plots for API gravity, mass % total sulfur, high temperature simulated distillation (HTSD) % off at 380 and 1050°F, vanadium and nickel, acid number, and micro carbon residue (MCRT).  John acknowledged the assistance of Clifford Mills and David Smart in reviewing the data and providing statistical analyses.

In the open discussion that followed, it was noted that a plot of MCRT vs. HTSD % off at 1050°F should provide a good correlation.  The group also affirmed that the parameters noted above should be recommended to Nymex for inclusion in their Domestic Sweet specification.  It was acknowledged that even if these recommendations are adopted, enforcement will be an issue for companies such as TEPPCO and Plains.

Future work of the Subcommittee will focus on having a sample of Domestic Sweet from Cushing included in ASTM’s Crude Oil Interlaboratory Crosscheck Program.  Harry Giles will work with ASTM in trying to have this sample distributed during the first round of 2009.  This will help validate the accuracy of the data collected to date.  It is also important to have representatives of TEPPCO and Plains attend future meetings and obtain their “buy in” to the proposed additional specifications.

During the meeting it was noted that Oil Daily published a front page article on the work of the Subcommittee, which drew considerable attention to our efforts (copy attached).  Despite this, Nymex has not responded to repeated invitations to attend our meetings.

 

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General Meeting, 1:00 – 5:00 p.m.

In opening the General Session, Harry Giles, COQA Director, gave a brief summary of some of the business conducted at the Group’s steering committee meeting on the previous evening.

The committee is committed to having attendance at our meetings more “globally encompassing.”    A number of companies active in the petroleum industry are noteworthy by non-attendance at our meetings.  The committee has identified points-of-contact in a number of these, and the Director will be sending letters inviting them to attend future meetings.

COQA has been operated as a sole proprietorship since it was organized in 1994.  We are now moving to be incorporated as a not-for-profit organization.  Articles of Incorporation and Bylaws have been drafted by an attorney and circulated to steering committee members for review and comment.  It is hoped to file these in Virginia before the end of the current year, following which application will be made to the Internal Revenue Service for recognition as a not-for-profit corporation under Section 501(c)(6) of the Internal Revenue Code – a process that can take up to two years.

A number of topics for future meetings were considered.  Among these are:

-        A repeat of some of the presentations made at the June 2008 meeting in Calgary.

-        Presentations on Hurricanes Gustav and Ike damage and recovery.

-         Refinery upgrades to allow for processing heavier oils.

-         Profiles of specific company operations, e.g. Portland Pipeline     Co.

-         Gulf of Mexico deepwater production and quality.

2009 meetings are being planned for Southern California in late February, Philadelphia in mid-June, and Houston in late October.

The steering committee enthusiastically endorsed another joint meeting with CCQTA, our Canadian sister organization, in about two years in the United States.

Technical Presentations

Following is a summary of the presentations made at the General Meeting.  Links are provided for copies of the presentations in PDF format.

U.S. Crude Supply Outlook Implications for Refining.  Martin Tallett of EnSys Energy discussed the global supply of crude oil over the next 10+ years, looked at supplies to the U.S., and their implications and impacts on the U. S. refining industry.  Condensates, natural gas liquids (NGLs), and coal to liquids (CTL) and gas to liquids (GTL)  are bringing increasing light streams into the market.  At the same time, sweet crude supplies are rising while heavy crude growth in limited in the medium term.  These could result in an excess of coking capacity until heavy crude supplies increase in the longer term.  Martin also discussed the issue of where to do syncrude upgrading – at the source or further downstream.  Other factors looked at related to their impact on U.S. refining were demand growth, mix, and uncertainty.   All of these are making for a difficult forward look at the industry.

 

Hurricane Gustav and Ike Impacts to U.S. Petroleum Supply and Infrastructure.  Jeremy Cusimano, Office of Petroleum Reserves, U.S. Department of Energy provided an overview of the impact of hurricanes Gustav and Ike on Gulf Coast refinery runs, affect on the four Strategic Petroleum Reserve (SPR) sites, and how the SPR responded in helping alleviate crude oil shortages.  In providing crude oil to the industry, the SPR also requests feedback from those receiving the supplies on how its quality compares with published assays. In his presentation, Jeremy looked at two issues that arose at this time: the use of an H₂S scavenger and micro carbon content (MCRT).  The use of an H₂S scavenger is widely practiced and there is no substantive evidence to indicate that its use has any deleterious effects in refining or produces undesirable products. It was acknowledged that the MCRT content of some 2008 SPR deliveries may have been higher than the 2006 published assays because a substantial quantity of a higher MCRT crude oil had been stored between the time the assay was published and the time the crude oil was delivered.

 

Woodside Energy:  A Brief Overview.  Bob Davis,   Woodside Energy (USA) Inc.   Woodside is Australia’s largest traded exploration & production company, and is one of the world’s leading producers of liquefied natural gas (LNG).  They have exploration interests in 11 countries, developments underway on three continents, and markets in five countries.  Bob discussed some of Woodsides’ oil and gas projects in Australia including their North West Shelf and Pluto LNG projects, and Enfield and Vincent crude oil projects.

Woodside has two offices in the U.S. – one in Santa Monica, CA, and the second in Houston.  In California, they have proposed an offshore terminal, approximately 25 miles offshore, for both receipt and regasification of LNG.  In the Gulf of Mexico, they have interest in a number of producing assets.  In 2008, Woodside has two deepwater startup projects – Powerplay and Neptune.  Neptune, in 6200 ft. of water, is a multiwell 50,000 bopd project tied back to a standalone tension leg platform.

 

Crudemonitor.ca  Tools, Tips, Tricks, and Possibilities.  Bill Lywood, Crude Quality, Inc.  In his presentation, Bill discussed the basics of Crudemonitor.ca, its extended features, some little known secrets, and future plans.

For Basics, he described what is currently available including the monthly  summary reports and analytical data, archival data, condensate program, and assay information among other topics.  Extended features include Batch reports that provide current and historical analyses, light ends and distillation information, as well as assay data on quarterly composites.  Some of the “little known secrets” are charting capabilities, olefins information, and custom report features.  Finally, future plans include continuing to work with industry partners to further enhance the “value, relevance, and ‘ease of use’ of Crudemonitonr.ca.” This entails ratification by CAPP, the Canadian Association of Petroleum Producers.  New concepts will periodically be introduced and feedback solicited from the site’s users.

 

Canadian Crude Quality Technical Association Update.  Phil Heaton, Maxxam Analytics.  Phil provided an update on the six active projects within the association, and discussed two new project proposals that are under consideration.  The currently active projects are:

·        Heavy Oil Methods Manual
·        Iron Fouling
·        Phosphorus in Crude Oil
·        Oilsands Bitumen Processability
·        TAN Project
·        NGL Contamination

The two project proposals that are under consideration are:

·        Condensate/Diluent Quality
·        On-line contaminant monitoring

Phil discussed the latter project proposal in detail, as it is also of interest to COQA members.  The goals of this project are “to develop an on-line monitoring tool for the purpose of measuring targeted contaminants in crude charged to a refinery.”  And, “to use this equipment to quantify the impact of contaminant concentration on plant operations.”

Thunder Horse and Southern Green Canyon.  Ron Fisher, BP.  Ron provided an update on the status of the two deepwater projects.  Thunder Horse is in over 6000 ft. of water, and has the capacity to produce 250,000 bopd and 200 MMSCFD of gas. It is the world’s largest semi submersible production and drilling facility.  Southern Green Canyon consists of three inter-connected projects:  Atlantis, Holstein, and Mad Dog.  These are located in 4500 to 6800 ft of water.  They have a combined production capacity in excess of 400,000 bopd, and nearly 400 MMSCFD of gas.  Each of the four projects has a number of superlatives which Ron highlighted in his presentation.  Ron also provided some assay data on the two streams comparing them with other deepwater Gulf of Mexico production.

 

Chevron Gulf of Mexico.  Anne Shafizadeh, Chevron Energy Technology Company.  In opening her presentation, Anne provided some background on deepwater Gulf of Mexico exploration and some of the perils presented by hurricanes such as Rita (2005) and Ike (2008) and their devastating effects.  She then focused on two deepwater Chevron projects:  Tahiti and Blind Faith.  As with the projects earlier described by Ron Fisher, each of these has many superlatives as illustrated in Anne’s talk.  She then presented additional information on developments in some “emerging” deepwater discoveries, notably Jack which is in 7000 ft of water.  This is the deepest well successfully drilled to date with a total depth of over 28,000 ft.  In closing her presentation, Anne provided some assay data on Tahiti and Blind Faith, and showed some plots comparing various quality parameters of deepwater production.

 

Next COQA meeting:

February 26, 2009, Courtyard Long Beach Downtown, Long Beach, CA

 

Harry N. Giles
Director, COQA