Meeting Archives

November 7^th

LOOP LLC hosted a tour of their Clovelly, LA facility. They provided bus transportation between New Orleans and the site, as well as lunch for everyone. Nearly 80 people were on the tour. 

At Clovelly, LOOP personnel provided informative presentations on:

•    LOOP’S Crude Quality Program
•    LOOP’s Hurricane Response Strategy
•    Preview of a new In-Tank Blending System (P-43)
•    Some Changes LOOP is making to take advantage of the ever changing Crude  Supply Chain

On the bus tour of the facility, three stops were made where LOOP personnel explained what was being seen and answered questions:

• Clovelly Tank Facility (15  - 600,000 bbl tanks)
• Brine Storage Reservoir  (27 million bbls)
• Main Cavern Pumping and Metering Facility 

November 8^th - Morning Session

Domestic Trading Center Subcommittee (DTC)

“Domestic Sweet / WTI Specifications”, Dennis Sutton, Marathon Petroleum.  Dennis provided a brief review of the Subcommittee’s activities to date, and the current status of our recommended additional specifications. In April 2011, Nymex met with Cushing personnel to discuss adoption of the additional specifications. At both the Fall 2011 and Spring 2012 meetings, Dan Brusstar spoke favorably regarding Nymex incorporating the specifications. Plains Pipeline previously reported that these are routinely being met. 2011 and 2012 Marathon Petroleum data also show that the specifications are being met.

·         The COQA recommended specifications are meaningful to refiners, practical to implement, routinely achievable, and do not limit liquidity of the stream;

·         In the last two years, work has validated the recommendations, and shown that perceived hurdles have been overcome; and

·         The importance of the specifications was highlighted in a recent presentation by Harry Giles to the National Academies of Science “Dilbit Committee.”

In closing, Dennis emphasized that the need for Nymex to formally adopt the COQA recommended specifications is even greater with the movement of Domestic Sweet to trading hubs on the U.S. Gulf Coast.
 


“CCQTA Update”, Randy Segato, CCQTA Vice-president. In opening his presentation, Randy provided some background on CCQTA, established in 1994 to:

 

·  

      Facilitate communications among industry stakeholders;

·       Provide a forum for the presentation and consideration of proposals for projects related to any aspect of crude oil quality; and

·     Improve industry knowledge and awareness of crude oil quality through cooperative exchange of technical information.

Randy then discussed “what’s new” with each of the 10 active projects. Of especial current interest is the one on Organic Chlorides. In closing, he provided information of two new projects:

 

·         TVP / RVP; and

·         Dewatering and Volumetric Discrepancy.

“Crude quality impact on the aluminum industry”, Marty Bull, Alcoa. Alcoa was founded in 1888, and now has over 61,000 employees at 200+ locations in 31 countries worldwide. The company invented the aluminum smelting process and, today, is the largest producer of Al in the world. They are also the only Al company with operations spanning every aspect of Al production from mining, smelting, production of rolled Al, to forging and extrusion.

Marty provided an overview of the smelting process and the properties of anode grade coke needed. Increases in the sulfur and vanadium content of crude oils over the long-term have had a significant impact on the Al industry. This “worsening” of quality has lead to increases in production of fuel grade coke relative to anode grade. Short term quality excursions have also resulted in unpredictability in coke supply. In closing, Marty stressed that the refining and Al industries can mutually benefit from reliable production of fuel grade coke.
 

 

“More Prone to Release? Transport of Dilbit by Pipeline”, Tom Menzies, National Academies of Science. The National Academies of Science has been asked by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration to examine whether diluted bitumen has a “higher likelihood of release” compared with other crudes. To conduct the study, a 12-member committee has been formed, comprised of corrosion experts from academe and the private sector, and others with broad experience and diverse backgrounds in risk assessment and pipeline operations.

This committee first met in July 2012, following which it visited producers and operators in Edmonton and Fort McMurray, AB. A second meeting was held in October 2012. To assist it, the committee has reached out to a number of U.S. and Canadian agencies, producers, operators, and industry associations including CCQTA and COQA.

Among the issues being examined are:

 

·         What is “diluted bitumen?

·         How do pipelines operate, with and without diluted bitumen?

·         How do pipelines fail?

·         Does diluted bitumen have chemical or physical properties that would initiate failure mechanisms?

 

The committee is in need of information and data on:

•        The chemical and physical properties of diluted bitumen;
•        Pipeline operational parameters and practices; and
•         Integrity management practices. 

The committee will next meet in early 2013 and, if necessary, again later in the year. Depending on conclusions reached, a final report could be released in Spring 2013, but possibly not until Fall 2013.

“Vapor Pressure in Crude Oils: Available Technologies”, Victor Cardozo, ATAC. After reviewing the principle of operation of ASTM D323 and D5191, Victor described ATAC’s Model 1354 Kinetic Vapor Pressure Analyzer and its application to online determination of crude oil vapor pressure. The instrument works on the Venturi Effect and is similar in operation to a paint spray-gun or steam ejector. Fluid under high pressure is converted into a high-velocity jet at the throat of a nozzle which creates a low pressure at that point. This low pressure is used to draw a suction fluid into the nozzle where it mixes with the motive fluid. As the pressure reduces, it will reach the vapor pressure of the sample. Victor discussed the various components and features of the Model 1354, options, and conditioning and installation requirements.

 
“Optimizing Crude Blending with Logistics”, Dean Trierwiler, Haverly Systems, Inc. Dean described Haverly’s H/CAMS-X Blend Optimizer and its applications, which include:

 

• Crude blend scheduling for sale and/or transport;
• Tracking and reporting full assay information; and
• Crude blend scheduling for distillation charge.

To illustrate this latter application, Dean discussed a scenario in which a pipeline delivered crude oil to a battery of tanks at a refinery, and how crude distillation unit feed could then be optimized. A number of screen shots were used to illustrate the process.

“Crude Oil Blending”, Steve Steward, Cameron Measurement Systems. Blending occurs in tanks at terminals and refineries, and in pipelines. It is done to upgrade product or crude oil quality, to allow crude oil to meet transport specifications, and to provide market access for otherwise poor quality un-transportable crude oils. In blending crude oils, several challenges need to be addressed:

• Blend high and low quality crude oils to a target parameter;
• Dynamically blend on-line; 
• Provide consistent blends at the lowest cost; and 
• Reduce give away.

In-tank blending has been practiced for perhaps 100 years, but has a high operational cost and can be a lengthy process. Moreover, the mixture may not be homogeneous or of consistent quality. In-line blending provides a faster, more-easily controlled option and blends of closely defined quality. Steve illustrated his presentation by describing his company’s installations at several locations including a production field, an FPSO loading facility, and at a marine terminal. 

 

Afternoon Session

“US Shale Production and Infrastructure”, Gus Vasquez, Argus.  In the last 18 months alone, Bakken and Eagle Ford production has nearly tripled.  Bakken production, which exceeds 800,000 b/d now reaches all corners of the U.S. as a result of the marked increase in unit train operations. Demand for the grade is increasing along with its ability to move.  Eagle Ford production has surpassed 350,000 b/d. It moves by pipeline to a number of Texas Gulf Coast refineries, and by rail to St. James, LA. From St. James, it can be loaded on barges and shipped to the entire U.S. Gulf Coast.
 

Several companies have plans in place to add pipeline capacity enabling up to 1.6 million b/d of Bakken to be moved by 2015. Rail transportation capacity is now at 730,000 b/d, and could reach 880,000 b/d by 2015. For the Eagle Ford, a number of projects with a takeaway capacity of 2 million b/d of liquids are underway or planned. The potential exists for an infrastructure over capacity. A further potential for a sweet crude oil bottleneck looms on the Gulf Coast as refiners reach capacity. Waterborne exports of light, sweet crude have become a topic of conversation, but these could be limited by the Jones Act.
 

 
“EAI, Inc.’s U.S. North American Shale Fairway Crude Supply, Logistics, Refining and Pricing Outlook Study”, Joe Leto, EAI, Inc..  In opening his presentation, Joe provided an overview of all the U.S. shale plays before focusing on the Marcellus and Utica in the East and Midwest.

Utica Shale: Production Outlook. The U.S. Geological Survey estimates the Marcellus has technically recoverable reserves of 3.4 billion bbl. of NGL’s, and the Utica 208 million bbl. of NGL’s and 940 million bbls. of crude oil. To date, considerably less drilling activity has been done in the Utica with only about 36 wells completed. Other basins within the U.S. central corridor have seen even less development.

Utica Shale: Refining and Transportation. Crude oil pipeline access into OH-PA-KY is somewhat limited. New construction is focused on NGL export from Marcellus and Utica plays. Marathon’s Catlettsburg, KY and Canton, OH refineries are well suited for Utica output. Excess NLG will need to be exported to Quebec or the U.S. Gulf Coast by barge or on new or expanding pipelines.

Increased local crude oil supply could stimulate refinery expansion. Refined product trade across the Midwest could be altered, with less being brought in from the U.S. Gulf Coast and via East Coast ports. Canadian crude oil supplies to the region could be backed out, and waterborne crude oil imports displaced.

 

”Shale Oil Impacts on Refining and Transportation”, Larry Kremer, Baker Hughes. A number of quality and processing issues are associated with shale oil, among them:

 

·         Wax deposits in tanks;

·         Emulsion stabilization;

·         High filterable solids;

·         Overhead corrosion; and

·         Cold and hot train fouling.

Besides these, shale oil production often exhibits considerable quality variation within a field, making characterization problematic at times. Larry provided several examples of the problems that can result from the above issues.

Baker Hughes’s Asphaltene Stability Index Test was shown to be applicable to measuring the onset of asphaltene flocculation when shale oil is blended with other more asphaltenic crude.


 

“Tight Oil Impact on Desalter Operations”, Dennis Haynes, Nalco. Following a brief overview of refinery desalters, Dennis discussed the important factors contributing to their effective operation. Gravity settling of suspended water droplets is the most important of these, and is governed largely by density of the oil droplets, their size, and density and viscosity of the oil. Dennis illustrated this point with several slides comparing Bakken and Eagle Ford shale oils with conventional crude oils. The numerous additives that can be present in shale oils can affect not only desalter operations, but can have an impact on crude unit operations.

Blends of conventional crude oils with shale oil can be incompatible, resulting in asphaltene precipitation in the desalters. These can stabilize emulsions resulting in water being carried under to the wastewater treatment plant potentially resulting in environmental excursions. Dennis described a stability index analyzer that is useful for assessing incompatibility of mixtures. Various additives can then be considered for stabilizing asphaltenes.



“OGC Applied Technology and Innovation Center (ATIC)”, Wayne Kriel, SGS. In 2006, SGS made decision to develop and deploy a Portable Analytical Laboratory (PAL) for the field.  To produce laboratory quality results in remote and harsh environments, the overall system had to be user friendly, portable or transportable, and produce results comparable to those of published standards. As developed, the PAL consists of the following components among others:

 

·         Mini-PVT;

·         Mini-GOR flash analyzer, with associated GC for gas analysis;

·         GasPro™ system configured for LNG, natural gas, stack gas, or LPG analysis;

·         GC configured for crude oils and condensates; and

·         Natural gas analyzer.

The MiniPVT system is mercury free, requires only ~100 mL of sample, works at pressures to 20,000 psia, and in a temperature range of 20 - 350°F.



“Logistics Considerations in a Changing Crude Market”, Tim Berrigan, Petroplex International. Growth in unconventional oil from North Dakota, Texas, Ohio, and elsewhere is challenging existing logistical suppliers, and providing an opportunity to others offering transportation alternatives. Crude by rail has become a solution that can move unconventional oil supplies to virtually anywhere in the U.S. Currently, more than 800,000 b/d are moving by rail from North Dakota, Texas, Alberta, Canada, and other producing areas. St. James, LA has become a hub for receipts of this production.

Petroplex International is developing a facility on the Mississippi R. at St. James that will provide connectivity via road, rail, pipeline, and barge for its customers giving them considerable transportation flexibility. The project will utilize state of the art technology, allowing for decreased loading/unloading times, and optimized blending and tank-to-tank transfers. The facility will be able to adapt to customer specific needs and store a large variety of products. Many of the required permits have been received, engineering design has started, and the facility is expected to be operational by 4Q2014.

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This concluded the November 8, 2012 meeting of the COQA.  The next meeting of the association will be in San Antonio at a venue and date to be announced. Details will be posted to the COQA website as they become available.

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Harry N. Giles

Director, COQA