Crude Oil Blending

James Ignatovich Area Manager, WGC

Intertek - Commodities Division

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Crude Oil Blending

Transportation and Logistics

Pipeline economics

Quality Management

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1. Blending Heavy Crude for Pipeline logistics

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In-line blending for transportation

Heavy crude (A) Viscosity! Pour Point!

Density! Receiver (B)

Horsepower

Heavy crude
Pipelin
e $$$$

AsThe
theefficiency
viscosity ofincreases,
moving crude
the flow
oil through the
thisOne
pipeline
pipeline
solution
decreases
is totally
is to acquire
dependent
and the
a light
pressure
on crude
some or of its
As theproperties
increases.
physical density
All increases
pipelines soDENSITY,
including does under
must operate the VISCOSITY
amount of horsepower
theanother
MaximumAND
acceptable required
Operating
POUR POINT to push
hydrocarbon
Pressure they the
that iscrude
are
through
designed for,the
so pipeline.which will cost
it may not be possible morereadily
to pump on an incremental
untreated
accessible pipeline
high viscosity
and tariff!
useproduct
an inlineat all.
blender to create a blend with a lower
Density, Viscosity and Pour Point.

Light crude or
other diluents
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In-line blending for transportation

Heavy crude (A) Viscosity! Pour Point! $$$$

Density! Receiver (B)
Medium
crude blend
Pipelin
e

Inline blender
One
The solution
problematic
is to physical
acquire aproperties
light crude
willor
another
now be acceptable
eradicated hydrocarbon
and the blendthat
willisbe
readily
easily pumped
accessibleto and
the reciever.
use an inline
blender to create a blend with a lower
Density, Viscosity and Pour Point.

Light crude or
other diluents
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2. Sharing a Common Pipeline

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Shared Pipeline blends

Here youUsing the benchmark

see wells
three platforms value
Now lets say
it can be with differing
calculated how
all producing
quality A sweet
are the And
drilled same
crude quality
the well
owners
nearby. andof the
crude. Itamuch
is
Aresourall
thethe sour
lower
comingled
owners
crude
crude
value sourisstream
and
wellgoing
are to
decreasing
toNo,
pumpedconstructed
lay shore
miles may
they the
not
viawill
and streams
want to
connect
amiles
single ofgive up
Medium sour close
suchthe
by
compensation!
pipeline.value
The
pipeline and
to this common
allocations
to keepownerwill will be
the
penalized.
One solution to the allocationonly be based
of funds ispipeline.
streams to onsegregated?
metered
Medium sour $$$
Sourfocuses
volumes.
set up a quality bank that on key
quality parameters for the medium sour
crude.
Each quality parameter will set a benchmark
for the value for the original crude. Common
Carrier

$$$ But what about

Likewise it canthe
beowners of
Sweet the higher value
Medium sour calculated howstream?
much the
They will want to be
sweet crude is increasing
compensated for the sweet
the value and the owner
product they are introducing
will be compensated.
to the system.

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3. Blending Crude Oil for Margin Optimization
(Quality Management)

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 The B word.Blending high quality crude oil with low
quality crude oil in order to change the value of the product has
been around for decades.

It has been a taboo subject in years past and some of the

crude oil blending that took place was very controversial
resulting in what was known as Dumb Bell crudes.

The industry standard for defining crude oil quality was by

analyzing and measuring only two parameters, Gravity and
Sulfur.

Therefore the quality could be easily manipulated by blending a

very heavy crude with a very light crude.

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 Historical and controversial dumb
bell crude blending

As this blend passes Blending a heavy crude with

through the refinery units a condensate
But the other characteristics
would give a
the metals would and parameters
resulting blend that would
has be very
Heavy Sour
different
Gravity and from a desirable
Sulfur
Crudedeactivate or poison
catalysts and upset other crude oil.such
parameters the sameasas
heavy
a
sensitive equipment metals!!sweet crude.
desirable

This
Thedidheavy
not fair
and well
light
with
product
refiners
and
yields
because
would ofbethisvery
thehigh
COQA but
and
theother
desirable
industry
middle
associations
distillate
pushed
yieldsfor
wouldmorebeparameters
very low. to
Fe beHence
analyzedthewhen
term Dumb
definingbell
the
V
Ni quality
crudeof crude oil.

Condensate

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 Pipeline Specifications

Here you can see some Here you can see a typical sweet
Pipeline crude
typical resultssale specs
for a virgin crude pipeline spec taken from a
Test sweet crude that meets
Unitspec Min Max publicMedium
Virgin website. Along with the
Heavy LS
along with other domestic and Sweettraditional Gravity
Sour and Sulfur
Sour we Cond
foreign crudes that do not now have other specifications.
API: 34.0 41.0 36.1 25.0 29.0 45.0
meet spec.
Sulfur: %WtIf a marketer has the
0.400use of0.336
a blending0.400 1.90 0.05
Light Ends:(C2-C5 facility and has access to each of these
The light ends and residue specs20.0
total): %w/w 6.0 2.98 2.62 1.40
crudes they can blend them together shouldand still Dumb bell
eliminate
Sim Dis: (1020+): potentially4.0
%w/w meet all12.0
of the requirements of the total23.0
8.6 crudes and
2.9 metals spec 0.1
the pipeline and the refinery.1.7 (V, Ni & Fe)
0
will stop heavy
- -
MCRT: %Wt 2.0
metals from poisoning the
Metals: mg/kg 8.0 3.3 catalysts.
4.2There is also
75.0 an acid 5.0
number specification.
TAN: mg KOH/g 0.70 0.37 0.28 0.51 0.05

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Tank blending

Virgin Sweet 0.33% Sulfur Pipeline Spec 0.4%

$100 Sweet Blend $100

MARS 6MB
Target blend for
EIC 28MB contract sale

SAH 38MB

Virgin crude oil available for

the operation of supplying a
Virgin sweet 200MB
0.40% sulfur sweet crude
blend through a pipeline.

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Tank blending

Virgin Sweet 0.33% Sulfur Pipeline Spec 0.4%

$100 Sweet Blend $100

MARS 6MB
LS Cond 0.05% Sulfur EIC 28MB
$95
LS Cond 38MB

238MB
Sweet light Blend
0.29%200MB
Virgin Sweet

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Tank blending

Virgin Sweet 0.33% Sulfur Pipeline Spec 0.4%

$100 Sweet Blend $100

MARS 6MB
LS Cond 0.05% Sulfur Med Sour 28MB
$95

266MB
238MB
Sweet Blend
Med Sour 1.00% Sulfur Sweet0.36%
light Blend
$90 0.29%

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Tank blending

Virgin Sweet 0.33% Sulfur Pipeline Spec

$100 Sweet Blend $100

Heavy Sour 6MB

LS Cond 0.05% Sulfur
$95
272MB
266MB
Sweet Blend Common
Sweet
Ready forBlend
Pipeline Carrier
Medium Sour 1.00% Sulfur
0.36%
$90
Virgin Sweet 200MB

Heavy Sour 1.90% Sulfur

$90 $98.05/Bbl
Gross profit $530k

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Tank Sampling If this shore tank was to scale
then this tiny, little dot would
..this
represent shows
1000how difficult
quarts of it can
be andThis
product. howmeans
importantthat itthe
is to
get good
analysis we representative
run is on a sample
1000 the size ofathis
samples
th from crude shore
dot..
tank
300,000 Barrel Shore Tank
300,000 x 42 = 12,600,000 Gallons
12,600,000 x 4 = 50,400,000 quarts
The samples would go back .
to our lab for testing. Based Here is a representation of a
on the results the lab would 300MB crude oil shore tank
produce a Report of Analysis that our inspector would
for the whole tank based on climb and take quart
that one quart sample. samples from each level
(U/M/L) along with running
averages.

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 A lot of pipelines converge at this
area
Here is aMidwest.
in the map of the
At a little
crude
town oil Cushing,
called pipelines OK.
in Known
North
locally asAmerica.
the Pipeline
crossroads of the world. The
large crude oil terminal here has
been upgraded and expanded
(50M Bbls) recently for mass
storage and blending of crude oil.

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Intertek Crude Oil Laboratory,
Cushing, OK
Crude oil and fuel testing
Intertek has committed to opening a full
crude oil laboratory in Cushing, OK.
Capabilities include almost all ASTM
crude oil methods, including
GC light ends & HTSD
Metals by ICP, Nitrogen, Sulfur,
Gravity, RVP, Chlorides
and many, many more.

Opening March 2011

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Questions?

Bruce Carlile 832-861-4053

Bruce.Carlile@Intertek.com

James Ignatovich Area Manager, WGC

Intertek Commodities Division

total customer focus

www.intertek.com
www.intertek.com