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Annual Meeting

March 9-11, 2008


Manchester Grand Hyatt
San Diego, CA

AM-08-42 Improve Crude Selection by Better


Understanding Crude Quality

Presented By:

Pat Swafford
Solutions Consultant
Spiral Software
Shawnee, OK

National Petrochemical & Refiners Association 1899 L Street, NW 202.457.0480 voice


Suite 1000 202.429.7726 fax
Washington, DC www.npra.org
20036.3896
This paper has been reproduced for the author or authors as a courtesy by the National
Petrochemical & Refiners Association. Publication of this paper does not signify that the
contents necessarily reflect the opinions of the NPRA, its officers, directors, members, or staff.
Requests for authorization to quote or use the contents should be addressed directly to the
author(s)
Improve Crude Selection
By Better Understanding Crude Quality
by Pat Swafford
Spiral Software Ltd.

Summary
Crude oil qualities have a major impact on transportability of the crude oil, compatibility with refinery
processes and suitability of distillation products for their respective end uses. The price of crude oils
may vary by over 20% depending on such qualities. The value of an individual crude oil will also vary
between refineries depending on each refinerys configuration and supply and demand constraints.

A common practice in the crude selection process for refiners is to use data from laboratory crude
assays in planning models and to update common assays once every year or two. Crude oil qualities,
even within a single grade of crude, vary over time. These qualities not only differ between oil fields,
but also vary from cargo to cargo for a single traded crude oil. Often, the crude oil received in a
refinery is a blend of several crude oils in unknown proportions.

The result is that the refiner may not have a good measure of the quality of the crude oil when using
a crude assay that is even as recent as one or two years old.

This paper demonstrates that using static crude assays leaves too much margin on the table.
Optimal crude selection and processing decisions require the refiner to take account of the changing
quality of crude oil. By employing advanced statistical techniques and models for predicting crude oil
qualities, refiners can better understand the changing quality of crude oil and speedily generate
comprehensive, updated assays even from limited current quality data.

Traders and refiners can gain a market advantage by utilizing these capabilities.

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Value of Accurate Crude Oil Data
This information is a key input to trading, refinery planning, scheduling, process simulation and
blending models, supporting such business processes as:

evaluating and selecting the optimal slate of crude oils and other feedstocks for a refinery.
ranking the margin on alternative crude oils and assessing opportunity cargos.
scheduling receipts of feedstock cargos at the refinery and blending crude oils as feed to
crude stills.
optimising the cut-points, yields and qualities of the products from the crude still, based on
actual fractionation rather than that in the laboratory.
evaluating naphthas and condensates as liquid feedstocks to olefins and aromatics
petrochemical plants

In addition, as product quality specifications become ever tighter, driven by both environmental and
automotive developments, accurate and detailed assay information becomes increasingly important.

Required Crude Oil Information


Each of the various crude oil transportation and refining processes has its own information
dependencies. In addition, the ability to meet product specifications is dependent on the crude oil
and the intervening refining processes.

Examples include:

Transportation and Storage: whole crude density, pour point, viscosity and acid number.
Segregation in Storage: whole crude sulfur content, paraffinicity, asphaltenes and other
characterizations.
Crude Oil Distillation:
o acid number, salt content etc. as indicators of corrosion or fouling tendencies.
o distillation yield vs. boiling point as basic data for crude oil distillation.
Product Quality:
o Naphtha:
Density, naphthenes, aromatics and other compositional data as basis for
yields and performance of reforming, isomerization and cracking processes.
Sulfur and chlorides which impact on catalysts.

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o Kerosene:
Density, sulfur, freeze point, smoke point, aromatics for jet fuel and burning
oil.
Cetane index, cold flow (CFPP), pour point and viscosity for blending into diesel
fuel and fuel oil.
o Diesel/Atmospheric Gasoil:
Density, sulfur, aromatics content, cetane index, pour point, cold flow (CFPP)
and viscosity for blending into diesel fuel and fuel oil.
For heavy gas oil, UOP K or similar characterization, nitrogen content and
Conradson carbon content as criteria for processing through fluid catalytic
cracking and other conversion processes.
o Atmospheric Residue and Vacuum Gasoils
Density, pour point, sulfur, viscosity, metals for blending into fuel oil.
UOP K or similar characterization, nitrogen content and Conradson carbon
content as criteria for processing through conversion processes.
Suitability as lubricants feedstock.
o Vacuum Residue
Density, pour point, sulfur, viscosity, metals for blending into fuel oil.
UOP K or similar characterization, nitrogen content, asphaltenes and
Conradson carbon content as criteria for processing through fluid cracking and
other upgrading processes.
Suitability as lubricants feedstock via de-asphalting.
Penetration and softening point for bitumen or asphalt blending.

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As a consequence, a comprehensive matrix of data is required as outlined in figure 1

Figure 1: Matrix of minimum crude oil property data

ng i ng
i ng sw
i
sw
sw e re
a h a
il or
e or fo ue
th ht ef be
il h p il sO ef -b l- ue sid
Op ap Na ne Ga -b Oi
id re
tN y e sO y GO GO es os
de av os Ga av yV as
h
cR
Cr
u
GA
S
L igh He k er Lt He L tV Hv W Va At
m
Yield (wt %)
Yield (vol %)
TBP Cut Point Initial (oC/F)
TBP Cut Point Final (oC/F)
Specific Gravity / API
Sulphur (Total) (% wt)
Sulphur, Merceptans (% wt)
Acid number, mg KOH/li
RVP, psi/kPa
Molecular composition (methans to pentanes)
N-Parrafins (% vol)
I-Paraffins (% vol)
Naphthenes (% vol)
Aromatics (% vol)
Benzene (% vol)
RON/MON/DON
Luminometer Number (none)
Smoke Point (mm)
Cetane Index (none)
Cloud Point (oC/F)
Pour Point (oC/F)
CFPP (oC/F)
Freeze Point (oC/F)
Viscosity (kinematic) at 40.0C/100F (cSt)
Viscosity (kinematic) at 100.0C/210F (cSt)
Carbon Residue (Conradson) (% wgt)
Nitrogen (Basic) (ppm wgt)
Nickel (ppm wgt)
Vanadium (ppm wgt)
Asphaltenes (% wgt)
Penetration, mm
Softening point, (oC/F)
UOPK (none)
Aniline Point (oC/F)

In practice, data are needed for additional cuts in order to generate property profiles as a basis for
recutting to actual refinery straight run products. Also, in order to properly evaluate crudes in light of
todays increasingly stringent gasoline specifications, the molecular composition of the light ends of
the crude oil, from C1 to C8, is usually required.

Data Generation Today


Assay data are the results of a set of laboratory tests in accordance with standardized test methods,
typically API or ASTM methods. Each of these test methods has repeatability and reproducibility
ranges for measurements. The range of qualities tested and the number of cuts and their boiling
range may differ between laboratories. The content of assays from a single laboratory may be driven
by the specific needs of the particular oil company commissioning the assay.

A comprehensive laboratory assay may cost in excess of $20,000 (including sample procurement
and transport costs) and typically take 2-4 weeks to complete. A decreasing number of major oil
companies maintain their own laboratories and resources to produce an in-house library of
laboratory assays for crude oils around the world. Even these companies focus on the assays of the
crude oils which they routinely produce or refine, and are looking at ways to reduce the laboratory
workload, especially in updating assays. The maintained assay libraries licensed from the oil majors
typically update or add 5-10% of the crude oils annually.

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Causes of Variation in Crude Oil Quality
All crudes on the market are actually blends of multiple grades of crude that are produced from
several wells. Qualities vary with time as:

reservoirs proceed through their production lifecycle during which both quantity and quality
will change; this is especially the case for some of the smaller, more mature fields
individual wells, production or pipeline facilities are taken out of service for maintenance and
work-overs
The crude oil received in the refinery, especially if via pipeline, may be a blend of several
crude oils in unknown proportions

The result is that the refiner may not have a good measure of the quality of a current cargo of the
crude oil when using a crude assay that is even as recent as one or two years old.

Consequences of Variation in Crude Oil Quality


The following three examples illustrate the range and consequences of such variations.

Example 1, Forties Blend


The trend API of Forties Blend in the North Sea increased by 4 API from 1998 to 2006. Re-assaying
every year would reduce this trend variation to 1-2 API.

Figure 2: Variation in quality of Forties Blend crude oil cargos

Short term
variation

Long term
trend

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Within this trend, short-term cargo-to-cargo variations are up to 3 API. This will not be captured
other than by cargo-by-cargo assays.

Figure 3: Difference between Forties assays

Forties Forties Cargo


Cargo 1 2 % on cut
Cargo API 45.1 42.3
Wt% Wt%
Light ends 5.9 4.5 -23.7%
Light naphtha 8.8 7.4 -15.9%
Medium Naphtha 12.8 11.1 -13.3%
Heavy Naphtha 11.7 12.3 5.1%
Kerosine 11 11 0.0%
AGO 12.4 12.5 0.8%
Atmosheric residue 37.4 41.2 10.2%

The value of this difference will depend on whether the refinery is long or short on naphtha and
atmospheric residue. In one example refinery model, using 2006 prices, the lighter 45.1 API crude
is worth $1.10/bbl less than the 42.3 API crude. Such a large and unexpected difference in
naphtha and atmospheric residue yields could also present major operational problems.

Example 2, Arabian Crudes


Even large volume, relatively stable Arabian crude oils exhibit significant short term quality
variations.

Figure 4: Qualities of Arab Light crude oil at various confidence levels

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The right-hand-side chart shows that at the 95% confidence level, the qualities of an Arab Light cargo
could match the nominal quality of Arab Medium. As an example, purchasing Arab Light but receiving
Arab Medium-like quality instead would result in overpayment for the quality of crude received. For a
typical parcel, this could result in a potential loss of up to $2M or more.

Example 3, Alaskan North Slope crude Jan-Dec 2006


Figure 5: Month by month variation in gravity of Alaskan crude oil

32.0
31.5
31.0
API Gravity

30.5
30.0
29.5
29.0
28.5
28.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006

The following observations for 2006 may be made.

The average monthly API gravity varied by over 2 API from 29.3 to 31.5.
For a typical PADD V refinery, assays generated to track the monthly quality were on average
$0.45 per barrel more accurate (in economic terms) than a static laboratory assay generated
at the beginning of the period.
Improved understanding of crude quality would lead to additional benefits in crude selection,
product mix optimization, and operations optimization.

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Objectives of a Best-practice Approach to Understanding Current
Crude Quality
In practice, it is extremely difficult and prohibitively expensive to perform a complete laboratory assay
on every cargo of crude oil received in a refinery. So, the challenge of managing crude oil data should
be focused on the following objectives, which would minimize expense of performing crude assays
while still providing quality data in a timely manner. A best practice process for managing crude oil
data should include the following objectives:

Minimize the required number of laboratory measurements.


A speedy process to match the dynamics of purchasing or trading decisions and refinery
operations.
Accuracy to support robust decisions.

Spirals Approach

Predictive model to reduce data needs

Since all crude oils are formed by roughly similar geochemical processes, there should be some
relationships between physical properties and chemical composition.

At a glance, crude oil properties can be seen to have some clear correlations. For example, high
sulfur crudes tend to be denser.

Figure 6: Relationship between specific gravity and sulfur content of a number of crude oils

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Another example is that of increasing smoke point of kerosene with increasing paraffin content.

Figure 7: Relationship between paraffin content and smoke point of kerosene of a number of
crude oils

Since crude oils show non-linear relationships, a simple linear statistical model will not generate an
accurate representation of a crude oil. An alternative approach could be to build a neural network
model for crude oil data. However, experience has shown that it is difficult to build such a model
which shows the required accuracy in interpolation and is also stable in extrapolation.

Therefore, Spiral predictive technology is an advanced non-linear statistical model which identifies
local and global patterns across a set of detailed crude oil assays. It is based on modern research
techniques for handling large data sets and analysing variable-quality information. The model is built
from data for a large number of crude oil assays. For example, Spirals models built on the Chevron
or Shell assay libraries are based on 1000-2000 assays from around the world.

This statistical model is the engine behind Spiral CrudeManagers functionality for updating existing
assays or creating new assays. This functionality is described below.

The AssayUpdate module of CrudeManager


o generates detailed, balanced updated assays of known crude oils including
predictions of all properties in the model, based on such cargo inspection data as
density, sulfur content and, preferably a simulated distillation.
o it is used by at least two of the Majors to produce an updated assay for every cargo
using a limited flash assay set of data.

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The example below shows the yields and sulfur profiles for:
a) A 1997 reference assay for WTI with density 0.829 / API 39.2 and sulfur of 0.48%.
b) An updated assay for WTI with density 0.835 / API 37.9 and total sulfur of 0.40%.

Figure 8: Comparison between reference and updated assay for WTI


Property Profile Graph
100 4.5

90
4.0

80
3.5

70
3.0
Cumulative Y ield (% wgt)

S ulphur (Total) (% wgt)


60

2.5

50

2.0

40

1.5
30

1.0
20

0.5
10

0 0.0
-200 0 200 400 600 800 1000 1200

Boiling Point (C)

WTI20070120 CumYld(%w ) WTI20070120 Sul(%w ) WTIO19970418 CumYld(%w )


WTIO19970418 Sul(%w )

The lower API/ higher gravity leads to a yield shift towards higher temperatures.
Conversely the reduced sulfur content results in a downward shift in the sulfur
profile.
The AssaySynthesis module of CrudeManager
o generates a full assay description of crude oils for which a full set of assay data is not
available. Examples could be crude oils from recently commissioned oil fields which
are not in the existing database.
o uses available data plus the model to predict a full set of balanced properties and
yields.
o Displays confidence limits for the predicted properties to allow risks to be estimated.
This functionality enabled at least one Spiral client to take an early, profitable position on a
newly marketed crude oil.
Another use of the predictive model is to generate full assays for pipeline parcels or tanks
containing a blend of crude oils in unknown proportions.

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Speed

A rapid analysis is key to enabling a best-practice crude oil data management process. Typically
CrudeManager estimates all missing data in <30 seconds.

Mathematical crude oil descriptions enable fast recutting requiring <1ms per crude cut for
perfect or thermodynamic separation.
It takes as little as 15 minutes to input the data for a new crude, generate the assay, export
to LP tools such as PIMS and run an evaluation.
Spirals Web-based CrudeSuite internet (CSi) incorporates simplified refinery models which
enable traders to complete this cycle, through to netback valuations in even less time.

Accuracy

Accurate crude oil data is a requirement for making economically sound decisions, and must be part
of a best practice crude oil data management process. The accuracy of CrudeManager has been
proven in commercial use for over 8 years. CrudeManager

has been selected over NMR and NIR spectroscopic techniques after significant projects
investigating these areas.
is the single assay workup tool used by BP, Chevron and Shell to create their marketed assay
libraries
No clients have moved away from this technology once adopted.

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