Crude Oil Blending

James Ignatovich Area Manager, WGC

Intertek - Commodities Division

total customer focus

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Crude Oil Blending

Transportation and Logistics

Pipeline economics

Quality Management

total customer focus

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1. Blending Heavy Crude for Pipeline logistics

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In-line blending for transportation

Heavy crude (A)

Viscosity!

Horsepower

Heavy crude

Pour Point!
Receiver (B)

Density!
Pipelin
e

$$$$

AsThe
theefficiency
viscosity of
increases,
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
density
increases
soDENSITY,
does under
the VISCOSITY
amount
of horsepower
required
to push
the
increases.
physical
All
pipelines
including
must operate
theanother
Maximum
AND
acceptable
Operating
POUR
POINT
hydrocarbon
Pressure
they
that
are
iscrude
through
will cost
morereadily
on
an incremental
pipeline
tariff!
designed
for,the
so pipeline.which
it may not be possible
to pump
untreated
accessible
high viscosity
and
useproduct
an
inline
at 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!

Medium
crude blend

$$$$
Receiver (B)

Pipelin
e

Inline blender
One
The solution
problematic
is to physical
acquire aproperties
light crude
will
or
another
now be acceptable
eradicated hydrocarbon
and the blendthat
willisbe
readily
easily pumped
accessible
to 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

Medium sour

you
Using
the benchmark
value
Here
see wells
three
platforms
Now lets
say
with
differing
it can
be
calculated
how
the
And
the well
owners
all
producing
same
quality
A sweet
crude
andof the
quality
are
drilled
nearby.
the
sour
crude
lower
value
sourisstream
crude. Itamuch
is
all
comingled
and
Are
the
owners
to
sour
crude
wellgoing
are
decreasing
the
streams
may
not
want
to
give
up
they
connect
pumpedconstructed
toNo,
shore
viawill
amiles
single
lay
miles
and
of
close
by
Medium sour
suchthe
compensation!
and
owner
to this
common
pipeline.value
The
allocations
will will be
pipeline
to
keep
the
penalized.
be based
metered
streams
One solution to the allocationonly
of funds
ispipeline.
to onsegregated?
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

Medium sour

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Sweet

$$$

But
what about
Likewise
it canthe
beowners of
the
higher value
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.

3. Blending Crude Oil for Margin Optimization

(Quality Management)

total customer focus

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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

through the refinery units
the metals would
Heavy Sour
Crudedeactivate or poison
catalysts and upset other
sensitive equipment

Blending a heavy crude with

a condensate
But the other
characteristics
would
give a
and parameters
resulting
blend that would
has be very
different
a desirable
Gravity
and from
Sulfur
crude oil.such
asas
heavy
parameters
the same
a
metals!!sweet crude.
desirable

This
The
didheavy
not fair
and
well
light
with
product
refiners
and
yields
because
would
ofbe
thisvery
thehigh
COQA
but
and
the
other
desirable
industry
middle
associations
distillate
pushed
yieldsfor
would
morebeparameters
very low. to
Fe beHence
analyzed
thewhen
term Dumb
definingbell
the
crudeof crude oil.
Ni quality

Condensate

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Pipeline Specifications

Here you can see some

Pipeline
crude
specs
typical
resultssale
for a virgin
sweet crude that meets
Test
Unitspec
along with other domestic and
foreign crudes that do not
API:
meet spec.

Min

Max

34.0

41.0

Here you can see a typical sweet

crude pipeline spec taken from a
publicMedium
website. Along
with the
Virgin
Heavy
LS
traditional
Gravity
and
Sulfur
we
Sweet
Sour
Sour
Cond
now have other specifications.
36.1

25.0

29.0

45.0

MCRT:

0.400
%WtIf a marketer has the
use of0.336
a blending0.400
1.90
0.05
facility and has access to each
these
of
The
light
ends and residue
specs20.0
2.98
2.62
1.40
%w/w
6.0
crudes they can blend them together
still Dumb bell
shouldand
eliminate
8.6 crudes and
2.9
potentially4.0
meet all12.0
of the requirements
of the total23.0
metals spec 0.1
%w/w
will stop heavy
the pipeline and the refinery.1.7 (V, Ni & Fe)
0
%Wt

2.0

Metals:

mg/kg

8.0

TAN:

mg KOH/g

Sulfur:
Light Ends:(C2-C5
total):
Sim Dis: (1020+):

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0.70

metals from poisoning the

3.3 catalysts.
4.2There is also
75.0 an acid 5.0
number specification.

0.37

0.28

0.51

0.05

Tank blending

Virgin Sweet 0.33% Sulfur

$100

Pipeline Spec 0.4%

Sweet Blend $100
MARS 6MB
EIC 28MB

SAH 38MB

Virgin crude oil available for

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

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Virgin sweet 200MB

Target blend for

contract sale

Tank blending

Virgin Sweet 0.33% Sulfur

$100

Pipeline Spec 0.4%

Sweet Blend $100
MARS 6MB

LS Cond 0.05% Sulfur

$95

EIC 28MB

LS Cond 38MB
238MB
Sweet light Blend
0.29%200MB
Virgin Sweet

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Tank blending

Virgin Sweet 0.33% Sulfur

$100

Pipeline Spec 0.4%

Sweet Blend $100
MARS 6MB

LS Cond 0.05% Sulfur

$95

Med Sour 1.00% Sulfur

$90

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Med Sour 28MB

266MB
238MB
Sweet
Blend
Sweet0.36%
light Blend
0.29%

Tank blending

Virgin Sweet 0.33% Sulfur

$100

Pipeline Spec
Sweet Blend $100
Heavy Sour 6MB

LS Cond 0.05% Sulfur

$95

Medium Sour 1.00% Sulfur

$90

Heavy Sour 1.90% Sulfur

$90

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272MB
266MB
Sweet
Blend
Common
Carrier
Sweet
Ready
forBlend
Pipeline
0.36%
Virgin Sweet 200MB

$98.05/Bbl
Gross profit $530k

Tank Sampling

If this shore tank was to scale

then this tiny, little dot would
..this
shows
how
difficult
represent
1000
quarts
of it can
be andThis
howmeans
important
is to
product.
that itthe
get good
analysis
we representative
run is on a sample
samples
from
crude
shore
th
1000 the size ofathis
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
on the results the lab would
produce a Report of Analysis
for the whole tank based on
that one quart sample.

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Here is a representation of a
300MB crude oil shore tank
that our inspector would
climb and take quart
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.
map of the
in the
At a little
crude
oil Cushing,
pipelines OK.
in Known
town
called
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.

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