An Expensive Barrel of Water

July 20, 2015

Extracting sediment and water (S&W) from crude and deducting the percentage of S&W from the total crude purchase is a normal procedure at most refineries. Having the refinery’s laboratory test for S&W is also a common practice at most refineries. What is not common is having the right procedures, tools, and behaviors to eliminate any variances calculated by the lab against what is deducted at point of custody transfer.

This gap impacts mass balance, unit upsets, and the bottom line of any refinery. As a result, the refinery pays a significant price for unusable sediment and water. There are multiple ways to address this gap. First, there must be an understanding that the lab is not a separate entity and collaboration with the rest of the refinery is a prerequisite to success. Second, accurate measurement is a necessity and cannot be compromised. Correct testing procedures need to be continuously reviewed based on crude slate, especially with the growing use of light shale crude in North American refineries. Internal procedures to ensure repeatability are a must and lab managers have to expect the highest accuracy from their technicians. But it’s not only the lab’s responsibility, there also needs to be correct procedures to review variances between the lab and the tickets. Just as important is the ability for the systems to compare the lab results with those of the ticket’s, allowing management to identify trends and variances. Finally, there needs to be a clear escalation procedure in cases where variances are detected. Sometimes this involves third party oversight which requires trained employees to observe the sampling and testing of S&W to ensure that correct API procedures are being followed. Other times, it involves working with the commercial team to issue a claim with the pipeline.

Regardless of the approach, the impact of paying for water instead of crude is substantial to any refinery’s bottom line. Correct resource allocation with the proper process and system can save a refinery millions of dollars.

By: Poria Kanozi