In refineries, an Operating Expense hides in plain sight – Hydrocarbon Loss.

Hydrocarbon Loss occurs daily in refinery operations because improper systems, processes, and behaviours are in place.  This is a preventable loss that often costs individual refineries millions of dollars per year.  Best-in-class targets are under 0.25% loss, while under 0.5% loss is considered an achievable target for the average refinery. If your refinery is performing worse than these targets or, worse, is operating in the dark, don’t worry, a solution exists – a Hydrocarbon Loss Control Program.

A Hydrocarbon Loss Control Program is a set of measures that can be implemented to systematically reduce refinery Hydrocarbon Loss.  An effective Loss Control Program will identify all refinery fence line inputs and outputs to identify known losses and potential causes of unknown losses. Using a structured approach, the Loss Control Program can then become more granular and identify process unit inputs, outputs, and sources of loss.

To have a successful Loss Control Program that can identify opportunities, it is important to understand the root causes of Hydrocarbon Loss.  It often occurs at custody transfer points – the measurement points, where possession (custody) of hydrocarbons changes hands. Typically, these are interface points between the refinery and pipelines, rail cars, trucks, and vessels. At these custody transfer points there are three common causes of loss:

Crude is necessary for the refinery’s operations, but the sediment and water intrusions that often exist in crude are not. Often, the refinery is paying for these intrusions without realizing the magnitude of these intrusions or of the associated cost.

Measurements are used to track the volume and/or mass of hydrocarbons throughout the value chain, inaccurate measurements result in false data and prevent data-driven action and solutions. At point-of-sale custody transfer points, incorrect measurements can result in financial losses, or penalties if the quantity or quality is different than contracted to the buyer.

When offloading rail cars, trucks, and barges not all the product is extractable or the opportunity cost of extraction is greater than the value of extraction. The amount that remains onboard is often paid for, but not accounted for in mass balance programs.

Hydrocarbon loss remains a hidden but significant operating cost in refinery operations, driven largely by gaps in measurement accuracy, process control, and operational discipline. By understanding the root causes—such as sediment and water intrusions, inaccurate custody transfer measurements, and unaccounted retains—refineries can begin to uncover where value is being lost.