Discussions / Questions - Recent Threads

Refiners boil down today’s challenges

Emerson Exchange News — Wed, 25 Sep 2019 23:46:24 GMT

Paul Studebaker

“Today’s refineries are dealing with many challenges including operational agility, higher margins, different crudes, corrosion and reliability, as well as how to use the Industrial Internet of Things,” said Ed Schodowski, refining director, Emerson, to attendees of the Refining and Petrochemical Industry Forum at the 2019 Emerson Global Users Exchange in Nashville, Tennessee.

With the guidance of live audience polls, Schadowski moderated a panel of four industry experts who discussed six topics that brought out a range of views and useful insights for automation engineers at refining and petrochemical companies. They dove in by asking the audience what types of operational excellence programs they’ve used to improve Solomon benchmarks, and how automation was involved. The audience chose mechanical availability (73%), turnaround index (35%), net cash margin, USD/bbl net input (19%), energy intensity index (15%), and personnel efficiency index (13%).

“Solomon is a double-edged sword,” said panelist Bruce Taylor, director, digital transformation, Sinclair Oil Co. “It can lead management to slash and cut budgets and head counts, so you have to produce information that explains maintenance efficiencies—for example, sometimes it’s less expensive to just replace a relief valve than to remove it, test it and put it back.” Taylor recommended that managers make the Solomon criteria more granular, so plant personnel could recognize their influence. He said, “We gave them metrics directly related to them so they know their contribution.”

Panelist Michael Barham, principal engineer and control systems technologist, Marathon, said, “Looking at the metrics, our mechanical availability is high, but we haven’t done much using automation. We could do much more to increase that number, but how can we quantify it? We measure things falling apart, not holding together.” Barham emphasized that turnarounds are a quick way for plants to lose money. “They’re often 20% over budget,” he said. “Good turnarounds equal good maintenance. Do turnarounds well, and the rest will fall out.”

Panelist Richard Marcantel, instrument engineering manager, Citgo, said, “We’re an old plant with analog signals and few smart devices. We need to have as much availability as possible. We’re trying to leverage HART and get information to people who can use it.”

Panelist Dustin Beebe, vice president, control and operator performance, Emerson, pointed out that “Procedural automation can transform the way people work. Don’t just deploy technology, lift and shift operators. Automation is one way to do it.”

Improve equipment reliability

Attendees were then asked where they were on the journey toward best practices in Integrity Operating Windows (IOW) as described in API 584, and improving fixed equipment reliability. The poll showed 48% “have started and are on the journey,” while 28% are “talking about it and creating plans,” 21% have “only discussed it,” and 3% have programs that are “fully developed and comprehensive.”

Emerson’s Beebe observed that, “With millennials coming in, most people are on the journey.”

Marcantel at Citgo said, “We started, and are early in the journey, asking how to get data—information—to the computers on their desks to make better decisions.” It’s important because, “We make measurements on rounds, but what happens between rounds?” he said.

“The bottom line is money,” said Marathon’s Barham. “We look at the IOWs when it’s important, but mostly pull data before meetings, and that’s shortening downtime.”

Taylor at Sinclair warned that, “Many people don’t know what an IOW is versus a limit or target, so we usually give information in terms operators can appreciate,” such as dollar signs or value symbols. Further, “When we see step changes from shift to shift, we try to learn from those anomalies and get everyone on the same page,” he said.

Upskill for more data

Asked, “What have been the best upskilling methods and procedures to utilize additional information about the process and assets?” the audience poll showed attendees use formal onsite training (69%), formal vendor offsite classroom training (48%), lunch-and-learns (52%), webinars (16%) and universities/technical schools (8%).

Training is good, but “It’s hard to get change into the operator rhythm, to continually reinforce training so it becomes part of the operating norm,” Taylor said. “Training is valuable, but it has to be followed up.”

At Marathon, “A chemical company customer requires our operators to have four-year technical degrees, so we sponsor and follow that,” said Barham. He says the problem with formal training is that it’s a one-time thing. “Webinars are very valuable because they’re always coming up,” he said. Repetition is important because, “Our models that we train them on don’t replace the models in their heads—they compete with them.”

Marcantel at Citgo said, “We do all of these. We have a really good technical school in our area, and companies in the area require a degree from that school.” He prefers off-site training because people tend to get pulled out of on-site training for emergencies. But the most important thing is to put training to use immediately, he says. “If you don’t use it, you lose it.”

Beebe agreed. “We can’t do enough formal training, so we use more online webinars,” he said. “Operators can see a webinar on, for instance, alarm management or an instrument procedure, then they can go do it.”

Justify wireless

Asked to comment on lessons they’re learned about wireless justification, implementation, maintenance, etc., the audience poll revealed that 51% need a better vision for use cases, 44% need better financial justification, 28% need management buy-in, 23% need a total wireless IT plan, and 21% have had trouble tackling cybersecurity issues.

“We put in a comprehensive Wireless HART and Wi-Fi system,” said Taylor at Sinclair. ”The infrastructure was five times the cost of the devices for a single application, so we canvassed for all the applications and created a vision—no one use case justifies the cost, but together, the return was huge. We cut two to three days out of a turnaround.” But he cautioned, “When you build it, who owns it? Who changes the batteries? What about monitoring and cyber? And you must understand the protocols—Wi-Fi is not industrial.”

Marcantel at Citgo pointed out that, “Management doesn’t understand all the terminology. Dumb it down so they can understand.” He agreed that it’s important to make decisions about ownership and maintenance upfront.

“We designed a wireless temperature sensor innovation program with great Emerson sensors, but it’s not moving forward due to cost priorities,” lamented Barham.

Beebe replied, “Think about what the project means to your company. Then challenge the vendors on cybersecurity and understanding your use case.”

Get a grip on mass balance

Asked about their successes and best practices in improving mass balances, the audience poll found that 80% have improved data quality for unit or plantwide optimization/modeling, 13% have improved losses, 5% have reduced financial risk, and 3% have reduced theft.

“Our biggest challenge is people,” said Barham. “It’s so basic, it’s not sexy, and people don’t care.” There are great automated tools that use statistics to pinpoint where the problems are, “But then you have to get the fix done,” he said, adding, “You must have mass balance for advanced process control (APC) projects and model-based control.”

Beebe noted that available systems “can pinpoint the instruments causing loss, tell you where to put instruments, where to improve accuracy. A refinery runs on barrels, which equal mass, and you really need to understand where it’s going.”

Marcantel said, “We have a lot of orifice plates, not mass flowmeters. New processes and new crews change things up all the time, and when you start with bad data, you end up with bad results.”

Taylor observed, “It has the same problems as APC. Who keeps it evergreen? A new engineer gets the job for their first 18 months, then what? It’s a great application for artificial intelligence (AI).”

Connect islands of automation

Finally, the audience was asked to fill in a blank: “Where has your plant removed islands of automation, such as stranded PLCs?” Responses were many and varied.

“First, what’s the value? It’s a capital cost, it has to have ROI,” said Barham.

Marcantel replied, “The costs include maintenance of stranded PLCs, doing maintenance and diagnostics out in the plant. Technicians could be doing something else more productive. We’ve integrated a lot of PLCs to our DCS—a DeltaV can integrate them very easily. Or run a Modbus TCP connection and bring it back. Use an OPC connection if there’s no DCS to get it to operators,” adding, “It really helps you on the maintenance side.”

Beebe said, “It’s also for optimization, by bringing data together and into the cloud. It helps you coordinate cybersecurity, deploy patches, control attack surfaces.”

Taylor pointed out that, “When islands are not integrated, they run on their own for functionality as well as data. It’s hard to know what’s going on.” Furthermore, “AI is coming, and AI totally depends on cross-functional views. For example, a pump’s usage, history, environment—we need all that to optimize it.”

Corrosion and Erosion Monitoring

Andreea — Tue, 09 Oct 2018 11:17:55 GMT

Ageing plants, greater fluid corrosiveness, ever stricter health and safety requirements, tighter CAPEX/OPEX budgets and leakage costs are all common industry challenges with which we are familiar.
That is way, now, we offer the widest range of best‑in‑class tools and technologies to create unique solutions to solve these challenges.

To find out more about the corrosion and erosion management solutions you can watch this short video.

For the full experience click here.

Industrial Apps Simplify Data Analytics

Deanna K Johnson — Fri, 13 Apr 2018 16:56:14 GMT

When wireless technology for instrumentation really took off 10-plus years ago with the introduction of WirelessHART, the ease of deploying new field devices and acquiring data got ahead of the back end of the process, turning the new data in to actionable information. In most cases, those new wireless devices were brought into the DCS or other automation system just like a wired device. But the picture is changing rapidly as more wireless devices are being used for equipment condition monitoring rather than process control.

Emerson’s Marcio Donnangelo looks at this evolution in an article that ran on page 12 in the AFPM Annual Meeting Conference Daily in March 2018 titled Industrial Apps Simplify Data Analytics. His contention is that these devices don’t need all the overhead of their wired and wireless counterparts doing process monitoring and control.

Different from real-time control, monitoring requires a new approach in terms of response time, data collection hardware, databases, analytics and actions. These needs, coupled with cost and time pressures, often make wired instrumentation infeasible for new asset monitoring applications. This is driving a need for different, suitable technologies, and this is where WirelessHART® rises to the top.

The cost of wireless instrumentation has always been lower than wired counterparts, but even greater saving comes when the overhead of changing DCS control code and creating new custom HMIs can be eliminated. That’s what’s happening today as industrial users build on lessons learned from consumer electronics.

Next-generation software applications, or industrial “apps,” collect raw data from these wireless and existing wired instruments, and then perform analytics to determine the condition of plant equipment and assets. This provides users with greater visibility into operations, enabling improved reliability and energy efficiency. As with apps for smartphones and tablets, these types of industrial apps are becoming a common way for vendors to supply software to end users, supplanting more traditional software products. These industrial software apps are also lightweight and require very little in the way of corporate IT support.

So, the need for calling in system integrators and creating special software to establish asset management programs may no longer be necessary. Just as you don’t have to write your own software to put an app on your smartphone, you can set up an asset management program the same way using simple pre-configured software.

Emerson’s Plantweb^TM Insight apps utilize pre-built analytics with embedded domain expertise to diagnose the health of plant assets. The resulting information and insights can be accessed and visualized on a web-user interface running on PCs, laptops, tablets or smartphones. Dashboards and charts simplify navigation and interpretation of information, so minimal training is required. The apps include features to ensure security, including role-based access.

Marcio discusses how Plantweb Insight apps can handle assets such as steam traps, pressure-relief devices, pumps, heat exchangers and more. It’s impressive to see how WirelessHART technology combined with new software can improve the way companies maintain and optimize their assets.

You can find more information like this and meet with other people looking at the same kinds of situations in the Emerson Exchange365 community. It’s a place where you can communicate and exchange information with experts and peers in all sorts of industries around the world. Look for the WirelessHART and IIoT Groups and other specialty areas for suggestions and answers.

RE: Industrial Apps Simplify Data Analytics

Jonas Berge — Sat, 12 May 2018 01:31:59 GMT

A key to the success of data analytics is easy to use analytics apps purpose-built for condition monitoring of equipment like pumps or heat exchangers etc. so that maintenance and reliability engineers and technicians can use them. General purpose analytics is too complicated, requiring data scientists. Plantweb Insight readymade apps avoid the need for costly and time consuming programming and ongoing support. Plantweb Insight apps are platform agnostic analytics which can be used with multiple existing data sources such as historian or control system, fieldbus and wireless sensors, eliminating the need for additional platform layers. Learn how other plants are doing it form this essay:
www.linkedin.com/.../real-end-users-analytics-data-scientists-jonas-berge

RE: IIoT and the Digital Transformation

Jonas Berge — Sat, 12 May 2018 01:28:14 GMT

I personally believe Digital Transformation (DX) of how the plant is run and maintained is key to achieving operational excellence such as improve reliability, reduce maintenance cost, improve energy efficiency, reduce HS&E incidents and response time, and increase productivity etc. Many plants are already successful with digital transformation including a mix of on-premise digital and IIoT solutions starting from digital sensors on wireless and fieldbus. Learn how other plants do it from this essay: www.linkedin.com/.../digital-transformation-what-actually-means-plant-jonas-berge

Digital inspection
Digital collaboration
Digital document box

Digital distress calls
Digital safety checks
Digital mustering headcount and rescue locating

Digital operator rounds
Digital logbook
Digital package unit management

Digital energy management

IIoT and the Digital Transformation

Deanna K Johnson — Fri, 13 Apr 2018 17:02:36 GMT

It’s hard to imagine there are many people working in the oil & gas industry who have not looked at the developments in IIoT and wondered what it’s all about. The more specific and important question some ask is, “Is this something my company should be adopting?”

By this point, most industrial users realize the IIoT has moved well past the buzzword stage and represents a group of technologies that are quickly maturing and proving their usefulness. On page 16 in the AFPM Annual Meeting Conference Daily in March 2018, Emerson’s Tim Olsen examines the issue in his article, IIoT and the Digital Transformation. He says it’s all about promptly delivering useful information to the right people.

One digital strategy is providing information—analyzed data and actionable information that can improve the safety, availability and performance of the operation—to the right person at the right time to enable a proper response. Today, processing facilities are beginning to effectively utilize the abundance of process and asset health data and information as part of an overall IIoT strategy. Although a digital transformation will require investments in technology, one cannot forget the investment in training staff to improve and behave differently with the new timely information. It should be noted that some jobs will be replaced (e.g., manual data collection), new roles will emerge (e.g., analysts and planners), and other jobs will evolve to be more efficient.

So the IIoT is more than just wireless devices, and implementing it effectively requires significant changes in work practices, and even the behavior of individuals. When these new and expanded capabilities are put to work correctly, individuals realize they have better tools which can help them do their jobs more effectively.

Most processing facilities are balancing the needs for safety, quality, profit, environmental compliance and reliability against the challenge of applying the right knowledge across organizational and geographic boundaries, while simultaneously reducing costs. Therefore, many companies are taking advantage of technologies such as enhanced KPIs and dashboards, remote monitoring and control, virtualization and digital twins, co-location of personnel and control room consolidation. However, questions remain about applying the correct technologies and techniques to get the greatest results, and what processes and behavior changes are required to attain these benefits.

The concepts of condition-based maintenance and device diagnostics have been around for a long time, but IIoT-based tools such as Plantweb Insight are making their implementation far simpler and less expensive. This is ushering in a broader change as companies make the shift from reactive to proactive.

The traditional approach has been to collect and historize process data, and then only use the data to look back and evaluate after an incident. The new approach is to utilize the abundance of process and asset health data and predictive analytics software to automatically analyze data and turn it into information. This new approach looks forward and alerts before abnormal operation or imminent failure, thereby providing the ability to take appropriate timely action to avoid asset failure.

But the question remains, “Is this for us?” Tim goes into more depth on how an individual company should evaluate the situation, looking at its specific plans and goals, to make the call.

Combining IIoT strategies that are integrated with pervasive sensors from both process and asset health that generate timely information, with trained staff to take appropriate actions is an extremely effective way to improve plant safety, operational effectiveness, enhanced competitiveness and, ultimately, profitability.

LINK: Cost-Saving Corrosion Solutions for Refineries

Kjell Wold — Wed, 18 Oct 2017 17:51:15 GMT

Did you know that using a combination of integrated flow solutions can help your refinery mitigate corrosion and increase profitability? For more information, check out the video, Cost-Saving Corrosion Solutions for Refineries, in the EE365 Flow group. [mention:4818240e0fb7448790c2a926e9e22aea:e9ed411860ed4f2ba0265705b8793d05] discusses how non-intrusive FSM technology can garner fast detection and localization that can help you extend the life of your equipment, increase uptime, and improve your crude blending ratios.

New Blending Solutions Brochure

Marcelo Carugo — Tue, 25 Jul 2017 14:50:34 GMT

The new Blending Solutions Brochure is now available to share with your refining customers. It presents Emerson’s comprehensive, cross business unit blending solutions for fuel, crude, lube and grease, and specialty chemical blending applications, while highlighting our consulting services and PlantWeb digital ecosystem capabilities.

The brochure is posted on the Blending, Crude Unit, and Specialty Chemical pages on the Sales Portal, and you can use this link to send a low-res PDF to your customers. Printed brochures are also available in the publication stockroom.

See latest Capex investment forecasts for Refining, Chemicals and Pharma markets from IIR

Marcelo Carugo — Fri, 28 Apr 2017 18:55:10 GMT

Webinars available on the following link

http://www.industrialinfo.com/webinars/webinarLibrary.jsp

Marcelo Carugo

CERA Week 2017 - Industry videos

Marcelo Carugo — Tue, 14 Mar 2017 19:57:22 GMT

Last week, Emerson attended CERAWeek, and IHS markit event. (So called the Davos of Energy.)

Many of the sessions were taped, and they are available at CERAWeek Live.

http://live.ceraweek.com/

click into Video Gallery.

You can find David Farr on a plenary about what ever happened to Globalization, and also, in the changing workforce on the agora studio.

Many of our customers are in the videos.

Take a look, they are worth watching.

Marcelo Carugo

Emerson Exchange 2016 Refining and Petrochemical Industry Forum - Presentation Slides

Tim Olsen — Tue, 01 Nov 2016 14:55:37 GMT

I hope you were able to join the Refining and Petrochemical Industry Forum at the 2016 Emerson Global Users Exchange in Austin last week.

There was insightful information from the panelist which included Jeff Dudley from Solomon Associates, Andras Marton from IPA Institute, and Luan Bo from Chambroad Petrochemicals. The panel members did a great job generating dialogue and open discussion during the industry forum, which is why we are making the presentation slides available to you.

You can access the Refining and Petrochemical Industry Forum presentation slides to review and comment on the forum at your convenience.

We welcome feedback on future topics and suggested changes to the refining and petrochemical industry forum process. Please let me know if you are interested in becoming a panelist for the next year’s forum.

See you next year for Emerson Exchange at the Minneapolis Convention Center, October 2-6, 2017.

RE: Emerson Exchange 2016 Refining and Petrochemical Industry Forum - Presentation Slides

Statikk — Tue, 01 Nov 2016 21:57:22 GMT

Thank you!

Best Regards

Victor Odman
QMI Reliability Engineer

Caltex Refineries (QLD) Pty Ltd
P: +61 7 3362 7302
M: 0478 303 101
F: +61 7 3362 7972
E: bodman@caltex.com.au

MOCHA HAGoTDI

Making Our Customers Happy And Having a Good Time Doing It!

RE: Emerson Exchange 2016 Refining and Petrochemical Industry Forum - Presentation Slides

Rachelle McWright — Tue, 01 Nov 2016 21:41:10 GMT

Hi Victor, you have to join the Refining group in order to access to the items in the library. Simply click the yellow banner just below the main navigation on any of the Refining group pages to join & you're in! :)

RE: Emerson Exchange 2016 Refining and Petrochemical Industry Forum - Presentation Slides

Statikk — Tue, 01 Nov 2016 21:36:15 GMT

Hello

I’m keen to look at these slides but keep getting ‘Access denied’, is there a work around?

Best Regards

Victor Odman
QMI Reliability Engineer

Caltex Refineries (QLD) Pty Ltd
P: +61 7 3362 7302
M: 0478 303 101
F: +61 7 3362 7972
E: bodman@caltex.com.au

MOCHA HAGoTDI

Making Our Customers Happy And Having a Good Time Doing It!

The IIoT is Making a Major Financial Impact in Refineries Worldwide

Deanna K Johnson — Mon, 22 Aug 2016 16:46:10 GMT

There are about 650 major refineries globally. Some of these plants are operating at peak performance, but many are not. Emerson’s calculations show the difference in operating costs between a well-run refinery and an average one is about $12.3 million per year for a typical 250,000 barrel per day facility. Assuming about 60 percent of refineries are not operating as well as they could, the overall worldwide financial impact runs into hundreds of billions of dollars annually.

The Industrial Internet of Things (IIoT) provides solutions to deal with performance issues in the form of Pervasive Sensing^TM solutions. These solutions consist of adding wireless points of measurements throughout the plant, monitoring these points using predictive analysis, and alerting plant personnel so they can take timely action. These activities help optimize production processes.

Another important issue is the shortage of skilled personnel to run refineries, which can be addressed by applying IIoT Pervasive Sensing and predictive analytic strategies to increase the efficiency and effectiveness of the people running the plants. The IIoT does this by presenting plant operators and engineers with timely and actionable information with the help of asset management and other data analysis tools, allowing them to act to prevent failures and consequent safety and environmental incidents. The IIoT also gives operators the data they need to improve plant performance.

Companies building new refineries are well aware of the benefits of using IIoT and pervasive sensing applications. A typical modern facility will have about 50,000 inputs and outputs to and from control and monitoring systems. But an older refinery will typically have closer to 20,000 inputs and outputs, with the 30,000 shortfall mostly inputs. The lack of information from these missing inputs is the root cause of much inefficiency, and many operational issues and safety incidents. So why haven’t all refineries added thousands more points of measurement, given the proven financial benefits?

One reason is that in the past, these inputs would have been wired from the sensing point to a control and monitoring system. Adding this wiring to an existing facility is usually a very expensive undertaking, and it often requires significant downtime, which isn’t an option as many refineries operate at or near full capacity. But proven Pervasive Sensing solutions allow these points of measurement to be added quickly and inexpensively with wireless sensors.

For more information, go to this link to see Bob Karschnia's the full CIO Review article at http://www2.emersonprocess.com/siteadmincenter/PM%20Articles/Emerson%20Process%20ManagementMarch2016.pdf

2016 Emerson Global Users Exchange in Austin, TX, October 24-28

Tim Olsen — Tue, 16 Aug 2016 12:51:24 GMT

Are you planning to attend this year's Emerson Exchange in Austin? If so, learn more about this year's Solve & Support workshops & courses: http://bit.ly/2a2Xx58 #EmrEx

At this information exchange, you can learn best practices, implementation successes, tips and tricks, and proven project solutions shared by users. More than 350 Workshops and Short Courses are planned this year, covering a wide spectrum of industry and technology specific topics. There are 48 sessions planned just on refining (using the search tool): https://www.emersonexchangeregistration.org/2016/connect/search.ww

There is also a myExchange Tool to help registered attendees prepare for the event: http://www.emersonexchange.org/americas/myexchange-tool/

I hope to see you in Austin at the end of October.

Gasoline appeal fades as refiners chase the next profit boost

Tim Olsen — Fri, 17 Jun 2016 13:21:22 GMT

I saw an online article today from Hydrocarbon Processing about how profits are slowing related to gasoline, but diesel is coming back. This article reminded me of the September 2015 HP article, “Improve Refinery Flexibility and Responsiveness”, and how refiners need to be flexible to take advantage of market changes and opportunities.

LONDON, June 16 (Reuters) - Just as drivers hit the road for summer holidays, refiners are turning the taps down on gasoline as a global excess cuts into their profits.

Refiners in Europe, Asia and the US, boosted the proportion of gasoline they churned out to cash in on record driver demand.

But now they are moving back to the diesel, jet fuel and heating oil that for more than a year had become a "by-product" they did not want.

"The pendulum of profitability between gasoline and diesel is set to swing back toward the latter during the next 12 months," ESAI analyst John Galante said in an annual forecast. "Tightness in the global gasoline market has run its course."

Already, Europe's refineries are moving towards diesel, traders said, while Asian units are maximizing jet fuel. In the US, Husky Energy in Lima, Ohio, is making more diesel, while Delta Air Lines is considering switching its Trainer, Pennsylvania refinery to maximize diesel.

The shift is due in part to the success of their own efforts to do everything they could - from choosing different crude oil to tweaking the way they ran their units - to capitalize on booming gasoline and naphtha demand.

Most can only shift a small amount of production from one product to another - less than 5%, even in a best-case scenario - but the worldwide effort had a big impact.

Physical supply of so-called light-end products built quietly on ships, at refineries and in storage tanks, with even China exporting gasoline to the United States. The figures are now showing up in official data.

According to Euroilstock, gasoline inventories in Europe clocked a counter-seasonal build of 3 MMb from April to May, while even the U.S. EIA has shown some builds in gasoline stocks despite record demand from drivers.

"It has become clear that this is really not 2015 anymore and that the effects of yield-shifting exercises across the globe have more or less taken care of what we assume to still be strong demand growth for gasoline," analysts at JBC wrote.

At the same time, an unexpected shortfall in diesel and jet fuel crept in, buoyed by strikes that closed four French refineries and extreme heat from El Nino that boosted distillates burned in power generators in India, Pakistan and Vietnam.

Last week, premiums for gasoline over ultra-low-sulfur diesel fell to flat on a per-barrel basis for the first time since March, in Europe, and November, in Asia, according to JBC. U.S. gasoline traded at a discount to diesel on Wednesday for the first time seasonally in three years.

Still, the shift could prove to be only a short-term profit aid. One trader said the change "makes little sense historically", while analysts warned it could simply crush diesel margins.

"If they are forced to make more diesel it will undermine those economics, particularly as August is typically a slow period for demand," said Robert Campbell, head of oil products with Energy Aspects.

(Additional reporting by Jarrett Renshaw and Devika Krishna Kumar in New York and Seng Li Peng and Roslan Khasawneh in Singapore; Editing by Dale Hudson)

http://www.hydrocarbonprocessing.com/Article/3562986/Latest-News/Gasoline-appeal-fades-as-refiners-chase-the-next-profit-boost.html

RE: Gasoline appeal fades as refiners chase the next profit boost

Marcelo Carugo — Wed, 22 Jun 2016 21:33:25 GMT

Complementing your article, EIA has publish the recent article titled, Higher US gasoline production, inventories are reducing gasoline crack spreads.

Here are the highlights, from my perspective:

While lower economic growth in developing countries and increased distillate exports from the Middle East and China led to high distillate stock levels in major storage hubs, the drop in crude oil prices in late 2014 was one of many factors that led to an increase in gasoline demand, both domestically and abroad.

US refiners are shifting their output mix to increase the gasoline production share and reduce the distillate production share, which is increasing gasoline inventories and beginning to reduce the gasoline crack spread—the difference between gasoline futures prices and crude oil.

Monthly average gasoline crack spreads are now lower than they were last year, the second consecutive month of year-over-year declines. While distillate crack spreads are also lower than last year, they are only $0.03/gal lower than the five-year average and have increased $0.09/gal over the past two months. Changing gasoline-to-distillate production ratios are a contributing factor in the difference in crack spreads.

The US gasoline-to-distillate production ratio began increasing in 2015, reversing a several-year decline. In May 2016, the gasoline-to-distillate production ratio reached a five-year high of 2.12. Over time, refineries have some ability to adjust petroleum product yields in response to changes in price signals by adding additional equipment or modifying processes and feedstocks.

A way for refineries to gauge product value is to look at the prices of futures contracts for delivery of a product at a future date. Because both gasoline and distillate prices exhibit seasonality in the summer and winter months, averaging the front-month and sixth-month futures contract price of each of the gasoline and distillate contracts and then calculating the price spread between the two averages provides insight into the price spread between these two physical products without reflecting sudden seasonal price swings that occur throughout the year.

From 2010 to 2013, US refineries increased production of distillate compared with gasoline because the average price of the New York Harbor distillate contract, which began trading ultra-low sulfur diesel (ULSD) in the spring of 2013, rose compared with the reformulated blendstock for oxygenate blending (RBOB, the petroleum component of gasoline) contract over that period. The strength in distillate prices was in response to rising distillate demand in developing countries, while US demand for gasoline was stagnant or declining during much of that time.

However, in 2015, the trend changed, as the price of RBOB futures contracts rose compared with distillate contracts because of lower distillate demand and higher distillate inventories globally. Lower economic growth in developing countries and increased distillate exports from the Middle East and China led to high distillate stock levels in major storage hubs, including Singapore, northwest Europe and the US. On the other hand, the drop in crude oil prices in late 2014 was one of many factors that led to an increase in gasoline demand, both domestically and abroad. These developments spurred US refineries to increase gasoline yields, which is contributing to the rise in overall U.S. gasoline production. In 1Q 2016, total US refinery and blender net production rose 0.82%, compared with the same period in 2015. During the same span, gasoline production rose 2.18%, while distillate production declined 2.56%.

Inventories of both gasoline and distillate have been above the five-year historical range for most of 2016. As refineries increased gasoline production to meet rising demand, US gasoline inventories leveled off after months of declines but are still well above the five-year range. On an absolute basis, gasoline inventories are 19 MMbbl greater than at the same time last year, and distillate inventories are also 19 MMbbl higher.

On days-of-supply basis, taking into account both domestic consumption and exports, US gasoline inventories can fulfill an additional day of total gasoline demand than the same period last year. The year-over-year change in days of supply for gasoline gradually increased since February. Alternatively, the decline in distillate production and a slight strengthening of distillate demand following a very warm winter in the Northeast reduced the year-over-year change in distillate days of supply from a high of nearly 11 days in February to 3.2 days, according to the latest Weekly Petroleum Status Report.

For the complete report, logon to www.eia.gov/.../
(Source: EIA)

US refiners see surprise surge in diesel demand

Tim Olsen — Thu, 26 May 2016 12:23:01 GMT

This Hydrocarbon Processing online article was surprising good news for refiners with regards to an increase in diesel demand. A key element for refiners is to have flexibility and responsiveness to take advantage of changing market conditions. Please share your thoughts on this diesel demand and overall fuels demands.

NEW YORK - US refiners are enjoying their strongest diesel margins in months as surprisingly robust overseas demand, combined with lower domestic production has triggered an unusually large drawdown in inventories for this time of year.

The surge in appetite for U.S. diesel comes on the heels of a mild winter that sapped demand for heating oil and punished margins as products went straight into bulging storage tanks. US independent refiner profits dropped 74% in the first quarter compared with last year.

The strong demand for diesel comes at an odd time for US refiners, who have shifted their production focus on gasoline ahead of the busy summer driving season that kicks off with the upcoming Memorial Day holiday weekend.

Notably, the U.S. diesel crack spread, a measure of how much refiners profit from converting crude oil into diesel, has risen by roughly 40% since early this month, touching $14.90/bbl on Monday, the highest level since February when strong demand for heating oil boosts profits.

Last week, US distillate inventories dropped by an estimated 3.2 MMbbl, the fifth consecutive week of declining inventories and the second largest weekly draw for the month of May since the U.S. Energy Information Administration began collecting the data in 1982.

Philadelphia Energy Solutions, the largest East Coast refiner, has recently booked at least six cargoes of diesel totaling 1.8 MMbbl for exports in June, with vessels bound for Europe and South America, according to a source familiar with the plant's operations.

The refiner booked 9 cargoes for export in May and April, totaling 2.7 MMbbl, which represent about a fifth of the diesel volumes the region exported all of last year.

"Demand from India is very strong," the source said, noting that India is pulling barrels away from Latin America and Europe. "I am not sure this refinery has ever seen a run of diesel exports like this."

Inventories, which include heating oil and diesel fuel, are expected to fall by another million barrels when new EIA figures are released Wednesday, a Reuters poll of six analysts released Monday shows.

Diesel prices react more globally when there is a disruption in one region, such as elevated demand in India or in Europe, where refining strikes have cut local production.

Mark Broadbent, a analyst with Wood Mackenzie, said refiners switched to gasoline mode earlier this year as gasoline margins significantly outpaced diesel. As a result, refiners produced roughly 300,000 fewer bpd of diesel in April compared to last year, Broadbent said.

He said the combination of decreased supply and the uptick in demand has the market pulling barrels out of storage to meet the gap, supporting cracks.

"The most important factor to watch will be crude runs," Broadbent said. "Refiners will likely increase runs over the summer and push (production) to record rates once again, which should close the gap between supply and demand and put a stop to the storage draw."

(Reporting By Jarrett Renshaw; additional reporting by Jessica Resnick-Ault; Editing by Alan Crosby)

http://www.hydrocarbonprocessing.com/Article/3556915/Latest-News/US-refiners-see-surprise-surge-in-diesel-demand.html

2016 Emerson Exchange Americas in Austin – Refining and Petrochemical Industry Forum

Tim Olsen — Thu, 31 Mar 2016 19:53:42 GMT

Alan Weldon (Industry Forum Chair) and I are looking for panel members to participate in the Refining and Petrochemical Industry Forum at the Emerson Global Users Exchange in Austin, TX, October 24-28.

The format is 90 minutes with three topics of discussion. Each panel member speaks for ~10 minutes to initiate dialogue followed by ~20 minutes of discussion and Q&A with the audience. The 30 minute process is repeated for each topic. This is the list of preferred topics we are seeking panel members to present on and discuss:

Refining and petrochemical industry trends and forecast
Modernization best practices
Wireless applications to improve reliability, safety, and efficiency
Process safety

The refining and petrochemical industry forum takes place 2:30-4:00pm CT on Monday, October 24^th in Austin, TX. Additional information can be found online at http://www.emersonexchange.org/americas/

Please contact Tim.Olsen@Emerson.com if interested in participating on the panel.

Refining and Petrochemical Industry Forum Brussels Wednesday April 13 11 AM

ed schodowski — Fri, 29 Jan 2016 01:03:47 GMT

This year we are planning the following topics for the Refining /Petrochemical industry forum at the Emerson European Exchange. The refining group is looking for a client that would be interested in giving a brief presentation (20 Min). The attendance fee for the exchange paid by Emerson for this small assignment. Please let me know if you can help.

Topics (general title client may modify)

Solving Opportunity crude challenges through innovative measurements and analytics (Emerson and or Clients presenter)

Creating a journey to first quartile Availability (Client presenter)

RE: Refining and Petrochemical Industry Forum Brussels Wednesday April 13 11 AM

Tim Olsen — Fri, 29 Jan 2016 20:11:55 GMT

As crude oil prices dropped over the past year, the downstream sector has taken advantage of discounted feedstocks. For refiners, there are more challenges associated with processing different opportunity crudes; they need to equip and learn how to effectively use these discounted crudes. I encourage a refiner to share their experiences in upgrading their measurements, control and process in crude units to effectively process these varying feedstocks.

For both refining and petrochemical, top quartile availability means lower operating costs, safer operations, and better margins. Top quartile availability just doesn’t happen; the facility must invest in measurements, automated predictive analytics and reliability engineers evaluating asset root cause failure analysis, automatic alerts of abnormal operation and imminent failure, and finally training staff to take corrective action when presented with this new information. I encourage a refiner or petrochemical facility share in their recent journey in changing behavior at their plant from reactive to predictive.

US breaks 10% ‘blend wall’ for ethanol in gasoline

Tim Olsen — Wed, 02 Dec 2015 13:03:22 GMT

I saw this article and wanted to pass along the update. Share your thoughts.

So much for the so-called blend wall.

President Barack Obama’s administration on Monday ordered refiners to blend a record 14.5 billion gal of ethanol into gasoline next year. For the first time ever, that will mean ethanol will make up more than 10% of the total US fuel mix, a threshold that oil companies have said is dangerous to exceed because of potential damage to engines and catalytic converters.

Petroleum interests and biofuel supporters for years have sparred over whether the government should mandate higher blends of the fuel, so much so that the Environmental Protection Agency took the unprecedented step of delaying issuing targets for last year, 2015 and next, in an effort to reexamine the program. Monday’s long-delayed announcement comes as Obama meets with world leaders in Paris to discuss climate change.

“The victory here is that we are piercing the blend wall,” said Jeff Broin, chairman and CEO of Sioux Falls, South Dakota-based Poet LLC, the second-biggest US ethanol producer.

Consumers should use blends of ethanol above 10% in vehicles only if the owner’s manual says it is safe to use, Michael Green, a spokesman for AAA, the largest US motoring group said in a statement Monday.

Americans will consume 139.8 billion gal of gasoline in 2016, the US Energy Information Administration forecast in its Nov. 10 Short-Term Energy Outlook.

The oil industry asked EPA to set the biofuel mandate at “no more than 9.7% of gasoline demand to help avoid the 10% ethanol blend wall while meeting strong consumer demand for ethanol-free gasoline,” the Washington-based American Petroleum Institute (API), which represents ExxonMobil and Chevron, said in a statement.

15%

In 2011, EPA allowed blends of ethanol of as much as 15% for cars made after 2001 to be dispensed at filling stations, though it didn’t mandate it.

Broin said the overall higher national blend rate will be met mostly by growth in so-called E-15. Growth Energy, an industry group, is working with 5,000 retailers to install new pumps at filling stations, he said.

Still, the targets are about 500 million gallons short of statutory benchmarks laid out when Congress passed the law in 2007.

While biofuel blending requirements were established by the US to cut pollution and shrink the country’s dependence on foreign oil, Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, said the latest targets are intended to expand the use of E-15 and E85, another brew that’s 15% gasoline and the rest ethanol.

“There will be increased availability of biofuels like E-85 and E-15,” McCabe said on a conference call with journalists on Monday to announce the rule.

http://www.hydrocarbonprocessing.com/Article/3510570/Latest-News/US-breaks-10-blend-wall-for-ethanol-in-gasoline.html

Pemex wins license from US to import lighter crudes for refining

Tim Olsen — Mon, 02 Nov 2015 12:53:15 GMT

I believe this is a sign of times to come with potential U.S. crude oil export changes in law... seeing this Hydrocarbon Processing online article. Thoughts?

The dam holding back US crude exports is cracking.

Petroleos Mexicanos, the state-owned oil company in Mexico, announced it has received a license from the US government to import as much as 75,000 bpd of American crude. It’s the first time the US has given such a license to a country other than Canada in 40 years.

Pemex’s PMI unit will import light crude for one year starting in October in exchange for heavy Mexican oil, the company said in an e-mailed statement. The lighter grades will help the nation’s refineries produce more cleaner fuels, the company said.

“Among the benefits expected from this exchange of oil are integrating energy markets in North America, strengthening trade relations between Mexico and the US, improving logistics by reducing transportation costs through shipping efficiency to Mexico, and maximizing refining margins,” the company said in its statement.

Energy producers including ExxonMobil and ConocoPhillips have called for an end to rules restricting US crude exports that were instituted after the Arab oil embargo in the 1970s. The US House of Representatives passed a bill repealing the restrictions earlier this month, while lacking the votes to override a threatened presidential veto by the Obama administration.

Shale Boom

Drilling in shale regions from Texas to North Dakota reversed a decades-long decline in US oil production. Much of the new output sells at a discount to global prices for a number of factors, including that it’s mostly trapped within the US by the export rules.

The US has a few exceptions to its crude export rules. Shipments to Canada are allowed, for example, and the Commerce Department last year ruled that exports of lightly processed condensate, an ultra-light form of oil found in some shale rock, can be sent abroad. Commerce officials approved the swap with Mexico earlier this year.

Pemex lost money for the 12th straight quarter, the company said today. It lost 167.6 billion pesos ($10.18 billion) in the third quarter compared with a 60 billion-peso shortfall a year earlier as oil prices and output fell.

Pemex has said the US crude will help boost gasoline production at its refineries in Salamanca, Tula and Salina Cruz. Pemex exported 803,000 bpd of mostly heavy oil to the US last year, and Mexico imports about half its gasoline. Crude output from Pemex has been falling for a decade.

Mexico’s government approved energy reforms last year that allowed its refiners to import oil, after decades of relying on its own production.

http://www.hydrocarbonprocessing.com/Article/3501471/Latest-News/US-licenses-Pemex-to-import-light-oil-for-refining.html

40 Million Safe Work Hours at BP's Whiting Refinery Modernization Project (WRMP)

MC_Chow — Fri, 30 Oct 2015 21:11:29 GMT

Viewed this BP video on the safety record of BP's Whiting Refinery Modernization Project (WRMP) and took some time to reflect on this monumental achievement that I was personally involved in as part of Emerson's Main Automation Contractor team. The project effectively built a brand new refinery, by first demolishing older process equipment/units and then constructing the new process units all while the other parts of the refinery was operating! All this was done safely to the tune of 40 million safe work hours! A true feat of modern extreme but safe engineering indeed.