Contaminated Oil

[Marina Schwarz + 1,576]

"The complex web of U.S. pipelines, tanks and export terminals that’s helped make America the world’s top oil producer is causing a headache for some crude buyers. As various types of crude pass through the supply chain from inland shale fields spanning Texas to North Dakota, they risk picking up impurities before reaching Asia — the world’s biggest oil-consuming region. Specifically, refiners are worried about the presence of problematic metals as well as a class of chemical compounds known as oxygenates, which can affect the quality and type of fuel they produce.

Two refiners in South Korea — the top buyer of U.S. seaborne supply — have rejected cargoes in recent months due to contamination that makes processing difficult. Growing North American output from dozens of fields pushes everything from highly-volatile oil to sticky residue through shared tributaries and trunk pipes. Smaller carriers then take cargoes from shallow-water ports to giant supertankers in the Gulf of Mexico for hauling to far-away buyers."

I didn't see this coming, for sure. Here.

[Douglas Buckland + 6,308]

Another unidentified cost of the shale oil miracle.

[Jan van Eck + 7,558]

2 minutes ago, Douglas Buckland said:

Another unidentified cost of the shale oil miracle.

That is a much larger cost than you might think.  Producing a product that ends up rejected by the Buyer, after travelling half way around the globe (at huge expense) and then having no home, is a disaster for the exporter.  Who is picking up the shipping bill?  What is going to be the final home for the rejected material?  Does it have to go all the way back to the US Gulf Coast refiners and be sold there, at a discounted price, in what is in effect a forced sale?  

I suspect the solution for ensuring purity of these oils will be the oil unit train.  Loading into a specific tankcar dedicated to that specific oil run resolves issues of cross-contamination.  That said, when the "contamination" is at the well-head, then even that does not answer the problems.  My personal guess?  More and more of that oil will end up processed and refined inside the USA. And the US will focus on being a large exporter of LNG, where these issues apparently do not arise.  We shall see.

[Oil_Engineer + 86]

9 hours ago, Marina Schwarz said:

"The complex web of U.S. pipelines, tanks and export terminals that’s helped make America the world’s top oil producer is causing a headache for some crude buyers. As various types of crude pass through the supply chain from inland shale fields spanning Texas to North Dakota, they risk picking up impurities before reaching Asia — the world’s biggest oil-consuming region. Specifically, refiners are worried about the presence of problematic metals as well as a class of chemical compounds known as oxygenates, which can affect the quality and type of fuel they produce.

Two refiners in South Korea — the top buyer of U.S. seaborne supply — have rejected cargoes in recent months due to contamination that makes processing difficult. Growing North American output from dozens of fields pushes everything from highly-volatile oil to sticky residue through shared tributaries and trunk pipes. Smaller carriers then take cargoes from shallow-water ports to giant supertankers in the Gulf of Mexico for hauling to far-away buyers."

I didn't see this coming, for sure. Here.

Do you think they buyers may be dumping the product due to "quality issues" to get out from under over-priced contracts?

[Old-Ruffneck + 1,177]

6 hours ago, Oil_Engineer said:

Do you think they buyers may be dumping the product due to "quality issues" to get out from under over-priced contracts?

From the article I would say pipeline issues, switching different grades and cleaning processes fouled the shipment up. But in reality how much cleaning solvents and such made it onboard the ship? The folks running the pipelines when switching need be more careful and diligent with what is being shipped.

[Ward Smith + 6,615]

8 hours ago, Oil_Engineer said:

Do you think they buyers may be dumping the product due to "quality issues" to get out from under over-priced contracts?

This.

Let's guess how much contamination was present. One barrel? One hundred? Parts per million or parts per billion? 

[Marina Schwarz + 1,576]

That's a good question. But why would they even contract the cargoes if they'd change their minds later? I may be just narrow-minded, though, I'm not a refiner.

[Tom Kirkman + 8,860]

Oooooh, perfect timing to link to the latest musings by @Mike Shellman.

I totally enjoyed this amusing yet informative article, and actually laughed out loud a few times.  This piece is a hoot and a half : )

Do take note of the bit about cows.

Weird Stuff That Goes INTO Oil and Gas Wells

 

[Oil_Engineer + 86]

8 hours ago, Marina Schwarz said:

That's a good question. But why would they even contract the cargoes if they'd change their minds later? I may be just narrow-minded, though, I'm not a refiner.

It is just a common tactic used in many industries when the market changes quickly and existing contracts become unprofitable, using "quality issues" to declare the product unfit and avoid paying for it and taking possession of it.

[eagle + 1]

Would anybody know of any oil presently located in North America that is contaminated with organic chlorides?

 

[ceo_energemsier + 1,818]

5 hours ago, eagle said:

Would anybody know of any oil presently located in North America that is contaminated with organic chlorides?

 

No, I heavent heard of any reports of contaminated US oil atleast from the ones I export and market. Even what happened earlier, really didnt make sense for contamination, as all vessels right after they load, take samples and that is tested and also buyer and exporter/seller have the right to do independent testing. Same is with oil marketed and passed through one company to the other and to refineries and through a chain of physical traders and marketers, it is sampled and tested. Contamination can happen at production site, production site tank batteries and along the whole chain of shipping and transport. But it does happen.

We have a clause in contracts which states that we wont as buyers of third party lease operators, producers, marketers etc etc, wont accept  crude oil containing halogenated, chlorinated or oxygenated organic compounds (such as but not limited to Carbon Tetrachloride, 1, 1 Dichloroethane, Trichloroethane or Tetrachloroethane, Isopropyl Alcohol, Ethyl Alcohol, Methanol, Glycol, Acetone) .

Contamination usually occurs when a producer uses one of these chemicals in treating wells, flow lines and lease tankage to remove paraffin buildup.

BY the time any vessel(s) reached South Korea , the crude samples taken onboard would have been tested and the crude analysis report would be made available to the buyers and sellers.

[eagle + 1]

Thanks for the info and reply