OUR PRODUCTS
Blended Crude Oil
Reasons to purchase over other crudes
Oil refineries, and especially their on-process units that process the primary crude feed stocks, are not uniform in either design or operation. The refinery process units and the combination of units built and in service at a given refinery location are part of a plan to accommodate a certain slate of crudes based on their properties. These decisions are also balanced against the availability and cost of crudes to determine an operating profit point. The more consistent the supply of Crude Oil to a specific refinery, the more that refinery can adapt its operation to that specific Crude Oil supply.
However, economics makes that level of optimization difficult to achieve or sustain. Necessity forces refiners to have to retain some flexibility in the refinery process to handle a wider range of crude types than that preferred. Crude blending works hand in hand with refinery process flexibility in crude types by enabling the ability to mix crudes that may not, as individual feeds, satisfy the operating range of the refinery, but as components of a mixed feed will meet the refinery operating requirements.
The practical implications of crude blending are intermixed with the requirements of purchasing and market analysis. These different, often conflicting requirements determine the optimal crude slate and refinery operation at any given time but reflect constantly changing conditions.
Refiners may have based the original design of a refinery on a local oil field characteristic’s, only to find after many years of operation that the local field yield has declined, forcing them to source other crudes. The properties of no two crude fields are identical, so no direct replacement is available. However, a blend of two or three available crude oils may come quite close to be the same in properties as the original field. In fact, some crude blending occurs at the field gathering stage itself, as different wells in the same crude field may even have varying properties.
Even if the local field yield is still capable of supporting
the refinery, changing market demands may force a refinery to change its crude source to be able to create more of the range of finished products that are demanded in the local market.
Refiners would always like to run a crude slate that is low in source Sulphur and high in component materials that match local market demand. That is why there is a cost premium for such crudes. By contrast, Crude Oils high in sediments, Sulphur, and other contaminants, while low in preferred component materials are sold at discount. Much of the more recent oil fields and supplies coming online have been of these heavy crudes. For a refinery that cannot process the heavy crudes, costs are driven up by premium to purchase light-sweet crudes. However, a refinery that cannot run pure heavy crude may still be able to run some heavy crude when it is diluted into the light-sweet crude. This allows the refinery to purchase some percentage of their crude at lower prices.
At current refinery operating margins, nothing can be wasted. Off spec and slops materials are reprocessed when they are not capable of being sold as product or reprocessed when the available prices of those products are not viable. However, no crude process unit can afford to receive a feed stream of undiluted slops and seconds, the variability of the properties
is too high.
International politics can play havoc with the supply of crudes. Refiners have been forced in the past to change their crude sourcing on a moment’s notice for no economic reason, and the odds are will have to again. Changing the source region or country for the origin of crude is a similar problem to the original field or crude slate type becoming economically unviable, the refiner is forced to source what is available at competitive prices and figure out a
mix of those that corresponds to the refinery
process capabilities.
With the ever-tightening margins of refinery operation combined with cost increases in the base crude feed stocks of the refiner, crude blending has taken on an increased importance in allowing for optimal operation of refineries. However, there is a large gap in crude blending ability between best in class and what is often performed at many sites.
