m3 technology, inc.of several crude ships. •crude inventories need to be managed to assure stable...

NPRA

2008 Q&A and Technology Forum PD-08-117 page 1

NPRA Q&A and Technology Forum NPRA

M3 TECHNOLOGY, INC. www.m3tch.com

Dealing with Crude Supply Problems

Requires Quick, Accurate

Scheduling Decisions

Authors

Robert Hutchings

Dr. Dong Dong

Real-Time Value Chain Management and Optimization Session

Paper No.: PD-08-117

Tuesday, October 7, 2008

NPRA


Business Process Evolution

• Many of our business practices go back to paper-based systems used at our refineries 20 to 30 years ago.

• As computer technology became available, the paper forms were converted into spreadsheets and required a lot of manual data entry.

• Everyone developed their own spreadsheet that met their job requirement.

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Business Process Evolution

• However, few spreadsheets were using the same data.

• Consequently, it was difficult to compare results between different spreadsheets.

• Some form of data integration might have been developed to address the problem of data consistency.

• Little was done address visibility and collaboration.

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Ageing Workforce

• Remember the Y2K crisis?

• It was nothing compared to the current ticking bomb.

• The impending retirement of the people that created and use those spreadsheets our business needs for survival.

• Some of those spreadsheets have 10 to 20 years business know-how built into them.

• A more subtle loss is the interpersonal relationships that fostered collaboration

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No Room for Mistakes

Challenging Environment

• Downsized operations

• Just in time (JIT) production practices

• Minimized tankage

• Volatile crude pricing

• Margin pressure

• External environment

o Public policy

o Geopolitical turmoil

o Environmental (weather)

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Facing the Challenges

• Faced with the new challenges, innovative systems are required.

• Building wrappers to envelop 10 to 15 year old code does capture the benefits of state of the art systems technology. In addition, the people who created the original code are retired or will be retiring soon.

• Consequently, refiners are searching for or developing new solutions.

• Plant level and enterprise level systems are being designed to improve transactional efficiency, scheduling effectiveness, greatly enhance collaboration and provide a truly coherent view of the enterprise with the ability to drill down to the minutia when required.

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• Storm in the Gulf causes a late arrival of several crude ships.

• Crude inventories need to be managed to assure stable refinery operation and that adequate cuts are made to keep all units operating.

• Crude scheduler re-optimizes the crude blends for the next week to assure units are operational and that gasoline and other products can be made.

• Gasoline blender, working with the forecasted rundowns & inventories re-optimizes the gasoline blend recipes for the next week to assure that do not run out of required components or if out-of-stock on a critical component is forecasted then issue an order to purchasing to buy the component.

• This entire process needs to be completed within several hours

Problem Scenario

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Refinery Flows: Planning & Scheduling

Nominations

& Scheduling

Ships & Pipelines

Crude Unloading,

Crude Scheduling

& Blending

Process Unit Scheduling Product Blending & Distribution

Planners and schedulers need to visualize the plant level operation and drill

down as required to see the cascading effect of crude changes and quickly run

what-if scenarios to evaluate alternative schedules. State-of-the-art systems

provide simultaneous execution of crude scheduling, process unit scheduling,

crude and product blend optimization, product progression and product lifting.

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Nominations

& Scheduling

Ships & Pipelines

Refinery Flows: Ships, Docks & Pipelines

Challenges

• Ship schedule typically vary +/- 2 days

• Demurrage is a major cost

• Storms & channel problems can compound the problem

• Pipeline schedules have low variability

• Calculate and account for pipeline fills

• Track compositions from receipt to crude tanks

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Dock Scheduling Visibility

Cargo Arrival Schedule Inbound Transit Docking/Unloading

Outbound Transit

Tanks Receiving

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Crude Unloading,

Crude Scheduling

& Blending

Refinery Flows: Crude Tankage & Blending

Challenges

• Limited crude tankage

• Stratified tanks

• Crudes fed to unit thru inline blender

• Crudes fed to unit thru crude charge tank

• Optimum mix of crudes required to meet production requirements while maintaining stable operation

• Drawdown select crude tanks in time to receive new cargo to minimize demurrage

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Crude Scheduling Objective

• Generate feasible schedule

• Make the qualities of crude diet stable

• Improve the crude unit throughput

• Reduce crude “quality giveaway”

• Evaluate and handle opportunity crude rapidly

• Reduce demurrage

• Optimize crude schedule

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Potential Benefits

• Reduced Crude “Quality Giveaway”

Constraints in planning crude selection can be raised

Sulfur: from 3.0% to 3.2%

API: from 22 to 20

Using the World Bank 2004 data, the saving for 200,000 BBL/D is:

$9.49 million dollars

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Process Unit Scheduling

Refinery Flows: Process Units

Challenges

• Process unit scheduling

• Maintenance issues

• Actual reactor conversion

• Actual rundown rates

• Actual versus Planned

Crude

Vacuum

Catalytic Cracking

Hydro Cracking

Coking

Reforming - BTX

Hydrotreating

Alkylation

Distillation

Hydrogen Production

Process Units

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Product Blending & Distribution

Refinery Flows: Rundown, Component Tanks & Blending

Challenges

• Rundown to component tanks

• Inventory management

• Component pricing

• Single recipe optimization

• Multi-period blend recipe optimization

• Distribution Scheduling o Pipeline

o Trucks

o Rail Cars

o Ships

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Quickly and accurately determine crude recipes for the coming week, month or any period that allows the crude scheduler to see the cascading effects of crude blending and scheduling changes

Modern user interface empowers the gasoline blender to visualize and interact with the schedule and quickly run what-if cases for single and multiple blends.

Multi-period Blend Optimization

Typical Blend Recipe to be Passed to Blender

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Collaboration among Schedulers

• Each of these scheduling areas may be managed by different schedulers and report into different departments

• Visibility to what is going on is paramount

• Efficient collaboration is required to make quick and accurate decisions

• All schedulers need to be notified of changes and be able to see who changed what and when.

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Scheduling Activities

• LP Planning provides period averages

• Scheduling systems must convert plans into actionable events

o Dock Scheduling

o Crude Scheduling

o Multi Period Crude Blending Optimization

o Process Unit Scheduling

o Multi Period Product Blending Optimization

o Product Shipment Scheduling

Planning

Scheduling

Multi-Blend

Dock Manager

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Plant Level Visibility & Collaboration

Emerging Systems

• Enterprise scalable

• Service oriented architecture

• Multi-user

Multi-model

Multi-tier

• Must easily integrate with

plant and enterprise systems

• Users are notified of data

changes detailing

who changed what and when

• Data is entered only once

Data

Base

Plant

Scheduling

Fuels

Blending

Crude

Scheduling

Dock

Scheduling

Web Services

Integration

Interface

ERP

Nominations

Oil Movements

& Storage

Plant

Historian

Laboratory

Information

LP Planning

Systems

Ship

Scheduling

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Global

Visibility

Corporate HQ

Planning

Scheduling

Multi-Blend

Dock Manager

Refinery C Refinery B Refinery A

Planning

Scheduling

Multi-Blend

Dock Manager

Planning

Scheduling

Multi-Blend

Dock Manager

Enterprise Visibility & Collaboration

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• Efficient integration among the business and planning & scheduling systems enables a uniform view of enterprise and plant level planning and scheduling environment

• Business processes embedded in the systems foster collaboration

• Fast and accurate modeling of the plants and operations empowers planners and schedulers to evaluate many possible options quickly.

• Advanced Systems Technology

o Enhanced security

o Enhanced change management capability

o Robust operation

• Results: Reduced operating cost and enhanced margins

Conclusion

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