A Best Practice Approach To Refinery Inventory Logistics

A Best Practice Approach to Refinery Inventory Logistics
Author: M.H.Petrick Honeywell Process Solutions 2010-07-05
Executive Summary
This white paper walks the reader through a collection of best practice areas around refining logistics operations in which value can be unlocked. The following angles are taken: 1. Process Optimization: Planning and scheduling bigger optimization scope, closing the gaps between plan and actual and tighter blending operations. 2. Protecting material integrity 3. Incident mitigation by automating material movement monitoring and where possible the movements themselves. These issues are so important that Honeywell believes that it is possible to justify capital investments in this often neglected part of refining operations. We are willing to help do this and have a proven installed base for which this has been successfully achieved.
Introduction
Refining operations are often subjected to benchmarking. The most common benchmark is Solomon (Solomon Associates, 2010). However, Solomon does not explore any details in assessing the logistics required for smooth and profitable refinery operations. This document explores the definition of refinery offsite best practices. This should assist developing business case arguments that may be fruitful in developing and justifying projects in this commonly neglected corner of refining.
A Process Angle
Refineries differ in terms of their units and this strongly influences what they are able to process. The refinery location also affects the degrees of freedom. For example, an inland refinery will depend on pipelines for bulk crude supply and be less flexible in terms of being able to receive and ship intermediate products compared to a coastal refinery. All refineries process hydrocarbon on the basis of some planning and scheduling algorithm. However, there are significant differences in terms of what problem that optimizes.
Figure 1: What optimization scope is currently addressed?
Whereas most refining operations today have implemented advanced optimizing controllers over their units, and perform some refinery wide optimization, few consider the larger optimization problem beyond the refinery. What opportunities arise, if one could optimize several refineries, or move intermediate products between them freely? Are all options within your degrees of freedom considered?
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While some larger oil companies have attempted, at least conceptually, to tackle this bigger problem, the attempts have been fraught with difficulties. What then is needed to actually implement such larger scope optimizations? The following may be areas worth pursuing:
Executing the plan?

Crude processing is dependent on the crude slate. Specific crudes can only provide certain mixes of products. To what extent then are your refinery commodities driven by current market trends and are you maximizing the profitability of what you produce? Most will answer: We optimize our refinery and we perform planning and scheduling and execute plans. But these will be executed with provisos: 1. There is always a gap between the plan and the actual execution. 2. The cycle is quite slow and reacting on differences is hard to realize. The best optimized plan is often thwarted by unforeseen events and these can often not be reacted upon promptly. Why? By and large the links between what is planned and what is executed are either non existent or not automated enough to be useable and useful. The larger the optimization scope, the more reliant the process is on good information flow. The larger the system considered becomes, the more one relies on a specific IT infrastructure and the more this infrastructure needs to be standardized and the processes in it automated. Most refiners today make sales on the basis of what is in product and raw material tanks. While there is active trading of oil products in the markets, how strong is the link between such trading and day to day refinery operations? Is there potential for wet oil traders to sell ahead, based on what they know can be produced by a deadline? Ability to do this and then deliver as promised has financial promise in inventory reduction, cash flow and profitability. To tackle this larger optimization problem successfully, the following best practice areas need to be attended to: Is there a corporate planning and scheduling process and a standardized set of tools to support this? Although Planning and scheduling can be considered an Enterprise Resource Planning (ERP) function, the task is quite specialized and ERP vendors normally cannot provide tools with the necessary sophistication in their product offering. The larger the optimization scope considered, the more important it becomes that similar tools be used. This means that most often it is necessary to pick a single set of tools and then use them consistently on a corporatewide basis. The task of modelling the refinery operations is quite specialized, and therefore, it would be beneficial to develop and deploy such know-how from a central base. Since the inputs and the outputs for optimization models need to integrate into other systems, there need to be agreed and standardized interfaces to refinery execution systems. Is this planning and scheduling process closely linked to the ERP System? The extent to which refining planning is represented in the following ERP functions should be a performance criteria: Material Management: What crudes and intermediates are purchased? What material movements and blends in the refinery offsite area are scheduled? Is oil loss analysis on material movements between refineries and refinery and customer controlled as tightly as it could be?
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Production: Is the refinery operation directly driven by the planning outcomes? How is the refinery told what to execute and when? Is there control over whether the plan is executed or not? Is the plan aware of maintenance schedules and equipment states? Finance and Accounting: Oil movements across company boundaries and across national borders involve custody transfer with related invoicing and payment of taxes and duties. Are these well integrated in a manner that allows business continuity to be assured even if the ERP temporarily goes down? Sales and Marketing: Is the refinery plan based on actual market demand? Are you able to react to changes in the market and operational issues in a timely manner? It may be possible to link planning and scheduling tools to the execution in production systems directly. This may be realized faster and at a lower cost than full ERP integration. However, as that leaves certain business interfaces unaddressed, the disadvantages of doing so need to be understood and mitigated. Is business continuity sufficiently considered in the refining IT infrastructure? Refining operations are high volume and they have certain very specific invoicing, quality certification, legal and customs requirements. For example, interruptions in truck loading can lead to traffic chaos and delays in ship processing can have significant demurrage costs. These are all factors to consider and may lead to the need to implement the manufacturing execution functions, as an example, for printing certificates of analysis, invoices and customs documents elsewhere than in the ERP. It should be clear from the above that justification of projects in refinery offsite operations are far from negligible in making what is planned actually happen. This may mean that it is time to rethink their status in the overall refinery operations. If one wants to close the gap between planning and execution, an IT and control infrastructure is needed capable of providing standardized interfaces between planning and scheduling and the ERP, the ERP and operations in offsites, as well as timely and accurate reporting of what was actually done. Figure 2 illustrates what this would involve.
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Figure 2: An overview of the IT and control functionality needed to close the planning/execution gap
Components of required IT and control functionality: A standardized approach to planning and scheduling allowing local refinery and refinery cluster models to determine overall refinery plans. These models need to be based on actual timely status information and preferably must be able to be rerun frequently in reaction to unplanned events. There have to be levels of abstraction that separate the needs of the ERP, the order world and the execution of tasks in the refinery in terms of data models and processes to be executed. Ideally the offsite operations would be automated and the information captured automatically in such a manner that it is acceptable for custody transfer purposes. Automation of material movement monitoring and operations is a very important component of offsite best practice. For business continuity purposes, it may be desirable to ensure that the local refinery with its own staff is at all times able to set up and execute to completion the entire order cycle. This means that it must be possible to create orders and print all shipment documentation without any dependency on IT infrastructure not available on site. Could inventory be lowered? All the crude, intermediate materials and products at a refinery are tied up working capital. Not only does this have to be financed, but owning and maintaining tanks is also a significant expense. Estimates of the order of $1million per tank per year are not uncommon. (The Oxford Princeton Programme, (2007)).
Example: A refinery has 100 tanks. Assume that they on average contain 10000m of a hydrocarbon and that the average value of the hydrocarbon in these tanks in 200/m.
This values the inventory at the refinery at 10000*100*200= 200 million. This tied up working capital needs to be financed. Assuming a WACC (Wikipedia, 2010a) of 20%, having this inventory costs the refiner 40 million a year. Even small reductions are significant!
While owning and operating tanks is expensive, it also gives degrees of freedom to play out speculative strategies on price movements of materials. Whatever the strategy followed, there is benefit in tight control over inventory and making it a definite part of all optimization modelling.
How is the refinery blending?

There are several distinct best practice areas for blending in a refinery:
Crude Blending
Refinery best practices will include an appropriate form of crude blending for the refinery. Crude blending is a way of influencing the crude properties to make them fit the current product spread and, when done successfully, has significant economic benefits in reducing crude costs and maximizing achievable benefit from refinery capability. The degrees of freedom for crude blending are however strongly influenced by: The number of crude tanks available. The refinery location: how it gets access to crudes and intermediate materials. The availability of special crude blending equipment. Successful crude blending requires access to crude properties and special optimization tools for crude buying decisions as well as calculating blend recipes. Not surprisingly, successful crude blending is largely dependent on being able to plan what one wants to do, trace whether the logistic actions to make the plan executable are happening, and then controlling actual blending execution tightly.
Product Blending
Running refinery units in an optimal manner is no use if the products are finally not blended optimally. Getting the giveaway reduced by blending to specification optimally is, and has been part of refinery best practices for many years. Product blending can be done in two fundamental ways: Off-Unit Blending In the past, refineries would often be run to achieve maximum unit throughputs. However, this may not be the best strategy. It is often possible to control unit processes to achieve the component mix desired in the optimal manner. This is quite common in gasoil blending and as approach can reduce the intermediates storage need. There are some disadvantages to this approach which include limited ability to control flow rates and start and stop the blending operation. Refinery best practices should explore optimal off unit blending where there is potential for it. Tank-based Ratio Blending Blend ratio control in distinct batches or blends from a single wild flow and storage tanks is a further best practice area common for petrol, lubes, fuel oil and bitumen blending. As in offunit blending, the process can be optimized based on available components and their current cost to produce, control the product properties to specification with the least specification giveaway and at the lowest possible cost per volume unit.
Analysis and Certification

Optimal blending relies on analyzers and lab sampling. These results drive the optimizing algorithms. There are several issues with reliance on lab samples: Tank and header sampling for lab analysis is associated with significant time lags. Before a product tank can be sampled it may have to be mixed and then there will be delays between taking samples and receiving the analysis results. Delays of 4-10 hours are quite normal a period during which equipment is tied up, which as explained before has associated costs. Lab result based optimization is inherently requires some giveaway (exceeding the specification limits). This cannot be avoided because samples are taken fairly infrequently and every analysis has some error band that needs to be accounted for to ensure staying within specification tolerances. Because analyzers continuously sample, they can achieve a higher level of total blend property monitoring (enabling property control) than working with lab samples ever can. With appropriate analyzer validation, the fact that the analyzer sees more of the total blend can be used to: 1. blend closer to the specification limits and 2. enable online certification processes. These allow blending product to certified tanks, ship or truck directly, knowing that the product remains on spec throughout. While lab samples remain part of this process, the certification is issued and managed online because, if the service factor of the analyzer is high enough, product specifications statistically cannot have been violated. This allows avoiding, or at least reducing, the need for product storage. What a specific refinery should do is highly dependent on the volumes of specific product groups manufactured at the specific refinery, the available tankage, the cost of maintaining analyzers, etc. Refinery best practice may therefore include non-optimized blending and even batch blending in which volumes are batched in parallel or sequentially. Even in unsophisticated blending, there can be measurable value in getting closer to automated blend recipe setup and execution, or replacing batching operations with blend ratio control.
Material Integrity Protection

The materials in a refinery, their properties and maintaining product quality are important parts of best practice. The following best practice areas can be defined: Lab Data Integration Raw materials and products in a refinery undergo analysis to determine their properties. On both ends of the refinery operation these results matter. The best refinery optimization algorithm produces bad operating strategies if the data it works with is not accurate. On the product side, there are customer specifications that have to be satisfied. While labs exist in all refineries, the degree of integration of the Lab Information Management System (LIMS) with refinery operations differs widely. Best practice would include the following: Integration of sampling with the systems used by operations and lab personnel in doing their regular job. Availability of analysis results on all tanks with a record of samples taken and properties returned.
Processes for review and acceptance of sample results Integrated tank certification processes: The ability to certify a tank against product specifications that makes the tank inventory available for use as raw material or as shippable product. Online estimation of tank and line properties and compositions with corrections based on measurements.
Product Integrity Protection Functions on Tanks To assure material integrity, simply having lab results is not sufficient. These Quality Assurance processes need to be embedded into tank farm processes that tightly control what can be done with the tank. Best practices require a level of automation that would include: Tank usage states: This involves being able to declare tanks as: o Useable as destination only: Such tanks can accept receipts or rundowns but cannot be transferred from. This effectively prevents use of the inventory until it has been analyzed and its properties are known with sufficient certainty. o Useable as source only: Such tanks are shielded from being produced into or receiving into. This protects the integrity of the content ensuring that the properties of the tank remain valid as long as the tank is used. o Free tanks: Such tanks are available for simultaneous use as source and destination and known to not have assured qualities. Certification: As mentioned under lab data integration there needs to be a process that can certify tank inventory for use. This will normally be driven off lab results, but can also be online based on analyzers or a combination of the two. However, it requires tank-based functionality to monitor the certification status: o Decertify the tanks on certification sample age o Decertify tanks should there be mass increases in the tank (something get added) o Decertify tanks when named valves open (This can be a customs requirement that receipt valves must be closed and locked to be able to ship) o Decertify the tank when it becomes empty o Decertify the tank when its usage stage changes from source only. o Decertify the tank when the estimated properties violate specification limits. Automated consequences of the loss of certification: Tanks need to receive certification against product specifications. A tank can be certified against several specifications, and depending on the type of movement for which it acts as source this needs to be evaluated in different ways. If the movement is a shipment of end product, there has to be a match between the customer specification and the tank certification. Should the tank not be specified for the customer specification, this must result in not being able to ship the material. Similarly, should a tank loose its certified status, any current shipment requiring a certification must immediately stop. Material Compatibility Protecting material integrity also requires management of compatibility of materials. Refinery best practice requires that such functionality exists at two levels: Compatibility of end points: Generally it is not desirable to put a material into a tank that currently contains something else (blends being the exception). Should an operator attempt to set up a material movement that attempts to do this, there should be checks to warn of the possible consequences or prevent this from being done. The severity of the consequences of putting material A into material B must be able to govern whether a warning or prevention results.
Compatibility in the path: Refinery best practice includes building a model of all piping and valves in the refinery and keeping track of what each line contains. Once this information is available, it enables the following: o Routing of movements such that the same lines continue being used for the same materials. o Identification of incompatible materials in lines and either raising warnings or inhibiting line use. o Triggering displacement, flushing or pigging operations to resolve compatibility problems. Management of material incompatibility is an important function in refinery operations, as often even small contaminations can severely degrade a product. Once contaminations have occurred, they are time consuming to resolve and very disruptive to refinery operations, not to mention the financial losses that could be incurred.
Reducing Incidents
Every once in a while there are media reports of spectacular accidents and incidents (explosions, fires, spills).
Table 1: Publically known recent refinery oil spills
Date 24-Feb-2010
11-Feb-2010
Description Sabotage in a depot tank farm on an old refinery site in Monza. (BBC, 2010) NARCO Ingleside - crude spill as tanks rupture on an old Falcon refinery site (Chirinos, 2010) Cepsa: A line on a crude offloading raptures (TypicallySpanish, 2009) Total Donge: A line ruptures during loading operations and this goes unnoticed. (Cedre, 2008) Coffeyville Kansas, In preparing a refinery shutdown before a storm operators forget to close valves and tanks overflow for hours. (NewsInferno, 2007) CITGO Refinery on the Calcasieu River, near Sulfur, LA, due to an undetected series of equipment failures (IncidentNews, 2006) Description Valve failure during a gasoline transfer causes a huge spill at Jaipur. Ignition causes a huge file (The Times of India, 2009)
16-Sept-2009
Consequences 600 m of petrol and oil contaminates the Lambro and Po rivers 50 000 barrels of crude fortunately contained in bunds, about 2000 barrels into a fresh water pond. unknown
17-Mar-2008
400 tonnes of heavy fuel oil spilt into the Loire estuary 71 000 gallons of crude oil spilled and polluted Coffeyville with over 2000 people displaced. 71 000 barrels of waste oil spilt during a rain storm
28-June-2007
19-June-2006
Table 2: Publically known recent hydrocarbon fires and explosions at terminal facilities
Date 31-Oct-2009
23-Oct-2009
Explosion and fire at Caribbean Petroleum

Consequences 11 fatalities. Rs500 crore (roughly 100 million) reported to have gone up in flames. Full consequences not yet clear 11 fatalities, 15 of 40 storage
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Date
11-Dec-2005
Description Depot in Puerto Rico (CNN, 2009) Buncefield fire and explosion. Overfill of a gasoline storage tank during a pipeline import to the terminal forming a large vapour cloud which ignited. (Ramsden, 2010)
Consequences tanks ablaze. Full consequences not yet clear A powerful explosion causing severe damage to neighbouring office buildings, igniting several surrounding tanks and injuring several people. Incident cost in terms of asset damage and business interruption of the order of a billion US dollars.
What is reported in the public domain is the tip of the iceberg only. Safety, Health and Environment arguments are extremely powerful justification arguments for capital projects, because anything that has to be reported or is reported in the media is extremely damaging, to the point of endangering the license to operate. Investments in counter measures that avoid or mitigate such risk can therefore be sizable and of significant value. Investments in technology are only a part of the required response to mitigate and avoid future incidents. However they are part of the recommendations (Ramsden, 2010).
Example: As a result of a spill of 212 000 barrels of oil on a pipeline in Prudhoe bay, Alaska in 2006, BP was fined more than $30 million for violations of federal environmental regulations in Alaska. This had the effect that $500 million was invested in upgrades to improve safety and limit releases. (Burke, 2010)
What is more, there are techniques like Failure Mode Effect Analysis (FMEA) that can be used to categorize risk and quantify cost of an incident. (Wikipedia, 2010b) What follows cannot be a comprehensive treatment of the subject; nonetheless it indicates best practices that address incidence mitigation:
Inventory Monitoring
Automating movements allows the following monitoring functionality to be built: Volume Reconciliation The idea behind this functionality is to make sure that what leaves a source reaches its intended destination. To be able to monitor this, it is necessary to build systems of all tanks and offsite boundary points 1that are connected through material movements as these are lined up and terminated. The volume in such a volume reconciliation group of connected endpoints is then monitored and alarms generated when the total volume deviates from the intended volume by more than a specific tolerance as this indicates a leak from the group.
An offsite boundary point is any point where material flows into or out of the modelled bounds of the offsites. Examples include refinery rundowns, loading arms, depot loading for rail and road and connections to pipelines.
1
Note that implementing this requires the following: All material movements occur in monitoring tasks, thereby allowing inference of connected systems. This requires setting up such tasks and stopping all unregistered moves by tank farm operators. Metering on all endpoints of movements. Tank Leak Detection On automating offsite movements, one knows which tanks are being used in movements. Leak: If a tank is not part of a movement and its volume starts dropping this clearly indicates that the tank is leaking2 and can be alarmed as such. Unexpected Movement: Once a tank is in a movement, but the movement is not started and the level or volume changes unexpectedly (example: source tanks see level increase), this can be alarmed. Rate of flow change alarming: Catastrophic failures are often detected faster on the basis of large flow rate changes. It is possible to tune such inventory monitoring algorithms such that one is able to, based on the scan rate of the tank gauging system and configured tolerances to avoid nuisance alarms know the maximum size of the leak or spill that can occur before an alarm. While the inventory monitoring functions described above certainly should be part of offsite best practice, all they can achieve is detecting the incident and through responsive operator action on the alarm, limit the damage caused. A better approach is taking actions to reduce or prevent the possibility of such incidents.
Movement Automation
Greatly reducing the possibility of contamination and spillage is possible by implementing full-scale movement automation consisting of: A model of all material flows into and out of the refinery offsites (rundowns, loading arms, pipelines), all tanks, lines, pumps and valves and how they are connected Setting up tasks to represent each movement operation. These tasks in their simplest form represent a source to destination movement including the complete path from the source to the destination. In more complex tasks there can be multiple sources (example: blends) or destinations, the task can include planned source or destination replacements during the task (swings) and can have multiple parallel paths between every source and destination. Once there is a task with defined paths through the piping model from source to destination this enables the following: o Isolation of Paths: This term refers to the physical separation of paths in the piping network. This is achieved by closing valves branching off the path to ensure that when the path is flowing, it is open only to the intended source and destination. Isolation therefore makes sure that a path is not open to anywhere else, thereby avoiding unintended contaminations or spills. Best practice would ensure isolation as part of lining up paths i.e. well before any flow starts. o Key Valve Operation: Lining up paths in offsite best practice should bring the task to within one valve operation of flow. The term key valve is used for the
Leaks can occur into the environment or into the piping network. Detecting both as soon as possible is really important.
valve that is left closed. Key valve operation ensures that paths do not flow until the movement task starts. Having built a model of the refinery tank farm and all lines, valves and pumps it therefore becomes possible to pro-actively prevent unwanted material movements. However, this is only as good as the information that is available about actual valve statuses. Where valves are remote-sensed or remote-sensed and operated there is no problem. However, most tank farms have a considerable number of fully manual valves, and what is more: the investment needed to fully automate or at least equip all valves with position sensors may be prohibitive. Does this mean that building a refinery piping model is not worth pursuing? Not necessarily. Best practice in tank farm operations would deal with the issue as follows: Collecting statistics on the number of valve movements per valve with a planned budget to instrument and/or automate the most used valves over time. Considering the use of emergent technologies such as wireless position sensors to obtain more remote sensed valve positions into the model. Implementing operator guidance software with portable hand held devices for manual valve operations to include: o Presenting operators with lists of valves to operate and guidance to where it is in the field. o Positive identification of valve prior to changing its position to avoid accidentally operating the wrong valve (Scanning an identification tag). o Positive confirmation of the desired position after the operation. o Timely automatic update of updated valve positions into piping model. While eliminating manual valves in tank farms is probably unrealistic, technology exists today that can ensure that what a piping model contains reflects the actual piping network status. Note: The piping network in refinery off-sites is not static. The mix of products and raw materials changes and as it does, the piping is adjusted. If one automates refinery off-sites, the method used needs to allow such changes to be coped with, without adversely affecting the validity or availability of the automation system. This is a strong argument against any hard coded interlocking in movement automation.
Time delays, backflow and equipment damage

Automating the execution of material movements has many further benefits other than enabling proactive spill and contamination avoidance. Providing tight control over what is commanded and in what order, enables the following: Opening key valves only once there is backpressure avoids backflow. Starting centrifugal pumps against backpressure protects them against cavitation One can ensure that it is never possible to start a pump with the suction path blocked. It becomes possible to control source and destination replacements to happen automatically on, for example, level limits and in such a way that minimizes gravitation between tanks while at the same time ensuring uninterrupted flow. One can automatically stop movements when tanks become empty or full or there is a reconciliation issue detected, thereby preventing spills from occurring altogether or reducing their size. A further best practice area in tank farms is flotation management. The term flotation is used to refer to pressure relief in piping systems. Ideally lines should be left floated (pressure
relieved) back to tanks. Why does that matter? Pipelines in a refinery often have significant volumes and the materials they contain expand or contact as the temperature changes. Lines that are blocked in will hence experience pressure build-up or vacuum formation. As a consequence at minimum, valves can become stuck as the vacuum or suction drastically increases the stiction that needs to be overcome before the valve moves. While the valve is stuck in its present position, the needed movement cannot proceed and the resultant delays can be very costly (demurrage, inability to execute plan, disruptions to refinery units, etc.). Even worse, lack of flotation can also lead to lines rupturing (overpressure) or collapsing (under vacuum). While it is possible to provide lines with pressure or vacuum relief, doing so is costly and leaves spill potential. The more optimal approach is to avoid blocking them in. Best practice movement automation will assure that.
Reconciliation and reporting

As indicated in Figure 2, the ability to re-plan or re-schedule depends critically on timely feedback on movement operations. As such this is a really important area of refinery inventory logistics. Support for certified tank gauging and metering Material movements across refinery boundaries in many instances involve custody transfers. As soon as this is also accompanied by subsequent movements across national and international borders, there are very specific legal requirements that systems used for custody transfer metering need to fulfil. This normally includes certification of the custody transfer measurement system by a national or international metrological authority for custody transfer. As a measurement system as whole is certified and needs to present itself as a closed tamper proof entity, the trend is for such systems to be based on intelligent tank gauging systems and flow computers. Best practice involves being able to interface with such systems to provide them with the inputs needed to perform the required metering and being able to take movement metering results from these systems in an unchanged form for reporting and feedback to higher level systems. Support for reconciliation processes It is common for movements to have one or more sources of measurement. If a movement involves a ship for example, the shipped or received volumes are likely to be measured: By a custody transfer meter By the captain on the vessel By the tank gauging of affected tanks It is good practice to include a reconciliation process as part of the movement completion to detect and resolve any inconsistencies at the point of loading. Such a process would involve capturing all sources of volume, applying tolerance rules to these and flagging and measurement inconsistencies to be able to resolve them by re-measurement before the shipping documentation is finalized. Note that movement reconciliation on the basis of reconciled tasks is much more accurate than retrospective reconciliation on the basis of tank volumes in a historian could ever be. It is therefore considered best refining practice to execute all movements of materials in the form of tasks and pay specific attention to measurement accuracy for everything that crosses the custody line. This includes procedures for waiting for tanks to be stationary prior to taking opening and closing readings for a movement.
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Also, note that the bigger the envelope of the managed problem becomes, the more important these processes become because they give a handle on oil loss in transit as well, if what is received can be reconciled with what was shipped at the source. Shipping documents Material movements often have significant documentation requirements. These may include material hazard sheets, customs documentation, certificates of analysis, etc. Best refining offsite practice requires the ability to generate such documentation to assure business continuity even if higher levels of IT are not reachable. Movement History A lot of data is recorded in the lifecycle of executing movements. This information is used in many ways, but at a minimum must include accurate and timely reporting to the ERP as well as planning and scheduling systems on the execution progress of what was planned. Closing this loop effectively is key to being able to work total inventory reductions while still supplying customer demand. Movement history also allows implementing procedures for monitoring transport performance and register issues. Such applications relevant in a refining context can be: Berth scheduling and dealing with ships that do not hold the scheduled times Issuance of letters of protest when there are any issues with receipts of transport vessels Controlling demurrage responsibilities as issues occur.
Honeywells part in refining movement logistics

Honeywell has been active in offsite refinery applications for many years and has a significant installed base of projects implemented to realize best practices in all the areas outlined in this paper. Honeywell continually works to identify and realize practice improvement potential with customers, thereby adding significant value to their operations. Honeywell has a significant experience base and can offer consulting assistance in developing and justifying projects Implementing projects that move a refiner closer to the best practice mark.
References
BBC, (2010). Oil spill reaches Italys River PO after sabotage [online] Available from: http://news.bbc.co.uk/2/hi/europe/8534422.stm Burke, J. (2010) BP still fighting fines stemming from 06 oil spills at Prudhoe Bay [online] Available from: http://alaskadispatch.com/dispatches/energy/5369-bp-still-fighting-finesstemming-from-06-oil-spills-at-prudhoe-bay Cedre (2008). Spills, Donges Refinery [online] Available from: http://www.cedre.fr/en/spill/donges/donges.php Chirinos, F.S., (2010). Oil spill cleanup in Ingleside continues [online] Available from: http://www.caller.com/news/2010/feb/11/oil-spill-cleanup-in-ingleside-continues/
CNN, (2009). Puerto Rico fire fighters work to contain massive fuel blaze [online] Available from: http://www.cnn.com/2009/WORLD/americas/10/23/puerto.rico.explosion/index.html IncidentNews (2006). Citgo Refinery Incident [online] Available from: http://www.incidentnews.gov/incident/6094 NewsInferno, (2007). Kansas Oil Spill at Coffeyville Resources Refinery Blamed on Open Valve [online] Available from: http://www.newsinferno.com/archives/1662 The Oxford Princeton Programme, (2007). Discussions during a Refinery Economics course in The Hague The Times of India, (2009). Jaipur fire: Rs 500 crore goes up in flames [online] Available from: http://timesofindia.indiatimes.com/city/jaipur/Jaipur-fire-Rs-500-crore-goes-up-inflames/articleshow/5182092.cms Ramsden, M. (2010). Buncefield Process Safety Report: New Standards for Fuel Storage Facilities in the UK, EHS Journal, 10 April 2010 [online] Available from: http://ehsjournal.org/http:/ehsjournal.org/martyn-ramsden/buncefield-process-safety-reportfuel-storage-facilities-uk/2010/ (Accessed 4 July 2010) Solomon Associates. (2010) Solutions for Refining [online] Available from: http://solomononline.com/benchmarking-performance/refining/ TypicallySpanish (2009) Another oil spill at Cepsa refinery in Huelva [online] Available from: http://www.typicallyspanish.com/news/publish/article_23095.shtml Wikipedia (2010a) Weighted Average Cost of Capital [online] Available from: http://en.wikipedia.org/wiki/Weighted_average_cost_of_capital Wikipedia (2010b). Failure mode and effects analysis [online] Available from: http://en.wikipedia.org/wiki/Failure_mode_and_effects_analysis
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A Best Practice Approach To Refinery Inventory Logistics

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A Best Practice Approach to Refinery Inventory Logistics

Author: M.H.Petrick Honeywell Process Solutions 2010-07-05

Figure 1: What optimization scope is currently addressed?

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