No doubt you’ll have read a fair amount on the Forties Pipeline System (FPS) shutdown over the last week. And equally, if you follow LUX, you will have often heard us discuss the issues that methanol contamination presents for operators in terms of lost revenue due to refinery penalties and devalued crude. You may not have considered, however, how closely these two topics are related. Duncan Baillie, Business Development Manager at LUX, explains.
“Working with clients to ensure they have the right tools to conduct efficient and effective management of methanol contaminated crude is something I’ve done for many years. With the news this week of the FPS shutdown, however, I’ve seen a huge increase in enquiries regarding how best to manage methanol contamination once the wells come back online. It seems that it’s a hot topic for those of us working in the North Sea…or at least it should be!”
Methanol contaminated crude
“After methanol has performed its primary function, preventing hydrate formation upstream, it remains as a problematic contaminant within crude oil. The presence of this methanol in crude oil poses a significant risk to refineries as it can damage catalysts and effluent plants, and left unchecked, has the capability to cause £ millions worth of damages to refinery processes. It is for this reason that crudes high in methanol are often un-saleable, or command lower prices downstream. 1m3 of methanol in crude, for example, carries a penalty of around £4k, which, if the operator is managing several wells, can add up to be rather costly. Not to mention the deferment cost of storing crude prior to approval and export (which can be up to 2 weeks). To avoid these costs, operators will often seek to side-stream contaminated oil before blending back in to future cargoes or flows to pipeline.”
Methanol contamination and FPS shutdown
“More relevant to the FPS shutdown however, is the fact that methanol is often the production chemical of choice during a start-up or shut-down of a well, when it is common to “shut in” methanol to prevent the formation of flowline blocking hydrates. The recent shutdown, therefore, means that many wells in the North Sea are now shut in with methanol, and once repaired, the start-up of over 85 fields which contribute to FPS will pose some significant challenges for Kinneil Terminal and Grangemouth Refinery. Equally, it will pose a serious challenge for the operators and producers dosing methanol – close and accurate monitoring of the methanol content in their crude will be essential once their wells come back on-line. The FPS waiver system is designed to minimise potential damage from methanol and requires operators to declare content of this chemical in crude oil, prior to exporting to FPS. It is therefore no surprise that I will be recommending a quick, accurate and on-site tool for monitoring methanol content in crude, to the operators I work with.”
The importance of accurate, on-site analysis
“Having an on-site method to determine methanol content in oil can save operators both time and money, helping to increase crude oil revenue, by producing results which can be reported to FPS in a timely manner, with the potential to allow quicker entry to the pipeline. Having an accurate, timely result also saves overestimating or “erring high, to be on the safe side”, potentially saving on waiver costs. And importantly, it allows the crude to reach market quicker, with a known amount of methanol, potentially gaining higher revenue.”
“Certainly, when FPS is repaired and the wells start up, accurate and timely results will be critical to allow decisions to be made in real time regarding side-streaming and re-blending methanol contaminated crudes into the main production, thus helping to avoid penalties from Ineos.”
Gas Chromatography vs OMMICA™
“Operators used to rely solely on Gas Chromatography (GC) for their methanol in oil analysis; a complex, skilled and usually on-shore based analysis method. OMMICA™, by LUX Assure, however is redefining the measurement of methanol in crude oil, providing the oil industry with a rapid and accurate method of measurement in the field. Designed specifically to address the many issues users experience with GC, OMMICA™ allows for on-site testing of crude, by non-specialist personnel and provides results within 1 hour. Importantly, independent 3rd party testing has shown OMMICA to have an excellent correlation with GC.”
“In terms of FPS, faster results means faster reporting. Refineries and receiving terminals, such as Kinneil and Grangemouth, will often ask for advance notice of high methanol containing crude, allowing them to plan their operations. Operators who are able to provide this notice will reduce the likelihood of receiving penalties, with the potential to save them £ millions each year.”
How to find out more
“It still seems fairly uncertain when FPS will be repaired and the wells will start producing again, but sometime in the next few weeks seems likely. I hope that operators don’t wait for this to happen before they consider how best to manage their methanol contaminated crude!”
OMMICA™ is the ideal solution to monitor methanol content in crudes, when bringing new wells into operation or after shut ins. If you’d like to find out more please contact Duncan Baillie at firstname.lastname@example.org or on +44 (0)7557104345.
You can also access more information here.