1. Crude oil blending involves mixing different types of crude oil to optimize properties like density, viscosity, and pour point for transportation or value. Blending can allow problematic high-viscosity crude to flow through pipelines or different quality crudes to be transported in a common carrier pipeline. 2. Historically some controversial "dumb bell" blends manipulated quality tests but yielded poor refining results, leading specifications to include more parameters. Now multiple crudes can be blended to meet pipeline specifications while optimizing margins. 3. Intertek provides crude oil testing and quality analysis to support blending and transport operations. This includes a new laboratory in Cushing, OK which is a major crude oil blending and storage hub.

1. www.intertek.com
Crude Oil Blending
James Ignatovich – Area Manager, WGC
Intertek - Commodities Division
total customer focus

2. www.intertek.com
Crude Oil Blending
• Transportation and Logistics
• Pipeline economics
• Quality Management
total customer focus

3. www.intertek.com
1. Blending Heavy Crude for Pipeline logistics
total customer focus

4. www.intertek.com
In-line blending for transportation
Receiver (B)Density!
Viscosity! Pour Point!Heavy crude (A)
Light crude or
other diluents
$$$$Heavy crude
Horsepower
Pipelin
e
The efficiency of moving crude oil through this pipeline is totally dependent on some of its
physical properties including DENSITY, VISCOSITY AND POUR POINTAs the density increases so does the amount of horsepower required to push the crude
through the pipeline….which will cost more on an incremental pipeline tariff!
As the viscosity increases, the flow through the pipeline decreases and the pressure
increases. All pipelines must operate under the Maximum Operating Pressure they are
designed for, so it may not be possible to pump untreated high viscosity product at all.
One solution is to acquire a light crude or
another acceptable hydrocarbon that is
readily accessible and use an inline
blender to create a blend with a lower
Density, Viscosity and Pour Point.

5. www.intertek.com
Heavy crude (A)
In-line blending for transportation
Receiver (B)
Inline blender
Light crude or
other diluents
Medium
crude blend
Density!
Viscosity! Pour Point! $$$$
Pipelin
e
One solution is to acquire a light crude or
another acceptable hydrocarbon that is
readily accessible and use an inline
blender to create a blend with a lower
Density, Viscosity and Pour Point.
The problematic physical properties will
now be eradicated and the blend will be
easily pumped to the reciever.

6. www.intertek.com
2. Sharing a Common Pipeline
total customer focus

7. www.intertek.com
Shared Pipeline blends
Medium sour
Medium sour
Medium sour
Common
Carrier
Sweet
Sour $$$
$$$
Here you see three platforms
all producing the same quality
crude. It is all comingled and
pumped to shore via a single
pipeline. The allocations will
only be based on metered
volumes.
Now let’s say wells with differing
quality are drilled nearby….A sweet crude well and
a sour crude well are
constructed close by
Are the owners going to
lay miles and miles of
pipeline to keep the
streams segregated?
• But what about the owners of
the higher value stream?
• They will want to be
compensated for the sweet
product they are introducing
to the system.
No, they will connect
to this common
pipeline.
• And the owners of the
lower value sour stream
may not want to give up
such compensation!
• One solution to the allocation of funds is to
set up a quality bank that focuses on key
quality parameters for the medium sour
crude.
• Each quality parameter will set a benchmark
for the value for the original crude.
• Using the benchmark value
it can be calculated how
much the sour crude is
decreasing the streams
value and the owner will be
penalized.
• Likewise it can be
calculated how much the
sweet crude is increasing
the value and the owner
will be compensated.

8. www.intertek.com
3.Blending Crude Oil for Margin Optimization
(Quality Management)
total customer focus

9. www.intertek.com
total customer focus
• The “B” word…….Blending high quality crude oil with low
quality crude oil in order to change the value of the product has
been around for decades.
• It has been a taboo subject in years past and some of the
crude oil blending that took place was very controversial
resulting in what was known as “Dumb Bell” crudes.
• The industry standard for defining crude oil quality was by
analyzing and measuring only two parameters, Gravity and
Sulfur.
• Therefore the quality could be easily manipulated by blending a
very heavy crude with a very light crude.

10. www.intertek.com
Historical and controversial dumb
bell crude blending
Heavy Sour
Crude
Condensate
V
Ni
Fe
• Blending a heavy crude with
a condensate would give a
resulting blend that has
Gravity and Sulfur
parameters the same as a
desirable sweet crude.
• But the other characteristics
and parameters would be very
different from a desirable
crude oil….such as heavy
metals!!
• As this blend passes
through the refinery units
the metals would
deactivate or “poison”
catalysts and upset other
sensitive equipment
• The heavy and light product
yields would be very high but
the desirable middle distillate
yields would be very low.
Hence the term “Dumb bell”
crude
• This did not fair well with refiners
and because of this the COQA
and other industry associations
pushed for more parameters to
be analyzed when defining the
quality of crude oil.

11. www.intertek.com
Pipeline Specifications
Pipeline crude sale specs
Test Unit Min Max
API: 34.0 41.0
Sulfur: %Wt 0.400
Light Ends:(C2-C5 total): %w/w 6.0
Sim Dis: (1020+): %w/w 4.0 12.0
MCRT: %Wt 2.0
Metals: mg/kg 8.0
TAN: mg KOH/g 0.70
Virgin
Sweet
36.1
0.336
2.98
8.6
1.7
3.3
0.37
Medium
Sour
Heavy
Sour
LS
Cond
25.0 29.0 45.0
0.400 1.90 0.05
2.62 1.40 20.0
2.9 23.0 0.1
0 - -
4.2 75.0 5.0
0.28 0.51 0.05
• Here you can see a typical sweet
crude pipeline spec taken from a
public website. Along with the
traditional Gravity and Sulfur we
now have other specifications.
• The light ends and residue specs
should eliminate “Dumb bell”
crudes and the total metals spec
(V, Ni & Fe) will stop heavy
metals from poisoning the
catalysts. There is also an acid
number specification.
• Here you can see some
typical results for a virgin
sweet crude that meets spec
along with other domestic and
foreign crudes that do not
meet spec.
• If a marketer has the use of a blending
facility and has access to each of these
crudes they can blend them together and still
potentially meet all of the requirements of
the pipeline and the refinery.

12. www.intertek.com
Tank blending
Virgin Sweet 0.33% Sulfur
$100
Virgin sweet 200MB
SAH 38MB
EIC 28MB
MARS 6MB
Pipeline Spec 0.4%
Sweet Blend $100
• Virgin crude oil available for
the operation of supplying a
0.40% sulfur sweet crude
blend through a pipeline.
• Target blend
for contract
sale

13. www.intertek.com
Tank blending
Virgin Sweet 0.33% Sulfur
$100
LS Cond 0.05% Sulfur
$95
Virgin Sweet 200MB
LS Cond 38MB
EIC 28MB
MARS 6MB
238MB
Sweet light Blend
0.29%
Pipeline Spec 0.4%
Sweet Blend $100

14. www.intertek.com
Tank blending
Virgin Sweet 0.33% Sulfur
$100
LS Cond 0.05% Sulfur
$95
Med Sour 1.00% Sulfur
$90
Med Sour 28MB
MARS 6MB
238MB
Sweet light Blend
0.29%
266MB
Sweet Blend
0.36%
Pipeline Spec 0.4%
Sweet Blend $100

15. www.intertek.com
Tank blending
Virgin Sweet 0.33% Sulfur
$100
LS Cond 0.05% Sulfur
$95
Heavy Sour 1.90% Sulfur
$90
Virgin Sweet 200MB
Heavy Sour 6MB
Common
Carrier
Medium Sour 1.00% Sulfur
$90
$98.05/Bbl
Gross profit $530k
266MB
Sweet Blend
0.36%
272MB
Sweet Blend
Ready for Pipeline
Pipeline Spec
Sweet Blend $100

16. www.intertek.com
Tank Sampling
.
300,000 Barrel Shore Tank
300,000 x 42 = 12,600,000 Gallons
12,600,000 x 4 = 50,400,000 quarts
• Here is a representation of a
300MB crude oil shore tank
that our inspector would
climb and take quart
samples from each level
(U/M/L) along with running
averages.
• The samples would go back
to our lab for testing. Based
on the results the lab would
produce a Report of Analysis
for the whole tank based on
that one quart sample.
• If this shore tank was to scale
then this tiny, little dot would
represent 1000 quarts of
product. This means that the
analysis we run is on a sample
1000th
the size of this dot……..
…..this shows how difficult it can
be and how important it is to
get good representative
samples from a crude shore
tank

17. www.intertek.com
• A lot of pipelines converge at this
area in the Midwest. At a little
town called Cushing, OK. Known
locally as the “Pipeline
crossroads of the world”. The
large crude oil terminal here has
been upgraded and expanded
(50M Bbls) recently for mass
storage and blending of crude oil.
• Here is a map of the
crude oil pipelines in
North America.

18. www.intertek.com
total customer focus
Intertek Crude Oil Laboratory,
Cushing, OK
Crude oil and fuel testing
Intertek has committed to opening a full
crude oil laboratory in Cushing, OK.
Capabilities include almost all ASTM
crude oil methods, including
GC light ends & HTSD
Metals by ICP, Nitrogen, Sulfur,
Gravity, RVP, Chlorides
and many, many more….
Opening March 2011

19. www.intertek.com
Questions?
Bruce Carlile – 832-861-4053
Bruce.Carlile@Intertek.com
James Ignatovich – Area Manager, WGC
Intertek Commodities Division
total customer focus

20. www.intertek.com