Oil and Gas

What is crude oil?

Crude oil is a mineral oil consisting of a mixture of hydrocarbons of natural origin and
associated impurities, such as sulphur. It exists in liquid form under normal surface
temperatures and pressure. Its physical characteristics (for example, density) are highly
variable.
How many gallons of oil are there in a barrel?
42 US gallons (35 imperial gallons), or 159 litres.
How many barrels of oil are produced and consumed a day?
As of 2011, approximately 89 million barrels of oil and liquid fuels were consumed per day
worldwide. That works out to nearly 32 billion barrels a year.
Petroleum can also contain molecules containing oxygen, nitrogen, sulfur, and metals. Crude
oil can contain up to 2% oxygen and 1% nitrogen. 2 Basic classification of crude oil:
1. Sour crude: Sulphur content > 5%
2. Sweet Crude: Sulphur content < 5%

Oil and Gas Value Chains

From Wellhead to Gasoline Pump
Crude Oil Value Chain
Exploration
Production
Using technology Bringing oil to
to find new
the surface
oil resources
using natural
and artificial
methods

Transportation
Moving oil to
refineries and
consumers with
tankers, trucks
and pipelines

Refining
Converting
crude oil into
finished
products

Marketing
Distributing
and selling
refined
products

Natural Gas Value Chain

Exploration

Production

Processing

Transportation

Marketing

Using
technology
to find new
oil resources

Bringing gas
to
the surface

Treating
gas
to be sent
to markets

Moving gas
with pipelines
and tankers

Distributing
and selling
natural gas

Oil and Gas Value Chain

Hydraulic Fracturing:

Fracturing Fluid: A fluid injected into a well as part of a stimulation operation. Fracturing
fluids for shale reservoirs usually contain water, proppant, and a small amount of nonaqueous fluids designed to reduce friction pressure while pumping the fluid into the wellbore.
Proppant: Proppants are particles mixed with fracturing fluid to hold fractures open after a
hydraulic fracturing treatment
Environmental Concerns: The chemicals were injected as fracturing fluids in the hydraulic
fracturing operation. Hydro-fracturing has attracted increased scrutiny from lawmakers and
environmentalists because of concerns that the chemicals used can contaminate underground
water aquifers.
How Are Crude Oil and Refined Products Transported?
Crude oil must be moved from the production site to refineries and from refineries to
consumers. These movements are made using a number of different modes of transportation.
Crude oil and refined products are transported across the water in tankers. On land crude oil
and products are moved using pipelines, trucks, and trains.
Tankers are used to transport both Crude oil and Refinery products for transportations across
the countries. Tankers range in size from the small vessels used to transport refined products
to huge crude carriers. Tanker sizes are expressed in terms of deadweight (dwt). The smallest
tankers are General Purpose which range from 10 to 25,000 tons. The Large Range and Very
Large Crude Carriers (VLCC) are employed in international crude oil trade. The size of
tanker that can be used in any trade (commercial voyage between a port of origin and
destination) is dependent on the tanker's length and loaded depth and the size of the loading
and unloading ports. The larger ships are used because they reduce the cost to transport a
barrel of crude oil.
Refining: Crude oil is processed or refined to produce useable products such as gasoline.
The process is very complex and involves both chemical reactions and physical separations.
Crude oil is composed of thousands of different molecules. It would be nearly impossible to
isolate every molecule and make finished products from each molecule. Refineries are
composed of many different operating units that are used to separate fractions, improve the
quality of the fractions and increase the production of higher-valued products like gasoline,
jet fuel, diesel oil and home heating oil. There are two basic columns ( units ) in refinery
process: CDU and VDU.
Crude Oil Distillation (CDU): It separates crude oil into fractions based on their boiling
points. The separation is done in a large tower that is operated at atmospheric pressure. The
tower contains a number of trays where hydrocarbon gases and liquids interact. The liquids
flow down the tower and the gases up. The lighter materials such as butane and naphtha are
removed in the upper section of the tower and the heavier materials such as distillate and
residual fuel oil are withdrawn from the lower section.
Vacuum Distillation Unit (VDU): The residua fraction from the crude tower can be sent to
fuel blending to produce residual fuel oil. This unit is operated at a slight vacuum. This
allows the hydrocarbons to be separated at lower temperatures and prevent undesirable
chemical reactions that would "burn" the material and produce petroleum coke.

The residue from VDU is sent to DCU, CCRU, HGU and other units for enhanced recovery
of useful hydrocarbon.
Important products from Refinery in order of their recovery:
1. LPG (liquefied Petroleum gas)
2. Naptha
3. Gasoline (petrol)
4. Air turbine fuel /Kerosene
5. Diesel
6. Lubricating oil/ Waxes
7. Fuel Oil for furnaces
8. Bitumen
Other products are Sulphur (used in pharmaceutical industry and as a fuel in furnaces)
Refinery Gross Margin: The difference in dollars per barrel between its product revenue
(sum of barrels of each product multiplied by the price of each product) and the cost of raw
materials (primarily crude, but also purchased additives like butane and ethanol).
Nelson Complexity Index: Nelson Complexity Index is a measure of secondary conversion
capacity in comparison to the primary distillation capacity of any refinery. It is an indicator of
not only the investment intensity or cost index of the refinery but also the value addition
potential of a refinery. Also it quantifies the relative costs of the components that constitute
the refinery. To calculate index a factor of one to the primary distillation unit. All other units
are rated in terms of their costs relative to the primary distillation unit also known as the
atmospheric distillation unit.
Higher complexity allows refinery to process more heavy crude oil or to get higher valued
products. Currently Reliance refinery has highest refinery complexity of 10. The new
upcoming refineries in Asia have higher complexity than the existing refineries in Europe (
avg 6-7) and USA.

Liquefied natural gas (LNG) Terminal:

An LNG terminal is a facility at which liquefied natural gas is regasified (turned back into
a gaseous state) after shipment by sea from the area of production.
LNG terminals have four main functions:
1. Receiving LNG tankers and unloading their cargo
2. Storing LNG in cryogenic tanks able to withstand temperatures below -160C
3. Regasifying LNG to meet demand
4. Feeding gas into the national transmission network.
Reception and unloading
On arriving at the terminal, the LNG tanker (200-300 metres in length) is moored at the
unloading dock, where articulated pipes (arms) are connected to transfer the LNG to the
storage tanks. The LNG flows into pipes specially designed to withstand the embrittling
effect of extremely low temperatures (below -160C). This process is completed in under 12
hours.
Boil-off gas is returned to the ship to maintain pressure in the cargo tanks.
Storage
The LNG is stored in double-walled insulated tanks to limit boil-off. These tanks are able to
withstand the temperatures of below -160C needed to keep the gas condensed in a liquid
state. The outer walls are made of pre-stressed reinforced concrete or steel.
Despite the high-quality insulation, a small amount of heat still penetrates the LNG tanks,
causing minor evaporation. The resulting boil-off gas is captured and fed back into the LNG
using compressor and recondensing systems. This recycling process prevents any natural gas
escaping the terminal under normal operating conditions.
Compression and regasification
The LNG is subsequently extracted from the tanks, pressurised and regasified using heat
exchangers. The tanks are equipped with submerged pumps that transfer the LNG towards
other high-pressure pumps. The compressed LNG (at around 80 times atmospheric pressure)
is then turned back into a gaseous state in vaporizers.

References:
1. http://www.elengy.com
2. http://www.petrostrategies.org/