the quarterly newsletter from sgs’s oil, gas & chemicals ... · contact your local ogc...

InspIrIng solutIons for the oIl, gas & ChemICals seCtor that go on anD on anD on…

spIreD solutIons In the DIverse ogC busIness seCtor

The QuarTerly NewsleTTer from sGs’s oil, Gas & ChemiCals BusiNess N° 5 • NovemBer 2011

ContentskeepIng safe In the presenCe

of hyDrogen sulphIDe 2

traDe alerts helpIng you

aDapt to Change 3

marIne seCtor:

managIng ghg emIssIons

anD Costs In shIppIng 5

workIng 24/7 to meet DemanD

thane laboratory In mumbaI 8

testIng marIne fuel

CompatIbIlIty

onboarD your vessels 9

CloseD samplIng proCesses

that work harDer 10

the ChallengIng task:

reDuCIng Cost anD

maxImIsIng returns 12

monItorIng methanol 14

ogC In the Investor Days 15

Carole streng

Project management

[email protected]

In the Oil, Gas and Chemicals sector SGS already has a comprehensive service portfolio to meet a wide-range of testing, inspection and certification requirements. We are regarded as the market leader in providing these services, however, we cannot afford to become complacent.

Today SGS is proactively observing the OGC sector and seeking greater diversification to expand the scope of our services. We are focused on high-end segments (e.g. data analysis and trending) and in creating new service bundles, which bring together our technical expertise across all industries.

For you this means access to turnkey solutions and to simplified answers for all your questions – wherever they are located in the SGS network of services.

Our InspIratIon has not changed. Yet our DIversIfICatIon is helping us provide the Oil, Gas and Chemicals industry with services and solutions that go on & on & on...

In this newsletter we begin with revisiting the dangers from hydrogen sulphide. Understanding of this gas is not what it was a generation ago and with regulations tightening on H2S issues we dispel some myths, and replace them with real facts.

Staying informed with SGS Trade Alerts to keep pace with the many changes in the OGC business sector is the focus of our next article. Then we move to new approaches in the marine sector and how the Energy Efficiency Operational Indicator (EEOI) helps you manage GHG emissions in your fleet; why the SGS IFO Stability Testing Kit for bunker fuel acts as an early warning system when refueling;

and the success of our recent partnership with BP Oil International into research with the new UKS&G closed sampling equipment, at drawing samples equal to open hatch sampling.

We travel to India and bring you inside our state-of-the-art testing facility at Thane, Mumbai, and explain the management and customer-focus changes from implementing a continuous improvement initiative. Then we focus on two ways you can perform tests onsite and receive fast, reliable, independent and accurate findings – the SGS MIC (Methanol in Crude Kit) for the monitoring of methanol and the SGS fixed lab network with remote laboratory access for used oil and lubricant analysis.

We end the newsletter with a look back at the Investor Days recently held in Toronto and how SGS further consolidated its ‘superior positioning within an extremely attractive industry’ (Deutsche Bank).

Your feedback is always welcomed and with it we aim to deliver you an enhanced and improved service. Please feel free to contact your local OGC representative or email us at [email protected]

alIm saIDovExecutive Vice President,

Oil, Gas & Chemicals Services

[email protected]

4

DDEDICATION

9.01225

E10.811

EVALUATION

9

I18.998

IDENTIFICATION

9

I18.998

INNOVATION

14

N92.906

NAVIGATION

16

P32.065

PROFITISATION

18

R39.948

REALISATION

19

S39.098

SOLUTION

9

I18.998

INFORMATION

14

N28.086

NOTIFICATION

8

H15.999

HARMONISATION

19

S39.098

SOLUTION2

keepIng safe In the presenCe of yDrogen ulphIDeKnowledge is more than just

power. Knowledge can keep

us safe. Taking safety related

decisions based on little

understood information is a big

risk. When the right information

can save lives, as it can when it

comes to the facts about Hydrogen

Sulphide, it is crucial that it is only

from the correct information that

safety measures are made.

hyDrogen sulphIDe In CruDe oIl

Hydrogen sulphide, or the chemical compound with the formula H2S, is a colourless, very poisonous, flammable gas. Its characteristic rotten-egg odour is perceptible at concentrations as low as 0.00047 parts per million (470 parts per trillion).

Hydrogen sulphide is present in most crude oils at some concentration. If the concentration is low (defined as below 2 ppm in the liquid phase), the crude is usually referred to as sweet. If it is higher, the crude is said to be sour.

The easy-to-reach sweet crude reserves are being exhausted. As wells are squeezed dry, more and more sour crude is entering day-to-day refining. Although some hydrogen sulphide and mercaptans are removed in the refining process, some remnants do find their way into the residual black oil fractions. As a result, we are seeing a general rise in H2S levels in bunkers, fuel oils, VGO, atmospheric residue and similar bottom end fractions and blends. This unfortunately increases the daily hazards for those working in the industry.

beIng aware of the Issue

People are killed by H2S every month, and it leaves others sick or struggling with very serious long-term health problems. With an outcome such as this, hydrogen sulphide cannot be treated as an abstract potential threat.

Regulation has tightened up on H2S issues, and everyone involved in the oil trade needs to be fully aware of the inherent dangers of working with liquids containing H2S. This includes every party from E&P staff to refiners and from storage companies to traders. As well as being aware of the dangers, it is important to understand the H2S-related regulations and legislation that are now in place and how to assess and manage them.

the DeClIne of safety

With the generational turnover in staff in the older developed centres, and the increase in frequency of sour cargos, the working population needs more awareness about the dangers of hydrogen sulphide than they did ten or fifteen years ago. The current lack of awareness means the risk level of working with H2S is skyrocketing, leaving many workers depending on false information, which could end up costing them their lives.

myths about hyDrogen sulfIDe

The number of common misconceptions surrounding H2S is astounding. Here are a few, with explanations of what is really the truth:

Myth 1

You can calculate the H2S level in the liquid phase from the concentration measured in the vapour phase, and vice versa.

This is impossible. The number of variables that can change from the liquid to the vapour phase means that there is no way to calculate the H2S level in one from the other. These variables include such things as: headspace size and temperature; surface to volume ratio of the liquid; liquid viscosity and temperature; the partial pressures of other species present in both the liquid and the headspace; moisture content of the headspace; and headspace gas throughput.

Myth 2

If you measure the concentration on the headspace at one point in time, it will remain constant or near constant.

This is not the case. Small changes in temperature, slight agitation or a host of other factors can change the headspace concentrations dramatically in only a fraction of an hour.

Myth 3

You can transport samples and still obtain reliable results for H2S content.

There are numerous transport situations that potentially affect the H2S content. All of the published methods make it clear that analysis must be carried out within a very short space of time (no more than 24 hours) and that the sample must be kept at sea level or very close. It cannot be heated or shaken. This makes air transport in particular extremely hazardous.

Myth 4

Readings in the headspace on the vapour give the same concentration as the analysis of the liquid beneath.

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SOLUTION

The QuarTerly NewsleTTer from sGs’s oil, Gas & ChemiCals BusiNess N° 5 • NovemBer 2011 P. 2

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19

S39.098

SOLUTION

Typically, this is not the case. A liquid concentration of, for example, 8 ppm in the liquid phase, depending on other factors, might give rise to a vapour phase concentration of anything from about 150 ppm to 25,000 ppm in the headspace above.

ControllIng hazarDs

Preventative measures can, and must, be taken to prevent hydrogen sulphide related problems.

1. Safety Data Sheets (SDS) must

be provided

All cargos where H2S is known to be in the oil, including crude, must, by international convention be

accompanied by safety data sheets. This is also a requirement of the more recent MARPOL and regional legislation such as REACH and NICNAS. The safety data sheets must reflect the situation and warn fully about the hazards present. It is an offence to instruct anyone (e.g. storage terminals, ships, inspectors, pipeline operators, etc.) to place staff in proximity to cargo that may contain H2S without providing safety data sheets to make the nature of the hazard explicit.

2. Tri-Mode personal monitors and

breathing equipment should be available

Also, all people who may be working in an area where H2S exposure is possible should be equipped with

tri-mode personal monitors which measure H2S, O2, and LEL levels at near mouth height. They should also be equipped with breathing apparatus appropriate to the situation.

H2S can be tested a number of ways, but the quickest, most reliable method in use is IP 590 for liquid phase measurements. By becoming aware of the level of sour oil you are working with, you can ensure that you and your employees take the appropriate steps to keep safe.

For more information, please contact

Richard Taylor at [email protected]

traDe alerts helpIng you aDapt to Change

The pace and degree of

development within the oil, gas

and chemicals industry is greater

than ever. Regular updates, such

as Trade Alerts, are one way we

can all stay on top of the industry.

The world, and the OGC business, has changed enormously over the past few decades, more than anyone could have anticipated. This, naturally, has left many companies confused. There are a number of factors that have combined to effect the changes we’ve seen, such as the retirement of industry leaders, increasingly demanding trade regulations, more advanced technology, shifts in the types of companies that prosper, and more international business. Here we discuss some of these factors.

generatIonal Changes

We are in the latter stages of a generational shift in staff. This applies to every business within the industry. Staff who joined in the ‘70s are retiring. As energy was an unfashionable career choice in the ‘80s and ‘90s, recruitment was low in those years. This led to a demographic hollow in the industry, which, at a time of great change, poses a real threat to efficient, safe and profitable operations. Although these new operators may be less technical they are more in tune with business processes and commercial finance and as a result those in the industry are increasingly becoming more efficient, more frugal, and more cost-conscious.

tIghtenIng traDe regulatIons

Trade regulation is on the increase, and certain aspects in particular have skyrocketed, particularly those connected to environmental issues (e.g. sulphur levels in fuels, mercury content, heavy

metals content and NOX and SOX emissions). The advent of schemes such as NICNAS and REACH the CLP/GHS global alignment, pose serious challenges to an industry already in need of help.

InCreaseD equIpment optIons

Technology has advanced by leaps and bounds, meaning testing can now be done using equipment that couldn’t have been imagined twenty years ago. Cheap PC power in particular has enabled techniques such as GCMS and FTIR to move out of the research lab and into the field. Although this makes them more convenient and even semi-portable, it has also fragmented the installed base of test capabilities.

the latest leaps forwarD

In oIl teChnology

Similarly, product innovation has changed the industry. With new refining techniques, the introduction of


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alternative fuels such as GTL and CTL fuels, and the advent of first and second generation biofuels, the blending pools have become ever more complex.

the neeD to aDapt In

the faCe of Change

Some companies leave themselves unnecessarily exposed due to their lack of knowledge in technical matters. The need for specialised expertise on test methods and specifications has increased, which in some cases leaves a significant and important knowledge gap in house.

DIfferent CompanIes take Charge

The industry has changed significantly in that different types of company have risen and fallen. The new industry leaders are: NOCS (National Oil Corporations), such as Aramos, KPC, NNPC, Petronas, Petrobras; Tolling refiners, like Valero, Tesoro, and Petroplus INEOS; and technology providers and marketers, such as Dow, Shell Global Solutions, and Nexant. However, small and mid-sized traders

and wholesalers have struggled to survive in the credit crunch.

With vertically integrated oil companies retreating from their silo style operations, trade flows towards either end of those silos. The trade flows for crude, products and petrochemicals are in radical transition. Cargos are larger, go further and enter new markets every day.

growIng InternatIonal

InfluenCes

Globalisation and international trade could also explain industry shifts. Europe is now a diesel road fuel economy, whereas North America remains a gasoline market. China is growing at a phenomenal rate in demand terms, with the rest of Asia not far behind. Local added value plants in the Middle East and Asia have increased. Korean refined distillate is a more significant element of Med supply than would have been thought possible, let alone usual a few years ago. Radical thinking is needed to support this industry in these areas.

what we Can Do to help

SGS OGC Trade Alerts hope to address these industry changes and help fill the gaps in expertise. These Alerts are two or three-page summaries, which draw attention to items of interest within the trade. These range from new specifications for jet fuel, interesting court cases, environmental regulation on bunker fuels, import requirements such as REACH, or any other development that might expose our customers to unknown or changed risk.

Our trade alerts are issued as open, public domain documents, which draw out the key points for the concerned non-technical person. We hope that they prompt reviews, discussions, and updates as appropriate. The general reaction to our Trade Alerts has been positive and we hope to continue to support our customers with this service in the future.


Richard Taylor at [email protected]


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marIne seCtor:

International maritime transport

carried 90% of world trade in

2007, yet only contributed 2.7%

of global CO2 emissions making it

the most energy efficient method

of global mass transport. The

maritime sector is expected to

experience significant growth

for the future and even with

its enviable record on GHG

emissions, the International

Maritime Organisation (IMO), as a

part of its greenhouse gas study

in 2009, estimates that reductions

of between 10% and 50% in CO2

emissions can be achieved solely

through operational measures.

the energy effICIenCy operatIonal

InDICator (eeoI)

To assist ship owners and ship operators in reducing and monitoring GHG emissions the IMO has developed the Energy Efficiency Operational Indicator (EEOI), to establish a consistent approach for measuring energy efficiency on each voyage (or over a certain period of time) and to provide a benchmark for the operational performance evaluation of the ship or fleet.

the eeoI CalCulatIon anD Coverage

The Energy Efficiency Operational Indicator (EEOI) is expressed in grams of CO2 per tonne-mile and the formula allows comparison between individual ships. The formula for calculating EEOI is shown here:

aCtual fuel ConsumptIon InDex

=

fuel ConsumptIon In operatIon

÷

(Cargo onboarD × DIstanCe

travelleD)

The EEOI can be applied to almost all ships (new and existing), including passenger ships, however it cannot be applied to ships that are not engaged in transport work (e.g. service, research vessels, tug boats or FPSO) as it is the transport work that is the input value together with emissions (fuel consumed).

This formula provides operators and crews an objective way to monitor the effectiveness of any new measures applied in accordance with the Ship Energy Efficiency Management Plan (SEEMP).

In the SEEMP, measures include:

• Onboard Management Tool

> Improved voyage planning

> Speed and power optimisation

> Optimised ship handling

> Improved fleet management

> Improved cargo handling

> Onboard energy management

• Guidance on Best Practices

> Slower steaming

> Faster turnaround

> Special hull paints

> Heat recovery systems

the eeoI formula

The Energy Efficiency Operational Indicator (EEOI) is a simple formula that has become the benchmark indicator of energy-efficiency in marine transport vessels. The EEOI was a response to a 2009 study by the International Maritime Organisation (IMO), who determined that marine vessels could be running more efficiently and consuming less fuel, while producing less greenhouse gas. The EEOI was developed as a result of the adoption of the Energy Efficiency Design Index (EEDI), which set technical standards for improving the energy efficiency of certain categories of new ships, which will also lead to a reduction in CO2 emissions – approximately 25-30% reductions by 2030.


managIng ghg emIssIons Costs In shIppInanD

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G14.007

GENERATION

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DesIgn (new shIps)savIng of Co2 tonne-mIle CombIneD CombIneD

Concept, speed and capability 2% to 50%*

10% to 50%*

25% to 75%*

Hull and superstructure 2% to 50%

Power and propulsion systems 5% to 15%

Low-carbon fuels 5% to 15%**

Renewable energy 1% to 10%

Exhaust gas CO2 reduction 0%

operatIon (all shIps)

Fleet management, logistics and incentives

5% to 50%*10% to 50%*Voyage optimization 1% to 10%

Energy management 1% to 10%

* Reductions at this level would require reductions of operational speed. ** CO2 equivalent, based on the use of LNG

Source: Second IMO GHG Study 2009

Potential reductions of CO2 emissions by using existing technology and practices

CalCulatIng the eeoI value

A smaller EEOI value means a more energy efficient ship.

The basic expression for EEOI for a voyage is defined as:

equatIon 1 EEOI = Σj FCj x CFJ / mcargo x D

equatIon 2 Average EEOI =

Σj Σj (FCij x CFJ) / Σi (mcargo,i x D i)

(NB: Equation 2 does not give a simple average of EEOI among number of voyage i)

Where:

• j is the fuel type

• i is the voyage number

• FCi j is the mass of consumed fuel j at voyage i

• CFj is the fuel mass to CO2 mass conversion factor for fuel j

• mcargo is cargo carried (tonnes) or work done (number of TEU or passengers) or gross tonnes for passenger ships

• D is the distance in nautical miles corresponding to the cargo carried or work done

The unit of EEOI depends on the measurement of cargo carried or work done (e.g., tonnes):

• CO2/(tonnes • nautical miles)

• Tonnes CO2/(TEU • nautical miles)

• Tonnes CO2/(person • nautical miles)

sgs solutIons for eeoI

ImplementatIon

Although the calculation of the EEOI is fairly straightforward, making changes based on the results can be difficult. Some of the more effective measures are better fleet energy management and voyage optimisation; and changes in operations, such as the introduction of just in time planning or weather routing systems.

SGS specialises in assisting organisations in implementing energy control measures and we utilise EEOI so that you receive monitoring of the operational performance of an individual ship or an entire fleet. We advise on emissions measures, such as low-carbon fuel use or changing to renewable energy sources, and provide factual evidence through EEOI calculations.

SGS experts can also help you take full advantage during the design and testing of any future vessels you have planned – which will need to incorporate the new Energy Efficiency Design Index (EEDI) – in order to maximise the various design parameters for new vessels to include the best energy efficiency technologies.

SGS is on hand to help, making change processes as simple as possible and ensuring all benefits are maximised as a result.


David Springett at [email protected]

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workIng 24/7 to meet emanD thane laboratory In mumbaI

Since 1997, SGS India has operated

a petroleum and chemicals

laboratory at Thane (Mumbai).

Over recent years we have

responded to market demands in

the region by introducing state-of-

the-art technologies and software

packages to meet the growing

needs of our customers. The result?

Our laboratory has recently been

operating 24 hours a day to keep up

with the demand for its services.

Our investment in technologies and

personnel at the Thane laboratory

has enabled our team to deliver

the analytical services needed by

organisations in India.

state-of-the-art teChnologIes

With customers requiring an ever-growing list of laboratory testing solutions, SGS India has installed state-of-the-art software packages and developed a team of highly trained experts. This investment means that customers such as SUZLON Wind Energy, Mercedes Benz, General Motors, Diamler, SeaTech, Petronas, ExxonMobil, Bharat Petroleum, Rohm & Haas and Philips Carbon can now benefit from around the clock access to the most up-to-date testing facilities in the region. SGS’ accreditations by the National Accreditation Board for Testing and Calibration Laboratories (NABL), and by the “Indian Register of Shipping” reassure customers that all results from our fully equipped laboratory are without doubt reliable and the usual high standards expected from SGS. Our testing here includes:

• CCLAS Systems

• SOFIA Systems

• ICP-OES

• FTIR

• Trace Sulphur Analysers

• XRF

• PIONA

• Low-OX

• Auto Distillation

• Particle Counters

• BDV & Auto Viscometer

testIng programs for

the ogC InDustry

SGS’ Thane laboratory offers customers three different testing programs to cover the widest range of OGC testing requirements.

Petroleum Testing

Petroleum product testing includes:

• Naphtha

• Reformate/ Pygas

• Lubricating Oil

• Natural Gas/ LNG/LPG

• Gasoline

• Diesel

• Aviation fuel

• Asphalt and Biodiesel & Bunker Fuels

Additive blending for various types of additives to improve or correct the quality of the cargo or product includes:

• Bacterial contamination

• Cloud Point / CFPP improver & pour point

Used Oil Testing

Used oil testing includes:

• Physical and chemical characteristics of used lubricating oil to yield information on the wear of metals and oil

• Ferrography analysis

• Sampling with easy-to-use kits including return postage

• Oil Condition Monitoring with expert diagnosis and interpretation of results and their relationship

Petrochemicals Testing

Testing on chemical products includes:

• Acetates

• Alcohols

• Ethers

• Gases

• Glycols

• Hydrocarbon solvents and ketones

4

DDETERMINATION

9.0122


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Ships, which operate on different grades of Marine Bunker Fuel Oil depending on their engine type, need to take fuel onboard from various locations and suppliers around the globe. This opens them up to the risks associated with incompatible fuels. When one of our customers came to us for help in overcoming this problem, we devised a simple testing kit that we could train their employees to use onboard ship as an early warning system, highlighting any potential incompatibility or impurity issues. Known as the SGS Onboard IFO Stability Testing Kit, our solution is now available to all our customers and provides a quick and easy fuel assessment.

avoIDIng the Issues assoCIateD

wIth InCompatIble fuels

Although fuel comes with a specification, testing gives you more information about whether it is compatible with your existing stock. Early testing prevents you from taking

incompatible fuel into a vessel’s bunker tanks. If mixing does occur extracting or separating the resultant unstable split fuel is more difficult. Suspect tanks need to be unloaded, which also leaves you with the expense of disposal while purchasing replacement. You can manage the risk, protect your profits and limit costs by testing a fuel before accepting it onto your vessels.

the astm D4740 CleanlIness anD

CompatIbIlIty stanDarD

Our Onboard IFO Stability Test Kit gives you all the information the ASTM D4740 Cleanliness and Compatibility Standard delivers, onboard your vessels wherever they are in the world. These results provide guidance as to the compatibility of fuel oils and their suitability for your engines, helping your fleet run smoothly.

The results of this early-warning system are simple to understand. After a sample has been taken and analysed for both cleanliness and compatibility, the reference spot sheet is used to give two accurate spot ratings, providing separate results for cleanliness and compatibility. In each case a spot rating of three or higher indicates a potential issue with the fuel and acts as a warning that it should not be taken onboard without further testing.

traInIng to use the sgs onboarD

Ifo stabIlIty test kIt

The SGS Onboard IFO Stability tests are simple and the equipment is small, so the procedure can easily be taught anywhere. During the one-day training course we offer an SGS technician to demonstrate the test method. When all attendees are familiar with the concept, they carry out the test themselves several times to get an overall feel for the test and to develop an understanding of how to interpret the results obtained.

The ease and portability of the IFO Stability Test makes it an invaluable onboard analysis tool, and its one and a half hour turnaround time for results means your vessels can be filled quickly with clean and compatible fuel. If further laboratory assessment is needed, SGS is able to provide you with these analyses and answers.

The SGS Onboard IFO Stability Test helps you manage a successful, profitable marine fleet by avoiding breakdown and saving time and money.


Steve Aylieff at [email protected]

testIng marIne fuel CompatIbIlIty nboarD your essels

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VALIDATION

V47.867

ContInuous Improvement

InItIatIve at thane laboratory

As part of the on-going development of the Thane Laboratory, improving management techniques and leadership has always been a priority and a continuous improvement initiative has been put in place to achieve this. All SGS employees have been educated in

LEAN and 5S project methodologies. As a result, we have been able to improve management efficiency and customer-focused thinking.

As demand for our services has grown at a rate previously unseen by our laboratories in the region our expert employees have, with the new skills learnt, been able to answer this

increase in demand. Operations have been streamlined and our 24-hour service ensures we can meet our customers’ analytical requirements around the clock.


Scott Wythe at [email protected]

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SGS OGC, in partnership with

BP Oil International, recently

began research into sampling

through closed loading valves

with the new UKS&G equipment.

BP approached SGS – who had

already demonstrated its expertise

in sampling low-viscosity, clean

products, such as gasoline or

gasoil – for a solution to the

difficulties of sampling high

viscosity, badly stratified, products

such as fuel oil cargos blended on

ship from a number of individual

source tanks.

the neeD for hIgh

qualIty samplIng

Drawing high quality, representative samples, which meet the stringent requirements of the standards bodies has always been one of the biggest challenges facing the OGC industry. With the new UKS&G closed sampling equipment SGS aim to draw samples equal to open hatch sampling, and have these samples meet the minimum standards for API/ASTM/ISO/EI testing.

the neeD for hIgh

qualIty samplIng

In past investigations SGS had proposed various solutions and obtained promising results. However, a number of factors still needed to be overcome to make this new venture a success, including:

• Sample quality

• Ease of use

• Upper viscosity limit

• Portability

• Ease of sample transfer timings

• Operational and equipment limitations

further Challenges

– polICy Changes

One major hurdle is the recent policy changes affecting most major ship operators. These restrict the sampling of vessel cargo tanks via open sample hatches and make representative samples even harder to extract. This limits the ease of sampling very large non-homogenous cargos, which are becoming more commonplace every month. Cargos such as these further complicate the sampling process, as no matter how carefully a lab test is conducted it can only ever be as representative as the sample it is testing.

loseD samplIng proCesses that work harDer

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CALCULATION

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loseD samplIng proCesses that work harDer

Specifically, problems occur in:

• Very large cargos of fuel oil, made up from multiple individual source tanks, each of which has a separate quality and no mixers

• The move to blend to a given specification on board from multiple grades of oil, where the success is inherently reliant on samples being drawn from tanks – before and after the blending activity – that are representative of the components and the resultant mix

lImIteD In DrawIng samples

To deal with these issues SGS has been increasingly limited to drawing samples through a vessels closed system. This has to be done via the vapour locks, however the equipment from manufacturers of vapour lock systems was created for measurement and inspection industry standards, not as equipment designed for sampling.

The issue of fit-for-purpose in current equipment design is the reason for API MPMS Chapter 17.11/EI HM 52 Measurement and sampling of cargoes on board tank vessels using closed and restricted equipment, which states:

“Measurement accuracy and representative sampling are essential to the sale, purchase and handling of bulk liquids. Accurate measurements and representative sampling require the use of standardized equipment and procedures. Government and regulatory agencies worldwide are imposing safety and environmental regulations that prohibit tank vessel operations from releasing hydrocarbons into the atmosphere. This has resulted in the restriction and, in some cases, the prohibition of traditional methods of obtaining cargo measurements and samples. Consequently, methods and technologies are now being developed and used that allow cargo measurements and samples to be taken with no vapor release (closed) or with very limited vapor release (restricted). Shipboard sampling at the load or discharge port is frequently required to test the quality of the cargo against contract and also to determine if any cargo quality degradation has occurred during the shipping process. Shipboard sampling may also be required prior to cargo acceptance and custody transfer, particularly where shipboard blending has taken place. It should be noted that when taking vessel samples it may not be possible to obtain representative

samples of nonhomogenous cargos due to the inherent nature of the cargo and the sampling restrictions.”

new researCh at the port

of rotterDam

SGS carried out the research into sampling through closed loading valves at the Rotterdam Port. A total of six vessels were included in the testing and wherever it was possible samples were taken with both open hatch U.M.L and closed sampling equipment. A comparison was conducted on a tank-by-tank basis of the analysis, for density, viscosity and sulphur.

results equal to open

hatCh samplIng

On the completion of all testing, the SGS and BP research collaboration clearly established that the new style closed sampling equipment from UKS&G is equal in accuracy, effectiveness, and to the same criteria as open hatch sampling methods.


Robert Collins at [email protected]

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the ChallengIng task: eDuCIng Cost anD maxImIsIng returns

18

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With the need to keep heavy

equipment well maintained, SGS

Used Oil and Lubricant Analysis

offers independent testing

diagnosis and regular monitoring

to maximise the lifecycles of your

lubricants and your machinery.

fast, aCCurate anD InDepenDent

Staying informed of the condition and performance of individual links in the production chain is essential to avoid the costs of downtime and failures. With access to a fast, accurate and independent view of what is happening inside your power generators, gearboxes, compressors, turbines, transformers, hydraulic systems and other critical machinery – you can pro-actively extend productivity and increase profitability of operations.

InDustry anD Customers

SGS provides used oil and lubricant testing to benefit many different industries and customers, including:

• Transport: marine, road, rail, aviation

• Offshore Oil Industry: rigs, platforms

• Construction: highway construction, major earth moving

• Mining: deep and open cast

• Energy: fossil fuel, nuclear, renewable sources

• Military: army, navy, airforce

• General Industry: utilities, engineering, manufacturing, process industries and others

onsIte testIng – remote DIagnosIs

Getting access to lubricant testing services where you need them most – in the field – is one of the biggest challenges in used oil and lubricant testing. SGS overcomes this in three ways: the option of a modular remote laboratory with installed capabilities for the basic analysis on engines, transmission or hydraulic oils; we can provide you with self-test kits that can be mailed back to our laboratories network; or we can undertake handling of your sampling needs onsite.

fIxeD lab network

Once the samples are analysed, SGS expert master mechanics and mechanical engineers complete an in-depth diagnosis. They take into consideration the factors relating to your unique operational environment. Any results are systematically compared to previous results for your samples and to our database. To complete the report picture, SGS makes sure to keep close relationships with customers to arrive at an accurate and true diagnosis of the condition of the oil and lubricants.

over 20 000 tests, on 1 000 samples,

every Day

SGS laboratories are equipped with modern automation and robotic systems so you can be sure, even when we report daily on more than 1 000 used lubricant samples, and perform over 20 000 individual tests, the routine 24-48 hour turnaround time is always met. For occasional urgent samples we can offer fast track service.

Making use of the latest techniques for analysing lubricating oils, grease and hydraulic fluids, we test the physical and chemical characteristics of the oil, and provide information on both the oil and the wear of metals. This allows the detection of changes in the concentrations and ensures the earliest warning on any potential risk of failure. If there appears a risk, SGS notifies you of the results immediately via phone or fax.

DetaIleD reportIng

An extensive report, detailing a complete history of the samples and data, from each piece of equipment, allows viewing of the whole spectrum of statistics. This gives you the opportunity to determine the root cause for any equipment failures and pro-actively take precautions if similar data present themselves in related equipment.

The reporting is available in 12 languages to meet the needs of a global customer base and our expert diagnosticians answer any questions you may have if further clarification of the results is required.

Reports can also be accessed from SGS via email or through our web-based reporting facility.

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reDuCeD operatIng Costs

SGS Used Oil and Lubricant Analysis provides an independent solution in helping you maximise production through scheduling maintenance and downtime, allowing your business to reduce operating costs and downtime related to equipment failures.

For more information, please contact Rachid Boubetra at [email protected]

amerICa europe – ame asIa

23 Laboratories in 19 Countries

Projects in 2012

8 laboratories

150 000 samples

9 laboratories

400 000 samples

6 laboratories

110 000 samples

sgs useD oIl laboratorIes anD projeCts

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The monitoring of contaminants

is a top priority in the upstream

industry. Methanol monitoring is

brought onsite using reliable, fast,

and easy-to-use methanol analysis

allowing immediate quantification.

hazarDs of hyDrate formatIon

Recovery of crude oil from deepwater wells can be difficult and dangerous, particularly when the crude oil contains hydrates. Hydrates are clathrate compounds that crystallise at the low temperatures and high pressures characteristic of the ocean floor environment. If hydrates crystallise in the wellbore, the flow of the crude oil can be impeded or stopped, resulting in low production and hazardous conditions on the platform.

methanol Improves flow

assuranCe, but DegraDes

the proDuCt

To inhibit hydrate crystal formation, methanol is artificially introduced during the early life of a deepwater well or in the case of a well shut in. The level of methanol present in produced fluids however can greatly devalue the oil. If there is an excessive amount of methanol in crude, refineries will greatly undervalue it, or even reject the purchase.

portable anD aCCurate

methanol analysIs

In order to ensure real-time monitoring, the SGS MIC (Methanol in Crude) Kit is designed for the onsite quantification of methanol in produced oilfield fluids. The kit was created to test oil and produced water samples from oil wells and can be modified to include the measuring of methanol in produced natural gas. The analysis takes 30 minutes to perform and can detect methanol to 5 ppm with an accuracy of over 90%. The portability, fast analysis time, and accuracy of the SGS MIC Kit allow fixed lab-quality analyses to be brought directly to the field. Our services give customers the opportunity to isolate crudes containing

high methanol into a separate container where it can be blended at low levels into the cleaner crude production. This allows a customer to make real-time decisions before the contamination affects their production.

the next step In

automateD DeteCtIon

In addition to the SGS MIC Kit, the SGS Upstream Services Research Team is developing an automated system to perform the analysis. The system is based on a sequential injection analysis where samples and reagents are introduced to a device called Lab-On-Valve (LOV). With precision controlled time events, different amounts of samples and reagents are delivered by syringe pumps and mixed together in a reaction holding coil. After reaction is completed, the products formed in the holding coil are delivered to a flow through cell connected by fibre optic cables and real-time data is sent to the computer for processing. The whole process will be automated and an operator can just load the samples in the vials and press a start button from the software. This device is still under development but we expect to roll out the completed system soon.

sgs aDDresses the Issues wIth

forwarD thInkIng solutIons

Industrial technology moves forward quickly, and our systems are state-of-the-art. We address real problems in the OGC industry with viable, efficient solutions, so our customers are never kept waiting on results.


Graham Mullings at

[email protected]

onItorIng methanol

13

M26.982

MAXIMISATION


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In the

Investor DaysSGS recently held two well-

received Investor Days in Toronto.

The investor events allowed us to

highlight SGS’ “superior positioning

within an extremely attractive

industry” (Deutsche Bank).

on traCk for the sgs 2014

growth plan

SGS’ focus on moving towards value-added services, such as, upstream/inland testing and integrated solutions services, with more cross selling of services to existing customers, means we are staying on track for our future growth targets. This long-term strategy, and our global network, positions us to “benefit from (…) secular trends of outsourcing, globalization and increasing regulations [and] deliver profitable growth going forward.” (Deutsche Bank).

On Site, In Action

SGS’ push on upstream, consulting and R&D related services was further highlighted with visits to flagship facilities at Lakefield, Mississauga and SGS Oilsands. The site trips demonstrated first-hand the way in which SGS provides a “complete mine cycle offering, with the more traditional geochemistry lab work being complemented by upstream discovery related services and also full process development services” (Exane).

ogC: new growth vs

traDItIonal servICes

SGS’ strategy of moving up the value chain in all business lines included identifying new growth areas in the SGS Oil, Gas & Chemicals division. These

areas include: sample automation; offshore site analysis; lab staff outsourcing; ARQS; down hole; drilling fluid; shale gas; biofuels & PVT testing; and metering & calibration. A move away from labour-intensive, commodity activities, to high-end professional services, is seen by investors as; “a good way to support top-line growth and push margins higher, which lends further credence to the 2014 plan” (Exane).

Plant & Terminal Operations (PTO)

The North American regional VP Brian Haymon elaborated on Plant and Terminal Operations (PTO), as part of the SGS business line since the acquisition of US-based Petroleum Services Corporation (PSC) in 2004. As a fairly recent acquisition, most of the PTO business still remains in the US and Canada, with sales in 2010 totaling US$160m.

The division is unusual in that it is an operator service, rather than a testing or inspecting service, and offers skilled individuals who operate and supervise the transfer of oil and chemicals at terminals onto water and rail transport.

Specific services include:

• Barge loading and unloading: PSC is the oldest and largest barge loading and unloading service in the US (loading and unloading c.36 000 barges p.a.)

• Rail and truck loading and unloading (c.300 000 railcars and trucks p.a. at more than 50 plant sites)

• Rail switching operations

• Marine dock operations (75 major marine facilities in North America)

• Warehouse operations (mostly in plastics, fertilisers and rubber products)

• Tank farm and pipeline operations (pumping) and underground storage operations (liquefied gases)

Growth Opportunities

Within the OGC division, PTO is the least capital-intensive business and has “low margin volatility as costs are closely related to revenue” (Deutsche Bank). New growth for PTO outsourcing should arise as companies focus on core functions and cost control. The major expansion projects announced in the US chemicals industry should present opportunities as companies seek upsourcing. Already, “SGS has more than doubled its North American PTO business from USD55m in 2003 to an estimated USD130m in 2011 and targets revenue of USD170m by 2014” (Deutsche Bank).

posItIve outlook towarDs 2014

The two days in Toronto proved well-received and built on SGS’ reputation for openness and high-level disclosure to investors ensuring confidence in all business lines. Indeed, SGS is seen as remaining “best in class” (UBS) in explaining it’s complex and diverse mix of businesses to the investor community.


Carole Streng at [email protected]

15

O30.974

OPERATION

7

G14.007

GENERATION

3

C6.941

CALCULATION


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www.sgs.Com

CONTENTSINSPIRED SOLUTIONS IN THE DIVERSE OGC BUSINESS SECTORKEEPING SAFE IN THE PRESENCE OF HYDROGEN SULPHIDETRADE ALERTS HELPING YOU ADAPT TO CHANGEMARINE SECTOR: MANAGING GHG EMISSIONS AND COSTS IN SHIPPINGWORKING 24/7 TO MEET DEMAND THANE LABORATORY IN MUMBAITESTING MARINE FUEL COMPTABILITY ONBOARD YOUR VESSELSCLOSED SAMPLING PROCESSES THAT WORK HARDERTHE CHALLENGING TASK: REDUCING COST AND MAXIMISING RETURNSMONITORING METHANOLOGC IN THE INVESTOR DAYS

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