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Production Accounting: Cornerstone for Pacesetter MES Architecture Patrick Truesdale Senior Consultant

Sidi Mohamed DRISSI SMAÏLI Director MIS Department

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Agenda

l Business Challenge l Solution Description l Case Studies l Future Plans

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Global IT Business Integration

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RealTime Business Process

DCS, Instrumentation, Analyzers, RTDB (PI), Bar Coders, Inventory Levels, Gate Entry Security, Process Control,

Environmental Monitoring Stations, Lab Sample Data Entry, Manual Entry

Real Time Data Acquisition

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Operation Business Process Applications

Logistics, Operations, LIMS, EDMS, Balancing/Data Reconciliation, Production Accounting and Loss, Maintenance Management System, Operating Expense, Security, Supply and Distribution, Planning and Scheduling, Operations Monitoring,

Environmental, and Quality Assurance

Operations Management

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Business Process Applications

Global Management, Accounting and Financials, Administration Management, Purchasing, Materials Management, SCM, Asset

Management, Invoicing and Cash Flow Management, Communication and Technology, Key Performance Indices (KPI),

Government and Regulatory Reporting

Business Management

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Typical Refinery MES Architecture

Production Accounting •Receipts/Shipments

•Stock •Yields •Utilities

Consistent Consistent Economics Economics

& & Process Process Models Models

& & Data Data

CORPORATE ACCOUNTING CORPORATE ACCOUNTING CORPORATE PLANNING CORPORATE PLANNING

Maintenance Maintenance Planning Planning

Production Planning Production Planning

Scheduling Scheduling

Process Process Simulation Simulation

Operations Orders Operations Orders

Target Setting Target Setting

Asset Utilization Asset Utilization

Profitability Profitability

KPI KPI’ ’s s

Quality Assurance Quality Assurance

Process / Equipment Process / Equipment Monitoring Monitoring

ADVANCED PROCESS ADVANCED PROCESS CONTROL CONTROL

PRODUCT HANDLING PRODUCT HANDLING /STORAGE CONTROL /STORAGE CONTROL DCS DCS

Business Business Information Information System (BIS) System (BIS)

Production Production Management Management System (MES) System (MES)

Real Real Time Time System System

SCM SCM

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Supply Chain Management – Logical Architecture

Business Systems Business Systems ERP ERP

Headquarters Headquarters

Logistics Database Logistics Database

Plant Database Plant Database

Production Balance /Exchange

Business Financial

Accounting

Sales

• Marketing & Sales • Feedstock Purchasing • Trading •Supply Operations

Feedstock/Product Distribution & Transportation

Planning & Scheduling

Performance Metrics

Operation Monitoring

Production Accounting

Supply Chain Management Supply Chain Management Database Database

3 rd Party Exchanges & Processing

Customers

Inventory Management

Marketing Forecast (Demands)

Production

Feedstock Planning

Terminals Database Terminals Database

Inventory Production Accounting

Receipts Shipments

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Where are the Losses? – Supply Chain

Primary Depots

Refinery Terminals

Refinery Depots

Retail Stations

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Types of Errors

Gross Substitution of redundant value.

Bias

Substitution of redundant value.

Random Treatment using a mathematical algorithm.

Description Detection Correction Errors

Error occurring without any probability.

Error occurring without any probability but may be a function of time or temperature.

Error occurring with statistical distribution around mean, μ, and a standard deviation, σ

Values exceeding +/ 3 standard deviation, σ.

Three or more values exceeding +/1.5 standard deviation, σ or 7 continuous values that are on either side of the mean, µ.

Imbalances that remain after correction of gross and bias errors.

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Impact of Refinery Losses Typical

l With poor instrumentation and procedures: u 1.5 2.5% Mass

l With average instrumentation and procedures: u 0.7 – 1.5% Mass

l With good instrumentation and procedures: u < 0.5% Mass

l Good information enhances all business functions: u Planning and Scheduling u Process Operations u Management Decision

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Industry Relative Benefits

Benefits(M$/year) Stand Alone Application Prod Data Integration ERP Integration

Health,safety and environment

Production Management

Planning optimization

0 0.5 1 1.5 2 2.5 3 3.5 4

Material Management

Financial/Accounting

Laboratory(LIMS)

Project/design engineering

Corporate planning

Document Management

Maintenance Management

Performance Monitoring

Operations scheduling

52%

37%

11%

Courtesy: “Hydrocarbon Processing”

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Benefit Potential MM$/Yr

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Hydrocarbon Losses

Asset Utilization

Planning & Scheduling

Saleable Yield

Productivity

Crude Selection

EII

Inventory Reduction

Quality Giveaway

HSE

Mechanical Reliability

Chemical & Catalyst

$1.35/bbl total For ca 160,000 BPD

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Agenda


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RTDB (PI)

Relational Data Base

PADR Application Scope

Stock, Yield, and Utilities,

Unreconciled Reports

Receipts/Shipments

Business Processes

Analyst

Trial Balances

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RTDB (PI)





Receipts/Shipments


Reconciled Reports

Business Processes Analyst

Trial Balances Reconciliation

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RTDB (PI)



Tank Composition (Crude and Blends)

KPI Reporting



Receipts/Shipments


Reconciled Reports

Business Processes Analyst

Trial Balances Reconciliation Engineers Planners

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Balances: Production Accounting Results

Type of Balances § Volume § Mass § Tank § Product § Fuel gas/Fuel Oil § Bitumen/Lube/Coke/Sulfur § H2 § Steam § Environmental (NO, SO, Greenhouse)

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PADR Business Process Flow

Period End Cutoff Data Period End Cutoff Data

Gross Error Detection and Diagnostics

Gross Error Detection and Diagnostics

Trial Balancing Trial

Balancing Resolution or Reconciliation Resolution or Reconciliation Checking Checking

Modifications Adjustments Modifications Adjustments Refinery

Configuration Models

Refinery Configuration

Models

Measurements Movements Lab Data

Meter Tickets Surveyor Documents

Tank Inventories Blends

Measurements Movements Lab Data

Meter Tickets Surveyor Documents

Tank Inventories Blends

Results Generation Results

Generation

Manual Input

Automatic Data Collection

Reconciled Balances, Yield, Loss and Inventory

Reporting

Reconciled Balances, Yield, Loss and Inventory

Reporting

Production Management Data Base

Production Management Data Base

Integrate with Other Systems

(SCM, SAP, LP, etc)

Integrate with Other Systems

(SCM, SAP, LP, etc)

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Gross Margin versus Weight Loss

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Jan01

Feb01

Mar01

Apr01

May01

Jun01

Jul01

Aug01

Sep01

Oct01

Nov01

Dec01

Jan02

Feb02

Mar02

Apr02

Month

Wt %

Weigh

t Los

s

0

50

100

150

200

250

Gross Margin in k$

Weight Loss Gross Margin

KPIs Reporting

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Benefit of Daily Plan vs Actual Information

Where did it happen? • Models • Process • Data Quality

Before (Monthly)

Plan/Schedule

1 2 3 4 5 6 7 8 9 10 11 12 13 14 Time (Weeks)

Actual Operation

• Capacity

• Utilization

• Production rate

• Quality

• Energy

• Yield

• Reliability

• Environmental

What went right??

What went wrong??

After (Daily)

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PADR Reporting

Reduce Hydrocarbon Loss by 0.5%: Prize = 56,000,000 BPY x 0.5% Loss reduction x 50% capture x $62.50/Bbl = $8,750,000 /year

Cornerstone for KPIs reports: • Actual Unit Balance versus Plan • Unit Constraint Cost Versus Plan • Energy Intensity Index • Clean Product Yield Growth • Qualities Giveaway Cost

Must find daily discrepancies/data problems that cause imbalance

PADR must achieve plant wide balance

Delta Economics$/day Plan Reconciled Product Measured

37 174 210 1 37 72 35

Gross Margin :73 1,502 586 844 72

1,429 1,047 382

8,650 8,687 8,603 Production 3,890 4,400 360

6,350 2,300

83 Gain/ Loss

3,716 3,584 ULSD 4,610 4,672 PUL 361 347 FUEL GAS

8,687 8,686 Total Feed : 6,422 6,399 Crude B 2,265 2,287 Crude A

Plant Wide Balance Actual versus Plan 11Dec2006

8,650

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Agenda


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Case Studies

1. North African Refinery 2. Asia Pacific Refinery 3. Supply Chain Management

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Case Studies


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Case Study 1: SAMIR

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Case Study 1: SAMIR Configuration

Crude distillation Lubes oil Units

Merox LPG

Merox LSR

Gasoline HDT/Reforming

Kerosene Merox/HDS

Gas oil HDS

LPG Unit

Gasoline Blending

Propane Butane Regular Super Unleaded Jet A1 Gasoil Fuel oil

Crude oil storage Sidi Kacem

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Case Study 1: SAMIR Global Business Process

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Case Study 1: SAMIR Global Business Process

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Case Studies


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Case Study 2: PETRONAS (Melaka Refinery)

l 200,000 BPD Refinery in Melaka, Malaysia produces: u LPG u Petrochemical Naphtha u Motor Gasoline u Dual Purpose Kerosene u Diesel u Low Sulfur Waxy Residue u Fuel Oil u Lubricant Base Stocks u BTX

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Case Study 2: PETRONAS Architecture

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Case Study 2: PETRONAS Benefits

l All data collected in real time from source u Flow rates – from DCS u Transfer Data – from OAS u Density – from LIMS

l Reduced Oil Accounting work by ca. 50% l Insure financial security

u PISecurity u PIAudit Trails

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Case Studies


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Case Study 3: Refining Company SCM

l REFINERY • Movement Tracking • Process Unit Balances • Fuel and H2 Balances • Receipt and Shipment Accounting • Inventory Balances • Oil Loss Accounting • Refinery Planning and Scheduling Models

l SUPPLY AND DISTRIBUTION • Movement Tracking • Receipt and Shipment Accounting • Inventory Balances • Oil Loss Accounting • S&D Models

COMPANY WIDE • Integrated Production Accounting

• Foundation for Supply Chain Management

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Case Study 3: Refinery Company Region

Area 6 Area 5

Area 4

South

Area 8

Area 3

Area 2

Refinery Area 1

Area 9 Area 11

East

Area 10

North

= Distribution Terminal

= Depot

Area 7

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Case Study 3: Refinery Company Losses

l Poor instrumentation: u 1.5 2.5% Mass

l Poor information affects other business functions: u Planning and Scheduling u Process Operations u Management Decision u Process Engineering u Marketing

l Increased costs

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Case Study 3: Refinery CompanyPotential Benefits

Note: Benefit estimates for 12 MM ton/yr refinery – y depots (truck and rail Crude = $210/ton

Benefit Benefit US$ pa

Refinery Oil Loss

Planning Improvement

Refinery Optimization

Terminal Depots and Retail Stations Oil Loss

Operating Costs

SCM Inventory

SCMO Total

15,120,000

3,000,000

12,000,000

380,000

900,000

2,050,000

510,000

33,960,000

Area

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Case Study 3: Refinery Company Losses

Range Estimate • Custody transfer (crude receipt,

water %, shipmentsrailcar and tank trucks)

0.35 to 0.55 0.45

• Fuel and H2 consumption understated– not real oil loss

0.85 to 1.05 0.95

• Flare, oil in effluent, evaporation, BS&W loss, vents and leaks, FCC coke make calculation

0.45 to 0.65 0.55

TOTAL 1.65 to 2.25 1.95

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Case Study 3: Refinery Benefit Calculation

l Estimate loss = 1.95% l Custody Transfer Loss = 0.45% l Flare, FCC Coke, Other Loss = 0.55% l Apparent (understated fuel/H2 consumption) = 0.95% l Improvement

u Achievable Goal = 0.4% u Delta = (0.45%+0.55%0.4% = 0.6%) u 0.6% x 12MM T/yr x 210US$/T = $15,120,000/yr

l Refinery optimization u 0.25 $/T x 12MM T/yr = $3,000,000/yr

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Case Study 3: Depots/Retail Stations Benefits

l Weight Percent Oil Loss: u Gasoline: 0.12% u Diesel: 0.15%

l Improvement: 0.20%: l Benefit:

u 0.20% x 1,024,800 M3/yr x 0.8 x $230/t

l Operating cost reduction: u Closure of 3 more depots u Average cost = $200K to $400K/yr u 3 x $300K/yr = $900,000/yr savings

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Case Study 3: Supply Chain Benefits

l Inventory Reduction: u Refinery 5060% Working Storage u Depots 4065% Working Storage

l Target: u 3545% or 10% reduction u Refinery = 2,066,000M3/Depots = 620,000M3 u Carrying Costs = 8% u Onetime Inventory savings ($25,730,000) u Plus annual reduced carrying costs ($2,050,000)

l Supply Chain Optimization: u 0.50$/ton X 1,024,000M3/yr x 0.8 M3/Ton = $510,000/year

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Case Study 3: Benefits – Business Process

As is now Target Now +5 Yr Best achievable

OPEX

More test runs,

simulations & “what ifs”

Actual comparisons,

Deviation analysis, Quantity & quality

in $

Supply chain with no $ disconnects

Best Practice

Gross product value

Feedstock costs

Business Process Plan, Operate, Measure, Analyse, Improve

Optimum crude selection and runs More

profitable plan

Push the envelope

Improve Operations Excellence

Timely meetings, process

actions, and $ outputs

Simplify learning from performance

and gaps

Process units, and constraints tuned to

models.

Best Practice

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Case Study 3: Intangible Benefits

l Inaccurate measurements highlighted and selectively corrected

l Inconsistent analyses identified l Validated and reconciled data

available to all l Reliable, statistically correct

production data available daily

l Early detection of losses and inefficiencies

l Instills systematic approach to optimization

l Improvements statistically proven

l Data can be integrated with ERP

l Accurate data available for LP model

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Agenda


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Future Plans

l Provide Front end Studies and After Project support services u Development of Business Case u Stock loss surveys u Analysis of measurement systems/procedures (compliance with SOX) u Post audit of benefit achieved u Measurement system support/maintenance

l Provide Total Solution/worldwide l Follow Industry Integration Standards l Other Industries

u Terminals and depots u Petrochemical u Oil and gas u Power and water u Metals and Mining

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• ASSET OPTIMISATION Machinery Health & Asset Management

• BROOKS Flow Measurement

• FISHER CONTROLS Control Valves and Regulators

• MICROMOTION Coriolis Mass Flow

• PROCESS SYSTEMS & SOLUTIONS Process Automation Systems

• POWER & WATER SOLUTIONS Power, Water and Waste Water Control Systems

• ROSEMOUNT Pressure and Temperature Transmitters, Flow and Level Instruments

• ROSEMOUNT ANALYTICAL Gas and Liquid Analysis

Process Management

23%

Process Management

23% Appliance &

Tools 23%

Network Power 17%

Climate Technologies

19% Industrial Automation

18%

Emerson’s Total Solution Capability Emerson’s Total Solution Capability

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Plant Topology Configuration

Third Party Access

Tank Gauging System

Laboratory System

Production Accounting

Blend Control and Optimization

Terminal Management

Inventory Management

Master Data Administration

Movement Automation

Realtime data

Transactional data

Reference data

Control System

Common Data Architecture

Order Management

Recipe Management

Business Applications (ERP)

Emerson’s Total Solution – SmartProcess™ Emerson’s Total Solution – SmartProcess™

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Albany Atlanta

Beaumont Boston Charlotte Chicago Cincinnati Cleveland Denver Detroit Houston

Indianapolis Kansas City Los Angeles Louisville

Marshalltown Memphis

Minneapolis New Orleans New York

Philadelphia Pittsburgh Richmond St. Louis

Salt Lake City San Francisco

Tampa Tulsa Wichita

Dhahran Jedda`

LaHabra

Austin

Sao Paulo

Buenos Aires

Haan Leicester

Paris Minneapolis

Mexico City

Santiago

Bombay Johannesburg

Madrid

Singapore

Melbourne

Bangkok

Vienna

Seoul

Moscow

Alleroed Karlstadt Rijswijk

Jakarta

Kuala Lumpur

Calgary Cambridge Edmonton London

Montreal Regina Toronto

Vancouver Winnipeg

San Juan

Bogota

Manila

Shanghai Taipei

Milano

Brussels Kiev

Dubai

Lagos

Cairo

Kuwait City

Tokyo

Auckland Caracas

Rome

Cincinnati Kobe

Karlstadt

PorsgrunnVantaa

Emerson’s Total Solution Worldwide Emerson’s Total Solution Worldwide

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Emerson’s Total Solution Structure

TAS

PAS

Business Layer

Regulatory Control

Movement Automation

Gantry Automation

Movement Control

Gantry Control

Order Mngt/Prod. Accounting

Basic Control

Business Layer

MES Layer

Control Layer

Field Layer Field Layer Field

Overlap

ERP

ISA S95