Product Giveaways

[ghamsa]

We have 2 Fractionation columns these columns are:
1) DePropanizer (DeC3) to produce liquid Propane product (C3).
2) DeButanizer (DeC4) to produce liquid Butane product (C4).

We are producing these products (C3 & C4) as per certain products specifications expressed in volumetric percentages, for example C4 component in the C3 product must not be more than 4 volume%.

With that in mind, we also need to increase the product revenues by minimizing product giveaways by minimizing the more valuable component in the product or vise versa but within the products spec.

At the beginning of each month, we receive products prices expressed in mass basis for example:
1) C3 product is $xx/Metric tone
2) C4 product is $yy/Metric tone

Based on the above C3 & C4 product prices, we go ahead and adjust the DeC3 and DeC4 fractionation operating targets meaning when to maximize or minimize, for example, C3 component in C4 product or C4 component in C3 product.

Please note the following points:
1) Due to density difference, C3 & C4 product prices in volumetric basis ($x/bbl) are always OPPISITE of C3 & C4 product prices on mass basis ($x/Metric tone).

2) DeC3 and DeC4 columns are being operated and controlled on volume basis, for example C4 component in C4 product is being controlled at 4 volume% in C3 product. Also, C3 product to storage is measured in MBD (thousands bbl per day).

THE QUESTION:
If we are operating the columns on volumetric basis and, at the same time, adjusting the columns fractionation operating targets based on C3/C4 products prices that expressed in mass basis, $x/Metric ton, is this the right way of minimizing product giveaways?

Thx all

 

[saxon]

ghamsa, I don't know? It's difficult to produce "apples" with an "oranges" spec. Either convert the "apples" to the "oranges" spec. (difficult since the process instrumentation is set up for apples); or convert the "oranges" spec. to an "apples" spec. (convert $/T to $/vol.). As for your storage, convert to std. vol./day. This makes everything apples and not in "apples, oranges and pears".

Uniformity of units leads to understanding, unless obscurity is needed for security reasons.

Hope this helps.
saxon

 

[ghamsa]

Saxon:

Firstly, thanks for your contribution.

Secondly, in the plant where I work, Operations have been adjusting the Fractionation operting targets based on LPG products mass basis ($x/Metric ton) for more than 20 years.

Personlly, I agree LPG prices in $x/bbl must be used; this is to keep unit consistency since the Fractionation columns are operated in volume bais (vol%)

Could it be they were wrong all these years??????? and the Plant is maximizing the products giveaways!!!

 

[25362]

I pressume that only in the US pricing of those hydrocarbons is on a volume basis. The rest of the world uses $/ton for trading them.

Platt's uses the following conversion factors from cts/gal to $/ton. For C3:5.21, for n-C4:4.53, and for i-C4:4.69.

Pricing, as you rightly say, should enter the control algorithms in operating costs. Then, why couldn't factors as above be incorporated all along ?

 

[ghamsa]

Thanks for writing back, 25362

We use $/ton for selling our C3 & C4 finished products.

Currently, we are testing new control algorithms which use the pricing to control the operating cost.

THE CONCERN IS:

If the the process instrumentation & control are already set up in volume basis and we are charging the C3/C4 product to the customers on mass basis ($/ton)

THE QUESTION: Should we use product pricing in $/ton OR $/bbl to operate the fractionation columns???

 

[25362]

Follow advice by saxon.

 

[ghamsa]

I searched this subject and found that it was CORRECT to use the mass pricing, although our instrumentation on the columns was set up in volume basis. The reason for this believes was based on the fact that we were selling our products to the customers using MASS PRICING NOT VOLUME PRICINIIG.
To illustrate this point further, we use volume for example a barrel as a mean or a tool to get more MASS out of the column that is all. AND at the end of the day we get paid for the mass we are making NOT the barrles we use get this mass.

Is this right??

 

[TD2K]

I'm not sure I could simply say yes or no because I suspect it depends on the change in pricing versus the change in density as you shift material from one product to another.

Why not just run various cases for different amounts of C3 and C4 in the product streams, put the stream flows in a spreadsheet and see what the final $ return is. I would think you'll pretty quickly see the trends.