Fuel blending: The key to unlocking your refinery’s cash register

Many refineries fail to give their blending area the attention it deserves. But it is worth reevaluating this attitude, since fuel blending is essentially the “cash register” of the business. Because this area is where profits can be made or lost, it should receive the investments necessary to be efficient and flexible, and able to quickly accommodate changes in product blend and the shipping schedule, for example. Plus, the continuing evolution toward more stringent product specifications places increasing pressure on the blending area to “get it right the first time.”

Change the traditional way of holding inventory 
Successful refinery managers are making headway in the industry by adopting inline blending to eliminate expenses around building and maintaining tanks and save millions in working capital by no longer holding excessive inventory. This approach is currently used by industry leaders. 

Valero Energy Corporation took advantage of this business philosophy by implementing a new control system and single-blend optimization system that makes it possible to blend gasoline directly into tanker ships for delivery. This new approach not only saved the Pembroke refinery millions by reducing tankage inventory, but also significantly reduced Valero’s product giveaway costs.

Other refineries willing to make changes to reduce or eliminate the need for tankage will dramatically reduce their working capital costs as well. To follow in the footsteps of the Top Quartile performers, you must enhance your refinery’s reliability and efficiency, and always operate your process units correctly to eliminate process upsets or unexpected downtime. This will make your refinery a strong candidate for inline blending certification. 

             Pembroke refinery saved millions
             by reducing tankage inventory and
             reducing Valero’s product giveaways.

Automation upgrades offer strong ROI Regardless of where you are on the spectrum for inline blending, it’s worth taking a hard look at blending improvements you can make within your geographic footprint to eliminate inefficiencies. For instance, in the U.S. market alone, where refiners lose about $3 billion each year due to quality giveaway, there are many cost savings and high ROI opportunities to be gained from the right modernization strategy. By upgrading your blender with advanced automation technologies, you’ll improve profits by minimizing product giveaway and excess touch-ups, as well as more easily maintain regulatory compliance. And, when you take advantage of the right inline blending analyzer, you can improve your quality testing processes, saving time and cost.  Plus, enhanced automation, monitoring technology, and more precise control is the most economical way to respond to current blending complexity trends requiring blenders to process additional components to meet more stringent product specifications and handle increased throughput.  

So, whether you are on your way to becoming a Top Quartile performer preparing for inline blending certification or upgrading your existing operation, there are many options for ensuring your refinery’s cash register has the flexibility and agility you need to meet market demand and take advantage of profitable opportunities.