Contamination 2

In the previous post, I said I couldn’t recall anything like the recent contamination incident at Transneft in the past twenty-plus years. I wasn’t exaggerating, it turns out – according to Vitaly Yermakov of the Oxford Institute for Energy Studies (OIES):

The Druzhba pipeline contamination with organic chlorides became the most serious interruption of oil supplies in the 55-year history of oil trade on this key route… [T]he scale of the incident is such that it has had a profound impact on the whole value chain, from production facilities in Russia to refineries in Central Europe…

The exact costs for all the affected parties are yet to be determined… Russia’s reputation as a reliable supplier of energy to Europe has suffered, but whether it is going to make European refiners diversify away from Russian oil supplies via Druzhba in the future is an open question.

The contaminant, according to Yermakov, was dichloroethane, a term applicable to two isomers, CH3CHCl3 and CH2ClCH2Cl. It seems that I underestimated the compound’s concentration dramatically, assuming wrongly that a 2-3 ppm would be dangerous enough. Apparently, Transneft allows up to 10 ppm of organic chlorides in the crude:

According to Gomeltransneft documents, tests by Belarus on oil received from the Druzhba pipeline showed organic chloride levels at 150–330 parts per million (ppm) between 19 and 22 April; this level was up to 30 times the maximum 10 ppm concentration allowed by Transneft specifications.

In other words, I underestimated the chloride content by two orders of magnitude. But assuming the 330 ppm level for the whole 37 million barrels (5 million tons) would yield an insane quantity of the pollutant. Yermakov explains:

If one assumes that the maximum volumes of tainted oil reported in the press at 5 million ton are correct and applies to it the reported 330 ppm content of organic chlorides registered in Belarus, the volume of dichloroethane in the system comes to an enormous amount of 1,650 tonnes, or an equivalent to 50 large oil tanker trucks of pure dichloroethane (or 150-200 oil tanker trucks if one assumes 30% content of dichloroethane in the tainted oil).

This stretches credulity so Yermakov suggests a different approach:

If, however, one uses more conservative estimates of the total amount of contaminated crude at about 1.3 million ton and applies lower average concentration of organic chlorides to it, then the amount of dichloroethane ends up in the range 200-400 tons. For this amount, the turnover number of oil tanker truck deliveries of the contaminated substance (assuming 30% concentration of dichloroethane and an oil tanker with capacity of about 30 tonnes) could be 20-40. This is still very significant but could be managed by a single oil tanker truck over the course of two weeks, if one assumes 2 or more deliveries per day.

Still, it leaves the key question unanswered: why would anyone use so much of this relatively expensive solvent, “at least ten times more expensive than crude oil?”

…it would not be very wise for anyone to use it to remove paraffine from the well-bore zone.

If Urals sells at $70/bbl (it’s actually cheaper within Russia due to export duty and transport cost), it’s roughly $500/ton – so dicloroethane would be $5,000/ton and 400 tons of it would cost $2 million. If we’re talking a modest producer pumping 1,000 bpd, the solvent cost would come up to 8% of the gross annual revenue at least, and no less that 10% of net annual revenue after duties, transport and selling expenses. Something’s off here. Yermakov could be overestimating the price of the chemical, but it’s typically big buyers that get big discounts.