Crude oil pipeline and marine terminal operator

Discovering the most efficient way to handle crude oil
Optimizing operations to improve productivity and reducing operational costs – whilst ensuring safe and reliable operations - are the main concerns for most marine terminal operators. Related to this, a crude oil pipeline and marine terminal operator company wanted to evaluate their current operating concept, and to identify alternative operating options, with the aim of using storage capacity more effectively, improving reliability to its customers, and reducing operational costs. The overall goal was to identify the most efficient process of handling crude oil.

Supported decision making through scenario analysis
To explore the most efficient way of crude handling, we applied two approaches:

1. A Supply Chain Operations Reference (SCOR) Analysis

We started off by analyzing the current state and challenges that the company was facing with regards to the existing infrastructure and relevant actors, such as long vessel waiting times in the terminal and limited operational flexibility to accommodate customer wishes. By using the Supply Chain Operations Reference model (SCOR) – a framework designed for the analysis and measurement of supply chains from suppliers to the customer’s customer - we performed a supply chain assessment, thereby analyzing the current planning process including nominations, constraints, and interface conditions.

The information was retrieved by conducting interviews with the company itself and its customers. This provided us with a thorough understanding of the current operating concept, revealing that the vessel discharge order wasn’t driven by the drivers to promote efficient handling, but by rigid rules that resulted in discharging of cargoes that hampered efficient operation of the system. Besides, it uncovered that customers were looking for more proactivity, flexibility, and reliability from the company.

2. Scenario analysis

Based on the analysis, we developed a customized mathematical model to evaluate and quantify different crude handling scenarios, which simulates all relevant parts of the process: from arrivals of the cargos to the batches that must be pumped into the pipeline. The model supports in making decisions on the discharging of vessels, the operation of the tank farm, and the feeding of the pipeline. In addition, applying the mathematical model provides insights into alternative operating concepts and compares those to the current concept, eventually enabling the discovery of the most optimal option.

Reliability and transparency while lowering costs
As a result of the Supply Chain Operations Reference analysis, the company got insights into what they wanted to achieve and what direction they wanted to head into. Moreover, several inefficiencies of the current processes were indicated, including insights on how to move to more reliable operations without the need for extra investments or additional operating costs, but by smartly determining the discharge order of vessels. Thanks to the mathematical model, different operating concepts can be compared so that quantitatively the optimal concept can be determined. This improves the reliability of the company, increases transparency, and reduces costs.