Cost Justification for a Tank Gauging Project


Preface:

Over the relatively short (5 year) life span of the MTG “Multi-function Tank Gauge” technology our customers have given us some tremendous feedback. The feedback shows cost justification for the MTG through safety, environmental, operational, and direct economic benefits.

Case 1:


A customer is warned by a high-pressure alarm from the sensor in the vapor space while filling a tank. They physically went to the tank and found that the pressure relief vents were frozen closed due to ice on the tank.

Structural damage to the tank and a spill would have resulted if they hadn’t received the vapor pressure alarm. Cost of structural repair to the tank and environmental cleanup can only be estimated. The risk model of a stuck vent occurring has not been calculated. However, in all probability a secondary high-level alarm would not have prevented this occurrence.

NOTE: In examining the historical event log from this occurrence, both the Vapor pressure and P5 sensor showed over pressure. A benefit of the MTG is multiple sensors providing multiple independent alarms.

Case 2:


A crude oil settling facility is reportedly shipping a high amount of entrained water to customers. The only way for them to physically monitor the amount of water was to let it settle for 14 days and then hand line the tank with water paste to determine if the water was above the pull out line.

MTG was put in under test. The MTG provided a real time view of the tank (level, multi-point temperatures, density strata, free water and entrained water) to watch the water settle out. It showed that the tank settled in roughly 8 days instead of the 14 days operations used, thus increasing tank asset utilization.

In addition to the free water, it also indicated a significant percentage of entrained water still above the pull out line that was being missed by hand line sampling in the gauge well. It showed operations that they could remove free water as the tank was settling, thus, eliminating most free water and bringing down most of the entrained water below the pull out line.

Bottom line; improved product quality, reduced production royalties paid, reduced transportation cost, and increased asset utilization. The customer stated that the gauge and trial system cost was paid back in two weeks, i.e., first shipment from the trial tank.

Case 3:

In refinery crude tanks, if a slug of water gets into a CAT Cracker it causes major internal damage. An explosion caused a major interruption in production at the facility for over three months. Could this problem have been more easily foreseen with the use of the MTG? Total cost of downtime, lost product revenue, cleanup, and repair? Risk of occurrence?

Case 4:

A refinery with a Crude Oil charge capacity of 100,000 b/d, multiply 100,000 b/d throughput by 0.5% entrained water content in crude oil purchased, it comes to 1,000 b/d. If we multiply the 500 b/d of water by a price of $49.00 per barrel paid for water (crude oil price) it equals $24,500 per day.

If multiplied by 300 operating days, the annual water cost at 0.5% = $7,350,000 per year, enough savings to pay for a tank gauging project and then some.

The use of a Radar gauge, Servo gauge, Magnetostrictive probe, or Capacitance probe will not provide the accuracy of the MTG. Especially when it comes to both entrained and free water monitoring (Qualitative measurement).

Case 5:


MTG's were installed on twenty (20) of the biggest (tallest) petroleum storage tanks in the world; 265’ in height, 100’ diameter with a capacity of 300,000 bbls.

The customer installed the MTG - H (30 sensors over the 265’ tank height). The initial MTG test criteria was to provide Inventory Accuracy (API Chapter 3.1B) of 1 inch or less on these tanks. The initial test criteria was tested and met during the startup phase of the project by the Customer, Contractor, and GSI.

Because of the good results, i.e., the MTG exceeding the Inventory Accuracy, the customer tested for Custody Transfer Accuracy (API Chapter 3.1B) of not more than 3/16” on these tanks. All tanks tested passed the Custody Transfer testing under API Chapter 3.1B.

Note: The MTG can pass custody transfer requirements under API Chapter 3.1B “Level” using Level, Chapter 3.6 “Hybrid” on either Volumetric or Mass, and Chapter 16 “Hydrostatic” using Mass.


The MTG “Multi-function Tank Gauge” Mass sensitivity was tested against the existing gauges, removing two (2) gallons of product at a time. The MTG registered a mass change every 3.2 gallons or 208 changes before the existing installed gauge recorded any change.

What is the cost of incorrect inventory? Loss Control?

Case 6:

When using the MTG on tanks supplying finished product to load rail cars or tank trucks being weighed. The MTG “Multi-function Tank Gauge” was used for mass balancing against the scale. If the MTG and scale do not balance, it's probable that your scale needs calibration.

A throughput of 100,000 b/cd multiplied by a 0.2% scale or meter error (no current mass balancing) = 200 b/d or 8,400 gallons per day multiplied by the price of the product per gallon. Motor gasoline wholesale price of $ 0.928 multiplied by 8,400 = $7,795.20 per day or $2,845,248.00 annually.

Proper accounting of finished product sold, i.e., Loss Control.

Case 7:


A lubricants plant had a problem of overcooking or overheating of product. Thus, the product was discolored and out of the Q.A. specification of the customer. The customer would have to wait on the reprocessing of product. The cost of reprocessing the product to meet the specifications and the cost of the delay incurred by the customer can only be speculated.

The installation of the MTG allowed the customer to set a high temperature and low temperature alarm per Multi-point RTD over the height of the tank, thus, identifying when product was about to be overheated and when the temperature ok.

The same was true of meeting the customers’ Q.A. specification for product density / specific gravity. The MTG provided the ability to know when density stratification was occurring. When to mix the product to uniform specific gravity, when not to mix, when to blend and when not to blend to meet specification, in real-time and without having to depend on laboratory analysis.

Cost saving from eliminating overheating, contracts gained in meeting customer product specification on schedule, electricity savings, etc.

Bottom Line: The MTG “Multi-function Tank Gauge” provides much more economic and operational benefits than just an inventory tank gauge!