Plan For New Operating Strategies and Capital Investments
ConocoPhillips is one the largest vertically integrated oil producers in the world. It owns and operates a network of refineries that convert raw crude oil to essential petroleum products, which are then delivered to gas stations, energy distributors, and various commercial users.
These refineries are connected to the crude sources and customers through a complex combination of transportation modes, including:
- Barges, and
ConocoPhillips is continually looking to ensure their refineries are capable of managing constantly varying supply and demand. As such, they wanted a tool which would help them verify capacity constraints and crude throughput, as well as experiment with different delivery schedules for all of its refineries. The results would then be used to evaluate options for expanding or reducing capacity, and the effects of projected future demand.
The successful tool had to be flexible enough for ConocoPhillips logistics planners and crude schedulers to customize settings for any facility and to experiment with multiple scenarios. It also had to be intuitive and easy to use so anyone could run and conduct analysis with minimal training.
As well, the tool had to accurately represent the entire flow from source to refinery to customer, tracking tank inventory and crude throughput during the entire time horizon. Detailed activity logs, including daily crude deliveries, tank transfers, and shortages would have to be kept in order to provide important data required for analysis.
To meet these challenges, Visual8 developed a generic Refinery Tank Simulator using SIMUL8 simulation software.
The simulator allows users to add components (template objects) that represent the various elements of the crude supply chain including:
- Refinery tanks, and
Each of these components is fully customizable to adapt to almost any size and type of oil production flow.
The tool is then able to model production for one shift or several weeks and can import orders, inventory positions, and production schedules from Excel or database sources. Parameters, such as tank capacity, flow rate, predecessors, and successors can be viewed and modified by directly clicking on the desired component.
In addition, easily accessible input sheets provide an overall view with a user-friendly interface. Additional options such as shift schedules and simulation reporting horizon are also available via this interface. This level of detail allows the simulator to model operations as accurately as possible.
Detailed reports track each decision of each component in the system in graphical and tabular form, providing immediate and valuable feedback on the impact of each component to the overall system performance. Users can then employ these results to quickly spot trends and patterns over time, make necessary adjustments to inputs, and immediately demonstrate the effectiveness of these adjustments. Higher level results including throughput and average inventory allow for overall evaluation of general system performance against service level targets.
After successfully implementing the Refinery Tank Simulator at the target refinery, it immediately became an indispensible tool for ConocoPhillips to use for planning new operating strategies and capital investments in all of their refineries. In one instance, the Refinery Tank Simulator proved that by employing an underutilized barge shipping dock nearby, the existing storage tank units of a particular refinery could be used to increase daily throughput. This result allowed ConocoPhillips to rescind an original plan to purchase new storage facilities, saving well over a $1,000,000 in capital cost.