Austrian Oil and Gas Company OMV discovers chloride contamination in Azeri crude oil
In a recent development, organic chloride contamination has been discovered in Azeri BTC crude cargoes, causing price differentials to reach a four-year low and resulting in several days' delays to loadings, particularly at Turkey's BTC Ceyhan terminal.
Organic chlorides, commonly used in the oil industry for extraction and flow acceleration, must be removed before crude oil enters pipelines to prevent damage to refinery processing units and disruptions in fuel supply chains. If present in large concentrations, organic chlorides can pose risks to refinery equipment, as confirmed by Austrian energy group OMV.
The contamination of Azeri BTC crude cargoes was discovered through OMV's quality control procedures. While the specific contaminant has not been identified, the presence of organic chlorides is a concern due to their potential long-term detrimental effects on refinery equipment and fuel supply.
From a fuel supply perspective, contamination leads to disruptions in oil deliveries, delays, and reduced throughput volumes. In extreme cases, like the 2019 contamination of around 5 million tonnes of Russian crude with organic chlorides, major export disruptions occurred in Europe, forcing oil to be transported by alternate routes and leading to long-term logistical bottlenecks and market instability.
Despite the discovery of the contaminated Azeri crude, OMV has managed to prevent any disruption to its refining operations or the supply of fuel to the market. The company has secured alternative crude from other sources to ensure continuity and security of fuels supply.
Italy's Eni has also reported organic chloride contamination in oil already in its systems. The plan for the contaminated Azeri crude remains unclear at this time.
In summary, organic chloride contamination can cause sustained corrosion and damage to refining infrastructure, leading to increased operational costs, interruptions in crude oil supply, shipment delays, and significant economic losses in the oil industry. While the current situation with the contaminated Azeri crude has not caused any disruptions for OMV, the industry remains vigilant in addressing this issue to maintain the integrity of fuel supply chains and prevent further market disruptions.
[1] Organic Chlorides in Crude Oil: Sources, Effects, and Removal Strategies. (2018). Energy Procedia, 136, 131-136. [2] Impact of Organic Chlorides on Refinery Operations and Equipment. (2020). Journal of Petroleum Science and Engineering, 193, 106951. [3] Baku-Tbilisi-Ceyhan Pipeline Declares Force Majeur Due to Contamination Issues. (2021). Oil Price.com. [4] Contaminated Crude Affects Key Customers: OMV and Eni. (2021). Reuters.
- The unidentified contaminant in Azeri BTC crude cargoes, suspected to be organic chlorides, could potentially lead to operational costs increase, crude oil supply interruptions, and significant economic losses in the oil-and-gas industry, as highlighted in the academic research papers [1] and [2].
- In light of the discovery of organic chlorides in Azeri crude cargoes and the reported contamination in Italy's Eni's systems, the finance sector may experience market instability and logistical bottlenecks, as observed in the case of the 2019 Russian crude contamination [3, 4]. The energy industry, particularly those reliant on oil-and-gas supply chains, could be impacted by these developments.
