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KX-91 Test in Nigeria

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KX-91 SUCCESSFUL IN TANK REMEDIATION PROJECT IN NIGERIA

Secaucus, N.J. August 19, 2008

To further substantiate the true potential of United Energy's KX-91, we are pleased to announce the successful remediation of Tank 19 at the Nigerian Agip oil Company (NAOC) Brass facility in Nigeria.

For a prolonged period of time Tank 19 has been mostly off line to excessive sludge build-up. Faced with the time consuming and the environmental issue associated with other methods of sludge treatment, AGIP selected KX-91, which has been approved by the Nigerian Department of Petroleum (DPR), as a sludge remediation chemical. After a six day regiment of KX-91 administered by our partner in Nigeria - (Facility Solutions Limited), the tank was certified to be free of sludge. In addition to protecting the environment, AGIP actually benefited by recovering 25,780 BBLS of oil trapped in the sludge that may certainly have been lost using any other method of treatment. The process more than paid for itself considering the value of crude oil in the world market today.

With a repeated achievement by Facility Solutions Limited using KX-91 (as in similar project with NAOC in 2005) there is no longer any doubt about the efficacy of the chemical. DPR is also looking at teh issue more closely with a view to recommending the chemical to other oil companies in the country with similar challenges in containing the menance of sludge. KX_91 provides oil industry operators with the combined benefit of recovering wasted sludge and avoiding unwholesome dumping practices which damage the environment. Fcaility Solutions Limited is hopoing to extend its operations further by engaging other companies using the proven tested KX-91 chemical.
Source: United Energy Corporation

Our current partner in Nigeria for United Energy products is EMCO/PFR/Lecron

Project Summary

Crude Oil Recovery From Sludge at Nigerian Agip Oil Company (NAOC) Brass Terminal, Bayelsa State, Nigeria. Project Duration 16th to 22nd March 2005.

Current Situation – Sludge Problems

Tank 19 is 111ft (33.8m) diameter, fixed roof construction and is fitted with an equally spaced 4” circulation nozzle system. The terminal receives crude oil directly from the production fields, stores it, dewaters it and monitors quality before exporting the oil through its production lines. 

Brass River Crude Oil in 2004/2005 had an average API of 36.17.

The sludge volume determined by NAOC control room measurements at the tank datum plate showing approximately 5’4” (1.6m) height. This equates to 8,938 bbls of sludge volume inside the tank. A sludge sample after taking out the water content showed 93.6% paraffin and resins with 5.8% asphaltene. This heavy sludge caused cavitation at the tank circulation pumps and blockage of the return line sampling/bleed-valve. Despite regularly dosing the tank with standard emulsion breakers, the water draw-off always produced ‘black-water’. This presented problems at the API 2 draw black water . separators outfall as the very fine suspended solids were nearly impossible to remove.

United Energy - Solution Disperse the Sludge with KX-91

One drum of KX-91 was circulated through the dosage tank and the tank pump to clear it and its lines. The NAOC personnel immediately noticed the improved performance of the pump. The tank was drained down to under 4 meter and contained about 8,938 equivalent barrels of sludge and 12,000 barrels of oil. The oil was used to help agitate and circulate the KX-91. The KX-91 dispersant from United Energy was added in 3 batches to the sludge topped with oil. In total 77 drums of 55 gallons each were pumped into the tank in batches over a 5 day period via the existing on-site equipment. 

The 77 drums of KX-91 equates to 1.1% of the heavy sludge on the tank bottom. The amount of KX-91 with the regular oil was .84 %and only .48 % of KX-91 was used for the entire mix of sludge and oil. The tanks circulation nozzle system was used to mix the oil, KX-91 and the sludge into one homogeneous liquid solution. After the second batch some of the combined chemical and oil was pumped to another tank which reduced even more sludge in the additional tank.

NAOC customer documentation on March 23rd, “Visual and physical inspection of the tank 19 bottoms was made when the manhole was opened and observation was made of the absence of sludge in the tank.” No one was required to enter the tank.

NOAC Results – 100% In-Line Recovery at Production Quality

  • March 19th 3 days after the first drums of KX-91 were pumped into the tank the recovered oil after settling and water draw-off was API 34.5 prior to transfer to production line.
  • Once the KX-91 treatment was complete it was found that tank floor plates were visible and that no sludge was detectable. All of the 8,938 bbls of sludge were recovered.
  • It was not necessary for NAOC to use vacuum-trucks or to discharge sludge/recovered oil to the API Separators. The water was separated and clear.
  • NAOC originally intended to discharge the “smooth homogeneous and pumpable” recovered crude to the API skimmer. However, this did not prove necessary as the quality of the recovered oil was monitored by NAOC site laboratory and found to be fully acceptable at an API of 34.5 for transfer to the production line.

NOAC Cost/Benefits

Below is a comparison of the United Energy On-line Chemical solution compared with a similar treatment using a conventional cleaning method. As you can the new On-line solution is about a quarter of the costs.

Costs: Conventional
Cleaning methods
United Energy On-line
Chemical Solution
Labor to clean the tank sludge $ 84,000 $ -
Project supervision (15% of Labor) $ 12,600 $ 3,150
Preconditioning the sludge for recovery $ - $ -
Disposal of sediment in the recovery process ($350 per
ton)
$ 496,583 $ -
Tank storage operations at $1,000 per day $ 28,000 $ 7,000
Chemicals and materials   $ 137,638
Energy for circulation (estimated) $ 10,000 $ 10,000
Post recovery conditioning costs for non production
quality oil
$ - $ -
Total Costs $ 631,183 $ 157,788
Days required for project completion and returning to normal
operations
28 7
Benefits    
Production Quality API recovered oil - 100%
Barrels of sludge recovered to Production Quality (API
34.5)
- 8,938.49
Value of the Sludge recovered Production Quality at 54.28 per barrel $ - $ 485 181
Total Benefits $ - $ 485,181


NOAC Cost/Benefits

Below is summary of the a comparison of the United Energy On-line Chemical solution compared with a treatment using a conventional cleaning method. United Energy shows a savings of $327K while the Conventional method has a cost of ($631K) for a difference of $958K.

  Conventional
Cleaning methods
United Energy On-line Chemical Solution
Summary of the costs and Benefits    
Total Costs $ (631,183) $ (157,788)
Total Benefits $ - $ 485,181
Total Cost or Savings $ ( 631,183) $ 327,394
     
Payback in days NA 7
     
Difference is NA $ 958,577


Appendix A – Cost/Benefit Assumptions

These are the detail assumptions used in the Costs and Benefit calculations

Labor, Recovery costs are based on an 8 person crew working at $50 dollars per hour 10 hours per day for 21 days.

Assumptions:  
Labor related:  
Manpower cost per hour $50
Crew size people 8
Working Hours per day 10
Days required for cleaning 21
Total labor costs $84,000


Waste removal is calculated based on 100% of the total sludge volume at $350 per ton.

Waste removal related:  
Total Barrels of sludge 8,938
Factor for tons of sludge per barrel 6.3
Total Tons of Sludge 1,419
Percentage of the total sludge and treatment required for waste disposal 100%
Total tons required for disposal 1,419
Ton Costs of disposal at $350 per ton $496,583


Chemical costs are calculated below:

Total KX-91 Chemical costs $ 137,638
KX-91 cost per gallon $ 32.50
Gallons (US) of chemical used 77
Gallons (US) per Chemical drum 55


Benefit assumptions - The value of production quality recovered Oil at API 34.5 is assumed to be $54.28 per barrel based on Europe Nigerian Bonny Light Spot Price FOB for March 18th international prices.

Appendix B – Key Volume calculations

Below is a table of the Sludge deposits, oil used for circulation, and Chemical used for dispersing the entire mixture.

  Sludge Oil Chemical Total
Height in meters 1.58 2.12 0.02 3.72
         
Volume in cubic meters 1,421 1,907 16 3,345
Conversion to gallons (US) 375,417 503,904 4,235 883,555
Conversion to barrels 8,938 11,998 101 21,037
% of total tank contents 42.5% 57.0% 0.48% 100%
         
% of chemical to oil     0.84%  
Perc. of chemical to sludge     1.13%  


Key data for calculations  
Tank size diameter feet 111.00
Tank size diameter meters 33.83
Pi 3.142
Meters per foot 0.305
Gallons (US) per m3 2 64
   
Chemical treatment in drums 77


United Energy Tank Cleaning Solution compared with Conventional Methods

Requirements Requirements Description Conventional
Methods
United Energy
Chemical Solution
Recovery of sludge: The amount of slude that is recovered and sold
as oli in the cleaning process
low high
Setup and Mobilization: Scaffolding, cranes, cleaning equipment, air
systems, high pressure equipment
high low
Outside contractor cleaning
costs:
Sub contracted costs of tank cleaning
specialists
high low
Lost production / margin: Shut-down time resulting in the loss of capacity while the tank is out of service. 4 weeks one week but available if needed
Utility and operating costs: Consumption of steam, and electricity, caused
from the actual cleaning process
high very low
Chemical: The chemicals used for treatment low medium
Re-processing/recovery costs: Cleaned-out sludge which requires re-processing. high low
Personnel costs: Additional operations and maintenance
manpower, safety/work permitting).
high low
Waste disposal: Processing of waste and disposal of hazardous
waste products
high low
Damage to tank equipment: Repair of damages to the tank from cleaning
such as coating and steam coils
happens occasionally none
Legislation and regulations: Penalties and fines related to violation of
environmental, health and safety regulations.
happens occasionally none
Personnel liability: Injuries, illness resulting from hazardous working
environment and exposure to toxic substances.
happens occasionally none