Matching Gasoline Supply with Distribution Requirements Optimizes Depot Storage Capacity
Systematic methods and tools for managing the complexity
Supply Chain Management & Business Decision Support (T4-3)
Keywords: supply,distribution,depot,capcity,ratio
The Nigerian National Petroleum Corporation, a refiner, owns and operates a petroleum products pipeline network connected to twenty one storage depots across Nigeria. Products are supplied to the depots from the local refineries and ex-jetties (for imports) mainly by pipeline. The main objective of establishing the pipeline network and the depot facilities by the refiner was to ensure efficient product distribution, reduce transportation cost and minimize products price differential across the country.
The concept, design and layout of the depot facilities were such as to maximize gasoline supply and distribution, which as a transportation fuel, has the highest demand profile over kerosene and diesel. Since the early 1990s, as gasoline demand increased by over 30% the entire supply/distribution chain appeared inadequate. The refiner then began to find a solution to products supply and distribution.
This study was done for one of the refiners depot located in the central zone of the country but receives supplies from an upstream facility in the Western part of the same country. The depot receives products from a 6 inch pipeline designed to transport gasoline, kerosene and diesel at programmed periods and volumes depending on the depot ullage, loading capacities and the upstream facility products’ availability. As gasoline is the priority product, the study aimed at maximizing its availability at all times.
For this depot, hourly gasoline supply capacity is 82 m3, whereas the loading/distribution is 100 m3 per arm. For a day’s activity, twenty hours supply is 1,968 m3 while eight hours loading (distribution), will be 800 m3. Loading facility designed for two arms each for gasoline, kerosene and diesel (or 33.33% for each product) whereas gasoline storage capacity is 55%, kerosene 11%, diesel, 33% and slops, 1% of the total depot capacity. The design supply to distribution chain capacity ratio showed a mismatch, which in actual operation becomes 2:1. The above design created ullage problem at sustained supplies, gross under utilization of supply chain infrastructures and poor operational performance.
After a technical evaluation, a section of the depot storage to loading pipeline network was re-designed and modified to enable products supply capacity match loading, and minimize products accumulation over a period. Hence the gasoline loading became 66.67%, kerosene and diesel, each of 16.67%. Overall, the actual supply to distribution chain capacity ratio was increased in favour of the latter from 2:1 to 2:2 (and when required, can be maximized to 2:3) thereby correcting the apparent mismatch between the supply and distribution chain capacities. The modification has enabled the refiner to increase depot and upstream supply chain utilization. Since some of the depots may have similar problems and bottlenecks, the refiner can also apply the concept used here to those facilities and achieve optimum utilization.
See the full pdf manuscript of the abstract.
Presented Thursday 20, 12:00 to 12:20, in session Supply Chain Management & Business Decision Support (T4-3).
