1. Colonial Pipeline Company Buster Brown January 26, 2005
Challenges in Distribution of ULSD Observations From Colonial Pipeline ULSD Test
Colonial Pipeline Company
Buster Brown
January 26, 2005

2. Topics Colonial overview Highway and Non-Road sulfur specification
Observations from ULSD test
Potential pipeline issues

3. Colonial Pipeline Profile
5,519 mile system from Houston to New York Harbor; operating since 1963
Delivers more than 2.2 million bpd petroleum products from approximately 30 refineries to more than 250 terminals
20 percent of all U.S. liquid product delivered by pipeline are handled by Colonial

4. All Off-Highway Diesel
~3400 ppm
Highway
500ppm
All Off-Highway Diesel
>80%
15 ppm
<20% 500 ppm
10/1993
06/2006
01/2010
Highway + Nonroad Diesel Fuel Sulfur Specs*
NR, L&M Diesel
500 ppm
NR 15 ppm
6/2007
6/2010
HWY NR
L&M
6/2014
HHF ~3400ppm
Small & Credit
6/2012
Small &
Credit ~500
Small & Credit ~3400
L&M 15ppm
* This figure is intended to illustrate the timeline for the final highway and nonroad diesel fuel sulfur control programs.
It is not drawn to exact scale. Refer to 40 CFR Part 80 for specific program dates.

5. Colonial Pipeline ULSD Test
Test Objective
Determine capability to successfully move ULSD through existing pipeline system
Use data to determine what physical and procedural modifications need to be made to ensure ability to transport ULSD
Use test results to set sulfur specs at origins

6. ULSD Test Description
Both batches originated into 36” distillate mainline at Baton Rouge and distributed along system to representative locations.
1st Batch 140,000 B
Destinations
Birmingham, AL
Atlanta, GA
Nashville, TN
Macon, GA
Greensboro, NC
2nd Batch 144,000 B
Destinations
Birmingham, AL
Atlanta, GA
Greensboro, NC
Baltimore, MD
New York Harbor

7. ULSD Test Description (continued)
Multiple product sequences; Gasoline, high- and low-sulfur diesel and kerosine leading the ULSD test batches.
Over 1500 samples analyzed.
Quantified trail-back of sulfur into ULSD batch from adjacent products.
Quantified sulfur contamination from manifolds, valves, dead segments, and high sulfur tank bottoms.
Used special protective operating procedures for test batch.

9. ULSD Test Observations
“Successful” movement through system with sulfur increase of 6-8 ppm
Size of product interface at head-end of batch was 1.5x to 2x normal
Tank farms resulted in largest contribution of sulfur increase
Valve integrity, tank line, manifold and dead leg segments were primary sources of sulfur increase
Sulfur analyzers are complex and difficult to maintain
Normal cutting procedures (gravity) may be ineffective. Therefore need quick, accurate, on-line sulfur analyzers.

10. Test Conclusions Significant volume downgrade of ULSD
(estimated to be 8% to 10% of total ULSD volume)
Sulfur analysis equipment needs improvement
Continued effort to understand and minimize tank farm issues

11. Formula for Developing Product Specification
Sulfur Specification
Formula for Developing Product Specification
Legal Requirement ppm
PLUS
Downstream Enforcement Tolerance ppm
MINUS
Test Method Reproducibility ppm*
MINUS
Transportation Degradation to -8 ppm**
Potential ULSD Specification at Refinery Gate = ppm
* ASTM “round robin” results have a reproducibility range from 6-16 ppm.
* *depending upon the number of tank farms

12. Product Movement Refinery to End User
After refining, products must be shipped from the refinery to terminals where it can be loaded onto tanker trucks bound for gas stations, homes, businesses and airports.
Terminal Tank
Refinery
Third Party Pipeline
Colonial
Intermediate
Colonial
Origin
Stubline
Mainline
Colonial
Origin
Mainline
Refinery
Tank
Colonial
Intermediate
Stubline
3rd Party
Tank
Terminal Tank

13. Possible Colonial Sulfur Specification
If every step improves…
Ideal
Receive into Colonial 7
Upstream transfer system 2
Colonial improves from
Downstream transfer system
Reproducibility improves to
TOTAL 18
Based on our test, we may propose the following specs... (walk through the slide)
The enforcement tolerance is not large enough to offset the test method reproducibility. This is a major contributor to the low spec. (which I will walk through in more detail on the next slide.)
I feel the amount of transportation degradation is notionally typical of other common carrier systems. Due to its size, Colonial losses will be larger on an absolute basis, but are may be similar on a percentage basis.
Again, I need to mention that these numbers do not include any change in sulfur that may result upstream or downstream of the pipeline.
Therefore, even if transportation degradation is reduced the spec at refinery may not change.
The specification is 17 ppm at retail.

14. ULSD Pathforward for Colonial
Implement special operating procedures for ULSD handling.
Evaluate construction of additional tanks and modify manifolds. - May require ULSD surcharge to existing diesel tariffs.
Concern with upstream and downstream facilities handling.
Work with customers to determine “appropriate, workable” specification at refinery gate.
May not supply all diesel grades to all markets.

15. Q&A