Transportation and Storage
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TRANSPORTATION AND STORAGE Baker & O'Brien consultants have considerable experience in the transportation, storage, and distribution of energy raw materials and finished products. We are RELATED SERVICES frequently called upon to analyze the costs associated with truck, rail, pipeline, and/or marine transportation of crude oil, petroleum products, and chemical feedstocks. We Accident/Incident Investigation undertake feasibility studies associated with pipelines and petroleum storage facilities. Asset Valuations We investigate the source and implications of leaks, fires, explosions, and other Due Diligence and Advisor to operating incidents that periodically occur during the operation of such facilities. Our Lenders and Investors consultants have provided evidence and expert testimony regarding proper Engineering, Procurement, and maintenance and safe operating practices for all types of transportation systems. Construction (EPC) Markets and Strategy Merger and Acquisition Support PRIMARY CONTACTS Property Damage and Business Interruption Insurance Claims Technology Assessment Robert L. Beck Consultant Houston William D. Jackson, Ph.D. Consultant Dallas Amy L. Kalt Consultant, Manager of Analytical Services Houston © 2021 Baker & O'Brien, Inc. All rights reserved. 1 of 22 TRANSPORTATION AND STORAGE Charles G. Kemp Vice President, Business Development Manager Dallas RELATED EXPERIENCE Bankruptcy Reorganization Developed, in conjunction with senior management, reorganization plans for various operating segments of a major trading and transport company. The resulting business plan formed the foundation of the company's successful reorganization and emergence from bankruptcy. Bitumen Valuation Study Developed a methodology using a marker crude oil to value bitumen at the production site. Methodology addressed differences in qualities (sulfur, acid number) and refining yields. Transportation costs from the valuation hub to the production site were developed. Blending methodologies were evaluated to develop bitumen blends for comparison to the marker crude oil. Black Oil Storage Provided an assessment of terminal facilities in the Long Beach and Los Angeles areas. Assessed historical and projected crude oil supply and demand for California. California Crude Oil Market Study Developed a detailed California crude oil supply, demand, and transportation balance (by refinery) for a mid-size independent California crude oil producer. Results were used in client's annual report for shareholders and security analysts. California Crude Oil Market Study Developed a detailed California crude oil supply, demand, and transportation balance (by refinery) for a mid-size independent California crude oil producer. Results were used in client's annual report for shareholders and security analysts. Chemical Pipeline Market Study On behalf of an acquisitive client, researched, identified, and characterized chemical pipeline operations in the U.S. to form a database of prospective business opportunities. The engagement included contacting each prospective target to ascertain an initial level of interest in pursuing commercial arrangements with the client. The study identified several attractive prospects and provided an overall measure of the market dimensions. Company Reorganization Study Following the bankruptcy of a major Singapore-based shipyard, with significant oil interests throughout Southeast Asia, worked with the company's lenders to restructure and reorganize the company's asset base. Made visits to all major company sites and prepared report outlining current status. Recommended the disposition of non-core assets and the reorganization of core assets into a smaller and less highly leveraged entity. Following acceptance of most of recommendations by creditors' committee, company was able to successfully emerge from bankruptcy protection. Condensate Feedstock Contract Dispute Assisted in a claim between: (1) a European refiner and ultimate condensate supplier, and (2) an intermediary company, concerning allegations that the intermediary company was prevented from obtaining condensate supplies for sale to the refiner. © 2021 Baker & O'Brien, Inc. All rights reserved. 2 of 22 TRANSPORTATION AND STORAGE concerning allegations that the intermediary company was prevented from obtaining condensate supplies for sale to the refiner. Studied the potential availability and quality of condensates in the producing region and elsewhere. Identified potentially suitable condensates for the refinery. Based on forecasts of oil and petroleum product prices, prepared an estimate of potential economic damages. Described how term feedstock contracts for condensate are typically concluded. Testified at an arbitration in London. Construction Dispute - Gas Plant Provided expert reports and testimony regarding project management issues, alleged defects, and liquidated damages for international arbitration between owner and contractor. The project involved an offshore platform, an undersea pipeline, an onshore pipeline, an onshore cryogenic gas processing plant, and a sales gas pipeline. Contamination at Bulk Petroleum Storage Facility Evaluated the potential long-term contamination at a bulk storage facility resulting from the sediment contained in incoming hydrocarbons. Crude Oil Gathering System Evaluation On behalf of an independent U.S. refiner, conducted an in-depth study of its crude oil gathering and transportation system. Our study included reviews of physical assets and crude oil purchase and transportation agreements, and evaluation of the economics of retention versus disposition. Our results and conclusions were used by the client in its asset rationalization plans. Crude Oil Import Terminal Feasibility Examined the feasibility of a deep water import terminal to meet the domestic refining industry's needs for imported crude oil as West Coast crude production declines. The analysis included a review of the history of imported crude oil for West Coast refineries, the current outlook for domestic production declines, crude oil import trends, shipping logistics, refinery capabilities, and future opportunities for moving crude oils to refining facilities east of the Rocky Mountains. Crude Oil Market Studies Prepared several detailed assessments of West Coast crude oil markets for an independent California producer. Studies included preparation of detailed regional balances, identification of target refineries for client's crude oil, and estimation of its value relative to imported and domestic alternatives. Results were presented to client's executive management and at its banker and security analyst conferences. Crude Oil Marketing and Trading Reorganization Recommended organizational structure and operating practice changes to increase effectiveness, efficiency, and profitability in the European crude oil marketing and trading arm of a major international oil company. Russian Crude Oil Marketing Strategy Analyzed potential markets, transportation options and costs, and contracting strategies for new crude oil production in Russia's Sakhalin Island region. Crude Oil Marketing Study Assisted the U.S. General Accounting Office in evaluating the potential for marketing of Naval Reserve crude (Elk Hills) in markets east of the Rockies. Work included evaluation of breakeven refining values, assessment of yield and contaminant penalties, and analysis of the potential for supplying this crude to the Gulf Coast market. Crude Oil Marketing Study Provided support to a major Canadian crude oil pipeline transporter in the customization of the PRISM model, Baker & O'Brien's proprietary refining industry analysis tool, the company had licensed from Baker & O'Brien. Support included addition of crude oils of specific interest to the client. Crude Oil Custody Transfer Dispute © 2021 Baker & O'Brien, Inc. All rights reserved. 3 of 22 TRANSPORTATION AND STORAGE Investigated alleged crude oil Automatic Custody Transfer volume and quality measuring devices irregularities. Reviewed common carrier pipeline tariffs, inspected site, and analyzed measurement data. Crude Oil Pipeline Acquisition Due diligence for a Canada to U.S. crude oil pipeline acquisition including a crude oil supply/demand balance forecast. Crude Oil Quality Dispute Acted as expert witness in a dispute between a major oil company and a small crude oil supplier that allegedly delivered "dumbbell" crude into the oil company's common carrier pipeline system. Prepared a report covering standard industry pipeline practices, crude oil quality acceptance, crude oil trading, and refining values of various crude oils. Calculated damages incurred as a result of the poor quality crude oil delivered and the impact on refiners receiving crude from the pipeline. Crude Oil Sludge Accumulation Following a claim concerning sludge accumulation in crude oil storage tanks over a twenty-year period, advised as to the creation of sludge in crude oil tanks, its accumulation, the ways to prevent or control it, and the conventional ways of dealing with it. Crude Oil Supply Evaluation On behalf of a major pipeline and terminal company, prepared a detailed assessment of future crude oil supply and demand balances for the U.S. West Coast, with an emphasis on California. The assessment was used by the client as a key part of its justification for a new crude oil import terminal, capable of handling VLCCs (Very Large Crude Carriers), to be constructed in the Port of Los Angeles. Results were presented to community and state government