Risk based models for the optimization of oil and gas supply chain critical infrastructure

224 Pages·2011·4.45 MB·English

by  Achebe, Kingsley Oseloka

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ABSTRACT

RISK BASED MODELS FOR THE OPTIMIZATION OF OIL
AND GAS SUPPLY CHAIN CRITICAL INFRASTRUCTURE

By
Kingsley Oseloka Achebe
The oil and gas sector faces a broad array of risks and uncertainties, affecting short- and
long-term planning, and causing adverse effects in the energy sector. To predict and
minimize them, risk based supply chain models were developed for the oil and gas supply
chain critical infrastructure.
First, the events and activities were categorized as short term and long term, and
their risk ratings derived, by analyzing data from past events and site visits. The result
showed that events like the Israel – Arab war, successful hurricane, and production
increase or decrease, had a risk rating of approximately 7.
Second, network reliability and connectivity were analyzed using the risk based
minimum cut-set model, and its associated algorithms and simulation, for tactical and
short term planning. The impact of link failures, due to the risk and risk ratings associated
with certain events and activities determined above, which can affect each source-
demand pair (i.e., from the crude storage tank to the refinery or from the refinery to the
product storage tank) of the network or the whole network, were determined. The result
showed that for a real world petroleum supply chain network like the Petrobas (Brazil),
this model could identify critical nodes/links in the supply chain network(s) that can be
severely affected by failure.
Third, a risk based LP Supply Chain Model (SCM) was developed, and used to
analyze the supply chain (SC), for strategic and long term scenarios. The average
expected risk ratings obtained above was used as one of the constraints in simulating
different risk scenarios. It was also used to forecast their likely impact on the supply
chain, and to come up with alternative ways to manage/minimize risk. The study showed
that for a generalized oil and gas supply chain like the Gulf coast area of the US, a very
critical (in terms of risk rating), and very severe (in terms of duration) event at the crude
source - like crisis in Nigeria or Iraq, occurring during the fall season could likely cause
an approximately 35% drop/loss in production of the supply chain. The study also
showed that other events like a refinery explosion/fire, tank leak/crack, or pipeline
fire/attack that is also very critical and severe, occurring during the fall season, could also
lead to an approximately 40% loss/drop in production of the supply chain.
Last, Fault Tree Analysis (FTA) and Model Based Vulnerability Analysis
(MBVA) were carried out on the supply chain, to determine whether each source-demand
pair analyzed, failed or not, due to the likely impact of any event/threat scenario analyzed
above. The analysis were also carried out to show how scarce resources can be allocated
for optimum results in protecting these oil and gas supply chain nodes/links from failure.
Using the supply chain (SC) of the Gulf coast area as a case study, the result of the
simulation showed that investing at least $200 million to provide Critical Infrastructure
Protection (CIP) in the Gulf coast area, can lower vulnerability to as little as 11%, and
prevent the potential for huge price increase on the consumers in particular, and the
economy in general.
RISK BASED MODELS FOR THE OPTIMIZATION OF OIL
AND GAS SUPPLY CHAIN CRITICAL INFRASTRUCTURE

by
Kingsley Oseloka Achebe

A Dissertation
Submitted to the Faculty of
New Jersey Institute of Technology
in Partial Fulfillment of the Requirements for the Degree of
Doctor of Philosophy in Civil Engineering

Department of Civil and Environmental Engineering

January 2011

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Copyright © 2011 by Kingsley Oseloka Achebe

ALL RIGHTS RESERVED
APPROVAL PAGE

RISK BASED MODELS FOR THE OPTIMIZATION OF OIL
AND GAS SUPPLY CHAIN CRITICAL INFRASTRUCTURE

Kingsley Oseloka Achebe

Dr. Fadi Karaa, Dissertation Advisor Date
Associate Professor of Civil and Environmental Engineering, NJIT

Dr. Robert Dresnack, Committee Member Date
Professor of Civil and Environmental Engineering, NJIT

Dr. John Schuring, Committee Member Date
Professor of Civil and Environmental Engineering, NJIT

Dr. Methi Wecharatana, Committee Member Date
Professor of Civil and Environmental Engineering, NJIT

Dr. L. Abdel-Malek, Committee Member Date
Professor of Industrial Engineering, NJIT
BIOGRAPHICAL SKETCH
Author: Kingsley Oseloka Achebe
Degree: Doctor of Philosophy
Date: January 2011
Undergraduate and Graduate Education:
• Doctor of Philosophy in Civil Engineering,
New Jersey Institute of Technology, Newark, NJ, 2011
• Master of Science in Civil Engineering,
New Jersey Institute of Technology, Newark, NJ, 2006
• Bachelor of Science in Building,
University of Jos, Nigeria, 1999
• National Diploma in Civil Engineering,
Federal Polytechnic, Bauchi, Nigeria, 1997
Major: Civil Engineering
Presentations and Publications:
Kingsley Oseloka Achebe, Bethzayda Rivera and Fadi Karaa, Model based vulnerability
analysis of energy utility critical infrastructure in the Gulf Coast region,
Presentation for Critical Infrastructure II class, NJIT, May, 2007
Kingsley Oseloka Achebe, and Fadi Karaa, Vulnerability of geographic concentration for
critical infrastructure, Presentation for Critical Infrastructure I class, NJIT,
December, 2006
Kingsley Achebe and Emmanuel Achuenu, Physical and mechanical properties of
sawdust concrete (Sawcrete) blocks, with coconut pulp ash at elevated
temperatures. Presentation and Project in fulfillment of B.Sc. degree in Building,
University of Jos, Nigeria, May, 1999
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Dedicated to the memories of my late Parents,
Reuben and Ramotu Achebe. I wish you were both here.

The secret of getting ahead is getting started.
The secret of getting started is breaking your complex overwhelming tasks
into small manageable tasks, and then starting on the first one.
Mark Twain

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ACKNOWLEDGMENT

First of all, it is my pleasure to express my appreciation to Dr. Fadi Karaa, who not only
served as my dissertation advisor but also introduced me to a breathtaking research topic.
I have learnt tremendously over the course of my Ph.D. study at New Jersey Institute of
Technology.
Furthermore, my deep indebtedness is given to Dr. Robert Dresnack, Dr. John
Schuring, Dr. Methi Wecharatana, and Dr. Layek Abdel-Malek for participating in my
committee and giving invaluable guidance beyond my academic pursuit.
My acknowledgement to the Department of Civil and Environmental Engineering
cannot be neglected. My accomplishment today would not have been possible without
their financial support over four years.
Last, but not least, I would like to express profound gratitude to my lovely wife,
Kechi, for her uncomplaining patience, unconditional support, and enormous
encouragement during my studies. I would also thank my siblings, Nkiru, Osondu, Chidi
and Rasak, for always being there for me. I will also want to extend my sincere gratitude
to all my other family members and friends in United States and Nigeria.

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