Artificial intelligence for refiners
First define the problem, then artificial intelligence can be the way forward
to higher operational efficiencies
JANE REN
Atomiton
A
rtificial intelligence (AI)
is an umbrella term that
covers many things. By
its name, it is using computer
programs to do what intelligent
humans could do, and often
doing it even better. Artificial
intelligence is also called cog-
nitive science, which is the
most popular computer science
course now in universities.
At its core, AI facilitates the
ability of machines to learn
from experience, adjust to new
inputs and perform human-like
tasks. Most examples encom-
pass deep learning and natu-
ral language processing. Using
these technologies, computers
can be trained to accomplish
specific tasks by processing
large amounts of data and rec-
ognising patterns in the data.
In the 1950s, the foundation
of AI research covered prob-
lem solving and symbolic meth-
ods before the US Department
of Defence took interest in this
type of work with the Defence
Advanced Research Projects
Agency (DARPA) projects in
the 1970s. They had some early
success with DARPA, produc-
ing intelligent personal assis-
tants in 2003, long before Siri,
www.digitalrefining.com/article/1002251
Alexa or Cortana were house-
hold names. This early work
paved the way for the automa-
tion and formal reasoning that
we see in computers today,
including decision support sys-
tems and smart search systems
that can be designed to com-
plement and augment human
abilities.
Five attributes of AI
The cognitive tasks of AI can be
divided into five categories: per-
ception, learning, forecasting,
reasoning, and coordinating.
With perception, AI can under-
stand the environment with
sensing, and detect and recog-
nise occurrences; is that smell a
fuel leak? From this it can learn
by synthesising that informa-
tion into knowledge; this could
be learning the relationship
between temperature set points
and distillate yield.
You begin to extract value
from this data by being able to
forecast with high precision and
simulate outcomes such as the
diesel fuel demand at your ter-
minal next week. When it comes
to solving logical problems, or
reasoning, AI can make deci-
sions or suggest the best solu-
tions; given what I know, what
is the optimal distribution of my
products at different terminal
sites?
Finally, coordinating, or
what economists call ‘playing
games’, is behaving with the
assumption of other autono-
mous agents and responding
rationally.
Despite the expanding range
of problems AI can solve, there
is one thing which no AI pro-
gram has been able to replace
humans in: defining the prob-
lem itself.
Given the obvious bene-
fits that can be derived from
adopting AI, what are the chal-
lenges that downstream oil and
gas companies face when they
embark on a programme? One
of the biggest mistakes that
companies make is that they
embark on AI without first
defining the problem. They
collect lots of data, but do not
know what to do with it, since
they do not know what prob-
lem they are trying to solve by
collecting all this data. Other
industries have made this mis-
take before. A familiar exam-
ple is the auto industry, which
spent fortunes on telemetry pro-
PTQ Q4 2018 1
 to interpret (Google, Amazon,
Seven steps to create a successful IIoT AI Facebook). Machine learning is
based on pattern recognition,
project and machine learning meth-
1. Identify a problem with tangible impact. ods consider all data as either
2. Depict the what-if scenario. inputs (features) or outputs
Example 1: if we could know A and B and get information on C 24 (prediction). Multiple inputs are
hours earlier than we do now, our operations would be entirely differ- fed into an algorithm that pro-
ent, because we would be able to perform D intelligently. This is the duces an output. If the output
prediction problem. does not match the actual data,
Example 2: if we had a real-time computer that could help our peo- the algorithm is tweaked to do
ple calculate all the possibilities (permutations) and consequences, we better next time. This is called
would be able to make the best decision all the time. This is an optimi- training in machine learning.
sation problem. The IT world has been using
3. Understand what category of intelligence is needed. This would machine learning for many
determine what AI methods are a good fit. years, in Amazon’s recommen-
4. Understand time and location dependency/sensitivity of the dation engine, Gmail’s spam fil-
solution. ters, and Google’s search engine
a. Most intelligence in downstream is time sensitive. Decisions relying ranking algorithm.
on them are on a minute, hour, or daily basis. This means if your AI pro- Because machine learning
gram always needs human intervention, for instance by a data scien- relies on large quantities of data
tist in the loop, it is going to be useless. This determines how your AI about the same subject, it is bet-
programs runs – inline or offline, and how often it needs to get data, ter at very focused problems
immediately or every week. and parameters, such as what is
b. Where are the sources of most data? Onsite, distributed, or central- the relationship between vibra-
ised? If you found you have to transport most of the data through the tion and engine failure?
wires for analysis, it is probably not efficient or secure. Machine learning behaves
c. Understand what data are needed and what data are available, and if poorly when the problem is
the data are available at the right time window at the right location. a system problem with more
6. Select technology, but more importantly have someone define an complexity, such as a refin-
end-to-end solution specific to your problem. Do not buy generic ser- ing process or a logistics sup-
vices that assume all problems are the same. There simply has not ply chain for oil that has many
been sufficient domain information fed into today’s AI technologies. moving parts, which prevents
Without domain specificity to your problems, most AI programs or ser- repeating patterns.
vices are useless. It can also struggle when
7. Remember to define and document the business impacts of the most of the information is
programme. Then iterate and expand the scope of your first selected domain specific, such as the
problem. pressure setting on the steam
boiler that has a certain rela-
tionship with the steam energy
grammes, collected terabytes of ing has become so popular that generated and subsequently
data, and have not yet figured many people equate machine the processes in the distillation
out what to do with them. That learning to AI. In fact, machine column. Such domain-specific
fervour did not save the auto learning is only a small part of information from the data can-
industry from its 2008 crisis, AI. not be utilised unless an engi-
nor is it protecting the industry Machine learning is popu- neer or data scientist has spent
from disruptive forces. lar because it overcomes scien- time to structure and correlate
tific unknowns through large the data to correctly represent
Machine learning quantities of historical data, the relationship between them;
One of the most popular sub- and hence has made fortunes this is something that machine
categories today is machine for companies that in the past learning cannot replace. The
learning. In fact, machine learn- found their data too complex cost of this manual work is

2 PTQ Q4 2018 www.digitalrefining.com/article/1002251

often ignored when companies
want to train their data. They
end up not having meaningful
conclusions.
Another problem occurs
when time and sequence are
important. Most machine learn-
ing programs do not incorpo-
rate time based patterns. For
example, the best way to predict
the loading queue at the termi-
nal in the next hour is to count
the current queue length. Fuel
demand estimates at a retail
fuel station require informa-
tion such as which month of the
year and which day of the week
it is in order to predict more
accurately.
This is where time series come
in. The central point that dif-
ferentiates time series prob-
lems from most other statistical
problems is that in a time series
observations are not mutually
independent. Rather a single
chance event may affect all later
data points.
Yet, existing time series tech-
nology alone does not solve
all the new problems either.
Enterprises are trying to aggre-
gate and store all data in time
series format, which under-
stands time, but misses all
domain correlations. This cor-
relation across the domain of
operations is critical for gaining
contextual intelligence. Even
though historian has been a
familiar technology to first use,
it is not sufficient.
Companies should con-
sider the nature of the prob-
lems before they invest. You
need the right AI tool based on
the problem you have defined.
Be sure to define the problem
first, so that you can select the
right tool. Do not make the auto
industry’s mistake.
AI is already making inroads
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Categories of problems in downstream oil
and gas
1. Scheduling/allocation/coordination problems: crude scheduling;
inventory distribution across terminals, loading and unloading
coordination. Fleet (fuel distribution) coordination
2. Process optimisation: for instance, optimising the FCC and crude
distillation unit to optimise or control yield
3. Monitoring, detection, faster responses: leak detection; equipment
performance monitoring and failure detection
4. Supply chain logistics: optimising supply and demand.
into the downstream sector. The costs based on higher demand
oil and gas industry is known costs and has a greater negative
for its long supply chain and environmental impact. Energy
complex activities. To man- use typically suffers from low
age cost and ensure quality in visibility, meaning it is diffi-
today’s oil price market, supply cult to attribute energy costs to
chain transparency and asset different assets and processing
performance offer the biggest activities. In refining operations,
returns on investment. Digitised there are many operational
supply chains gain insight from constraints that make manual
across terminals to better fore- optimisation of energy infeasi-
cast demand and plan supply, ble. By monitoring and profil-
while smart assets improve ing energy used for assets and
asset productivity and reduce activities (distilling, cracking,
energy costs. mixing), predictions for energy
Terminals and refineries load against operational plans
are discovering efficiencies by and schedules can be made.
implementing IIoT (Industrial Working within operational
Internet of Things) software that constraints and priorities, activ-
leverages AI and machine learn- ity schedules can be optimised
ing. In these sectors, margins using Atomiton IoT operating
are very low and therefore effi- stack (A-Stack) software. Peak
ciency is vital. There are ways energy use can be reduced by
that IIoT software can integrate leveraging optimised schedules,
AI into day to day operations thus reducing energy costs.
for the downstream oil and gas
sector to manage and reduce the Steam usage
use of resources and optimise Steam is another resource which
supply chain logistics. is challenging to manage. A
very small refinery could spend
Energy challenges in refineries over $1 million each year just on
Peak energy usage steam to heat the process. Steam
One of the main resources used is a resource where you must
in refining and processing is use it or lose it. If you gener-
energy, and peak energy use ate more than you need during
can be very costly. Peak energy the day, you then lose it. Not
use may also impact future only is that expensive, but it
PTQ Q4 2018 3
 affects the environment. On the
other hand, if you have a steam
shortage, it may cause a shut-
down or interruption to oper-
ations. Planning steam sources
is complex, with different types
of steam generation, steam
sources, and associated costs
and reliability.
By connecting to steam
meters and boilers at a refin-
ery, A-Stack uses real-time data
to profile steam demand and
solve for the most economical
combination of steam genera-
tion and purchasing sources, to
reduce steam costs while meet-
ing the refinery’s process needs.
Additional relevant data such
as weather conditions (humid-
ity) can be incorporated into the
models to predict the impact on
steam production and allow for
dynamic optimisation.
Terminal efficiency
In downstream terminals, max-
imising loading efficiency can
have a significant impact on the
performance of terminal oper-
ations. Scheduling is a com-
plex process due to the many
inputs (truck arrival time, termi-
nal queue, loading bay queue,
loading time, and so on) and the
multiple combinations of trucks
that require different products,
against the required volumes
and flow rates from pumps
into different loading bays. The
number of calculations becomes
exponential as you consider all
the variables in this process and
becomes a nearly impossible
task for humans. Today’s man-
ual process is typically experi-
ence based with some amount
of guess work, which does not
optimise terminal operations.
But with predictive analysis
from A-Stack, these different
variables can be used to calcu-
4 PTQ Q4 2018
late optimised scheduling, to
determine for each truck which
particular loading bay it should
use. This orchestration mini-
mises overall queuing for the
terminal and maximises load-
ing efficiency, improving sup-
ply chain logistics.
Strategic decision making
One of the main strategic ben-
efits that IIoT software with
embedded AI can deliver is that
you can now move from oper-
ational data to intelligent busi-
ness decisions. There are a few
areas that positively impact oil
and gas companies.
One is pricing. In this sector,
there are different pricing struc-
tures at different stages for each
commodity and these can rap-
idly change. This will depend
on whether the trading has a
day or hour boundary. Having
full visibility of the distribution
of inventory is vital. Sometimes
it is sitting in tanks, sometimes
it is being transported in boats
or trucks, and having this data
will make it much easier and
faster for people to make the
pricing decisions, and this also
includes products that flow
through pipelines.
The second is about plan-
ning and coordination. Real-
time data extracted from tanks,
equipment, loading bays, and
trucks can perform intelligent
predictions and optimisations
through automated actions.
Optimising supply chain logis-
tics by leveraging this inte-
grated intelligence enables
better demand forecasting and
supply planning.
The third area concerns new
business models. A company
that digitises can be more com-
petitive not only through cost
reduction and efficiencies, but
also can provide customers
with new kinds of visibility.
Continuous and dynamic opti-
misation of operations turns a
business advantage into a stra-
tegic advantage.
Starting the IIoT AI journey
Even though interest in the
technology is high, it is the
responsibility of IIoT AI ven-
dors to ensure that it is targeted
against solutions that can pro-
vide clear business benefits.
This begins with enterprises
defining the problems that
need to be solved. Start with
a focus area and quickly iden-
tify low-hanging fruit and con-
centrate on those – for example,
energy optimisation, demand
prediction, inventory optimi-
sation, scheduling or loading
optimisation. Next, define the
goals for the initiative – reduce
energy costs by 20%, increase
terminal throughput by 10%?
Then pull together your oper-
ations and IT teams. There is
often a lack of shared knowl-
edge between these groups.
When IT starts a digitisation
project without understanding
operational processes or activi-
ties, it can lead to failure. Teams
working together leads to a
much higher success rate and
to projects that give the busi-
ness valuable operations intelli-
gence and often rapid ROI. Start
small and develop an innova-
tion pilot that can then be scaled
easily once proven. The technol-
ogy is complex, and the ecosys-
tems have not all come together,
so it is important to work with
good partners to ensure success.
The interest level is extremely
high, and it is almost becom-
ing a mandate, particularly in
the oil and gas sector where the
industry has got a wake-up call
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with the price of oil. Higher effi-
ciency is essential.
Conclusion
Five categories of intelligence
• Future intelligence: the ability
to forecast future events with
good confidence
• Historical intelligence: the
ability to understand what
happened
www.digitalrefining.com/article/1002251
• Contextual intelligence: the Jane Ren is the CEO of Atomiton.
ability to correlate multiple
factors in a context and make
sense of what is happening
• Domain intelligence: the LINKS
ability to deepen domain
knowledge/science More articles from the following
• Logical intelligence: the abil- categories:
ity to compute numerous logical Instrumentation, Automation
conditions/constraints simulta- and Process Control
neously and find the solution.
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