Jargon

The sometimes colorful, occasionally confusing language of the petroleum refining, transportation and marketing industry.

 

Anomaly


An irregularity in a pipe due to damage or a defect in the pipe. Also used to describe unusual supply and demand movements.

 

API Gravity

 


An arbitrary scale defined as: degrees API gravity equals 141.5 divided by specific gravity minus 131.5. The API gravity of water is 10.0. Less dense liquid fluids have API gravities greater than 10.0.

 

Backwardation

 


A market situation in which market prices are expected to be lower in future months than today. (opposite of contango)

 

Barrel

 


A volumetric unit of measure for crude oil and petroleum products, derived by the original use of spent whiskey barrels to hold oil in the 1800s. One barrel equals 42 U.S. gallons.

 

Barrel-Mile

 


A unit of measurement of pipeline shipment of product that signifies one barrel moved one mile.

     
 

Barrel Per Calendar Day (BPCD)

 


The amount of input that can be processed under usual operating conditions. The amount is expressed in terms of capacity during a 24-hour period averaged over an entire year. It incorporates typical rate reductions for planned maintenance and other normal operating activities.

     
 

Barrels Per Stream Day (BPSD)

 


The average number of oil barrels of input processed within a 24-hour period.

 

Batch

 


A shipment of a single product that is handled through the pipeline without mixing with preceding or following shipments.

 

Biodiesel

 


A fuel made from vegetable oils, recycled restaurant oils, or animal fat. The oils or fat is typically processed into a methyl ester. It is low in sulfur, biodegradable and is derived from renewable products that can be blended directly with diesel fuel in various concentrations.

 

Booster Station

 


A pump station used to increase the pressure of oil received through a main pipeline to transmit it to the next station or terminal.

 

Butanes

 


Low boiling point hydrocarbons used for gasoline vapor pressure control.

 

Cleaning Pig

 


A tool used to clean or scrape residue from the inner walls of a pipeline. Also called a utility pig. (See Smart Pig)

 

Coking

 


A refining process for thermally converting and upgrading heavy residual into lighter products and petroleum coke.

 

Cold Zone

 


Area safe for necessary personnel.

 

Common Carrier

 


Any transportation system available for use by the public for transporting cargo; almost all interstate pipelines are common carriers.

 

Contango

 
 


A market situation in which market prices are expected to be higher in future months than today. (the opposite of backwardation)

 

Crack Spreads

 


The dollar per barrel value of a product or group of products versus the crude cost. Crack spreads are used as a proxy to estimate the gross margin for processing a barrel of crude oil in a refinery.

 

Cracking

 


A refining process under which heavy molecular weight hydrocarbons are broken up into light hydrocarbon molecules by the application of heat and pressure, with or without the use of catalysts.

 

Crude Oil

 


The basic raw mineral pumped from the earth. There are many different grades of crude, each containing various vapors, liquids and solids. This crude is processed at a refinery into many petroleum products, including gasoline, diesel, asphalt, jet fuel.

 

Dealer

 


A generic term referring to a retail service station or convenience store operator usually affiliated with a brand identity or program. A dealer typically leases the facility from a refiner or jobber.

   
 

Downstream

 


The segment of the oil industry involved in the refining, transportation and marketing of products.

 

Exchange
Contract

 


A contractual agreement with another product supplier whereby we deliver a product at a given point in a given quantity for a given period of time and we receive a like product at a given point in a reciprocal quantity for the same period of time. At times the exchange is not valued equally and one party owes the other money as well.

 

Feedstock

 


Inputs to refining or gasoline blending, other than crude oil, includes butanes, gas oil and natural gasoline.

 

Gas Oil

 


Material heavier than distillate and lighter than heavy fuel oil or asphalt. Cracked into gasoline and distillate-range products.

 

Gathering Lines

 


A small diameter pipeline used in gathering crude oil from the oil field to a common point for further movement to a trunk line.

 

High Pressure Pipelines

 


Pipe systems which operate at 600 psi to 2000 psi and higher.

 

Hydrotreater

 


The purpose of this unit is to reduce the sulfur and nitrogen contents of the feedstock and to improve the combustion characteristics of the transportation fuels In addition to sulfur and nitrogen removal, hydrotreating reduces the amount aromatic hydrocarbons that can give jet kerosene a poor smoke point and diesel fuel a poor cetane number.

 

Hypermarketer

 


A term referring to large retail stores and/or supermarkets which have a gasoline offering in their parking lots, perhaps as a loss leader. Also referred to as “big box” retailers.

 

Hot Zone

 


Area where hazardous vapors and liquids are present.

 

IMP Rule

 

IMP RuleIntegrity Management Plan Rule. Nickname for a rule published by the Office of Pipeline Safety entitled "Pipeline Integrity Management in High Consequence Areas." The rule requires that the integrity of pipeline systems be managed through testing, maintenance and evaluations of releases, third party damage, and other relevant data.

 

Independent
Marketer

 


A retail petroleum “seller” or wholesaler, who is not involved in the refining of petroleum products and therefore must purchase its supply of petroleum products from a refiner or other supplier.

 

Interface

 


The mixture which occurs in normal pipeline operations between batches of petroleum products or crude having different specifications. Also called "slop" or "transmix."

 

Jobber (Brand)

 


Customers who enter into a Product Supply Agreement with MPC in which MPC agrees to supply and the customer agrees to purchase Marathon Branded motor fuels at MPC terminals for use in stations where MPC has given permission to use its name and trademarks. The service stations may be owned/operated directly by the jobber, leased by the jobber to another operator, or owned/operated by some third party. These locations are called “jobber-dealers”. The jobber typically arranges his own scheduling and transportation of product.

 

Lessee Dealer (Brand)

 


Individuals who lease one of MPC’s company-owned service stations in Ohio, Michigan, Indiana or Illinois. Each lessee dealer is an independent businessman, making decisions concerning the day-to-day operations of the station, including street pricing.

 

Light
Products

 


The group of petroleum products with lower boiling temperatures, including gasoline and distillate fuels.

 

Line Section

 


A continuous run of pipe between locations.

 

Manifold

 


An arrangement of piping valves to provide interconnecting links between a number of pumps, tanks, and lines at a pump station.

 

MTBE

 


Methyl Tertiary Butyl Ether. An octane booster and oxygenate used for gasoline blending.

 

Natural Gasoline

 


Gasoline boiling range material co-produced with natural gas. Used for refinery feedstock and gasoline blending.

 

Octane Number

 


A rating, which is the average of the motor octane and research octane of a fuel sample, used to indicate gasoline’s anti-knock performance in motor vehicle engines. The higher the octane number, the higher the resistance to engine knock.

 

Oxygenate

 


Oxygen-containing blend stocks favored for their octane and their clean burning quality. Includes MTBE and ethanol.

 

PADD

 


Petroleum Allocation for Defense District. A group of five geographic areas in the U.S. used in reference to petroleum distribution, created in 1950 by the Petroleum Administration for Defense. These districts were originally defined during World War II for purposes of administering oil allocation.

 

Pipeline System

 


All parts of the physical facilities through which commodities move, including line pipe, valves, pumping units, metering stations and tankage.

 

Products

 


Refined substances made from crude oil: gasoline, fuel oil, butane and a host of various other petroleum products.

 

Products Terminal

 


A facility used primarily for the storage and/or marketing of petroleum products which would generally have a total bulk storage capacity of 50,000 barrels or more. It typically receives petroleum products by tanker, barge or pipeline and serves as a loading facility for trucks to transport products to stores, stations and smaller bulk distribution plants.

 

Proration

 


(Also known as an allocation) A temporary limit on the amount of product customers can purchase at the terminal, usually based on contracts, which is used to protect inventories in time of shortage. Can also refer to a limit on the amount of product that can be shipped on a pipeline during a specific period of time by a supplier.

 

PSI

 


Pounds per Square Inch. Common measure of pressure.

 

Pump Price

 


The self serve price, including taxes, posted for either gasoline or diesel fuel at a station or store.

 

RBOB

 

RBOB is the acronym for Reformulated Blendstocks for Oxygen Blending. RBOB combined with MTBE at some refineries makes what we call RFM (Reformulated gasoline with MTBE). RBOB combined with ethanol at some terminals makes what we call RFE (Reformulated gasoline with ethanol).

 

Rack

 


Refers to the loading area or point of sale from which trucks pick up products at a terminal to transport to other destinations.

 

Rack Pricing

 


Price to branded and unbranded customers for purchases of petroleum products at the terminal, typically with the customer arranging for and paying for transportation.

 

Refiner's Margin

 


Typically, the difference between the spot price of a light product, such as gasoline, and the price of crude oil.

 

Resale

 


The simultaneous purchase and sale of products or crude oil to improve profitability by capturing timing, location and/or grade differentials.

 

Retail Margin

 


The difference between the cost to acquire product at wholesale and the selling price of the product at street locations (store or station), exclusive of taxes.

 

Right-of-way

 


A strip of land usually from 50 to 80 feet wide on which permission has been granted by landowners for the construction/maintenance of a pipeline.

 

ROCE

 


Return On Capital Employed. A measure of how productively the company manages its refining, marketing and transportation assets. ROCE is the ratio of operating profits generated to the amount of operating capital invested.

 

RVP

 


Reid Vapor Pressure. The vapor pressure of gasoline under a closed vessel at 100 degrees Fahrenheit. Summer months require a lower RVP so gasoline does not evaporate before it can combust in a gasoline engine. Winter months require a higher RVP so gasoline does not vapor lock before it can combust in a gasoline engine.

 

Sellers (Brand)

 


Own their single-site location, but use MPC’s capital investment dollars and the business consulting services of its marketing representatives. Like the Lessee Dealer, each Seller is an independent businessman, making their own day-to-day operating decisions. They operate in Ohio, Michigan, Indiana or Illinois.

 

Smart Pig

 

smart pigAn internal inspection tool used in the pipeline industry to detect anomalies or irregularities on the walls of a pipeline.

 

SMYS

 


Specified Minimum Yield Strength. Identifies the mill property of a pipe showing its strength.

 

Specific Gravity

 


The ratio of a liquid’s density compared to water. A liquid with a specific gravity less than one is less dense than water.

 

Spot Price

 


The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased "on the spot" at current market rates.

 

Sour/Sweet Crude

 


Designation which describes the degree of a given crude’s sulfur content. Sour refers to high sulfur and sweet to low-sulfur.

 

Tank Farm

 


A group of tanks connected to a pipeline through which oil is moved.

 

Throughput

 


A volumetric rate measuring the flow of crude or products through a system over time.

 

Trunk Line

 


A main pipeline.

 

Turnaround

 


Period during which equipment is shut down for mechanical inspection and/or mechanical maintenance.

 

Upstream

 


The segment of the oil industry involved in the exploration and/or production of crude oil.

 

VOC

 


Volatile Organic Compounds. VOC is most commonly used when describing the summer gasoline season. This is the time of year when the Clean Air Act of 1990 requires reduced VOC emissions in gasoline in order to maintain air quality.

 

VRU

 


Vapor Recovery Unit. A VRU captures vapors from empty transport trucks that are pushed out the truck tank during the loading process. Some units actually recover the vapors, convert them to liquid state through various means and return the product to a tank within the terminal tank farm. Other units called vapor combustors burn the vapors in a flare.

 

WTI

 


West Texas Intermediate crude oil. The WTI spot price of crude is reported from Cushing, Oklahoma.

Updated: Wednesday, April 30 2008