Blockchain in Chemical Process Industries Blockchain and its Big Impact

Editor: Ahlam Rais

Branching into various industries, blockchain is now strongly making its presence felt in the oil and gas as well as the chemical process industries. PROCESS brings you the many plus points of this dynamic technology in chemical process industries.

Related Vendors

Blockchain is exhibiting its perks in many other dynamic industries such as the oil & gas and chemical industry.
Blockchain is exhibiting its perks in many other dynamic industries such as the oil & gas and chemical industry.
(Source: Deposit Photos)

Blockchain is considered to be one of the most revolutionary technologies of modern times. Initially associated with cryptocurrency, blockchain is now exhibiting its perks in many other dynamic industries such as the oil & gas and chemical process industry.

What is blockchain?

Blockchain is a distributed ledger technology that can be programmed to record and track valuable information such as financial transactions, product designs, machine parameters, etc. What makes blockchain unique is its process. The revolutionary technology stores information in groups called blocks that are linked together in a sequential order and in a straight line such that it forms a chain of blocks.

Additional Information
Making Blockchain Work with Blocklabs

Organisations: Software company Finboot and Repsol Technology Lab Research Center

Achievement: Developed ‘Blocklabs‘ application to improve product certification process in refining and petrochemical sector.

Processes: 60,000 samples from industrial businesses each year

Savings: 400,000 Euros per year (Around 450,000 Dollars)

Refining and petrochemical products require safety and quality certifications by regulatory organisms. At present, there is a lot of re-work involved in the processes due to labeling errors, information losses, or incorrect connections between information. With digitalisation, one can identify the samples correctly throughout their whole life cycle.

With Blocklabs, people can request certification of a sample on the web application, which creates an equivalent digital file and registers it in a blockchain. From this moment on, physical samples and all the associated information are registered and unchangeably linked to their digital equivalents. Once testing has been carried out and the certificate has been issued, the details of the certificate are registered in the digital asset with the same code.

The first pilot test was carried out recently and Repsol plans to incorporate the process in its research center by April 2019.

If one has to make changes to the information stored in a particular block then instead of over writing the information in the block, the altered information is stored in a new block with details of the change along with the time and date. This enables the organisation to track data changes over a period of time.

Blockchain is a decentralised system and distributed across a large network of computers. This reduces the chances of anyone messing around with the data. Also, before a block can be added to the chain of blocks, a cryptographic puzzle must be solved which is then shared and verified by all the other computers in the specific network. Once these criteria’s are met, the new block is added. This process makes sure that the data in each of the blocks is trustworthy.

The transparency of this technology also eliminates the need for intermediaries that are costly and time consuming. Hence, blockchain completely revolutionises the manner in which industries function with regards to their data.

Additional Information
Quick Bytes
  • In 2019, U.S. to see largest blockchain spending of 1.1 billion dollars, followed by Western Europe (674 million dollars) and China (319 million dollars), report by IDC.
  • China accounts for 25 % of new blockchain projects worldwide, claims data service provider Blockdata.
  • Chinese internet giants—Baidu, Alibaba and Tencent—have started their own blockchain projects.
  • Reliance, Chevron and Total join oil blockchain platform, Vakt, one of the maiden blockchain pilot schemes designed to improve commodity trading and reduce paperwork. Other oil leaders include BP and Royal Dutch Shell, Equinor, Mercuria Energy Group and Koch Supply and Trading, as well as Gunvor Group.

Blockchain in the oil & gas industry

Among the many industries that are actively incorporating blockchain in their processes is the oil and gas industry. Karn Sood, Business Development Advisor – Connected Energy, Shellsays, “In my personal opinion, the oil and gas/energy industry is a natural fit for blockchain. Much of the industry is largely stuck in the past and still uses paper documentation for a number of processes. With the amount of companies looking at blockchain for various use cases, if you are an Oil & Gas company that is not at least participating, you will get left behind.”

Plus points of blockchain in the oil and gas industry

  • Greater transparency of invoices

One of the leaders in this space, Accenture shares how blockchain can be used in the oil and gas industry. In the current scenario, companies are constantly worried about losing money owing to invoice overpayments and duplicate payments. It is here that blockchain eliminates this discrepancy by establishing smart contracts and offers increased visibility, transparency as well as accuracy of freight invoices. This process significantly reduces costs for the oil & gas industry.

  • Land sale records

According to a report byInfosys, the India-based multinational information technology consulting company, proper management of land sale records is also a vital concern for oil and gas companies as millions of dollars of investments as well as profits depends on the simple question – ‘who owns the land?’. The world has been witness to many instances of forgery or contract issues between different business parties. Now, blockchain can solve all these issues as it is a distributed ledger technology and the information stored on it cannot be altered. Thus providing accurate information and acting as the single source of truth.

  • Supply chain

Another major area of blockchain implementation is supply chain management. With an aim to improve quality control, companies can use this innovative technology to track and identify the complete supply chain of raw materials right from the place of origin to the end user. Once created, the data cannot be altered. Blockchain also holds potential to track the progress of numerous oil and gas equipment in terms of operating conditions of the equipment, history and maintenance of the equipment.

  • Smart trading

In the oil & gas industry, trading plays a crucial role as crude oil, petroleum products, natural gas, and petrochemical products are traded across various parties such as shipping agents, surveyors and others. With so many players involved, there are activities such as payments, validating quality monitoring, etc that require manual work. However, with blockchain all the relevant information is stored and is ready for verification by all the parties involved. This process enables to reduce manual work via automation and also reduces the possibilities of a dispute between the parties.

  • Handing over EPC projects

Even in the case of handing over projects to different segments such as EPC firms, engineering firms and other subcontractors, which require handing over all the relevant information about the project including design documentation, as-built documentation, project plans, project resourcing information, etc. can be achieved through blockchain. The process also helps the new players to understand the project with ease and all the information can be handed over to the concerned parties at one go.

Additional Information
Fresh Blockchain Projects in Action
  • Adnoc collaborates with IBM to pilot Blockchain-based automated system to integrate oil and gas production across full value chain.
  • Elemica completes blockchain pilot project for two global chemical companies. Aim: simplify transfer of documents and data, for the two firms.
  • Russian gas firm Gazprom recently launched own blockchain network to execute and monitor business contracts.

Subscribe to the newsletter now

Don't Miss out on Our Best Content

By clicking on „Subscribe to Newsletter“ I agree to the processing and use of my data according to the consent form (please expand for details) and accept the Terms of Use. For more information, please see our Privacy Policy.

Unfold for details of your consent