Royal Dutch Shell Co, Australian bank Macquarie Group and PetroChina International America, the U.S. trading arm of state-owned energy firm PetroChina Co Ltd raised concerns about high H2S levels, according to the shipping documents, emails provided by the Energy Department in response to a public records request, and a department official who declined to be identified.

Problems with crude quality would make the U.S. Strategic Petroleum Reserve (SPR) less useful in an emergency because refiners would need to spend time and money removing contamination before producing fuel. The reserve is the world's largest government stockpile, currently holding 665 million barrels. Hydrogen sulfide (H2S) occurs naturally in crude and natural gas, but oil producers typically decontaminate such products before delivery to buyers. High levels of H2S can corrode refinery parts and pipelines - and can be lethal to humans in gas form. Authorities in all major consuming countries keep oil in reserve to ensure that they do not run out of crude to refine into fuels if a natural disaster or war disrupts global supplies. The U.S. government established its reserve in 1975 following the Arab oil embargo.

The U.S. Department of Energy oversees the reserve and periodically sells some of its oil at times when there are no emergencies, as it did with the sales that sparked contamination concerns. The department took responsibility for cleaning the shipment to PetroChina with an additive after it determined in May of last year that levels of H2S were too high, according to the department official. The department disputes tests showing levels were too high in the other two cargoes, the official said. All three firms bought cargoes of SPR oil stored in an underground salt cavern in Bryan Mound, Texas last year. The oil was pumped from Bryan Mound through pipelines to the nearest oil terminal at Freeport, Texas before being loaded onto ships, according to records reviewed by Reuters and the department official.

The Freeport facility is owned by Houston-based Enterprise Products Partners LP. Enterprise knew about higher levels of H2S in a small number of cargoes traded between private firms that passed through its terminal, Enterprise Senior Vice President Brent Secrest told Reuters in an interview.

In March, Shell complained to the Energy Department after finding high levels of H2S in a cargo the company bought as part of a 6.2 million-barrel purchase from the U.S. government in January, according to emails provided by the department in response to the Reuters public records request. The firm was "unpleasantly surprised" to find the high levels, Shell oil trader Steve Sellers wrote to the department, adding that the issue caused concern at Shell about the quality of SPR crude for future purchases. The oil firm's emails said an initial test sample detected H2S gas at levels of less than five parts per million (ppm). But a later test by Shell - after it shipped the crude by boat to another U.S. location - showed H2S levels of 600 parts per million, according to Shell's emails to the department.

Exposure to vapors containing 500-700 ppm of H2S could cause a person to collapse in five minutes and die within an hour, according to the U.S. Occupational Safety and Health Administration. In November, Australian bank Macquarie Group bought the third shipment from the SPR and sold it to PetroChina, according to the shipping documents reviewed by Reuters. A testing company named Inspectorate tested a sample from the SPR cargo purchased by Macquarie, according to the documents, and found H2S levels of up to 9,000 ppm.