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Oil separation system includes coalescer/oil separator, oil water collection tank with float assembly, electrical heaters and self-priming pump. Overflow connection of degrease 2 is connected to degrease 1 and overflow collection of degrease 1 is connected to oil water collection tank. The oil water mixture from collection tank is sucked by pump through float assembly and delivered to oil separation tank. Oil separation tank has 3 partitions as separation chamber, oil water chamber & oil chamber. From oil chamber we can collect oil separated from water and from oil water chamber separated water is collected in degrease 2 tank.