In this paper, a recently established automated targeting model (ATM) for a heating utility system is extended to integrate the phase separation system in an oil and gas platform to determine its optimum overall cost. A heating medium is used at the oil and gas platform to reduce the viscosity of heavy crude oil from the well and to facilitate the separation process by reducing the size and cost of the separators. The downside of this approach is the additional cost associated with increased heating utility. Therefore, an optimization approach is needed to reconcile the various objectives and to minimize the overall cost. The proposed approach makes use of the pinch analysis-based ATM to find the optimum trade-off between the heating medium system and separation processes. For the ATM, a novel algorithm is introduced to automate the process for temperature sorting and also to locate the heating medium users in their associated temperature intervals. This enables the utility targeting step to be performed despite the changes in temperatures of the heating medium at the crude oil heaters; the latter are located upstream of the crude oil separators. The optimization problem is decomposed into two subproblems. First, the phase separators are sized for optimum cost based on different inlet temperatures. These optimum costs are then associated with the heating utility system by the choice of outlet temperatures at the heaters. Next, the model is solved for overall optimum cost. An industrial case study is used to elucidate the application of the newly proposed approach.