Measuring Profitability in Midstream Operations
With fracking-enabled North American petroleum production reaching over 22 million barrels/day in 20151 and the total global output of oil and natural gas exceeding demand, finding more efficiencies isn’t just a matter of coping with low prices, but a matter of survival for some energy companies.
In this post, we’ll look at three key areas to focus on to improve efficiency – fiscal transfer, cut-over and leak detection – to show how investing in innovative metering technologies and solutions can position midstream enterprises for better cost management now and greater profitability when the market rebounds.
Fiscal Transfer & Custody Transfer
Emerson has long said that the meters used in fiscal transfer operate as a “cash register,” and that measurement confidence is critical to profitability and compliance. With low oil prices shrinking profit margins, that accuracy has become exponentially more significant.
Fracking has changed the game for custody transfer as well. Directional drilling adds complexity to ownership rights; it’s part of why the Bureau of Land Management (BLM) has updated long-standing measurement standards for the oil produced on public land. A major addition by BLM to 43CFR 3174 is formal authorization of the use of Coriolis Measurement Systems and Coriolis meters in Lease-Automated Custody Transfer (LACT) systems as a response to the increasing need from the Oil and Gas Industry for new options and technology to improve custody transfer accuracy and streamline the process.2
Emerson Micro Motion Coriolis meters deliver best-in-class accuracy (± 0.05% accuracy for liquids and ± 0.35% accuracy for gases) in these applications. Micro Motion Coriolis meters are ideal for liquid custody transfer because they require practically no maintenance, and yet yield amazingly stable and consistent meter factors in service over time and under changing process conditions. Coriolis meters are typically the best choice in natural gas applications when line sizes are less than 4”.
Emerson Daniel ultrasonic meters offer a cost-effective choice for natural gas custody transfer in line sizes ranging from 4” to 12” and bigger. Like Coriolis meters, they offer excellent repeatability, require minimal maintenance, and come equipped with labor-saving diagnostics. Keep in mind that there are multiple factors in play – Emerson can work with you to determine which is the best choice for your applications now and going forward.
There is an estimated 2.6 million miles of pipelines in the U.S. that delivers trillions of cubic feet of natural gas and hundreds of billions of tons of liquid petroleum products each year.2 In light of the immense pressure on scheduling and revenue, capacity management needs to be precise.
Since new metering technologies can transmit data in real time, cut-overs can happen with much greater visibility. Emerson PipelineTransporter®, is a technology that can help in that overall process. It’s a web-enabled application that allows third-party access through a security management module, giving midstream companies visibility into their data to reduce downtime and to reliably move the product they are committed to deliver.
Leak Detection Systems (LDS) are becoming yet another critical part of the process that can impact costs. Furthermore, LDS effectiveness is more important than ever before with a heightened awareness and desire for greater safety and environmental stewardship. The last thing an energy company wants or needs is their name prominently highlighted in the news because of a personal injury or pipeline breech – it’s bad for public relations, employee morale, the brand, and ultimately the share value.
Variations in flow rates, products, pressures, and temperatures make monitoring the total volume of oil or gas in the pipe at any given moment for effective leak detection a tricky proposition at best. Emerson’s PipelineManager® software solution is configured by Emerson engineers to individually model your pipeline with an interface to your SCADA/DCS system to monitor the pipeline flow, pressure and temperature measurements. With its robust and highly sophisticated Real-Time Transient Model (RTTM) analysis method along with secondary methods for a hybrid LDS approach, PipelineManager will achieve the best sensitivity and immunity to false alarms, in order to notify you with trust-worthy reliability when pipeline integrity has been compromised due to an accidental leak or theft.
The Long-Term View to Profitability
In 2015, midstream operators, like every other segment of oil and gas, pulled back on capital investments. In December 2016, global oil producers scaled back production to force prices higher. The International Energy Agency reported that some U.S. shale producers are already making new investments, putting 161 rigs back into service since May 2016, after the total number of rigs had previously dropped to just 316.3
Taking the long-term view, thoughtful consideration of improving operations and measurement accuracy at each point in the value chain is one key to sustainable profitability. Emerson is in it, with you, for the long haul and, in this case, for the long-distance transport of oil and gas.
To learn more about how Emerson Flow Solutions and Consultation Services can help your enterprise improve fiscal transfer, cut-overs, leak detection and other O&G challenges, go to www.emersonflowsolutions.com.