Business End of Pipeline Scheduling

April 2015, Vol. 242, No. 4

Lars Larsson, Senior Product Manager, Schneider Electric

Energy consumption costs are on the rise. Similarly, pipeline schedulers and managers’ energy are increasingly consumed by challenges to keep pipeline operations running in a smooth and cost-effective manner.

The time and extensive management commitment required to reduce energy consumption and increase productivity can actually be a net cost to operators and their businesses. To avoid this, the addition of an automated and fully integrated pipeline scheduling system can add tremendous value and cost savings to a company.

In many cases, pipeline schedulers and managers use manual or limited automatic systems, like spreadsheets, that do not provide for an accurate schedule. If a company invests time and money to decrease energy consumption, personnel and other operational costs, without actually improving the efficiency of day-to-day operations, the investment won’t be fruitful.

Systems that require manual input or calculations are not only labor-intensive, but significantly increase the company’s likelihood for error. The increased time required to navigate these substandard systems materially diminishes the company’s overall productivity. The risk of data being inputted or calculated incorrectly adds to a pipeline scheduler’s daily responsibilities and requires additional time to find and correct, not to mention the operational cost caused by those errors.

A pipeline scheduler is required to incorporate numerous complex components into the calculations. A scheduler must be familiar with the quantity and quality of the product, destination, expected delivery time and optimal route. For these factors alone, there exist innumerable variations that can affect scheduling. As unexpected variations occur – a customer suddenly needs more products, for example – the day’s complete schedule becomes subject to unexpected outages and pullbacks.

From an operational standpoint, one outage or pullback can affect every schedule in its wake. Suddenly, products that were expected to leave the pipeline at a specific time must be transported to a different location, causing all other scheduled products to also require new routes. The amount of personnel time needed to develop alternative routes for all affected products can be head splitting for schedulers and managers alike.

From an accounting standpoint, managers are required to prepare budgets that conservatively allocate for these outages and pullbacks. These allocations are often cautiously excessive, intentionally overestimating the amount of crises that may occur so the company has enough resources to react as needed. Significant capital is set aside to deal with avoidable risks when it could be reinvested into the organization to increase overall profitability.

An outage or pullback also causes the value of the physical commodity to be lost. A product is worth the price paid by the consumer. If unexpected rescheduling of transport exceeds the paid price, the commodity is suddenly costing the firm money.

A company’s crude and refined products are its strongest asset in terms of generating revenue. Management of the products must be invested in effectively to realize full earning potential. The use of manual scheduling systems increases the risk for outages and pullbacks which greatly decreases the overall value of the products.

Schedulers know accuracy is the most valuable component of pipeline scheduling because customers demand precise delivery times. Companies that commonly face terminal outages can’t meet these timely requirements and may lose customers to competitors. The loss of a customer can have even further-reaching consequences. Pending an outage and loss of a customer, the products then become undeliverable.

The company may have a pipeline lockup on its hands, which can cause a cascade reaction for the delivery times of other customers. Timely transportation is an invaluable advantage to schedulers. An automated scheduling tool can help ensure precise delivery times to avoid lockups and create more economical and productive business operations.

A sophisticated scheduling tool can account for “what-if” scenarios. The system quickly compares all possible schedules for a day’s given demand, priority orders and delivery terminals to determine the best route. Decision-making is optimized by gathering extensive information and real-time data such as pump and valve status, flows and pipeline pressures.

The time required to manually gather all the necessary data to determine the best route makes it virtually impossible for pipeline schedulers to make effective decisions without tools like these.

The “what-if” tool can be applied in case of lockups or outages. It can account for the cost of rescheduling transport by leveraging the real-time data and can even consider internal expenditures like overtime cost for additional personnel.

A scheduling system that is integrated across all levels of operations can also help systems that blend crude. Companies that blend crude must consider copious factors, including the ratio of the different products and the viscosity and density of the product needed.

A scheduling tool can indicate optimal start times based on the pipe size, the efficiency of the pumping system and the quality of the end products desired. Productivity can be increased by a system that can analyze different start and stop times to choose the most cost-effective configuration.

Increasing Efficiency

As energy costs rise, pipeline schedules know they must operate more efficiently to remain profitable. To optimize power usage, a scheduler must consider situations like energy rate contacts, pump rates, pump start and stop times. An automated system able to monitor and analyze energy consumption can significantly cut energy costs.

A truly fully automated system can consider the geographical layout of the pipeline to determine the best routes for products while considering issues such as the cost and viability of driving pumps faster for priority orders. A system that can suggest best time-of-day practices based on energy rates can be a great asset.

As data is automatically absorbed, based on changing external information like energy rates, manual calculations and errors are eliminated. Furthermore, a user-friendly interface used across all systems within the organization can help cross-train schedulers to manage a range of crude and product pipelines.

The considerations an integrated system examines can be instantly changed to correspond with evolving government and industry regulations. The system can update all information about hazardous by-product buildup, environmental pressures, future trends and potential security threats to reflect a government regulation.

The system can even compare past consumption against current regulation to calculate carbon credits and help a company achieve the marketing and tangible benefits associated with being a greener organization.

Case Study

One case study of a major oil company outlined the tangible value added to a firm’s bottom line when a fully automated and integrated scheduling system was put in place.

In this case the value exceeded $1 million for the organization. The study revealed the disparate impact of using manual vs. automated systems. It was found that a pipeline operator spends between four and six hours organizing alternative pumping arrangements when an outage or pullback occurs. A system that uses real-time data to analyze current demand, inventory and equipment capacity can alert schedulers to potential outages and pullbacks.

An alert system that prevents just one instance of outage or pullbacks saves personnel costs of up to $62,500 at a relative crude value of $5 bbl. The amount saved in energy expenditures is about $10,000 per month at today’s prices. These micro-savings add up over months. If the scheduling accuracy is increased so that pullbacks are avoided, additional money is saved.

As a pipeline scheduler’s considerations grow in number and complexity, a more comprehensive method of recognizing and weighing demands and commitments is required. Without a more comprehensive method, a scheduler is charged with the tremendous task of identifying all external and internal information, analyzing it and making the best decision.

In the case of changing rates, demand or lockups and outages, a scheduler is often required to make these information-heavy decisions immediately. With no time to consider the important facts, a scheduler cannot make the best decision for the organization.

Energy costs are rising. Regulations are expected to target energy efficiency, and the demand of an environmentally friendly public image is greater than ever. As the energy industry shifts, the call for this type of technological innovation becomes clearer. Companies are already requiring dedication of resources to meet the changing demand of the marketplace. These types of systems meet that need while providing centralized and consolidated information to improve the overall efficiency of operations.

Author: Lars Larsson is a senior product manager at Schneider Electric with more 22 years of oil & gas pipeline industry experience from system design to commissioning and support. He earned bachelor’s degrees in process automation from Telemark Technical College in Norway and in control engineering from The University of Sheffield, UK.