Across many industries, companies showing a reluctance to embrace new technology are in danger of losing any competitive edge. In the oil and gas industry, where even the smallest error can have a major long-term effect, embracing innovation in the form of data analytics has become a necessity for companies striving to reach the highest levels.
In an article published in the Houston Chronicle in August, an executive from technology solutions provider Landmark explained that long-term payoffs outweigh upfront costs for oil companies that commit to investing in technology, especially when considering fluctuations in oil prices.
“The only mechanism to keep a sustainable low-cost view is to invest in technology and innovate,” said Nagaraj Srinivasan, vice president at Landmark, which serves the exploration and production industry.
For Enogex LLC, a midstream company based in Oklahoma, embracing technological innovation has been a focus for over a decade as the company’s executives recognized analytics could help in the critical area of lost and unaccounted for (L&U) gas.
Electronic flow meters (EFM) are designed to be the cash register for a midstream company, thus, in many ways, serving as the operation’s backbone. In the field, technicians track gas sold to downstream users or transporters, and ensure that customers pay for gas received at the wellhead. Millions of dollars are at stake when even small measurement errors occur, which makes the latest generation of EFMs extremely valuable, thanks to their tremendous accuracy.
The newest EFMs, which offer remote monitoring and almost real-time measurement capabilities, allow midstream companies to operate efficiently and with a maximization of resources. They are developed with long-term hardware and software reliability in mind, and an effectively deployed system of powerful, easy-to-operate EFMs enhances flow measurement and enables faster calculations. State-of-the-art EFM processors are also durable, with the ability to withstand extreme environmental conditions, including 6,000 volts of lightning and temperature cycling from -40° C to +85° C.
Enogex, which adopted the Thermo Scientific AutoPILOT PRO system, has taken a long-range approach to measurement improvement and has seen a high level of performance, as well peace of mind in the gathering and calculation of valuable data.
Route to Improvement
The story behind the company’s improved L&U levels began in the early 2000s when executives were prompted to audit operations due to substantial swings in L&U levels, specifically from the winter to summer months.
There were potential explanations for the fluctuations, including seasonal changes in gas temperature and ground temperature that affect the physical characteristics of gas. Executives, however, wanted to determine the specific causes and effects of such fluctuations, because of the effect on the accuracy of the data that feeds into the EFM and the company’s ability to set appropriate transportation and fractionation rates for customers.
An initial 12-month study of data found a difference of over 1% in L&U gas levels from mid-winter to mid-summer. L&U levels of about 0.85% were charted at the peak of summer while in the winter levels were closer to -0.40%. A loss or negative L&U has a financial effect in two ways: the customer pays for gas not actually received, and the replacement gas on the spot market may come at an elevated price.
Levels seen during the study were within the 2% threshold the industry accepts as reasonable, but were still alarming to Enogex, which wanted to establish a precise relationship between the work performed by its field technicians and subsequent L&U gas levels.
Executives brought in outside consultants to assess meter sites, including a review of calibration equipment, EFM configurations and physical meter tube inspections. The third-party review determined that field technicians required a more thorough understanding of American Gas Association (AGA) flow rate equations. Although the introduction of electronic flow computers helped the process, Enogex and its field technicians still needed to understand flow equations so they could conceptualize the resulting measurement numbers.
The company purchased a gas orifice flow (GOF) program in 2002 and installed it on the laptops of all measurement technicians, who began to understand the environmental parameters that affect the flow-equation factors, as well as how those factors influence the overall L&U calculation. Technicians were required to run the program upon arrival at a site and prior to leaving a site after calibration. The new procedures verified that the EFM was calculating data correctly, based on AGA flow-equation factors.
A new 12-month study, from 2006 into 2007, indicated the operation was headed in the right direction as it reflected significant improvements – a swing of less than 0.7% from mid-winter to mid-summer.
This provided incentive to keep going: executives opted to examine the data to identify opportunities for more enhancements to their services and bottom-line benefits, and determined a realistic goal for overall L&U was about 0.2%.
In 2007, the company chose to standardize its measurement protocols on one EFM platform, and over the ensuing three years, Enogex replaced all of its non-thermo-scientific EFMs with the AutoPILOT PRO (launched in 2008 and combined the capabilities of the Thermo Scientific AutoPILOT and Thermo Scientific AutoMATE flow computers.)
The GOF program provided calculation factors that were easily compared to the data made by the EFM and on one screen. The goal for standardization was to simplify calculation verification, troubleshooting and training with the expectation that it could maintain consistent L&U levels over any 12-month period. Those expectations were met.
A third study, conducted from February 2009 to February 2010, presented data showing less than a 0.2% swing from mid-winter to mid-summer, a significant improvement upon the 2006-07 analysis. Goals were lowered to a conservative 0.16% to emphasize the importance and continued focus on the key behaviors that drive low L&U.
Five Years Later
The L&U improvement initiative has been a success, with a five-year sample size now in place since its most recent internal study, and that success can be measured in several long-lasting ways:
• Standardizing on the AutoPILOT PRO has allowed field personnel to become more effective in helping to achieve the overall goals of the program. They now have a greater understanding of gas measurement calculations, where the data came from, and how the data affects L&U results. Technicians can be proactive in avoiding issues by seeing how each data point fits into an overall flow equation. Field technicians can play a larger decision-making role.
• The AutoPILOT PRO system enables per-second flow calculation on up to 6-meter runs simultaneously, and it interfaces with both differential signal devices and linear signal devices. It also features a simplified configuration that prevents personnel from spending valuable time on setup and programming.
• Sustaining low levels through changing seasons is critical for the bottom line of midstream companies, allowing them to drop their rates, set up more beneficial commercial deals, and gain and retain more customers.
• The success of the L&U improvements and the positive impact on commercial and financial gains contributed to Enogex’s attractiveness as a merger candidate. Enogex was previously a subsidiary of OGE Energy Corp before joining CenterPoint Energy in May 2013 to form a master limited partnership, Enable Midstream, which manages over 12,000 miles of gathering pipelines and nearly 8,000 miles of interstate pipelines as part of its operation.
The improved L&U levels show how the combination of adopting new technology, embracing innovative approaches to understanding data and having a long-term perspective can make for smart business practices. The company and its executives already knew that hundredths of a percentage point can be meaningful, but this case study shows further attention to detail paid off in the long run.
Technological innovation was beginning to transform the oil and gas industry when the L&U analysis began. Advanced monitoring instrumentation was rapidly being developed, increasing precision and accuracy to applications in the oil and gas industry. The companies that adopted such innovation quickly and correctly thrived, as measured by cost savings and streamlined operations. Enogex saw that the best method for solving problems entailed measuring and analyzing them first. That has elevated its business to a higher level.
Authors: Benjamin Fuentes has spent 17 years in the oil and gas industry with experience in manufacturing, field operations, sales and management. He has been with Thermo Fisher Scientific for the past seven years. Fuentes holds a bachelor’s of business management degree from the University of Texas of the Permian Basin.
Toby O’Brien has been with OGE Energy Corp. for over 33 years and is a registered professional engineer. He worked at the OGE subsidiary Enogex in the measurement department for eight years as a measurement engineer (2002-04) and operations manager (2007-12) and is director of project controls and administration for Enable Midstream Partners (formerly Enogex). O’Brien holds a bachelor’s degree in engineering technology and a master’s degree in technology management, both from Oklahoma State University.
Advanced monitoring has greatly reduced the adverse effects from lost and unaccounted for levels.