Metrics Blog

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Midstream Oil and Gas Process Optimization

Running a successful midstream oil and gas company can feel a lot like caring for a two-headed dog, one head for upstream operations and the other downstream. Midstream can’t address one head’s needs over the other, balancing the needs of both can prove complex and even redundant, leading to more work with less payoff. However, midstream can make peace by utilizing the right process optimization strategies that focus on increased transparency for both data and resource management.

Technological transparency for ethane recovery/rejection
Midstream oil and gas companies seeking to optimize their processes won’t succeed with a one-size-fits-all fix. Companies must develop multifaceted plans that cover different paths upstream operations might take according to market demand.

The choice between ethane rejection and recovery represents one such decision. Should upstream oil and gas companies divert its ethane into dry natural gas pipelines, or should they simply move it down the chain as is and send it to fractioners for midstream processing? In either case, how can either event receive an optimization boost so midstream businesses turn a good profit without adding complexity to an already complicated system?

“Data visibility allows midstream companies to discern which way upstream operations are leaning.”

Coordination with upstream and downstream partners through data transparency offers a window for midstream companies to interpret more about their partners’ schedules to effectively plan their own. Market and demand fluctuations scrutinized by either party should be shared via an easily accessible data management portal. Instead of waiting for commands from producers as to the course of action to be taken, data visibility allows midstream companies to discern which way upstream operations are leaning, so midstream can plan accordingly.

It isn’t just about market fluctuations either, as Level 2 Energy reported – the recovery-versus-rejection decision could also be contingent on the amount of ethane producers have recently sold as natural gas. Again, as the three segments in the oil and gas chain utilize an open network of freely moving, up-to-the-minute information in a centralized location with a consolidated data stream, midstream can better anticipate what’s coming down the pipe.

Hydrocarbon transfer asset management and maintenance
Hydrocarbon transfer systems present midstream companies with another valuable opportunity to hone processes, not exclusively in their day-to-day operation and use, but also their upkeep over time. Lease automatic custody transfer units move resources from buyers to sellers and give all parties involved visibility into previously transported volumes.

So, why has such important equipment appear to have fallen by the wayside as the rest of the oil and gas industry at large appears so open to other forms of modernization? A study by Rockwell Automation found a predominant number of LACT units rely on “snail mail” to report supply information between seller and buyer, leading to an epidemic of accounting errors. Additionally, maintenance plans for these hydrocarbon transfer assets are usually just as outdated. Manually managing these sites with little to no technological integration and data reporting means midstream businesses charged with their oversight waste valuable resources visiting remote LACT units with no problems while neglecting those that do.

“Operators can coordinate LACT unit visitation data to create criticality rankings.”

Midstream companies ought to invest in remote monitoring capabilities to prioritize maintenance work orders and bolster resource accounting in one fell swoop. Operators can coordinate LACT unit visitation data to create criticality rankings for each site in terms of which receives immediate attention and why. Digital resource reporting capabilities will also prevent miscommunication between buyers and sellers, decreasing or eliminating altogether the resources expended to amend breakdowns in accounting.

Midstream oil and gas operations can serve of two masters, so long as companies pay particular attention to how innovation can streamline data flow and simplify their responsibilities in intelligent ways.