Many production operators in the oil and gas industry transport multiple types of products (gas, oil, water) in their gathering pipelines. This creates a need for measurement technicians to understand how to perform accurate and reliable measurements of the various hydrocarbons.

As a measurement supervisor, you need to ensure that measurement technicians have a deep understanding of the industry standard for allocations to repeatedly produce accurate measurements.

What Are Allocations in Oil & Gas?

Allocations is the process of determining the portion of a total fluid stream that consists of oil, gas, water, etc. In the case of natural gas measurement it can be the process of determining how much of each hydrocarbon exists in the stream (methane, butane, propane, etc.). Allocation breaks down a total stream measurement into its component quantities of extracted hydrocarbons. Allocation leads to the designation of ownership of the component quantity of hydrocarbons and measured out during the process.

Though the contributing elements go into a commingled flow, each of these elements should be uniquely owned and accounted for.

Companies that handle multiple products must follow a process of accounting for each of these elements from the time the product is extracted and measured to the point where the product is sold (the custody transfer point).

Allocation includes the process of breaking down the quantities of each hydrocarbon in a multiphase flow to ensure accurate measurement. These measurements are then used to determine revenue, costs, and taxes for each stakeholder.

API MPMS 20.3: The Industry Standard for Allocations

The API Manual of Petroleum Measurement Standards Chapter 20.3 Measurement of Multiphase Flow is the industry standard for multiphase flow measurement taken upstream of the custody transfer point.

API 20.3 is intended for the application of production allocation measurement when required by contracts. If your measurement technicians are not trained on how to follow the industry standard, this could become a liability for your company by not adhering to the terms of the contracts with third parties and other stakeholders.

Measurement technicians should also have an understanding of specific aspects of allocation that include:

• Material balancing
• Inventory control
• The processes used to trace the ownership of hydrocarbons that are transported through pipelines

When measurement technicians have a greater understanding of the connection between technical measurements and the business end of accounting for hydrocarbons, they are more likely to embrace their role supporting the operational integrity of your company.

Ensure Proper Training on Allocations

Do you need to ensure that your measurement technicians understand allocations and how to follow the industry standard?

Gas Certification Institute (GCI) provides training on the fundamentals of measurement in the oil & gas industry, including custom training for the specific needs of your company.

We encourage you to contact us to discuss how we can provide training on the fundamentals of measurement for allocations, especially if your company operates mixed-use pipelines. To inquire, please complete our contact form, call 281-598-7200, or email contact@gascertification.com.