Midstream companies play an important role in the oil and gas value chain gathering, treating, transporting, and managing production on behalf of their customers.
Because of how important midstream is to the oil and gas industry as the connection between upstream production and downstream markets, midstream companies need to ensure the proper measurement of product as it passes through their facilities to its final destination.
For midstream start-ups, this means implementing measurement Standard Operating Procedures (SOPs) that support the accurate and reliable measurement of product. This ensures that all parties are treated equitably from the beginning to the end of the process.
Where to Start with Measurement SOPs for Midstream
The best place to start with measurement SOPs is aligning your policies and procedures with the industry standards that provide measurement guidance.
– API has created Midstream Standards for transportation, storage, and measurement. Included in their referential document are the key measurement chapters that need to be included in SOPs.
The chapters are based on the Manual of Petroleum Measurement Standards (MPMS) that include the following key elements:
- Vocabulary and definitions for measurement
- Tank Calibration and Tank Gauging
- Proving Systems
- Metering and Metering Assemblies
- Temperature and Density Determination
- Sediment and Water
- Physical Properties Data
- Fluids Measurement
- Custody Transfer
- Flow Measurement
- Testing Protocols
- And more recommended chapters (23 in total)
One of the most important chapters for Midstream purposes is Chapter 20 of the MPMS on Allocations. This chapter outlines the critical elements of production measurement and allocation to ensure that product is accurately measured and fairly allocated to each party in the oil and gas value chain.
– Additional standards from API, AGA, and GPA provide guidance on specific procedures in midstream measurement.
- API 14.3 and AGA 3 describe the design and installation parameters for measurement of fluid flow using orifice meters and other devices. These standards also provide a reference for engineering equations, uncertainty estimations, construction and installation requirements, and standardized implementation recommendations for the calculation of flow rate through orifice meters.
- AGA 7, AGA 9, and AGA 11 refer to the various types of linear meters (turbine, ultrasonic, and Coriolis) used for custody-transfer measurement applications to calculate oil and gas volumes.
- GPA 2166 recommends the procedures for obtaining samples from flowing natural gas streams that represent the composition of the vapor phase portion of the system to be analyzed.
– We have a useful resource to better understand how measurement SOPs come together using the industry standards.
Take time to listen to GCI representative Ardis Bartle dissect the industry standards referenced in measurement SOPs on this episode of the Pipeliners Podcast.
Ensure Alignment with SOX Standards for Reporting
An additional key component of measurement SOPs is matching procedures to the Sarbanes-Oxley (SOX) format for reporting measurements.
The SOX format allows midstream companies to verify and authenticate measurements so that there is complete transparency. This is especially important because midstream supports the entire oil and gas value chain.
All parties involved in the process need to be able to speak the same language and achieve clear understanding about measurements as product passes from upstream to midstream and eventually to downstream end-users.
To support this objective, midstream companies need to be able to prove the authenticity of the measurements and that the measurements were performed in alignment with the industry standards.
Measurement SOPs provide this necessary framework for measurement personnel in your company to complete the process consistently and accurately to deliver clear and reliable reporting in the SOX format.
Building Out Measurement SOPs for Midstream Start-ups
Building out measurement SOPs for midstream operations is an important task. SOPs ensure that measurement standards are followed, measurement reporting is completely transparent, and other parties can rely on the measurements.
Our role is helping midstream companies build out their measurement SOPs to support internal measurement activity and external measurement reporting.
We start with SOX templates that address the most common procedures to be incorporated in SOPs. Then, we adapt the templates to your company’s operations to create SOP manuals. Each manual will identify the recommended standard (API, AGA, and GPA) that supports measurement personnel in their role.
We have worked with many midstream companies to implement SOPs. Once we have an understanding of your specific operation, personnel, equipment, and devices, we will do the leg work building out the SOPs to support your company.