Operators and companies that are involved in processing liquid hydrocarbons often wonder how to get the most value from their liquid measurement program.
There may be internal questions about the purpose of liquid measurement, why your team needs to be trained on the liquid measurement fundamentals, or why your company needs liquid measurement Standard Operating Procedures (SOPs).
The main purpose of liquid measurement can be broken up into several key areas related to inventory, loss control, and income. The accuracy of measurements directly impacts your company’s ability to gain value in each of these critical areas.
7 Points of Purpose in Liquid Measurement
Accurate and reliable liquid measurement is necessary to support each of these points in the liquid measurement process.
The most important aspect of liquid measurement is supporting the contract between parties. The contract governs the terms of moving the liquid product from Point A to Point B. Accurate measurement ensures that the agreed-upon amount of product is correctly moved.
Essentially, measurement is a prerequisite to generate income. Further, accurate measurement adds value to the customer relationship.
2. Royalties and Rights
Measurement is critical to support the accurate recording of product moved at a royalty point.
The royalty point is the point where a landowner (or lessor) grants access to a particular area of land for production or transmission to occur. A measurement technician will generate a run ticket — or invoice — at the royalty point where the liquid hydrocarbons are measured.
Accurate measurement ensures that the lessor is paid the appropriate amount of royalty rights as a share of revenue generated, less any agreed-upon costs. When disputes arise, accurate and verifiable measurement records can prove that the lessor was paid the correct amount, per the terms of the agreement.
3. Inventory Control
Measurement plays a role in inventory control to keep track of shippers’ inventories. Why is this important? Operators need to measure product to avoid over or under delivering what a shipper owns.
Measurement also supports inventory control by ensuring that shippers fulfill a minimum throughput. This is important because changes in throughput could affect the shipper’s tariff level, impacting the cost of moving product from Point A to Point B.
Essentially, effective measurement is critical to establish understanding and to meet expectations with shippers.
4. Back Office Billing
Accurate measurement has legs beyond the field all the way to the back office. The billing department uses the tickets from the field to create invoices and make payments to generate revenue or cover costs, respectively.
The accuracy of each piece of data submitted to the back office ensures that contracts are upheld, vendors are paid, and other obligations are met to support operations of the entire company.
The accurate measurement of product can have tremendous safety implications. A discrepancy in measurement could result in an abnormal operating condition, creating safety hazards.
Storage vessels, caverns, transport trucks, and pipelines have limited capacity. Many also have a minimum requirement, such as floating roofs on tanks where the idea is to ensure there is no vapor space between the top of the fluid and the floating roof. Accurate measurement ensures effective, safe operation of these assets.
When you think of safety issues in liquid measurement, inaccurate measurement can cause more than safety concerns. Inaccurate measurement that undersells or oversells the amount of product could impact the efficiency of operations.
If a measurement technician reports a measurement that is more or less than the actual amount, then your operation risks losing the opportunity to produce or transport more product. A fractional error could cost your company millions of dollars by under-producing or under-transmitting what your system actually had capacity to support.
7. Line Integrity
Another point of purpose in liquid measurement is ensuring the integrity of the pipeline. Measurement is critical for effective leak detection, and improving measurement accuracy improves leak detection sensitivity and reliability.
At the most basic level, using measurement to compare the volume into versus out of a pipeline can identify issues. When measurement accuracy is improved, smaller leaks can be identified, and any leaks can be identified more quickly.
Consider Liquid Measurement Training to Support Each Point
Accurate and repeatable measurement of liquid hydrocarbons is critical for operators to ensure operational effectiveness, efficiency, and safety.
Your team should be trained on the key elements of liquid measurement and understand how to support the measurement Standard Operating Procedures (SOPs) employed by your company.
Gas Certification Institute (GCI) offers a Fundamentals of Liquid Measurement class that provides educational training and hands-on experience for measurement technicians and other support personnel.
We also offer liquid measurement SOP manuals for operators seeking documentation of measurement processes and procedures.
– Consider registering yourself or your team for our next Fundamentals of Liquid Measurement training class by viewing the GCI schedule.
– Also, contact us for a review of your measurement SOPs to ensure that you have the latest requirements to support liquid measurement.