American Oil and Gas Reporter - September 2020 - 76

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SpecialReport: Permian Powerhouse
customers have standardized on equipment
that is three-five years old and no longer
offers the best value," he says. "In others,
they are paying for top-end equipment
when they could automate their systems
with less expensive options that are more
robust and easier to service."
Modular LACT Units
As product quality requirements have
tightened and contracts between producers
and purchasers have become more complex,
the demands placed on lease automatic
custody transfer units have risen, observes
Gene Gradick Jr., senior vice president of
SCS Technologies LLC. To provide LACT
units that can achieve clients' goals at an
affordable price, he says some fabricators
are offering modular designs that support
several options for pumps, controls and
other key components.
"Cost cutting initiatives, customer consolidation, centralization and clients'
desire for one point of contact at the fabricator level are accelerating modularization," Gradick assesses. "Modular designs allow customers to meet application-specific goals while getting many
benefits of standardization, including
fewer repair parts, universal familiarity
at the field level and the freedom to move
measurement equipment to other areas
as assets age.
"One of the drivers is private equitybacked midstream companies," Gradick
mentions. "We have helped several startups
by supplying hundreds of units as they
develop their systems and bring on new
producers. For them, standardized and
modular units are the best way to build a
system on time while budgeting for and
controlling costs."
To support customers' automation efforts, Gradick says LACT units are becoming more sophisticated. "Since SCS
was formed in 2012, we have seen the
price per unit increase every year as customers' needs require more automation
and controls," he reports.
Increased automation often means
more client employees are involved in
LACT design decisions, Gradick notes.
"As teams get larger, it gets easier for design creep to sneak in," he cautions. "A
LACT unit with almost every option can
cost $400,000, but some customers can
meet their goals with an $80,000 or
$100,000 unit. We want to build longterm relationships, so we draw on our
experience to help customers decide
whether the situation merits buying a
Rolls Royce or a Chevrolet."
76 THE AMERICAN OIL & GAS REPORTER

Factory Acceptance Testing
As part of the purchasing process,
most LACT fabricators offer customer
factory acceptance testing (FAT) through
which customers can see the electronics
and controls of the skid in action. Gradick
says this testing is worth both teams'
time. When it is applicable, he recommends including a mechanical point-topoint test during the FAT.
"At SCS, we have the capability of
providing a 'flow or wet' test where we
run fluid through the unit so the customer
can see it functioning in as close to field
conditions as we can replicate in a factory
setting," he adds.
"One of the most interesting parts of
the build process is when the field operators can put their hands on the design,
because they often suggest tweaks to the
ergonomics or usability that people rarely
think of at design time," Gradick continues.
"In 2020 alone, we have made changes
to containment, adjusted controls height
and location, and raised platforms to
match customers' preferences and improve
their ease of use and safety.
"SCS has taken a proactive role in alleviating customers' challenges through
the downturn," he says. "One client had
a project delayed and might need to hold
off on installing pipeline metering systems
for 6-18 months, so we are storing two
metering skids it purchased. These skids
need to run to stay in operating condition,
so we have connected them to 480v power

and are stroking the valves and rotating
the pumps on a long term maintenance
schedule we developed and the customer
approved."
Gradick adds that SCS is making internal improvements to prepare for the
activity rebound he speculates will occur
in 2021. "We are taking the time to
control our costs, increase our efficiency,
and add processes and procedures to prepare for future growth," Gradick details.
"For example, we are investing in new
equipment and continuously improving
our manufacturing flow to limit how often
we need to move each unit, which speeds
the production process, enhances safety
and produces a better product.
"We are finding creative ways to benefit
our customers and keep our employees
challenged during this downturn," Gradick
continues. "Most of our engineers and
project managers have worked for producers, pipeline companies or repair and
maintenance teams, so they understand
clients' business drivers and have handson expertise with LACT units. We are
applying that experience to develop practical solutions."
Product Quality
By allowing producers to make better
decisions about where they sell their oil,
gas and liquids, data on product quality
can improve margins significantly, says
Mark Le Dain, vice president of strategy
for Validere Technologies Inc.

To help clients improve efficiency and implement increasingly complex contracts between sellers and purchasers, LACT unit fabricators are installing more sophisticated
automation and control, SCS Technologies LLC shares. Modular designs and improvements in manufacturing are limiting the extra cost associated with these capabilities.

American Oil and Gas Reporter - September 2020

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