American Oil and Gas Reporter - February 2021 - 64

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SpecialReport: Crude Purchasing
automatically sample and analyze oil quality while transferring the metered volume
from the tank battery into a pipeline or
truck, he notes. " Crude oil is sold on a
calculation of temperature, BS&W, API
gravity, and overall volume, " Gentry observes. " Having accurate and reliable
quantity and quality measurements are
critical. When it comes to maximizing
the value of the crude oil, quality is ultimately as important as quantity. "
While LACT units traditionally have
been associated with higher-flow applications, Gentry says smaller-sized units
are being routinely deployed on sites producing as few as 150-200 barrels a day.
Not surprisingly, as activity levels across
the Permian Basin region start to build
with WTI pushing ever-nearer to $60/bbl,
so too is the demand for LACT technology,
according to Gentry.
Regardless of whether the end-user is a
producer or midstream or pipeline company,
the primary driver behind the demand for
LACT units is the same at $55 oil as it is at
$75 oil: improved revenue capture. " Once
the producer understands the economic
benefits of LACT units, they will want the
technology on every site, " he states.
As Gentry explains it, the traditional
rule of thumb in calculating manual custody transfer measurements was to apply
a volumetric shrinkage factor to account
for sampling conditions, pressure and
temperature changes, measurement error,
etc. LACT units automatically measure
temperate, pressure, gravity, flow and
other variables.
Because crude oil expands and contracts roughly at a rate of 2% for every
temperature change of 40 degrees Fahrenheit, temperature is particularly critical
in custody transfer measurements. Without
the ability to accurately account for temperature dynamics, manual tank gauging
commonly results in 2% shrinkage in the
overall sales volume, he continues.
So, if the calculated shrinkage is 2%,
a producer that gauged 1,000 barrels at
a tank battery would receive credit for
980 barrels. " That may not sound like
much until you look at how the losses
add up on a monthly or annual basis, "
Gentry remarks.
Capturing Revenue
At an oil price of $50/bbl, those 20
barrels would equate to $1,000 in lost
revenue. On a lease that produces 1,000
bbl/d, losing 20 barrels each day to shrink64 THE AMERICAN OIL & GAS REPORTER

age would add up to $7,000 a week. " You
are potentially talking about more than
$350,000 a year in lost revenue from one
tank battery, " he points out. " A site making
2,000 bbl/d could capture upwards of
$700,000 a year. The magnitude of the
potential losses grow even larger at oil
prices above the $50/bbl reference. There
is huge value in installing a LACT unit
for automatic metering and measurement. "
And that holds true even for lowervolume sites, Gentry reasons. UMC Energy
Solutions' customers are using LACT
units in a range of applications, from
pipeline and midstream facilities moving
tens of thousands of barrels a day to individual wells making less than 200 bbl/d.
While the economic benefits multiply as
daily volume increases, Gentry says those
benefits can be very compelling for rightsized LACT units on smaller-volume sites.
" In the shale world, where wells come
on line at high initial rates, a LACT unit
can pay for itself in only a few weeks.
On the other end of the spectrum, let's
consider a 200 bbl/d lease, " he details.
" That lease would produce about 6,000
bbl/month, so losing 2% in shrinkage at
$50/bbl would be $6,000/month, or
$72,000 annually. In one year, the extra
revenue capture could more than pay for
a properly designed LACT unit. "
Because LACT units can be configured
to meet such a wide range of specifications
and conditions, each system should be
designed specific to the application to
maximize the return on the investment,
Gentry offers. " There are tons of ways to
design a high-quality LACT unit that
will meet even the most stringent specifications and still be cost effective, " he
says. " For a lower-volume site, that may
mean scaling down the skid and utilizing
a different meter technology, but there
will still be value in capturing revenue
that would otherwise be lost. "
UMC Energy Solutions' LACT units
utilize industry-leading components
through its strategic partnerships with
Emerson Process Management, Rosemount and Rockwell Automation, including Coriolis, density, magnetic and vortex
flow measurement technologies. The company was one of the innovators of combination designs that integrate a LACT
unit with a pipeline pump on a single
skid, eliminating the need to maintain
multiple skids at a pipeline entry point,
according to Gentry.
" These all-in-one skids have the LACT,

the pump for boosting pressure to pipeline
specs, the electrical panels, system controls
and everything else on one modular skid.
The customer has to run one 480-volt
power line and install the piping to hook
it up to the pipeline and it is ready to go, "
he offers. " The result is lower overall
costs and improved efficiencies. "
Improving Measurement
Accurate measurement at custody transfer is crucial to both producer and receiver.
It determines the economic value realized,
and affects everything from allocation to
reporting, accounting and field planning.
Errors and delays can have real consequences, says Stephen Anson, director of
measurement for W Energy Software.
Contracts typically specify which party
is responsible for measurement, with the
other party as witness. " Automated level
measurement has emerged as an accepted
practice, reading open and close and calculating volume, thanks to advances in
technology and industry standards, " Anson
details, noting that the measurement technology employed varies based on preference and economic value.
" Some of the more traditional technologies are still widely used because they
are affordable, accurate and fit for purpose,
and the range of solutions include, turbine
and positive displacement, with Coriolis
and ultrasonic flowmeters for dynamic
liquid measurement increasing in popularity
due to performance advantages and diagnostic capabilities, " he continues.
Still, even the most advanced metering
solutions can be adversely affected by
the presence of gaseous hydrocarbons.
" When measuring from atmospheric vessels like storage tanks, accuracy should
be high as long as the oil was in the tank
long enough for all the gas to break out, "
he explains. " This can be a challenge in
shale plays, where high gas-to-oil ratios
are common. "
Anson likens this phenomenon with
the behavior of a chilled can of soda.
" When you pop the top, the can becomes
noticeably flimsier and you hear the
carbon dioxide release, " he says. " Take a
sip and you get a bubbly sensation,
because there is still gas suspended in
the liquid. A few hours later, the gas will
have escaped and the soda will be flat.
This is essentially what has to happen to
achieve stabilized oil. "
Oil producers create this " dead oil "
by actively driving out the gas at the well



American Oil and Gas Reporter - February 2021

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2021

Contents
American Oil and Gas Reporter - February 2021 - 1
American Oil and Gas Reporter - February 2021 - Cover1
American Oil and Gas Reporter - February 2021 - Cover2
American Oil and Gas Reporter - February 2021 - Contents
American Oil and Gas Reporter - February 2021 - 4
American Oil and Gas Reporter - February 2021 - 5
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American Oil and Gas Reporter - February 2021 - Cover3
American Oil and Gas Reporter - February 2021 - Cover4
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