Automation Cuts Operating Costs by 25% on Major Gathering System
Competitive Challenge. When American Central Gas initiated a large expansion of their gathering system in Panola County, Texas, they were faced with a major competitive challenge. Production in the giant gasfield surrounding Carthage TX has been going on for 60 years, and the two principal gatherers in the field had systems going back to the beginning. In addition to being thoroughly established with Carthage-area producers, these gatherers had systems that were largely paid out.
To expand their system, American Central faced a threefold challenge. They would have to attract producer customers away from established gathering systems with low cost structures. They would have to offer better service to producers at a lower price. And there would have to be enough margin left in their cost structure to amortize the capital costs of building all the new facilities.
Automation-the Only Answer.
The project team concluded that the only way to achieve all three goals simultaneously was to build a fully automated system. For assistance in installing the necessary communication devices in the field, and for system integration back at the office, American Central turned to a core group of technically savvy communication and web experts now collectively known as eLynx Technologies. In the Carthage field, the typical setup is to have flowlines from 5-10 wells converge at a central delivery point or CDP. The first step to automation is putting an electronic flow meter [EFM] at every CDP. The eLynx system begins with a transmitter device connected to every EFM, tank, and control panel of every compressor on the gathering system.
Where eLynx moves beyond conventional SCADA systems is in the setup of the data gathering center used to run an automated system. In early applications of automation, data points were usually hard-wired to a central computer which, of necessity, was in or close to the field or pipeline system. Typically these were stand-alone systems that could be operated only from the office housing the central computer. There was also limited communication between these field data centers and company-wide systems for engineering and accounting at distant headquarters locations.
At eLynx, all the data-gathering functions have been centralized at a large server center in Tulsa equipped with high-security, backup power systems and diverse internet feeds. The heart of the advance represented by eLynx is that data collection, data reception by operating people, and management of the devices in the field are fully web-enabled. Thus, data from field devices flow from servers in Tulsa, which reform it into tables and graphic displays for transmission to any point in the company where it is needed via the internet.
Back in Carthage field, where American Central was trying to make inroads against entrenched competitors, they gained several direct operating benefits which lowered costs and provided greater reliability of operations to producers on the system. The most obvious is alarm monitoring at any point an employee designates. If there is a malfunction at any piece of equipment on the system, the employee can receive a remote callout on his home phone, e-mail, pager, or mobile phone. This quick response capability goes a long way toward prevention of catastrophic equipment failures and the resultant downtime and major repair costs.
On an everyday basis, the benefits of the system are most apparent when a field operator starts his day by connecting to the eLynx website for an update on system conditions. The eLynx system delivers a schematic of the whole system, allowing the operator to see at a glance if flow rates are down or pressure is building up anywhere. If any abnormalities appear, a mere click is all it takes to get a zoom into any meter or compressor on the system. If the closer look reveals a problem, then the operator knows exactly where to go as he starts his rounds for the day.
18% Cost Reduction.
Where the benefits all converged for American Central was in accomplishing a 18% overall reduction in operating costs compared to comparable systems. Management and field personnel on the Panola system all had extensive background in East Texas gathering, so they were well informed about performance of comparable systems. The cost reduction was integral to their program of attracting gas to the system with lower gathering fees, and the cost savings were confirmed by the profitability of the operation once they got underway. Although they can't quantify the exact cost savings connected to each system benefit derived from automation, they do know that most of the savings come from these seven improvements in field operations:
1) Prevention of catastrophic equipment failure from improved alarm monitoring.
2) Reduced fuel consumption from remote controlling of compressor speed to maintain desired suction pressure of 45 psi. Continuous remote control through eLynx prevents the machines from running at higher rates than intended.
3) Reduced downtime at field compressor sites. Prompt notification of compressor shutdowns in the field hastens corrective action to the site of the problem. American Central currently gets 99.9% run-time out of the 49 compressors at Panola with a combined 47,200 hp.
4) Improved scheduling of preventive maintenance. Continuous monitoring of compressor valve temperatures, engine cylinder temperatures, engine air/fuel ratios, fuel consumption rates and similar operating parameters permits graphic display of equipment operating trends. Potential problems are identified for scheduled maintenance before a breakdown occurs that requires emergency measures.
5) Improved measurement of flow rates and gas volumes. Instead of the 30-day lag times associated with paper-chart recorders, American Central has continuous real-time information on system inputs and outflows. The continuous data stream permits daily system balancing to eliminate gas losses and guard against pipeline penalties.
6) Reduced environmental impact by eliminating tank spills from continuous monitoring of levels in saltwater and condensate tanks. Alarm callouts when levels get high eliminate many problems before they occur. Monitoring of engine and compressor operations serves to keep the whole system operating within emission limits specified in its regulatory permits.
7) Increased productivity of operating and management personnel. There can be direct labor savings from elimination of some contract labor and possible reduction in overtime hours. The most important benefit comes from having highly productive personnel who know their efforts are being rewarded by results in the field.
Building Gas Volumes on the System.
Because of the need to offer competitive gathering rates, the drive for greater efficiency was the first order of business. Once the automated system was in place, they could go after their real objective of connecting more gas to the system. The greater efficiency was their ticket to attracting new business; greater gas volumes gave them the critical mass to achieve economies of scale and lower unit costs. In a sense, they created a charmed circle where efficiency and volume were feeding off each other to continually lower unit costs.
When a business gets into a charmed circle, selling the product or service becomes almost effortless. The lower gathering fees and greater reliability of operation meant higher netbacks for producers on Panola Gathering, and others naturally wanted to get connected. Once tied in, producers found that eLynx brings unanticipated benefits to their own operations.
Some producer benefits are improvements in efficiency similar to the gains made by American Central. The key one here is more efficient use of the workforce. With eLynx, the old pumper routes, visiting every producing lease, are a thing of the past. A glance at the screen of a laptop in the morning will identify all places that are operating normally and require no attention. Then the field personnel can devote their time to precisely the locations where trouble is brewing. The guiding concept here is management by exception, the most labor-saving approach to field operations to come along in years.
Reduced operating and maintenance expense is another gain likely to be realized by producers. The enhanced alarm system and short response time to deal with breakdowns works for the producer just as much as for the gatherer. Steadier operations and fewer breakdowns translate into lower maintenance on lease operating equipment.
Enhanced Production: the Real Kicker.
The benefits of efficiency are nice in terms of costs. But most producers find that by far the greatest benefit of eLynx field automation goes to the top line: increased revenue from rising production. For a gas producer, the greatest benefit of having a highly efficient gathering system is reduced downtime at the compressor stations. When those compressors stop, the back pressure shuts in the wells. When eLynx allows American Central to keep them running 99.9% of the time, field operations are almost never shut down by compressor problems.
Experience of producers on Panola Gathering indicates a positive production response on their leases in a range of 3-25%, with a 5% production gain appearing to be about average.
The Larger Enterprise Benefit.
There is not a lot of data available to quantify how eLynx facilitates smoother management through a large enterprise because it's just in the take-off phase as far as being adopted widely across many producing areas of a large company. But anecdotal evidence from one or two major producers in the Carthage field is that the benefits of eLynx are strongly felt at corporate headquarters. For the first time the field is talking directly to the central office, which can access all the operating information from the web just like the field operator who checks on the field before starting his morning round.
Gas accounting benefits from the accurate measurement of the EFM's and the instant relay of measurement results to the back office. The various engineering functions benefit in numerous ways from obtaining real-time information about field operations. It facilitates planning on field development as well as the care and maintenance of surface facilities.
In general, eLynx holds out the potential of providing a common platform for communication among all parts of a large company. Enormous lag times, often 45-60 days, of getting reliable field data to engineering and accounting departments has been common in the petroleum industry from the beginning. Taking down these communication barriers, and enabling different parts of a company to talk to each other quickly and reliably, will be the next major stride the industry takes toward streamlining operations and lowering costs.