Conducting site-specific approvals to save client over $2M in unnecessary upgrades
Case Study
Client: A Renewable Natural Gas Company
We are pleased to deliver this case study on behalf of Blue Chip’s findings:
Overview
Challenge
Through a regulator audit, it was identified that there was no liquid metering at the inlet of the gas plant and the measurement scheme that was being utilized throughout the field was not consistent at all; there were wells utilizing wet (effluent) metering, wells that had dedicated separation, and wells that had no metering at all. This left the operator with a number of non-compliant events that needed to be addressed.
It was identified that they would be required to install liquid metering on 6 inlet separators, 2 C5+ liquid meters, and 7 field dehydration units at ~$250,000+ each. The Blue Chip team of Measurement experts explored and risk ranked multiple solutions to the metering challenges. The challenge was to identify the measurement scheme that would provide the lowest measurement uncertainly with a reasonable amount of capital to implement.
Installing separation at each well, as suggested by the regulator, was not a practical solution as it was not necessary given the royalty structure, working interest structure, and production characteristics of the wells.
Solution
The Outcome
The regulator approved this application. This ultimately saved the operator over $2M in well and facility upgrades. And to be honest 2M is conservative. It would have likely been closer to 2.5M all said and done.
This outcome had a huge ROI. The cost of obtaining this specific site-specific deviation was close to $14k all said and done. This provides the operator with an ROI that is greater than 142:1 along with a sustainable program and plan to move forward with to ensure compliant and equitable product determinations are being determined moving forward.
Additional findings, we are currently working on a flare estimate application that will save them an additional 250,000k and assisting with addressing the other non-compliant events (NCE’s) that are brought to the surface through the regulator audit that was executed.
This operator has since engaged Blue Chip to conduct measurement reviews on other facilities to put proactive plans in place to address non-compliance events on a timeline and budget that is more conducive to their availability and resources. This allows them to put plans in place that can be executed “on their time” so as not to be rushed and over-taxing on existing resources.
If you would like more information on this case study, or book a meeting with our team, send us an email with your request to info@bluechipmrc.com
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