Natural Gas Measurement, Meters and Pipelines

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Natural Gas Measurement, Meters and Pipelines
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Royalty Calculation

• Produced oil and gas is measured prior to leaving
  the well site, as required by law
• In New York all production must be metered from
  each individual lease as well as from each
  individual zone
• The gross volume from which your royalty share is
  calculated is based on this measurement
• Todays measurement technology is generally
  accurate to within /-1.5

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How Do You Know Its Fair?

• It is in the well Operators best interest to
  insure proper measurement
• Operators want to get paid properly on their
  share just as much as you want the same on your
  share
• While there are recorded cases of theft, it is
  uncommon to find systematic theft of hydrocarbons
  through oil and gas measurement manipulation
• Measurement components should be inspected and
  tested regularly

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Gas Measurement

• A gas measurement device (regardless of brand or
  type) is only as accurate as the maintenance and
  calibration allows.
• Test equipment and standards are used to
  calibrate the three components used in the gas
  flow equation which are differential pressure,
  static pressure, and flowing temperature.

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Pressure Differential
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Units of Measurement

• The unit of measurement for volume of natural gas
  is the MCF, or thousand cubic feet
• A related unit of measurement, based on the
  heating (or energy) value of natural gas is
  called the MMBTU, or British Thermal Unit

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How is the Gas Measured

• Typically, the gas is measured at the wellhead
  and the sales delivery point
• There are various types of meters used for
  recording well flow depending on the needs of the
  operator
• Complex systems including telemetering are used
  to provide access to data for the operator
• All of the systems will meet standards set by the
  AGA ( American Gas Association) and the ASME (
  American Society of Mechanical Engineers) and
  local state standards if applicable

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Calculations

• Calculation of total gas flow is done on a
  monthly basis, usually by a third party gas
  measurement contractor. These calculations are
  passed along to the Operator who enters the
  natural gas measurements into their revenue
  accounting system, the software through which
  royalty owners are paid

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Wellhead Orifice Flow Metering

• Orifice meters are commonly used for wellhead
  measurement because they provide a visual
  presentation of well production on a chart
  showing differential and pressure to record
  production
• These records must be integrated to get the
  actual volume produced

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Wellhead Rotary Meter

• Rotary metering is also used for gas wells and is
  a simple way to accumulate production volumes

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Wellhead and Sales Metering

• Rotary meters will commonly have correction
  devices attached to the meters to convert the
  positive displacement of the meter to volumes in
  MCFs
• This device can typically be seen at both
  wellhead and sales meters

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Sales Meters

• Separate from the wellhead metering is a facility
  at the connection of the gathering line and a
  distribution or interstate pipeline system known
  as the sales point.

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Sales Metering

• Both Orifice and Rotary measuring instruments are
  commonly used at sales points. This facility is
  typically the custody transfer point for gas
  sales.

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Sales Metering

• Rotary meters are also used for custody transfer
  recording at sales points

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Meter Run to Sales Meter
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Gas Production Unit
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Chesapeake Sales Point to RGE
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RGE Meter Station at Gas Sales Point
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Pipelines
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Pipelines and Infrastructure

• Pipelines are needed to take the gas to market
• Compressors are needed to maintain pressures and
  move the gas through the pipeline system
• Gas Processing Plants are needed when there are
  liquids associated with the gas. (Natural gas
  liquids include propane, butanes and pentanes and
  heavier hydrocarbons C5)

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Major Types of Pipelines

• Gathering Pipelines from wellhead to sales
  point
• Intrastate Pipelines large transportation lines
  within the state regulated by the NYS Public
  Service Commission
• Interstate Pipelines - large transportation lines
  transporting gas between states regulated by the
  Federal energy Regulatory Commission
• Distribution Pipelines Local lines that bring
  the gas to homes and business

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New Capacity Planned

• The existing network of pipelines likely
  inadequate to bring Marcellus gas to market as
  production levels increase
• Transmission companies have announced 24 new and
  expanded pipeline projects with projected
  in-service dates over the next 3 years
• 6 Bcf/d of new pipeline capacity planned

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Tennessee Gas Pipeline
Source Tennessee Gas Pipeline, LDC Gas Forum,
June 8, 2010
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Pipelines

• Permanent easements filed in the courthouse.
  Limits the use of property afterwards
• Value of the easement to both parties
• 3/lineal ft to 25/ft
• Width of easement vs. work space
• 30/40 ft vs. 60/80 ft
• Critical to development of well
• Legal Review
• Addendums to protect unique concerns

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Pipeline ROW

• Use of existing ROW
• Valuation of trees
• Use of forester
• Soil replacement
• top soil/subsoil
• Impact on crops
• multi-year
• Visual impacts
• long-term planning
• tourism

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http//extension.psu.edu/naturalgas/publications