Introduction to Fiscal Metering (Custody Transfer)

INTRODUCTION TO
FISCAL MEASUREMENT
Mozaffar Etezadifar
Fall 2016
Mozaffar.etezadifar@gmail.com
Energykade.com

Energykade.com Mozaffar.etezadifar@gmail.com
Content

Chapter 1
Fiscal Metering Fundamentals

1.1. What is fiscal metering?
• Fiscal metering is combination of regulations,
laws, protocols, systems and devices which
enables two parties to transfer and measure
a valuable product from one side to another
in a way that both sides agree on.

1.2. When do we need fiscal metering?
• When seller and buyer are dealing on huge
amount of material OR expensive one, it is
important to have precise measurement of
amount transferred between two parties.
• Both seller and buyer should agree on the
amount and the way it’s calculated, to have a
deal.
• In Oil&Gas field, it’s both huge and expensive

1.3. How much value does it make?
• A very large custody transfer system can
$6,000,000 worth of natural gas per day, or
$2.2 Billion per year. If the measurement is
off by 0.25%, that’s an error of $15,000 per
day or $5.5 million per year in somebody’s
favor.

1.4. What can be done using created value?
• We can build much better custody transfer
systems, spending portion of that $5.5
million at first, And save a lot every year!
That’s the importance of having an accurate
material transfer system

Chapter 2
Fiscal Metering Categories

• Fiscal measurement is a general word:
measurement for money
• Fiscal measurement includes:
1- Allocation
2- Custody Transfer

2.1 Allocation
• Allocation is the numerical distribution of
products between parties according to their
equity share.
you share whatever you have, good or bad,
according to everyone’s share.

2.2. Custody Transfer
• Custody transfer is contract driven: that means that there is
a contractual obligation between buyer and seller which may
require adherence to accuracy, repeatability, linearity or
uncertainty standards as defined by measurement standards
such as API, GOST (Russian equivalent to API), etc.
• The terms custody transfer and fiscal metering are often
interchanged. Custody transfer takes place any time fluids
are passed from possession of one party to another.

2.3. Accuracy vs. Uncertainty and Validation
• All meters and metering systems are subject to uncertainty and it is a common
mistake to mix accuracy and uncertainty as they are subtly different.
• Accuracy is matching the meter output to a known standard or reference and
will include terms like bias, readability and precision, this can be considered the
best estimate according to the scale of the measurement.
• Uncertainty is more related to repeatability and is an estimate of the limits
where the true value is expected to lie for a given confidence level.
• Validation, before we can report any data, we should be able to make sure our
obtained data is valid! It takes some equipment, observation, time and money
but it totally worth it, because all these data is useless if they are not valid.

2.4. Maximum allowed uncertainty
• For every application there is a limit for
whole metering system uncertainty:
Application
Typical Uncertainty in mass flow rate
measurement (%)
Liquid Gas
Custody Transfer 0.25 1
Allocation 0.5-5 2-5
Well Test 10 10
Multi-Phase
Metering
10-20 10-20

Chapter 3
Fiscal Metering Frame Work

• Custody transfer details is formed by:
1. Industry Standards
2. National Metrology Standards
3. Contractual agreement between custody
transfer parties
4. Government regulations and taxation

3.1. Industry Standards
Every industry has its own standards. Some of them
may be initiated by dominant country in that
industry at first and then they’d become wide
spread all around the world. Like AGA which stands
for American Gas Association but it’s widely used in
other countries too. Also IGS stands for Iranian Gas
Standards.

3.2. National Metrology Standards
Every country may have National Metrology
organization or Standard organization which issues
general and specific regulations for each industry. A
project, should obey general regulations beside
industry-specified ones.

3.3. Contractual agreement between custody
transfer parties
When two parties go for a deal, they can both ask
for special criteria in their mutual contract. Good
contract should cover all the possible and required
situations and data so it prevent disagreement in
the middle of the deal. It can start with a tender
announcement and end up in an official contract.

3.4. Government regulations and taxation
Some times governments ask their ministries or
organizations to conform specific rules and policies.
Also they can issue tax and financial rules as their
favor which will affect a fiscal metering project.
Good example is forcing tenders to be provided be
national-made products.

Chapter 4
Custody Transfer

4.1. Why is Custody Transfer growing fast?
• Not only because of its widespread use for accounting
purposes due to escalation in material values, but also
because of its application in several other aspects of
upstream and pipeline operation such as:
– leak detection systems
– batch operation (for liquids only)
– loss/gain balance
All of these applications constitute key elements for the
operator who wants to maximize pipeline efficiency, and
requires a very strict correlation with accurate and reliable
flow measurement.

4.2. Where can it happen?
• Gas custody transfer flow measurement can take place anywhere
along the process value chain from the wellhead to delivery or
sale location. The dynamics of where these transactions are
actually located can be influenced by a number of factors with the
two primary ones being regulation and commercial arrangement.
• However for the lowest uncertainty in measurement, custody
transfer generally takes place at stable, predictable single phase
locations or physical discrete hand-over points (e.g.
platform/production exit location, pipeline entry/exit, terminal
entry etc.).
• These locations generally provide the favorable conditions that
flow measurement devices can operate predictably and
repeatability.

4.3. Custody transfer components:
• It’s not only about the flow meter, the whole system should
be designed for fiscal metering:
a) Multiple Meters/Meter runs
b) Flow computers and data management system
c) Gas sampler and gas chromatograph
d) Calibration system (Master Meter or prover)
e) Valves, Piping and Flanges
f) Pressure regulator or boosters
g) Transmitters (TT, Pt, …)
h) Gas filtration
i) Skid
j) Validating (Operator control, After sales services, Training,
Monitoring system, …)

4.3. Custody transfer components:

4.4 Single Run and Multi-Run
• Single Run

4.4 Single Run and Multi-Run
• Multi-Run

4.5. Standards and codes:
As mentioned before, there are many codes and standards which should be
considered during establishing and operating a fiscal metering station.
Standards and codes like:
• AGA
• ISO
• IGS, OIML, API and …

4.5 Standards and codes:
4.5.1. AGA
• AGA–Report No 3: Gas custody metering based on orifice metering.
• AGA–Report No 7: Gas custody metering using turbine meters.
• AGA–Report No 9: Gas custody metering using Ultrasonic flowmeters.
• AGA–Report No11: Gas custody metering using Coriolis mass flowmeters.
• AGA–Report No 8: Compressibility and Super
Hydrocarbon Gases. Transmission Measurement.
• Report No 10: Speed of Sound in Natural Gas and related hydrocarbon gases.

4.5. Standards and codes:
4.5.2. ISO
• ISO 12765: Measurement of Fluid Flow in Closed Conduits Methods using Transit
Time Ultrasonic Flowmeters.
• ISO 10723: Natural gas – Performance evaluation for Online Analytical Systems.
• ISO 5168: Measurement of Fluid Flow: Estimation of Uncertainty of Ultrasonic Flo
wmeters.
• ISO 6569: Natural Gas – Rapid Analysis by Gas Chromatography.
• ISO 6976: Natural Gas Calculation of Calorific Value, Density and Relative Density.
• And …

4.5 Standards and codes:
4.5.3. IGS and OIML …
• OIML DR 3: Draft Recommendations Gas meters (Combined revision of R6, R31 a
nd R32 Draft).
• OIML_D11 General requirements for measuring instruments - Environmental
conditions
• OIML_R137-1&2 Gas meters Part 1: Metrological and technical requirements
Part 2: Metrological controls and performance tests
• IGS-M-IN-104(1) Multi-Path Transit Time ultrasonic gas flowmeters
• IGS-C-IN-105(0) Calibration Duration of Measuring Instruments (Flow ,Pressure
and Temperature)
• IGS-M-CH-033(1) Specification for Iranian Natural Gas Quality

4.6. Affecting factors on accuracy
Reading and calculation factors Fluid and line factors
Flow computer setting and performance Distance from regulators ad control valves
TT and PT and Flow meter true reading Site headers and sizes
Calibration and its processes TT installation
Prover Meter Installation
Site condition
Fluid turbulence
conditioner
Piping

4.6.1. Reading and calculation factors
• 4.6.1.1. Flow computer setting and performance
All the actual data come from transmitters to flow computer to be changed to
standard data (At standard condition), so every flaw in your flow computer’s setting
or calculation will show your system wrong even though they’re working great.
You should be aware of gas components or signal ranges ( 4 to 20 mA signals from
transmitters). Flow computer reporting system should be set as customer needs
reports or logs otherwise data will be lost. There should be UPS for power outages to
avoid data missing.

• 4.6.1.2. TT and PT and Flow meter true reading
All the transmitters including Flow, Temperature and pressure should send valid
signals to flow computer. Their validity and accuracy depends on many factors but
their main problems usually initiates from outdated or wrong-range calibration, bad
cabling which affects data validity, bad physical installation or damaged parts.
So their validity should be checked on site or be guaranteed by valid test certificates.

• 4.6.1.3. Calibration and its processes
All the devices should be calibrated for working range, further more, there should be
periodic calibration for all of them to keep devices precise and accurate. Kind of
calibration and its period should be determined by standards or professionals.
Uncalibrated device may cause hidden error for whole system.

• 4.6.1.4. prover
On-site provers can help to make sure your whole system is working right. There are
many kinds of one or Bi-deirectional provers. Not all of custody transfer stations
have prover because of extra cost and space they need.

4.6.2. Fluid and line factors
• 4.6.2.1. Distance from control valve:
Noise from control valves can interfere with an ultrasonic sensor’s measurement,
so a good practice is to place valves downstream of meters (if possible), put as
much distance as possible between valves and meters, and put some bends in
the piping to reduce noise. “Noise trap” tees are very effective in reducing valve
noise. In a similar fashion, Coriolis meters can be affected by vibration, so they
need their own form of protection.

• 4.6.2.2. Site header and its size
Cost increases as the header size increases, but performance suffers if headers
are undersized. Header sizing sounds like a very basic concept that every
engineer should know, but we have seen a large number of incorrectly sized
headers on legacy systems.
Furthermore, sites with headers which have more than one flowmeter, can use
one meter as Master meter (with higher accuracy). Also these kind of sites can
shut down one line for maintenance and calibration which in total leads to
higher accuracy of system.

• 4.6.2.3. TT installation
The location of temperature sensors is critical for maximum accuracy. For gas,
AGA 9 recommends the thermowell be installed between two and five diameters
downstream of the flowmeter in a uni-directional system, and three diameters
from the meter in a bidirectional installation.
Inappropriate TT placing may cause unwanted turbulences which leads to lose of
accuracy.

• 4.6.2.4. Meter installation
Flow meter, as front face of metering site, should be installed according to its
codes and standards to provide site owner with highest accuracy and
performance of device. Factors like, adequate direct pipe line before and after
meter place, aligned axis installation, pipe diameter increaser/decreaser, Gasket
edge, and many other factors which should be consider for meter installation

• 4.6.2.5. Site Condition
High temperature or direct sunlight may cause damage or malfunction in whole
system performance and accuracy. Also, ambient temperature and pressure are
necessary values to know to set up calculations for flow meter or flow computer.
Humidity can be affecting value on system performance too.

• 4.6.2.6. Fluid Turbulence
To have measurement theories true and working and accuracy as desired, we
need certain fluid velocity profile. Many factors may affect this velocity profile
such as path that fluid goes through like 90° or U Turns before and after meter,
vertical or horizontal path, size changers and many other factors which all in all
will affect Reynolds number. Reynolds number describes fluid turbulence.

• 4.6.2.7. Conditioner
Conditioners or straighteners are parts that we use when our fluid has high
turbulence and we want to shape its velocity profile as needed to have high
accuracy. These parts have different kinds which may cost our system a little
more but will affect the accuracy in a good way.

• 4.6.2.8. Piping
As mentioned in 2 previous items, we need symmetric and non turbulent flow to
have true measurement. So every piping method (horizontal alignment, turns,
sizes and…) may affect fluid Reynolds number and of course system accuracy.
Piping method should be as close to standards and recommendations as possible
to avoid this loss of accuracy.

Chapter 5
Modules as hardware, Monitoring
system as software

5.1. necessity of a monitoring system and after
sales services
• What if you buy an expensive car and give it someone who doesn’t know how to
work with gears, and he only uses first gear?
You need to know how to use your product to get maximum out of your
expensive product!
• What if you invest a lot on buying an expensive car and you want to use that for
a lifetime and suddenly some part of it breaks down and you can’t find any spare
part for it?
If you want to make sure your investment will work a long time for you, you
should be provided with spares and service.
• What if it’s said that your expensive car burns very little amount fuel, but
because its engine isn’t adjusted, it’s burning much more than ordinary cars?
You should keep your product calibrated and adjusted at its best.
• And…

5.2. Monitoring system components
5.2.1. Trained Operator
5.2.2. Online monitoring and observation
system
5.2.3. Periodic calibration

• 5.2.1. Trained Operator
Every controlling or monitoring system needs trained
operators who knows exactly how system works and what
every signal means. With this, we can make sure that human
flaws or system errors will be minimum which can make
whole system a lot of profit (preventing losses) .
All operators should be trained and updated on preset
schedule.

• 5.2.2. Online monitoring and observation system
However an station may have its own local operator, but
being watchable and controllable from distance make the
whole system safer and more trustable. It can guaranty that
there’s not any manipulation or missed data. Also using
distance monitoring we can have remote backups of data.

• 5.2.3. Periodic calibration
Every system need re-calibration, eventhough the system is
fully calibrated at first. Not to care about calibration
sessions, will lead to loosing accuracy in whole system
because all devices will go out of calibration setting after a
while. Some devices has standard periods of calibration but
many others don’t. it should be checked with used
standards.

5.3. After Sales Services
5.3.1. Spare parts
5.3.2. Maintenance and guidance
5.3.3. Training new operators
5.3.4. Technology upgrade

• 5.3.1. Spare Parts
If you’ve spent a lot of money for your metering system, of
course you don’t want to loose your whole system operation
because of one simple part damage or malfunction.
It’s not rational to halt 1,000,000 $ system’s correct
operation for 5,000 $ part. So we should always consider
necessary original spare parts for our system.

• 5.3.2. Maintenance and Guidance
In case anything happens for metering system, it’s always
heart warming to be sure a team can guide our engineers or
operators to get over the problem or if it wasn’t solved their
team can come and check the situation ASAP.

• 5.3.3. Training New Operators
Every company or project may loose their experienced
operators or employees. To minimize its costs, there should
be always a team to train new employees and operators for
metering station to keep it safe, accurate and working.

• 5.3.4. Technology Upgrade
Good metering station will work for many years and during
these years new technologies and product may appear.
Usually, vendor companies are most up to date companies
about these changes, So they can offer their former
customers about new solutions to be more efficient.

Chapter 6
Conclusion

Conclusion
• Fiscal metering system is your cash register, invest on its
accuracy and validity. Investment on its accuracy and
performance will pay off a lot more in long term.
• Fiscal metering system isn’t only your flow meter. look at it
as a living system which needs maintenance, training,
backup. All its parts should work together properly to
provide us with good results.
• Paying for expensive and accurate metering system without
sticking to training and solution upgrades is waste of money
in midterm.

Introduction to Fiscal Metering (Custody Transfer)

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