Despite “Lower for Longer Market”, Operators are Still Benefitting from Multiphase Flow Metering

Over the last several years the oil & gas industry has experienced a tremendous amount of volatility starting with the downturn in June 2014, with CapEx and OpEx investments off almost $1 trillion, layoffs exceeding 400,000 globally, and bankruptcies exceeding well over 100 companies and counting, and more recently, oil prices reached $70s per barrel mark only to fall back into the $50s.  Despite this volatility and price uncertainty, operators are still making investments, albeit lower investments than in 2014, in multiphase flow metering (MPFM) solutions since the benefits provided by MPFM can be compelling. 

Benefits of Multiphase Flow Metering

The benefits assume the product performance ensures more than sufficient accuracy, reliability, and repeatability, such that users not only save on the cost and space of production and test separators, but also enjoy more real-time flow measurements, which provide real-time visibility, greater operational agility, and the flexibility to adapt to changing flow regimes that many mature oil and gas wells exhibit.

Additional benefits provided by MPFM include improved recovery rates and access to real-time data which can translate into actionable information and decision-making.  And these factors will lead to greater productivity and assist in making wise investment decisions on wells that are most likely to yield maximum profits.  The prices of MPFM units have, for the most part, declined along with the declines in oil & gas investments, thereby making these solutions a still more attractive alternative to an expensive, bulky, and not as dynamic, test separator. 

While not all industry participants are convinced that today’s multiphase/multi-component flow metering solutions represent a practical and/or cost-effective solution due to measurement uncertainty, initial cost, and other concerns, the technology has clearly been gaining traction since its introduction in the early 1990s.  This is due to both technical maturity and efforts by independent third parties to validate accuracy.  Energy companies, such as Equinor, PDVSA, BP, BG Group, Saudi Aramco, Chevron, Petronas, Shell, ExxonMobil, and Petrobras, among others, are deploying multiphase flow meters on a broad scale to be able to continuously measure the individual components in co-mingled oil, gas, condensate, and water streams.  Independents in onshore shale formations are increasingly adopting MPFM as they realize the benefits that more timely measurements can provide in enhancing production.

Multiphase Flow Metering Technologies

Today, most MPFM solutions employ multiple sensor technologies to provide true physical multiphase flow measurements, with the most popular combination being differential pressure across Venturi and gamma ray attenuation.  Typical applications for multiphase flow meters include:

• Production allocation
• Well testing – stationary and mobile
• Well monitoring
• Production monitoring
• Production optimization
• Flow assurance
• Artificial lift optimization
• Fiscal metering/custody transfer

Multiphase flow meters are often employed in conjunction with other instruments, such as water cut meters and pressure and temperature transmitters.  Some suppliers incorporate IR absorbance, while others rely on microwave technology for wet gas and water cut metering.  Regardless of the technology employed, industry participants all seem to agree that MPFM solutions will likely never reach the accuracy provided by a full separator, but they continue to strive to reach that objective.

Multiphase Flow Metering Considerations

When considering MPFMs for an application, owner-operators should:

• Investigate the expected flow regimes from the wells to be measured and determine that production envelope
• Identify MPFMs with a corresponding measuring envelope
• Select a MPFM that is capable of continuously measuring the applicable components and volumes with appropriate (ideally, independently validated) accuracy/measurement uncertainty for the application
• Ensure the availability of appropriate onsite resources to allow regular calibration/adjustment and verification

Recent ARC market research indicates that owner-operators are implementing MPFM solutions for flow allocation and, in some cases, for fiscal metering in a growing number of subsea projects that have been restarted after being delayed during the downturn when prices could not support many subsea projects. 

ARC believes that the adoption rates of MPFM solutions will increase as:

• The technologies being deployed continue to improve
• The understanding of how to more effectively model real-world multiphase conditions increases to help reduce the levels of uncertainty
• New industry standards are developed for MPFM equipment and testing protocols
• The price of these units continues to decline while performance improves, and
• Oil prices continue to recover to levels at/or above $60/barrel

ARC does not profess to have a crystal ball to predict if/when oil prices may recover to levels near $70 or more per barrel, but it does believe that the value provided by MPFM will, in many projects, provide ROI sufficient to warrant consideration and, if appropriate, investment.

ARC provided new quantitative analysis of the burgeoning market for virtual flow meters (VFM) that owner operators and independent E&P firms are increasingly adopting as a lower cost backup/validation option for a MPFM or a VFM being used as a standalone production monitoring option or for field surveillance when an MPFM investment is not feasible.  VFM market dynamics will be covered in a separate blog so keep your eyes open to learn more about this exciting market opportunity.