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Preface

Measurement is the basis of commerce between producers, royalty

owners, transporters, process plants, marketers, state and federal

government authorities, and the general public. In fact, accurate

measurement of hydrocarbon fluids and materials has a significant

impact on the Gross National Product of exporting and importingcountries, the financial performance and asset base of global com-

panies, and the perceived efficiency of operating facilities. T he need

for accurate fiscal measurement is obvious.

Given the present or future levels of the cost of natural gas, one

can quickly quantify the material and economic value unaccounted

for that is associated with each kO.Ol% of systematic uncertainty

that might unknowingly exist in the measurement systems.Measurement errors can have both immediate and long-term

impacts on profits. Inaccurate measurement may result in loss of

customers, adverse publicity, potential penalties, and legal liabili-

ties. I n short, equitable and accurate measurement is essential to

business. Itaffects the validityof financial and operating reports as

well as the corporate reputation (cash flow, profit and loss, balance

sheet, royalties and taxes).

For reasons such as these, i t is essential that material quantity

measurements be precise and accurate with minimal bias errors.

Furthermore, it is incumbent on those involved incustody transfer

to establish and maintain the traceability chains that link their

measurements to appropriate domesticand international standards.

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xx Preface

In this manner, fiscal transfers can be done equitably with the confi-denceof both seller and buyer alike.

The capital and operating resources (CAPEX, OPEX) appliedfor

fiscal transfers must be commensurate with the total cost of measure-

ment: the capital cost of technology, the operating cost of technology,

industry practice or standards, regulatory compliance and the total fis-

cal exposure or risk (commodity value times throughput), the strategic

and tactical business direction, and competitors’ strategy, The amountof uncertainty is governed by the investmentof resources (CAPEX

and OPEX) combined with the inherent uncertainty associated with

the methodofmeasurement (primary, secondary, and tertiary devices)

and the fiscal exposure or risk

Measurement is a technically demanding, complex, state-of-

the-art field with a significant impact on the profitability of any

business.Assuch, the field of measurement demandsahighly tech-nical language of definitions, acronyms, and symbols that must be

fully understood and embraced by managers, supervisors, engi-

neers, technicians, and operating personnel.

The combination of the “roadmaps” (sourcesof uncertainty)

for each flowmeter technology, the uncertainty estimations(USs),

and the statistical weighting method are tools that can

Identify error types and magnitude for the primary, secondary,

Identify areas of improvement for existing facilities (upgrade

Set achievable loss performance based on the invested resources

Identify OPEX requirements for each flowmeter technology.Set priorities on OPEX resource allocation for each location.

Set priorities on the loss investigation process.

and tertiary devices.

or replacement).

(CAPEX).

The author’s desire is that the information containedin thishand-

book providesa clear presentation of the measurement principles,

state-of-the-art technology, anditsapplications n the real world.