Natural Gas Measurement, Meters and Pipelines

Royalty CalculationProduced oil and gas is measured prior to leaving the well site, as required by lawIn New York all production must be metered from each individual lease as well as from each individual zoneThe gross volume from which your royalty share is calculated is based on this measurementTodays measurement technology is generally accurate to within +/-1.5 %

How Do You Know Its Fair?It is in the well Operators best interest to insure proper measurementOperators want to get paid properly on their share just as much as you want the same on your shareWhile there are recorded cases of theft, it is uncommon to find systematic theft of hydrocarbons through oil and gas measurement manipulationMeasurement components should be inspected and tested regularly

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.

Pressure Differential

Units of MeasurementThe unit of measurement for volume of natural gas is the MCF, or thousand cubic feetA related unit of measurement, based on the heating (or energy) value of natural gas is called the MMBTU, or British Thermal Unit

1

How is the Gas MeasuredTypically, the gas is measured at the wellhead and the sales delivery pointThere are various types of meters used for recording well flow depending on the needs of the operatorComplex systems including telemetering are used to provide access to data for the operatorAll 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

CalculationsCalculation 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

Wellhead Orifice Flow MeteringOrifice 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 productionThese records must be integrated to get the actual volume produced

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

Wellhead and Sales MeteringRotary meters will commonly have correction devices attached to the meters to convert the positive displacement of the meter to volumes in MCFsThis device can typically be seen at both wellhead and sales meters

Sales MetersSeparate 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.

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

Sales MeteringRotary meters are also used for custody transfer recording at sales points

Meter Run to Sales Meter

Gas Production Unit

Chesapeake Sales Point to RG&E

RG&E Meter Station at Gas Sales Point

Pipelines

Pipelines and InfrastructurePipelines are needed to take the gas to marketCompressors are needed to maintain pressures and move the gas through the pipeline systemGas Processing Plants are needed when there are liquids associated with the gas. (Natural gas liquids include propane, butanes and pentanes and heavier hydrocarbons C5+)

Major Types of PipelinesGathering Pipelines from wellhead to sales point Intrastate Pipelines large transportation lines within the state regulated by the NYS Public Service CommissionInterstate Pipelines - large transportation lines transporting gas between states regulated by the Federal energy Regulatory CommissionDistribution Pipelines Local lines that bring the gas to homes and business

New Capacity PlannedThe existing network of pipelines likely inadequate to bring Marcellus gas to market as production levels increaseTransmission companies have announced 24 new and expanded pipeline projects with projected in-service dates over the next 3 years6+ Bcf/d of new pipeline capacity planned

Tennessee Gas PipelineSource: Tennessee Gas Pipeline, LDC Gas Forum, June 8, 2010

PipelinesPermanent easements filed in the courthouse. Limits the use of property afterwardsValue of the easement to both parties$3/lineal ft to $25/ft +Width of easement vs. work space30/40 ft vs. 60/80 ftCritical to development of wellLegal ReviewAddendums to protect unique concerns

Pipeline ROWUse of existing ROWValuation of treesUse of foresterSoil replacementtop soil/subsoilImpact on cropsmulti-yearVisual impactslong-term planningtourism

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

****************************