Natural gas companies operate large, expensive, and liquidity-demanding equipment and facilities as part of their regular operations. Yet, despite massive investments in newer, faster, and smarter processes, the simple truth is this: most oil and gas (O&G) companies aren’t capitalizing on their investments. McKinsey estimates that O&G companies leave $20 billion on the table each year due to inefficiencies in production, and the average offshore platform is running at a mere 77% overall efficiency.¹

For players in the gas and liquefied natural gas (LNG) market, these inefficiencies permeate every layer of the supply chain. From facilities, plants, and terminals to pipelines and storage infrastructure, companies are losing billions of could-be dollars due to once-unsolvable productivity frictions. There’s a way to build bridges over these performance gaps.

Despite the operational complexity of natural gas infrastructure, modern analytics brings tangible value to energy companies — regardless of where their productivity gaps exist. Operational intelligence — a field of data analytics that emphasizes real-time data and rapid-fire decision-making — can help O&G companies discover productivity issues and correct them before they impact the bottom-line.

The Immediate Value of Operational Intelligence and Real-Time Analytics

O&G operators have a visible data gap permeating their companies. Operational Technology (OT) like SCADA systems rely on historical data to make long-term decisions based on operating conditions. Information Technology (IT) leverages pools of real-time data, but it’s only useful for back-end analytics and processes (e.g., financials, reporting, invoicing, etc.). Between them, there’s white space. You need real-time data on your operational equipment, facilities, pipelines, storage infrastructure, and local distribution networks.

This is where operational intelligence enters the equation. By combining machine learning with traditional data feeds, operational intelligence analytics can produce real-time data that drives actionable decisions. These aren’t “fluff” decisions. Operational intelligence overhauls every component of your traditional operational ecosystem.

From contract management, transactions, and wellhead management to predicting ratchets, inventory, and compliance needs, operational intelligence drives decision-making at every step in the natural gas journey, and it does so in real-time. In McKinsey’s recent discussion on COVID-19 resilience, it pegged “data-driven production optimization” as a key lever for energy companies going forward, but that’s only part of the story.²

Operational intelligence defragments traditional data-driven strategies. Instead of managing wells and reservoirs on one end and storage and distribution on the other, best-in-class operational intelligence platforms bring all of those insights into the same window.

Operational Intelligence in Action Throughout Your Supply Chain

  • Transactions and Wellhead Management
  • Pipelines
  • Storage Infrastructure
  • Transportation
  • End-User Consumption

1. Transactions & Wellhead Management

With Industry 4.0 technologies (e.g., IoT, AI, robotics, etc.) converging with massive-scale capital projects, keeping track of complex transaction entitlements and agreements can be headache-prone.³ Operational analytics provide end-to-end visibility across your gathering network by tracking complex transactions and managing intricate contracts. Not only does this help you maximize productivity via well-defined and managed gathering agreements, but it unlocks real-time visibility into wellheads, allowing you to optimize your gathering and processing activities.

Operational analytics also adds a layer of value stream mapping to your wellhead by tracking gas composition and imbalances. Again, this happens in real time by leveraging in-the-moment analytics and to uncover truths about wellhead gas composition and flow.

Here’s the real prize: you get all of this in a single window. Traditionally, vendor OT systems have been leveraged to track each particular component of the wellhead lifecycle. Not only does this involve balancing a variety of vendor-owned technology that barely integrates, but it creates friction for operators trying to see the big picture without real-time data about the larger scope of your gathering system and plant. In other words, operational intelligence helps you understand the interdependencies of large-scale gas flow networks. You can manage across variables and understand exactly how all of these variables will impact your wellhead in the ­moment instead of swimming through a digital muddle that creates more questions than it does answers.

2. Pipeline Control

Natural gas operators are in constant need of better pipeline operability, optimization and prediction. From compliance to maintenance and throughput optimization, managing complex gas flow through intrastate or interstate pipelines requires inordinate attention to variables and quick reaction times. Operational intelligence solves pipeline woes.⁴ By tracking actionable, real-time data and using canned and automated (or manual) responses for immediate issues, operational platforms let you immediately maximize operating conditions without sacrificing compliance or tariff requirements. Simultaneously, world-class operational intelligence platforms can help you manage pipeline risk and compliance across FERC and NAESB.

3. Storage Management

Operational intelligence is the lever that unlocks cost-effective storage infrastructure. You can predict ratchets and maximize storage conditions (e.g., injections, liquefaction, vaporization, etc.) across market dynamics, temperatures and seasonal conditions, and inventory demands. When storage conditions require action, operational intelligence platforms can help you automatically manage and act on those conditions to preserve the integrity of your energy inventory.

4. Transportation

Unfortunately, access to operational data for transportation isn’t easy with traditional systems. Legacy systems and OT/IT vendors create webs of complicated, unnecessary, and burdensome technology that often don’t play nice. In return, you’re forced to shift labor costs into point solutions, creating a layer of mismatched analytics across all of these systems. This is not the ideal way to go about transportation in the oil and gas industry.

Modern, cloud-based operational intelligence platforms can bridge together your systems and intelligence to deliver actionable insights that drive transportation performance. This includes combining elements such as:

  • Forecasts
  • Planning
  • Logistics
  • Scheduling
  • Notice services
  • Asset data

 

Together, these elements can accurately deliver natural gas to end-users in a cost-effective, accurate, and meaningful manner. Better yet, this connects to back-end processes like accounts payable, which makes invoice management easier and more efficient.

5. End-user consumption

To compete in today’s customer choice markets, you need to cater to individual demands. Responding to local gas needs and supply issues is the key to staying on top in an era of information. Operational intelligence is your secret weapon against demand changes.

You need to maximize your local distribution network while also playing ball with commercial clients and brokers. With the right operational intelligence platform, you can effectively manage imbalances and automate back-end processes like broker billing, reconciliation, and invoicing. The truth is: we aren’t going back to high margins in natural gas. Today, finding ways to cut micro-costs and maximize the efficiencies are surefire ways to stay competitive. But to accomplish that, you need to satisfy the end-user.

Driving Your Future Decisions with Trellis

Operational intelligence isn’t a fringe benefit that helps you shave off a few inconsistencies. It’s a transformative technology that keeps you competitive, integrated, and operational in today’s hyper-competitive marketplace. Are you ready to bridge all of your data and analytics under one cloud platform? Trellis helps natural gas companies create competitive advantages across their entire supply chain infrastructure. Contact us (https://trellisenergy.com/contact-us/) to learn more about how Trellis can transform your business.

Sources

  1. https://www.mckinsey.com/industries/oil-and-gas/our-insights/why-oil-and-gas-companies-must-act-on-analytics
  2. https://www.mckinsey.com/industries/oil-and-gas/our-insights/reinventing-upstream-oil-and-gas-operations-after-the-covid-19-crisis
  3. https://www.forbes.com/sites/bernardmarr/2018/09/02/what-is-industry-4-0-heres-a-super-easy-explanation-for-anyone/
  4. https://www.onepetro.org/conference-paper/PSIG-9811
  5. https://www.mckinsey.com/industries/electric-power-and-natural-gas/our-insights/the-new-rules-of-competition-in-energy-storage
  6. https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/advanced-analytics-can-drive-the-next-wave-of-growth-for-transportation-and-logistics-companies
  7. https://www.mckinsey.com/industries/oil-and-gas/our-insights/the-future-of-liquefied-natural-gas-opportunities-for-growth

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