How to Create a Competitive Advantage Based on Operational Analytics

April 19, 2023

Written By
Archana

Natural gas companies operate large, expensive equipment and facilities throughout their operations.

Yet, despite massive investments in faster and smarter processes, most oil and gas companies aren’t maximizing return on their investments. Not even close.

McKinsey estimates that oil and gas businesses leave $20 billion on the table each year due to inefficiencies in production. By way of example, they cite the average offshore platform running at a mere 77% overall efficiency.¹

For players in the gas and liquefied natural gas (LNG) markets, these inefficiencies permeate every layer of the supply chain.

From facilities, plants, and terminals to pipelines and storage infrastructure, companies are losing billions of dollars due to unaddressed productivity issues.

However, there’s a way to build bridges over these performance gaps.

Despite the operational complexity of natural gas infrastructure, modern analytics creates a tangible value creation opportunity for energy companies—regardless of where their productivity gaps exist.

Operational intelligence—a branch of data analytics that emphasizes real-time data and timely decision-making—can help oil and gas companies uncover productivity issues and correct them before they impact the bottom-line.

The Immediate Value of Operational Intelligence and Real-Time Analytics

Operational Technology (OT), such as SCADA systems, rely on historical data to inform decisions based on current operating conditions.

Information Technology (IT) leverages streams of real-time data to drive back-end analytics and processes—typically related to financial reporting, invoicing, etc.

In between, there’s white space.

Companies need real-time data from operational equipment, facilities, pipelines, storage infrastructure, and local distribution networks.

This is where operational intelligence enters the equation.

Operational intelligence combines machine learning with traditional data feeds to produce real-time data that informs actionable decisions.

These aren’t “fluff” decisions, either. Operational intelligence can impact every component of your traditional operating 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, in real-time. It 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 those insights into the same window.

Indeed, McKinsey’s recent discussion on COVID-19 resilience pegged “data-driven production optimization” as a key lever for energy companies going forward.²

Let’s explore operational intelligence in action throughout the natural gas supply chain.

Transactions & Wellhead Management

As Industry 4.0 technologies—such as IoT, AI, and robotics—converge with massive-scale capital projects, keeping track of complex transaction entitlements and agreements can be a major headache.³

Operational analytics provide end-to-end visibility across your gathering network by tracking complex transactions and managing intricate contracts.

This helps maximize productivity via well-defined and properly managed gathering agreements, as well as unlocking real-time visibility into wellhead-level performance, allowing you to optimize gathering and processing activities.

Operational analytics can also bring value stream mapping to the wellhead by tracking gas composition and imbalances. Once again, this enables optimization in real time, based on in-the-moment analytics that uncover truths about wellhead gas composition and flow.

Here’s the real prize: you can bring all of this into a single window.

Traditional OT systems track a particular component of natural gas supply. This leaves operators trying to balance a slew of technologies that barely integrate, creating friction when trying to see the big picture without real-time data across the full scope of the operation.

In contrast, modern operational intelligence helps you understand interdependencies within large-scale gas networks.

Operators can understand how multiple variables are impacting each wellhead in the moment, instead of swimming through a digital muddle that creates more questions than answers.

Pipeline Control

Natural gas operators benefit directly from any improvement in pipeline operability, performance optimization, and prediction.

From compliance to maintenance and throughput optimization, managing complex gas flows through intrastate and interstate pipelines requires paying attention to hundreds of variables and reacting quickly to changes.

Operational intelligence solves many pipeline woes.⁴

By tracking and reacting to real-time data and immediately delivering pre-structured responses to any issues that are detected, operational intelligence platforms bring an immediate improvement to operating conditions.

And all of this can be accomplished without compromising compliance or tariff requirements, helping you simultaneously manage pipeline risk and compliance with FERC and NAESB standards.

Storage Management

Operational intelligence is a key to unlocking cost-effective storage.

It predicts ratchets and optimizes storage conditions—such as injection, liquefaction, , and vaporization—in response to market dynamics, seasonal conditions, and inventory demands.

When conditions impacting storage demand action, operational intelligence platforms can act automatically to preserve the integrity of your energy inventory.

Transportation

Access to transportation data isn’t easy withing traditional operations management systems.

Legacy systems and OT/IT vendors have created webs of complicated, burdensome technology that often don’t play nicely together.

In response, significant labor cost is poured into point solutions, creating another layer of mismatched analytics across all these systems—a far from ideal way to manage transportation across the oil and gas industry.

Modern, cloud-based operational intelligence platforms bridge your systems and deliver actionable insights for optimizing transportation performance.

These combining elements such as forecasting, planning, logistics, scheduling, notice services, and asset data management.

These elements work together to ensure accurate delivery of natural gas to end-users in a cost-effective manner, connecting with back-end processes, such as accounts payable, to make invoice management easier and more efficient.

End-user Consumption

To compete in today’s customer choice markets, you must cater to individual demands, responding to local gas needs and supply issues.

Your secret weapon in the information era is operational intelligence.

It allows you to optimize local distribution networks while also satisfying commercial clients and brokers.

With the right operational intelligence platform, you can effectively manage imbalances and automate back-end processes such as broker billing, reconciliation, and invoicing.

With the days of high margin natural gas likely to stay in the rearview mirror, optimize costs and maximize efficiencies are the most important levels for staying competitive.

To accomplish that while consistently satisfying the end-user requires operational intelligence.

Driving Your Future Decisions with Operational Intelligence

Operational intelligence isn’t a fringe benefit to help you tidy up a few inconsistencies. It’s a transformative technology that you stay competitive, integrated, and operational in today’s hyper-competitive marketplace.

Bring all your natural gas operations data and analytics onto one cloud platform and you can create a competitive advantage along your entire supply chain.