This is the first in a series of columns on gas measurement technology that will appear the second month of each quarter. It is my goal to keep readers informed of the latest developments regarding new equipment and industry standardization efforts. I welcome your feedback and comments.
This first column is an example of the financial impact of gas volume measurement errors. This example is an actual custody dispute that I was involved in helping resolve. The example illustrates gas measurement is more just a scientific exercise. It is an important business function that can have an adverse effect on a company’s bottom line when done incorrectly.
Cost of errors, a case history
Background. A cogeneration plant in the southwestern United States was producing electricity for a local utility and thermal energy for an adjacent manufacturing facility. The plant had three gas turbines and one steam turbine that produced (nominally) 85 megawatts of power.
The plant consumed about 18,000 MMBtu/d of gas for its cogeneration operations. Gas supply to the plant was regulated to 425 psig at the plant fence line. Fuel flow to each gas turbine was measured independently in the plant. A custody transfer turbine meter at the plant boundary measured the total flow of gas consumed by the plant.
Problem. The cogeneration plant operator identified a variance between the cumulative fuel flow measured by in-plant instrumentation and the amount reported by the gas supplier’s custody transfer meter. This variance was tracked over a one-year period. The potential error indicated gas flow to the plant may have overregistered and resulted in an overpayment by the plant operator in excess of U.S. $52,000 per month.
As the error appeared to exceed the 2% upper limit allowed by the gas tariff, the gas supplier could have been required to correct the meter and reimburse the plant operator for the overbilling. Alternatively, a cumulative error in the in-plant check meters could have been the source of the discrepancy.
The gas supplier made several attempts to assess the metering error to determine the cause. The custody transfer meter station was upgraded and the meter corrector replaced, but the discrepancy between the custody transfer meter and in-plant meters remained the same. Then the plant operator checked the in-plant meters, which were found to be operating within expected accuracy limits.
At that point, the gas supplier and plant operator mutually agreed to remove the custody transfer turbine meter and corrector for testing by a third party. Unfortunately, due to corrections required by that testing, the inaccuracy of the meter could not be agreed upon by the two parties.
Eventually, the plant operator solicited Southwest Research Institute (SwRI) of San Antonio, Texas, to flow test the custody transfer meter at the Gas Technology Institute (GTI) Metering Research Facility (MRF) operated by SwRI. GTI MRF is an internationally recognized gas meter research and calibration test facility. The facility was able to meet the plant operator’s measurement uncertainty requirement of ±0.2% of reading and could test the meter at actual field operating pressure and temperature using pipeline-quality gas.
Solution. Following flow calibration of the meter and evaluating the corrector at the GTI MRF, SwRI concluded the combination had overregistered the volume of gas by an average of about 1.088% of reading. Based on an average gas consumption rate of 534 MMscf per month, the plant operator estimated the cost of the meter calibration was recovered in about 20 days.
Benefits. Since the meter error of 1.088% was within the ±2% allowed by the gas supplier’s tariff, no billing adjustments were required. However, the flow calibration enabled the cogeneration plant operator to reduce future gas metering charges more than 1%, resulting in an annualized reduction of gas cost of about $205,000.
This example illustrates how seemingly small measurement errors can have a significant financial impact. This particular example pertained to volumetric measurement errors. Gas usually is bought and sold based on the amount of energy delivered, rather than volume delivered. Thus, measurement errors in heating value, or gas composition, can be just as important as volumetric measurement errors. Next time, we will look at an example of how heating value errors can be costly.
Editor’s note: Bowles is manager of the of GTI MRF at SwRI. To obtain specific information on the economic implications of measuring your gas, contact Bowles at SwRI.
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