Flow Meters: To trust or not to trust, that is the question

Arbitration, North America

The natural gas energy to run a refinery is delivered in large quantities from external suppliers, the volumes for which are precisely measured through custody transfer meters for accurate sales accounting. A dispute between a refinery and fuel gas supplier surfaced when volumes received did not match volumes delivered. After analyzing the atypical supply configuration, the flow calculation methodology and instrumentation calibrations, Baker & O'Brien produced an expert opinion regarding the cause of the delivered/received volume discrepancy.

Refineries consume large quantities of purchased natural gas and are, therefore, highly dependent on its reliable supply in order to continuously operate in a safe manner. Consequently, refineries often enter into long-term agreements with one or more suppliers to provide dedicated gas volumes. The supply of gas is typically measured using a single custody transfer meter (CTM), in conjunction with a gas analyzer, to accurately measure the natural gas flow. Additionally, the CTMs and gas analyzers, which are typically owned and maintained by the suppliers of the natural gas, must be tested and calibrated on a frequent and predetermined basis. Normally, the flow is measured before the pressure is reduced ("let-down") into the lower pressure system through a flow control valve into the refinery's fuel gas system.

Following a significant and recurrent imbalance in its reported monthly natural gas supply volumes, a refinery began an internal investigation into the probable causes of the imbalance. The refiner ultimately concluded that the CTM metered volumes were incorrect - and high. The natural gas supplier was not convinced. Therefore, Baker & O'Brien was engaged to review the refiner's analysis and the gas supplier's position, and to opine on whether there was, in fact, an imbalance and, if so, the likely cause(s) of the imbalance.

In this case, the supply situation was not "normal" - the natural gas supplier had two supply lines, each with its own high-pressure supply CTM and, pursuant to an agreement with the refinery, an option to manually supply natural gas to three additional supplier-owned low-pressure systems "through" the refinery via an additional let-down valve. The flow into each of these three low-pressure systems was measured with three separate and parallel bi-directional CTMs. Thus, the quantity of the natural gas supplied to the refinery was calculated using five CTMs.

Baker & O'Brien reviewed the internal investigation conducted by refinery personnel and provided a report of our opinion on the methodology used in the flow calculation and the calibrations of the analyzers and CTMs.

Kevin P. Milburn

Senior Consultant, PRISM Services Manager

Petroleum Refining / Transportation and Storage
Standard of Care / Commercial Contracts / Litigation / Operations and Maintenance
North America