ARC Advisory Group research indicates that use of leak detection systems enhance pipeline integrity, especially when the LDS is in flowlines, gathering lines, onshore and offshore platforms, pipelines, and other midstream operations. An increasing number of end users now view leak detection systems as a positive investment in safety as well as a requirement for regulatory compliance. Effective leak detection systems provide a degree of insurance against undetected leaks that could negatively impact a company’s bottom line and reputation.
The global upstream oil & gas segment has been decimated by the rapid and precipitous decline in oil prices over last 19 months. The global midstream market is growing as companies continue to require pipeline and other infrastructure and networks to transport natural gas, natural gas liquids (NGL), and oil from the wellhead to the refinery; from the refinery to storage and distribution terminals; and ultimately, to the industrial, commercial, or retail consumer.
We’ve seen an increasing number of high-profile incidents involving pipeline leaks, ruptures, and even explosions related to aging pipeline infrastructures across the United States and the rest of the world. These incidents increase regulatory mandates and public pressure; increasing the need for systems that can rapidly and precisely detect and locate leaks to enable faster repair and remediation. In conjunction with parallel investments in pipeline monitoring systems that monitor for corrosion and pipeline integrity and associated pipeline simulation technology, investments in leak detection systems can enhance both operational integrity and performance and reduce business risk.
Leak Detection Systems Provide Operational Benefits
ARC’s recently published Leak Detection System market study covers both external- and internal-based solutions.
External-based systems rely on dedicated measurement equipment. In contrast, internal-based systems rely on existing measurement sensors for flow, pressure, and so on (typically provided by an installed SCADA system). In general, external systems provide excellent performance, but often cannot operate continuously. Investment and operational costs are usually higher than for internal systems because they need dedicated measurement equipment such as sensor cables that must be laid along the pipeline.
External systems are more likely to be used in critical applications, such as when pipelines cross nature reserves or high consequence areas (HCAs). Internal systems usually run continuously, which is why laws in some countries specify these as mandatory equipment for pipelines. Sensitivity is generally lower than external systems, but so are investment and operational costs.
Whether internal or external, leak detection systems can help companies reduce the adverse operational, financial, and public safety impacts of undetected leaks or ruptures. LDS can also help pipeline operators minimize product losses due to leaks or theft, improve pipeline integrity, increase public safety, and reduce negative environmental impacts in onshore, offshore, and subsea installations. Major LDS applications include:
- Onshore transmission pipelines
- Gathering lines
- Subsea/offshore transmission pipelines
- Well to FPSO
- Offshore platforms
- Onshore platforms/facilities
The specific operational requirements for a leak detection solution may vary somewhat by end user, project location, or operational parameters; but the main drivers behind greater adoption of LDS solutions include:
- Help owner-operators, pipeline operators, and other stakeholders maximize their transportation operations, mitigate losses, and reduce the chances that undetected leaks could escalate into major problems and/or cause an explosion
- Providing an additional layer of insurance that can help reduce operational losses, reduce financial liabilities from persons and property, enhance pipeline integrity, and extend the life of these capital-intensive assets
- Providing the ability to quickly and accurately detect leaks (ideally) of all sizes and localize their presence to enable timely repair and maintenance to minimize losses of oil, natural gas, or other liquids. This enhances bottom line performance by minimizing lost product and the legal, regulatory, and “soft” costs associated with those losses (such as damage to reputation)
- Depending on specific local, national, and/or regulatory requirements, implementing an appropriate leak detection system may be a requirement to operate
The oil & gas industry is comprised of many disparate and distributed assets that form one critical part of the entire oil & gas value chain, which runs from the wellhead to the gasoline pump or the gas heater. The Industrial Internet of Things (IIoT) offers significant potential value in leak detection applications – particularly along remote pipelines – and is likely to play an increasingly important role in these applications going forward.
ARC’s research determined that a large number of suppliers currently offer leak detection systems, with some offering more than one technology type. All these systems will likely meet some of the needs of most customers’ requirements. Since no one leak detection system technology can provide a “silver bullet” to handle every application or environmental challenge, users must select the LDS that best meets their specific requirements and economic tradeoffs. Some operators employ more than one technology type.
ARC believes that users should work closely with suppliers, both up front to identify the most appropriate leak detection solution, and during the installation and implementation phase to gain a better understanding of any potential nuances of the technology.
Companies that lack the in-house technical expertise needed to maximize LDS performance should consider outsourcing some or all of the operational activities to a capable and proven third party such as an oilfield services provider. Operators should consider investing in high-fidelity training simulators, like those recommended by the US Pipeline Hazardous Materials Safety Administration (PHMSA) and leverage the model for leak detection purposes. Training simulators provide one of the best methods to maintain appropriate knowledge and skills for a specific pipeline’s operational parameters.
ARC believes that operators must invest in solutions that will help them comply with regulatory requirements or help mitigate risk and enhance asset integrity. ARC recommends that owner-operators, pipeline operators and related stakeholders that are not already deploying a leak detection system should consider the potential cost of not deploying an appropriate leak detection system.
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