Skid Mounted Lease Automatic Custody Transfer (LACT) Systems

1 Introduction & Background

Lease automatic custody transfer (LACT) systems were originally developed by producing companies (leaseholders of oil-producing assets) with support of pipeline companies. Both parties were beneficiaries in the process as large tank batteries originally used for oil storage, and gauging systems were salvaged in the process. According to paper[1] presented in the 34^th Annual Fall meeting of SPE (Society of Petroleum Engineers), October 4 – 7, 1959, LACT can be accomplished using positive displacement meters coupled with standard open-type prover systems, which will be satisfactory to producers, pipeliners and regulatory bodies – around 2.5 million barrels of oil were already sold through LACT systems at the time of publication of this paper. It was recommended in the paper that performance, meter wear rate and appropriate meter proving interval can be determined/monitored by recording and analysing meter factor vs cumulative meter registration graphs.

The paper further emphasised using a check meter in series with a custody transfer meter to eliminate the possibility of a major meter error and the resultant loss to either party. Caution was also advised regarding chances of large errors for oil flows at high temperatures – indicating inherent limitations of group temperature compensators used with ASTM Table 7. The paper approved the reliability of samplers for determining BS&W (Basic Sediment and Water) while pointing out that true APE gravity of sample is only possible for fresh samples – not for petroleum samples stored for extended periods.

2 Difference Between LACT and ACT

Automatic Custody Transfer (ACT) systems are used for continuous and unattended custody transfer of crude oil and petroleum products between different pipeline carriers, for loading of ocean-going tankers, from pipelines to storage tanks or between any two stakeholders of the petroleum supply chain – production, transportation, refining, storage and distribution/marketing. When these systems are specifically used to transfer product custody between oil producers (leaseholder of wells producing crude) and a pipeline operator or refinery, they are referred to as Lease Automatic Custody Transfer (LACT). Both ACT and LACT systems are a very important part of the oil supply chain as they enable parties to monitor and determine the quality and quantity of flowing product from one party to the other over some time – in turn determining the value of financial transactions on a real-time basis.

A BS&W monitor is primarily used in a LACT system where “off-spec” crude oil is diverted to secondary systems, preventing the off-spec product’s sale. One of the many reasons for oil to be off-spec could be the presence of excess amounts of water in crude oil. A water-cut meter, referred to by the American Petroleum Institute as OWD or On-Line Water Determination, capable of measuring the water content (percentage) in flowing streams of produced crude oils and similar liquids is an essential part of LACT systems. The water-cut is measured as a percentage of water in the crude oil flow stream.

3 Selecting the Right LACT System

The following parameter list is provided to help select a LACT system for specific applications based on the constituents and properties of produced fluids from the reservoir. It is important to note that different wells from the same reservoir may flow fluids with varying compositions and should be considered critically when LACT systems are meant to handle multiple-well flows. As a minimum requirement for optimal performance of LACT systems, the following considerations are important:

• Suitable line sizing based on maximum and minimum expected flow rates
• Correct material specifications like 316 stainless steel construction with options for Duplex, Monel, Hastelloy carbon steel – where required NACE MR0175 specification should be identified
• Correct pressure and temperature rating, especially when reservoir fluid temperature is 125 degrees C (or higher) due to direct hot reservoirs …
• Correct estimation of water content range e.g. 0-1%, 0-25%, 30-60%, 80-100% , 0-100%
• Measurement Accuracy Requirements in consultation with Sale – Purchase Agreements or Lease Agreements in place
• Specific documentation in line with Q&HSE policy requirements for Testing, Welding, Radiography, Pressure Vessel Compliance codes
• Regional Electrical Certification with corresponding references to International Standards for Hazardous Area rating according to IECEx requirements.
• Monitoring requirements with regards to local and remote indication requirements, including Signal Output Requirements matching communication protocols
• Factory Acceptance Tests including meter calibrations and validation reports

Most crudes and condensates are produced with water. Due to gravitational separation of water and oil in the piping/pipeline structure, normally, the multiphase flow gets configured in a manner where oil (and gas if present) is travelling along the top of the pipe and the water is travelling along the bottom – a phenomenon often referred as “bottom water”.  To get the correct water-cut measurement by meter, this two-part fluid flow must be thoroughly mixed before entering the water-cut meter. Thus, water cut meters are generally supplied in LACT systems with an upstream mixer to avoid the possibility that the water will be missed entirely or measured inaccurately.

To ensure correct measurement of changes in fluid viscosity coming out of producing well, LACT systems should be designed for accurate measurement and sampling of various hydrocarbon liquids under a wide viscosity range, e.g., from 2 to 5000 centistokes.

4 Skid Mounted LACT System Components and Operating Requirements – Mandatory Requirements Under US e-CFR Code.

The Code of Federal Regulations (CFR) is published online as e-CFR defining requirements for the general and permanent regulations published in the Federal Register of the federal government of the United States. The CFR is divided into 50 titles representing broad areas subject to federal regulation. Under e-CFR Subpart 3174, regulations related to the measurement of oil are provided. Under subpart 3174, Rule 3174.8 provides requirements for LACT system components and operations, referencing relevant API standards for the convenience of concerned technical personnel. Following is a summary of mandatory requirements are as follows:

LACT system components.

Every LACT system to include all of the equipment listed in API 6.1, with the following mandatory requirements:

1. The custody transfer meter must be a positive displacement meter or Coriolis meter.
2. An electronic temperature averaging device must be installed.
3. Meter back pressure must be applied by a back pressure valve or other controllable means of applying back pressure to ensure single-phase flow.

LACT system operating requirements.

Operation of all LACT system components must meet the requirements of API 6.1 and the following:

1. Sampling must be conducted according to API 8.2 and API 8.3. Additionally, the sample extractor probe must be inserted horizontally within the centre half of the flowing stream marked with flow direction;
2. LACT system samples for determination of oil gravity and S&W content must meet the requirements of either API 9.1, API 9.2, API 9.3, and API 10.4.
3. The composite sample container must be emptied and cleaned upon sample withdrawal.
4. The positive displacement or Coriolis meter must be equipped with a non-resettable totaliser. The meter must include or allow for the attachment of a device that generates at least 8,400 pulses per barrel of registered volume.
5. The system must have a pressure-indicating device downstream and upstream of meter-proving connections. The pressure-indicating device must be capable of providing pressure data to calculate the CPL (Correction for the effect of pressure on a liquid) correction factor.
6. An electronic temperature averaging device must be installed with the temperature sensor of a reference accuracy of ±0.5 °F or better with minimum graduation of 0.1 °F, which must be placed in compliance with API 7. Following conditions to be met:
   1. The electronic temperature averaging device must be volume-weighted and take a temperature reading following API 21.2, Sub-section 9.2.8;
   2. The average temperature for a batch must be calculated by the volumetric averaging method using API 21.2, Sub-section9.2.13.2a;
   3. The temperature averaging device must include a display of instantaneous temperature and the average temperature calculated for a batch;
   4. The average temperature calculated for the batch must be used to calculate the CTL (Correction for the effect of temperature on liquid) correction factor.
7. Determination of standard net volume: Calculate the Net Standard Volume (Net standard volume means the gross standard volume corrected for quantities of non-merchantable substances such as sediment and water) at the close of each batch measurement following the guidelines in API 12.2.1 and API 12.2.2.

5 Standard Industry Requirements for Skid Mounted LACT Systems

Standard skid-mounted LACT systems available commercially are equipped with the following systems for smooth and error-free error-free custody transfer operations:

• Basket Strainer with Pressure Differential Indicator
• Oil stream Air Eliminator
• Back Pressure Valve
• Thermal Relief Valve
• Turbine or Coriolis Flowmeter
• Temperature Indicator & Transmitter
• Pressure Indicator & Transmitter
• PLC Control System with Flow Computer
• Panel view and operator interface
• Prover Connections
• Hydro test of all piping
• High-quality industrial coating system

Skid-mounted assembly is hydro tested for all piping and pressure containing vessels/tanks as per the following:

• ASME Pressure Vessel Code Section VIII
• ASME Pressure Vessel Code Section IX for pipe fabrication
• Piping Design complying with ANSI B31.3
• Structural Steel Assembly Design complying with AWS D1.1
• Relevant NACE compliance was required due to the corrosive property of oil

Protective painting for LACT skid piping and structural components shall meet the requirements of the following ISO standards as per site requirements/oil corrosive properties:

• ISO 2080, Metallic and other inorganic coatings – Surface treatment, metallic and other inorganic coatings
• ISO 8044, Corrosion of metals and alloys
• ISO 3233-1, -2 and -3, Paints and varnishes – Determination of the percentage volume of non-volatile matter.
• ISO 4618:2014, Paints and varnishes
• ISO 12944-5:2007, Paints and varnishes – Corrosion protection of steel structures by protective paint systems – Part 5: Protective paint systems.

6 Applications of Skid Mounted LACT Systems

Skid-mounted LACT systems generally include inlet strainers, air eliminators, Coriolis flow meters, back pressure control valve, suction/discharge piping, valves, instrumentation, controls, with a design that reduces field assembly a minimum requirement. These may be used for single good production metering or multi-well oil production. An auxiliary storage tank is often used between the production well and the LACT unit. Oil is pumped from a storage tank by a charge pump, passing through the BS&W (Basic Sediment & Water) monitor that measures per cent (%) sediment and water.  Oil is then moved to the highest point of the system, where an air eliminator removes any gases trapped in the oil stream and then to a static mixer that mixes the oil before a small sample is drawn by an online analyser.  Depending on the sampling result (per cent of BS&W in the oil), oil meeting custody transfer specifications are sent to the sales pipeline (road tanker or storage tank) through the meter and off-spec oil is diverted towards the off-spec oil tank by a divert valve. LACT systems are often equipped with PLC and flow computers to help prepare and record-keeping of custody transfer data and invoicing data – well wise Net Standard Volume and accumulated lease production and sales. Various industrial applications of LACT and ACT systems are described below:

• Offshore oil production and dispatch to pipelines and directly to VLCC
• Onshore oil production and dispatch to pipelines, storages, refineries and road tankers
• Support in the prevention of oil thefts and spills resulting in improvement in revenues
• Measurement and monitoring of well production behaviour resulting in improved leased development plans

7 How to Optimize Performance of LACT Systems

Due to uncertainties in well fluid flow rates and composition over time, it is important to understand how some important considerations while using a LACT flow meter can ensure better measurement results. Some suggested precautionary measures stated below can help circumvent these inherent difficulties in measuring well production.

Pressure and Temperature Measurement and Variability: Flow meters are sensitive to large pressure and temperature variations due to multiple variations in fluid composition, operating envelop (OE) and computations. TO ENSURE SPECIFIED METERING PERFORMANCE AND LONG-TERM RELIABILITY, a LACT flow meter should not operate beyond the OE.

Good Communication and Computation Requirements: To get the best use of the LACT meter, the data communication requirements should be specified, including parameters related to products intended for systematic collection and those related to meter diagnostics to fulfil operational needs. All types of communications between meter, flow computer and control room shall be specified for data rates, frequency and level of redundancy. All raw and processed data should be trended, ensuring that the computation of results is sufficiently fast and robust for predicted operating conditions.

Calibration and Field Verification: To achieve optimal performance of the LACT meter, all sensors should be calibrated as per detailed procedures specified by OEM / vendor. In some cases where calibration is not possible, the expected drift of the metering sensor should be documented with possible effects on overall meter performance. Understanding the user’s inter-dependency of key sensor parameters helps judge meter performance and diagnosis malfunction.