Midstream Asset Management
The often disjointed communications and incomplete data underlying the midstream asset management process threaten to limit the space’s efficiency and as a result, growth.
From 2018-35, up to $800 billion will be invested in new oil and gas infrastructure, with 2300 miles of new pipeline to be built annually, driving over 50 billion cubic feet per day of new gas transport capability and over 4 million barrels of new oil and natural gas transport capability. These numbers are an indication of the incredible growth forecasted for the midstream oil and gas segment.
Context & Challenges
The midstream segment describes the process of a resource moving from its original source to its final destination, connecting upstream exploration and production to downstream refinement and end. Its focus is on transport, and storage, meaning that it requires a huge amount of logistical coordination. Moreover, the environmental and capital risk of improper storage or transportation has turned the space into a highly regulated one, with the successful transport of a single drop of product across national, international or other borders involving interconnected regulatory approval at each step of the way.
Currently, the process is highly siloed, with regulations differing at each step, and information silos obscuring the full data picture from all stakeholders, especially in the case of inspections, fugitive emissions, spills, or repairs. Moreover, much of the information at hand is entered manually and as such pinpointing the data relevant to a specific time and place is a manual and intensive effort, and tracking items with granular detail in real time is near impossible.
The difficulty of obtaining accurate and timely information can affect processing speeds as well as responsiveness to either accidents, repairs, or safety breaches. The disconnect between the distinct inspectors and contractors at each step can often lead to communication failures with detrimental results.
Given the sensitive nature of assets under management in this process, having an effective alert and response process is integral in the case of a failing asset, given that every moment of suboptimal performance can lead to huge revenue losses. Without a comprehensive data picture on hand it’s near impossible to accurately predict potential leakage incidents or asset failures, and the infrastructure is vulnerable to theft and cyberattacks as well as miscommunications that could prompt outages and health, safety, and environmental costs.
There are around 2.7 million miles of O&G pipelines in the US and two-thirds of Americans live within 600 feet of a pipeline. As such, effectively predicting leakage incidents has the ability to save nearly $US 30 billion per annum for US pipeline companies, which could go towards funding almost 50% of the midstream capital expenditure required by 2030.
Separate of these systemic challenges, the midstream sector faces a slow adoption problem when it comes to integrating digital and data-driven solutions. Only 50% of the industry consider existing data management as a high priority item, a figure which stands in stark contrast to the potential benefits of such a change.
The World Economic Forum reports that digitization has the potential to drive approximately $1 trillion of value for Oil and Gas firms. The 24/7, transient, logistics based, and highly regulated nature of midstream processes renders the space and ideal host for a STRATO solution. STRATO’s automation, transparency, and ability to connect distinct parties in real-time based on the same shared data, render it a formidable partner for asset tracking in midstream.
- By storing data on a blockchain database, STRATO ensures permissioned stakeholders have a comprehensive view on the location and movements of their assets at each step of the supply chain
- By providing access to real-time and trackable data, stakeholders can understand and analyze the supply chain as a whole which allows them to quickly identify challenges and make educated decisions, driving gains on all fronts.
A specific example of these gains is STRATO’s ability to significantly increase processing speeds so that, for example, a slope change could be communicated near immediately to drive faster repairs. Early slope repairs are often the best way to avoid landslips and delayed repairs could often have catastrophic results. The same logic applies to the alert process and response time in relation to a failing asset and minimizing the negative financial impact of the downtime that exists in between. STRATO’s data driven approach has the potential to reduce annual downtime by 70% and reduce unplanned costs from the current proportion of 50% of total costs to 22%.
Any STRATO insurance solution leverages STRATO's enterprise grade features
RESTful APIs for direct connection of IoT devices such as storage providers' iPads to the blockchain network
Identity Management, OAuth and SSO capabilities for simplified IoT authorization and user login
Privacy via private chains to keep sensitive data private and control who sees what data
Enterprise Data Modeling for integration into existing data systems, and to ensure interoperability