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.