Midstream asset management processes are underlined with disjointed communication and incomplete data, limiting efficiency and growth.
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.
Some of the assets and processes that are affected by the current supply chain’s operational inefficiencies are valves, pipes, tanks, pumps, inspections, fugitive emissions, contractors, certifications, and API 6D compliance.
— The Oil and Gas Industry
The oil and gas industry suffers from inefficient operations and the costly errors and administrative work that can result from these.
Given that two-thirds of Americans live within 600 feet of a pipeline, errors can result in destructive accidents which have the potential to wreak havoc on neighbors.
The complexity of the current supply chain makes it difficult to oversee and effectively regulate operations.
Midstream asset management is unified, streamlined, and automated on STRATO Mercata.
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 an ideal host for a STRATO Mercata solution. STRATO Mercata’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 Mercata 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 Mercata’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 Mercata’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%.
Specific solution benefits include:
— Maintain a record of chain of custody for each asset
— Spin private chains to immediately and securely provide access to data to new permissioned parties, controlling who accesses what data through encryption
— Through traceability and immutability, prevent fraudulent manipulation of data
— Provide a holistic overview of all pertinent data in a single ledger, driving intelligent data-driven decision making
Additional features include:
— 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