Introduction- Liquids Transportation, The Epicenter of Pipeline Innovation
Record hydrocarbon output from the Permian and other US basins in the last decade has resulted in a good problem for midstream in the form of infrastructure bottlenecks across the country. For service companies that charge contract-based fees or regulated tariffs to move hydrocarbons, the increased volume from US basins is very good for business. As a result, midstream is undergoing profound changes to keep pace with demand, from gathering and pipelines to storage and processing. To succeed, increase agility, and minimize costs, companies must innovate. Digital transformation is bringing new operational and cost efficiencies to the pipeline link in the value chain, but the change is not uniform across the sector.
Economics dictates where and when infrastructure is being expanded. Sustained low prices for natural gas make it less attractive for companies to spend big on capital projects, resulting in producers flaring instead of taking a loss, in some cases, to move it.
Digital transformation in the pipeline space is heaviest where production growth and competition intersect. This is why an increasing number of midstream companies are improving their physical and digital infrastructure for managing the accounting movement of crude and NGL. Liquids transportation is a competitive landscape where a large number of service providers compete on price and for each other’s customers. Digital technologies and software are creating new efficiencies that give midstream companies a competitive edge, increase business agility, and lower operating costs.
In contrast, low natural gas commodity prices and a highly regulated interstate gas pipeline market have resulted in only a handful of gas transportation service providers, a lack of competition, and little incentive to innovate.
Digital transformation in the liquids transportation space is bringing powerful new capabilities to midstream companies and providing a catalyst for moving off of old ways of running their business. 3 Trends in Digital Pipeline Innovation: Liquids Management Simplified will explore top challenges for liquids transportation as this crucial link in the value chain undergoes change and the digital transformation trends that create exciting new opportunities. Over the next few posts, I’ll show how midstream can navigate increasing business complexity and sharpen their competitive edge, move off of home-grown liquids transportation software solutions, and bring all of their liquids management workflows together in the cloud. Throughout I’ll discuss how W Energy Software can accelerate digital transformation and equip companies with the technology that delivers the operational and cost efficiencies needed to succeed in a constantly evolving energy market.
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This is the introduction to our blog series, 3 Trends in Digital Pipeline Innovation: Liquids Management Simplified.
Author: Michael Ferrante, VP of Transportation
Michael earned a B.S. in business administration from Oklahoma State University. Since joining our team, he has helped build various modules within our software, ranging from marketing to gas balancing to land administration. Michael has lead implementation projects in many business areas of the industry and is currently focused on expanding the Transportation practice area with new pipeline and terminal clients.