Natural Gas Measurement,

Meters and Pipelines

Royalty Calculation
Produced oil and gas is measured prior to
leaving the well site, as required by law
In New York all production must be metered
from each individual lease as well as from
each individual zone
The gross volume from which your royalty
share is calculated is based on this
measurement
Todays measurement technology is
generally accurate to within +/-1.5 %

How Do You Know Its Fair?

It is in the well Operators best interest to insure
proper measurement
Operators want to get paid properly on their
share just as much as you want the same on
your share
While there are recorded cases of theft, it is
uncommon to find systematic theft of
hydrocarbons through oil and gas measurement
manipulation
Measurement components should be inspected
and tested regularly

Gas Measurement
A gas measurement device (regardless
of brand or type) is only as accurate as
the maintenance and calibration allows.
Test equipment and standards are used
to calibrate the three components used
in the gas flow equation which are
differential pressure, static pressure,
and flowing temperature.

Pressure Differential

Units of Measurement
The unit of measurement for volume
of natural gas is the MCF, or
thousand cubic feet
A related unit of measurement,
based on the heating (or energy)
value of natural gas is called the
MMBTU, or British Thermal Unit

How is the Gas Measured

Typically, the gas is measured at the wellhead
and the sales delivery point
There are various types of meters used for
recording well flow depending on the needs of
the operator
Complex systems including telemetering are
used to provide access to data for the operator
All of the systems will meet standards set by
the AGA ( American Gas Association) and the
ASME ( American Society of Mechanical
Engineers) and local state standards if
applicable

Calculations
Calculation of total gas flow is done
on a monthly basis, usually by a third
party gas measurement contractor.
These calculations are passed along
to the Operator who enters the
natural gas measurements into their
revenue accounting system, the
software through which royalty
owners are paid

Wellhead Orifice Flow

Metering
Orifice meters are
commonly used for
wellhead measurement
because they provide a
visual presentation of
well production on a
chart showing
differential and pressure
to record production
These records must be
integrated to get the
actual volume produced

Wellhead Rotary Meter

Rotary metering is
also used for gas
wells and is a
simple way to
accumulate
production
volumes

Wellhead and Sales

Metering
Rotary meters will
commonly have
correction devices
attached to the meters
to convert the positive
displacement of the
meter to volumes in
MCFs
This device can
typically be seen at
both wellhead and
sales meters

Sales Meters
Separate from the
wellhead metering
is a facility at the
connection of the
gathering line and
a distribution or
interstate pipeline
system known as
the sales point.

Sales Metering
Both Orifice and
Rotary measuring
instruments are
commonly used at
sales points. This
facility is typically
the custody
transfer point for
gas sales.

Sales Metering
Rotary meters are
also used for
custody transfer
recording at sales
points

Meter Run to Sales Meter

Gas Production Unit

Chesapeake Sales Point to

RG&E

RG&E Meter Station at Gas

Sales Point

Pipelines

Pipelines and Infrastructure

Pipelines are needed to take the gas to
market
Compressors are needed to maintain
pressures and move the gas through the
pipeline system
Gas Processing Plants are needed when
there are liquids associated with the gas.
(Natural gas liquids include propane,
butanes and pentanes and heavier
hydrocarbons C5+)

Major Types of Pipelines

Gathering Pipelines from wellhead to sales
point
Intrastate Pipelines large transportation
lines within the state regulated by the NYS
Public Service Commission
Interstate Pipelines - large transportation
lines transporting gas between states
regulated by the Federal energy Regulatory
Commission
Distribution Pipelines Local lines that bring
the gas to homes and business

New Capacity Planned

The existing network of pipelines likely
inadequate to bring Marcellus gas to
market as production levels increase
Transmission companies have announced
24 new and expanded pipeline projects
with projected in-service dates over the
next 3 years
6+ Bcf/d of new pipeline capacity planned

Tennessee Gas Pipeline

Source: Tennessee Gas Pipeline, LDC Gas Forum, June 8, 2010

Pipelines
Permanent easements filed in the courthouse.
Limits the use of property afterwards
Value of the easement to both parties
$3/lineal ft to $25/ft +
Width of easement vs. work space
30/40 ft vs. 60/80 ft
Critical to development of well
Legal Review
Addendums to protect unique concerns

Pipeline ROW
Use of existing ROW
Valuation of trees
Use of forester
Soil replacement
top soil/subsoil
Impact on crops
multi-year
Visual impacts
long-term planning
tourism

http://extension.psu.edu/naturalgas/publicati
ons