Gas and By-Product Allocations

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The allocation of gas and by-product production within Metrix can be split into two main methodologies: non-Gas Flow and Gas Flow.  Each control group must indicate whether it is using Gas Flow allocation or not, the default for a new control group is non-Gas Flow.  These two methodologies are quite different and within each of the them the user has a choice of allocation methods.  Each of these allocation methods support a different level of complexity in the allocation process and have their own requirements and reporting.

Allocation Methodology: Non-Gas Flow versus Gas Flow 

The non-Gas Flow methodology is the original allocation methodology developed.  It was developed during a time when the business of Production Accounting and Field Operations was much simpler and there was a single flow of product from the wellhead to the plant and all wells and partners participated in the same flow of product.  Due to this simplistic view, the allocation process is triggered only at the plant and the calculated plant production volumes are allocated back down the schematic until they are allocated back to the wellhead.  The process of allocating plant production back through the schematic means that the non-Gas Flow methodology can be considered a top-down approach to allocation. 

The plant production is allocated down through the facilities that delivered to the plant and allocated back to the wells.  The production allocation never looks at DOIs or ownership and therefore also never looks at unitization.  Once the production is allocated to the wells then ownership is applied to split the well production to the partners.  For unitized wells, this also means accumulating the production of all unit wells and splitting the unit production total first to the tracts using the tract factors, and then from the tracts to the partners based on each tract’s DOI. 

As the business matured and grew more complex, a new allocation methodology was required to address the need to control the flow of product at a much lower level (i.e. the ability to have multiple flows out of a single facility, the ability to indicate that only specific wells and/or owners participate in a certain flow, etc.).  The response to this new requirement was the development of the Gas Flow methodology.  This methodology allows the user to indicate participants at each facility in the schematic as the product flows from one facility to the next.  The allocation process is triggered at each facility in the schematic (instead of just at the plant) and the allocation results of one facility feed into the next facility’s allocation process.  It is this dependency between facilities and the order in which the volume flows that means the Gas Flow methodology can be considered a bottom-up approach to allocation. 

The production, now at each facility in schematic even if it is just Raw Gas, is allocated to those entities/owners that have delivered to the facility based on the volumes delivered.  One of the big differences between the Gas Flow methodology and the non-Gas Flow methodology is that in the Gas Flow methodology, the actual allocation of production is done at the entity/partner level instead of at the entity level.  This is required to allow for the ability to indicate which partners are to be allocated production and direct which way specific partners flow their product.  This methodology uses the bottom-up approach because the ownership decisions made at the sending facility impact the delivered volume into the receiving facility which then becomes the basis of allocation at the receiving facility.

Due to the requirement of the allocation to be done at the partner level in a bottom-up approach, the process starts with the wellhead gas production having to be allocated to partners.  For unitized wells, this means accumulating wellhead gas production for all wells in the unit (within the battery being processed) and splitting that to the tracts based on the tract factors, and then from the tracts to the partners based on each tract’s DOI.  

When using Gas Flow, each facility in the schematic goes through its own allocation process that requires a list of the products being processed at the facility and the allocation method being used.  Each facility can use a different allocation method, there is no need for all facilities to use the same method.  However, there are some restrictions since the results of one facility feeds into the other.  For a facility to use an allocation method that considers composition (component-based allocation) all the facilities that deliver into it must also use a component-based allocation method.

Functionality: Non-Gas Flow versus Gas Flow

When to use the Gas Flow Methodology

• You have gas swinging between multiple facilities.  This is where a single facility sends gas for further processing to more than one facility.

  • It is recommended that you use Gas Flow, as it has more robust functionality to control the flow of product.

• You have gas and/or by-products flowing from one plant to another plant.

  • It is recommended that you use Gas Flow, as it has more robust functionality regarding facility-to-facility dispositions.

• You have gas and/or by-products flowing from a facility in one control group to a facility in another control group.

  • Only Gas Flow supports gas and/or by-products flowing between facilities in different control groups.

• You want/need to control flow at a partner level without needing special DOIs.

  • For example:

    • If you have a situation where a specific partner or partners are not to receive any production of a specific product or products.

• You have product being produced and disposed of prior to the plant.

  • For example:

    • If you have condensate being produced and sold from the gathering system.

    • If you have Raw Gas sales at a battery or gathering system.

  • Only Gas Flow supports gas and/or by-product production and sales at a facility other than a plant.

• You have Oil, Wellhead Condensate and/or Water at a gathering system.

• You have Return Consumption being sent from a battery or gathering system.

• You want to be able to follow the flow of product through your various facilities and run reports showing the flow and allocation at each facility.

  • Since each facility has an allocation process run, there are various reports that can be run to review the volumes at each one at an entity/owner level.

• Some of the more recent Government Reporting requirements may require the use of the Gas Flow methodology to ensure that the data is available at the correct level for reporting.

Non-Gas Flow Allocation Methods

Within the non-Gas Flow Methodology, the user has a choice of 5 different allocation methods.  Each of these allocation methods use a similar top-down approach to the allocation and are only triggered at the plant but the basis of proration down through the facilities in the schematic is different.  The five allocation methods, listed in order of the simplest to the most complex, are Production, Gathered, Factored Gathered, Component and Ideal Product Shrinkage.   Each of these allocation methods will be explained in more detail in the following paragraphs but a quick summary of each is as follows:

Production: Produced product at the plant is allocated directly to the wells based on each well’s wellhead gas production volume regardless of consumption at the well or any other facility in the schematic.  Neither wellhead composition nor composition of produced product disposition(s) are required, or in fact used in the actual allocation process even if entered.  {See notes in the Summary of Non-Gas Flow Allocation Methods table for more information on when wellhead analyses may be used.}

Gathered: Produced product is allocated down from the plant through the schematic facilities based on gathered at each level until the well level.  For the wells the allocation is typically based on the well gathered volume, which is wellhead gas production less consumption at the well (does not include consumption/metering difference that occurred at facilities that was allocated down to the wells).  The facility-level gathered does take into consideration consumption/metering difference that occurred but not the well-level gathered.  However, there is an option that can be set to have consumption/metering difference from the various facilities considered during the allocation process.  Neither wellhead composition nor composition of produced product disposition(s) are required, or in fact used in the actual allocation process even if entered.  {See notes in the Summary of Non-Gas Flow Allocation Methods table for more information on when wellhead analyses may be used.}

Factored Gathered: Produced product is allocated down from the plant through the schematic facilities based on gathered at each level that is associated with the product being allocated (as determined by the analysis) until the well level.  For the wells the allocation is typically based on the well gathered volume, which is wellhead gas production less consumption at the well (does not include consumption/metering difference that occurred at facilities that was allocated down to the wells).  The facility-level gathered does take into consideration consumption/metering difference that occurred but not the well-level gathered.  However, there is an option that can be set at the plant to have consumption/metering difference from the various facilities considered during the allocation process.  Wellhead composition (analysis) is required. Composition of produced product disposition(s) is not required nor in fact used in the actual allocation process even if entered. 

Component: Produced product is allocated down from the plant through the schematic facilities based on gathered at each level that is associated with the product/component being allocated (each component in the produced product is allocated independently) until the well level.  For the wells the allocation is typically based on the well gathered volume, which is wellhead gas production less consumption at the well (includes consumption/metering difference that occurred at facilities that was allocated down to the wells).  Both wellhead composition and composition of produced product disposition(s) are required.

Ideal Product Shrinkage (IPS): Produced product is allocated down to the "theoretical" for each well/component that sent to the plant.  The allocated volumes for each well/component are netted off the "theoretical" for the well/component prior to the allocation of the next product.  The order in which the products are allocated is determined by the IPS Order Table that the user sets up for the plant.  Since the allocation of one product impacts another, all products produced at the plant (except for the Balance Only products mentioned below) must use Ideal Product Shrinkage or none of them can.  This allocation method is also referred to as using a net decline allocation process, since each allocated volume is netted off before the next product is allocated.  Both wellhead composition and composition of produced product disposition(s) are required.

There is a sixth allocation method called Balance Only but this allocation method is basically a non-allocation method.  This method can only be used for Oil, Water and Wellhead Condensate; products that are not typically processed through a gas plant.  This allocation method is used to allow the user to enter receipts, dispositions, and inventories of these products but they are not allocated down to wells, the volumes are used solely for government reporting purposes at the plant level. 

For more information, see:

Summary of Non-Gas Flow Allocation Methods

(1) If you are recombining your liquid into your gas at the wellhead, then the wellhead gas production used will include the gas equivalent of the recombined liquid volume.  In this case you will need a wellhead analysis with either a full component analysis to be used to calculate the Gas Equivalent Factor (GEF) or an entered GEF to be used when recombining the liquid volume.  However, the analysis will only be used in the calculation of the recombined volume and will NOT impact the allocation in any other way.

(2) Wellhead Analysis only required for entry/calculation of wellhead Heat Content if Gas Revenue Type is set to be allocated based on gigajoules.

(3) Wellhead net of liquids cannot be used. As there is no composition on produced products, it is not possible to net liquids from the gas to determine a net heat content.

(4) In order for allocated consumption/metering difference allocated to the well-level through Consumption Usage IDs to be considered during the allocation process the Allow Gathered Adjustments flag at the plant must be set to Yes.  When this option is set to Yes, all facility consumption at Usage IDs with entities attached, including that at the plant itself, will be included in calculating the gathered to use as the basis of allocation.

(5) Allocated consumption/metering difference allocated to the well-level through Consumption Usage IDs will be considered regardless of the Allow Gathered Adjustments flag at the plant when using the Component allocation method.  This will include all facility consumption/metering difference allocated to the well-level through Consumption Usage IDs, including that at the plant itself.

(6) Allocated consumption/metering difference allocated to the well-level through Consumption Usage IDs will be considered regardless of the Allow Gathered Adjustments flag at the plant when using the IPS allocation method.  This will NOT include the consumption at the plant as each consumption Usage ID will have its own Order ID in the IPS Order table.

For a list of which reports will be available for the various allocation methods see the following:

Production

The Production allocation method is the most simplistic and probably one of the most rarely used methods today.  In this allocation method the plant production volume is prorated back to all wells that delivered to the plant based solely on each well’s wellhead gas production volume.  {Reminder: if you are recombining liquid production into the gas at the wellhead then the wellhead gas production volume will include the gas equivalent of the liquid production.}

This method does not consider any activities (i.e. consumption, metering difference) that may have impacted the gas volume that reached the plant when allocating to the individual wells.  Using this method implies that all wells share equally in any activity along the way, such as consumption or metering difference. 

Usage of this method assumes that all wells have similar composition in terms of gas/liquid analysis.  Since we are allocating all gas and liquid by-products, based on the wellhead gas production volume there is no consideration being made for one well being heavier relative to another. Allocation of each produced product is based solely on each well’s wellhead gas production with no consideration for the composition of the volumes.

Wellhead analyses are not required for this allocation method.  However, if you are recombining your liquid at the wellhead or you want your gas revenue allocation to be based on gigajoules then you need to enter a well analysis.  At minimum, this well analysis must be a Direct Input analysis with just a GEF and/or Heat Content entered. If you enter a full well gas/liquid analysis it will be used only to calculate a GEF and/or Heat Content but will NOT be used during production allocations.

Disposition analyses are not required at the plant when disposing of the produced products.  If entered, they will be ignored during the allocation process.

Since this allocation method is a simple allocation of plant production directly to wellhead gas production the only Optix report that backs up this allocation is the Gas and Products Allocation Details report.    Note:  Although there will be a separate page for each product using this allocation method, the Proportionate Weight, Wellhead Production and Gathered columns will contain the same volumes for each product, only the Production and Calculated will be different.

The following is an excerpt from the report.  

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Gathered

The Gathered allocation method is a little more complex than the Production method as it will start to consider gas that gets used before it gets to the plant.  In this allocation method the “theoretical” volume (or Allocated Gathered as it is called for this method) is based on the gathered volumes through the hierarchy.  Gathered volumes at the facility-level take into consideration the facility's consumption/metering difference.  However, at the well-level, the gathered volume is defined as the wellhead gas production less any well-level consumption, not including facility consumption/metering difference allocated back to the well.  The plant production is then prorated based on the “theoretical” or Allocated Gathered.

There are two ways the Gathered allocation method can work.  The first is the standard or default way which was explained above.  The second way is to have any facility consumption and metering difference taken into consideration when calculating the “theoretical” volume, which in turn will impact how the production is allocated.  This functionality is triggered by setting the Allow Gathered Adjustments option on the Plant Production screen to be Yes.  To further control which wells are allocated the consumption and have their gathered adjusted accordingly then Consumption Usages must be set up with wells attached at the various facilities with consumption.

Like the Production allocation method, using the Gathered method also assumes that all wells have similar composition in terms of gas/liquid analysis.  Since we are allocating all gas and liquid by-products, based on the wellhead gathered volume there is no consideration being made for one well being heavier relative to another.  Allocation of each produced product is based solely on gathered volume with no consideration for the composition of the volumes.

Wellhead analyses are not required for this allocation method.  However, if you are recombining your liquid at the wellhead or you want your gas revenue allocation to be based on gigajoules then you need to enter a well analysis.  At minimum, this well analysis must be a Direct Input analysis with just a GEF and/or Heat Content entered. If you enter a full well gas/liquid analysis it will be used only to calculate a GEF and/or Heat Content but will NOT be used during production allocations.

Disposition analyses are NOT required at the plant when disposing of the produced products.  If entered, they will be ignored during the allocation process.

To follow the allocation process when using the Gathered allocation method, the Optix report Gas and Products Point-to-Point Allocation should be used.  Note:  Although there will be a separate page for each product using this allocation method, the Gathered, Allocation Factor and Allocated Gathered columns will contain the same volumes for each product, only the Allocated Production will be different.

The following is an excerpt from the report.

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If the plant is set up to Allow Gathered Adjustments, there are a couple of additional Optix reports that will be useful.  The Gathered Adjustment Audit and the Consumption Allocation reports will show each Usage ID at every facility in the hierarchy and the allocated volume calculated for each well attached to the Usage ID.  

Factored Gathered

The Factored Gathered allocation method is a little more complex than the Gathered method as it will consider the composition of the well, although the composition of the produced product is still not required.  This method is typically used when you want/need to consider the differences in well composition, but the producing facility does not have or does not communicate the sales analysis for one or more products.  Without a full production/sales analysis you cannot use either of the more fully composition-based allocation methods: Component or Ideal Product Shrinkage.

In this allocation method the “theoretical” volume (or Allocated Gathered as it is called for this method) is based on the gathered volumes through the hierarchy like with the Gathered allocation method.  Gathered volumes at the facility-level take into consideration the facility's consumption/metering difference.  However, at the well-level, the gathered volume is defined as the wellhead gas production less any well-level consumption, not including facility consumption/metering difference allocated back to the well.  Unlike the Gathered method, the gathered volume is adjusted to reflect the components included in the product being allocated.  The plant production is then prorated based on the “theoretical” or Allocated Gathered.

As with the Gathered method, there are two ways the Factored Gathered allocation method can work.  The first is the standard or default way which was explained above.  The second way is to have any facility consumption and metering difference taken into consideration when calculating the “theoretical” (gathered) volume, which in turn will impact how the production is allocated.  This functionality is triggered by setting the Allow Gathered Adjustments option on the Plant Production screen to be Yes.  To further control which wells are allocated the consumption and have their gathered adjusted accordingly then Consumption Usage IDs must be set up with wells attached at the various facilities with consumption.

Wellhead analyses are required for this allocation method and the Product Category associated with each component is critical.  The Product Category is how you tell the allocation process which components are associated with each produced product.  By default, when an analysis is created the following Product Categories are used:

You can change the Product Category for the various components.  For example, if the plant does not produce Ethane as a separate product you could modify the Product Category for the C2 component and include it in the GAS. 

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Disposition analyses are not required at the plant when disposing of the produced products.  If entered, they will be ignored during the allocation process.

To follow the allocation process when using the Factored Gathered allocation method, the Optix report Gas and Products Point-to-Point Allocation should be used.  Note:  There will be a separate page for each product using this allocation method, the Gathered will contain the same volumes for each product but the Allocation Factor, Allocated Gathered and Allocated Production will be different.

The following is an excerpt from the report.

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If the plant is set up to Allow Gathered Adjustments, there are a couple of additional Optix reports that will be useful.  The Gathered Adjustment Audit and the Consumption Allocation reports will show each Usage ID at every facility in the hierarchy and the allocated volume calculated for each well attached to the Usage ID.  

Component

The Component allocation method is the first method that takes into consideration the composition of the produced product.  This is the most used allocation method as it is the simplest method that considers the actual composition of the produced volumes.  This method requires both wellhead and production/sales analyses.

In this allocation method there will be a "theoretical" volume calculated for each component that exists in the produced product.  The “theoretical” volume (or Allocated Gathered as it is called for this method) is based on the gathered volumes through the hierarchy like with the Gathered/Factored Gathered allocation methods.  Gathered volumes at the facility-level take into consideration the facility's consumption/metering difference.  At the well-level, the gathered volume is defined as the wellhead gas production less any well-level consumption and any facility consumption/metering difference allocated back to the well.  The gathered volume is adjusted for each component in the produced product.  The plant production for each component is then prorated based on the “theoretical” or Allocated Gathered.

To further control which wells are allocated the consumption and have their gathered adjusted accordingly then Consumption Usage IDs must be set up with wells attached at the various facilities with consumption.

Disposition (or production) analyses are required at the plant for the produced products. 

Split Plant Production Volumes to Components

The first step done in the allocation is to split the plant production of each product down to the component-level.  Once that is complete, each plant product/component volume is allocated to the wells.

To follow how the plant production is split to the components, the Optix report Sales Meter Component Details should be used. It shows the plant production split to the component-level and which analyses were used. 

The following is an excerpt from the report.

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Allocate Plant Production/Component Volumes to Wells

Now that the plant production has been split to the components, it will be allocated down to the wells.  To follow the allocation process when using the Component allocation method, the Optix report Gas and Products Point-to-Point Component Allocation should be used.  Note:  There will be a separate page for each product/component using this allocation method, the Gathered will contain the same volumes for each product but the Allocation Factor, Allocated Gathered and Allocated Production will be different, as they will reflect the specific component being allocated.

The following is an excerpt from the report.

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If the plant is set up to Allow Gathered Adjustments, there are a couple of additional Optix reports that will be useful.  The Gathered Adjustment Audit and the Consumption Allocation reports will show each Usage ID at every facility in the hierarchy and the allocated volume calculated for each well attached to the Usage ID.  

Ideal Product Shrinkage (IPS)

The Ideal Product Shrinkage allocation method, or IPS for short, is the most complex method available for a non-gas flow plant.  This method considers the well, plant production and plant consumption composition and is the only method where the allocation of one product/consumption impacts the allocation of another product/consumption.   The product/consumption "actual" volumes allocated to each well/component are netted off the "theoretical" for the well/component prior to the allocation of the next product/consumption.  Since the allocation of one product impacts another, all products produced at the plant (except for the Balance Only products) must use Ideal Product Shrinkage or none of them can.  This method requires both wellhead and production/consumption/sales analyses. 

Before we get into more details regarding this allocation method there are a few terms that will be used that we should define.

• Plant Actual - this refers to the total gas equivalent volume of all product produced or consumed at the plant.

• Plant Original Theoretical - this refers to the total theoretical volume at the plant based on inlet volumes (prior to any adjustments and actual allocations).

• Plant Adjusted Theoretical - this refers to the total theoretical volume at the plant after it has been adjusted to better align with the composition of the plant actual volumes.

• IPS Order- this refers to the Metrix way of identifying each product and/or consumption usage that needs to be processed at the plant, so that they can be "ordered" (hence the name IPS Order) to ensure that the allocation of each is done in an order that reflects plant processing.

• Remaining Theoretical - this refers to the theoretical volume that is available to be allocated at a specific point within the allocation process.  This volume changes for a given well as each IPS Order is allocated and the well's remaining theoretical is reduced by the amount allocated to the IPS Order.

There are several steps within an IPS allocation: calculate/allocate plant actual, calculate/allocate plant theoretical, adjust plant theoretical and allocate each IPS Order.

The order in which the products and consumption usages are allocated is determined by the IPS Order Table that the user sets up for the plant.  This can also control which wells are to share in the allocation of each product. 

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Determine Plant Actual Volumes

As mentioned previously, the "plant actual" volume when using the IPS allocation method includes both production volumes and consumption volumes.  Also, for the net decline approach to the allocation to work properly all volumes must be in the same unit of measure which means that all liquid by-product component volumes must be converted to their gas equivalent.  

Split Plant Production Volumes to Components

The first step in determining the "plant actual" volume at the plant is to split the plant production of each product down to the component-level.  (This is done the same way as when using the Component allocation method and the same report can be used to follow the calculations.)

To follow how the plant production is split to the components, the Optix report  Sales Meter Component Details  should be used. It shows the plant production split to the component-level and which analyses were used. 

The following is an excerpt from the report.

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Determine Volume for Each IPS Order and Split to Components

The next step in determining the "plant actual" volume at the plant is to determine the "actual" volume for each IPS Order and split the volume down to components.  If the IPS Order is for a liquid by-product then each component is converted to a "gas equivalent".

To follow the calculation of the "actual" for each IPS Order, the Optix report Ideal Product Shrinkage Actuals Audit should be used. 

The following is an excerpt from the report.

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Determine Plant Original Theoretical Volumes

The calculation of the "original theoretical" volumes is like what is done when using the Component allocation method.   The “original theoretical” volume is based on the gathered volumes through the hierarchy like with the Component allocation method.  Gathered volumes at the facility-level take into consideration the facility's consumption/metering difference.  However, at the well-level, the gathered volume is defined as the wellhead gas production less any well-level consumption, not including facility consumption/metering difference allocated back to the well.

Determine Plant Inlet Volumes and Split to Components

The first step in determining the "plant original theoretical" volumes for the plant is to determine the plant inlet and split the inlet volume down to the component-level. 

To follow how the plant inlet volume is calculated and split to the components, the Optix report Ideal Product Shrinkage Inlet Theoretical Audit should be used. It shows volume being delivered into the plant, from the various facilities and splits each delivery to the component-level based on the analysis.

The following is an excerpt from the report.

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Allocate Plant Inlet/Component Volumes to Wells

The next step in determining the "plant original theoretical" volumes for the plant is to allocate the plant inlet volume by component, calculated in the previous step, down to the wells that delivered gas to the plant. 

To follow the calculation of the inlet "original theoretical", the Optix report Ideal Product Shrinkage Inlet Allocation Audit should be used. 

The following is an excerpt from the report.

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Disposition (or production) analyses are required at the plant for the produced products. 

Compare Plant Actual to Plant Theoretical

As mentioned before, one of the major requirements when using the IPS method is that you have good measurement at your plant inlet and outlet and that the analysis at the wells delivering to the plant are also accurate.  If there is not consistent, accurate measurement throughout the hierarchy it is difficult to do a net decline allocation.  However, we recognize that in some cases you are being asked to follow an allocation process that is not necessarily supported by the level of measurement that is available.  For that reason, we provide the ability to have the plant "theoretical" volume adjusted to better reflect the composition of the "actual" volumes. 

To review the differences between your plant "original theoretical" and your plant "actual" volumes at the component, the Optix report Ideal Product Shrinkage Actual vs. Theoretical Variance should be used. 

The following is an excerpt of the report.

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Theoretical Adjustment 

Based on the size and type of your variance you may decide to "adjust" your plant "theoretical" to more accurately reflect your plant "actual" by selecting Adjust theoreticals by prorating actuals in the IPS Adjustment Option on the Plant Production Master screen.  This will adjust your plant "theoretical" volume to match your plant "actual" volume (by component) and then prorate the "adjusted theoretical" volumes down to the well-level based on the well-level "original theoretical" volume (by component). 

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To see how the Plant "adjusted theoretical" volumes were calculated and allocated down to the well-level and to compare the "original" to the "adjusted", the Optix report Ideal Product Shrinkage Theoretical Audit should be used.

The following is an excerpt of the report.

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The Detailed Entity Theoreticals represent the "original theoretical" volumes and the Adjusted Entity Theoreticals represent the "adjusted theoretical" volumes.  Notice, that not only were the C1 and C3 volumes adjusted but the CO2 and C2 volumes that were in the "original theoretical" volume but not in the "actual" were adjusted to 0.

Allocate IPS Orders to Wells

IPS Orders are allocated individually in the order based on their Order Sequence (from lowest to highest).  Within each Order, the participants associated with the Order are allocated to in the order based on the well ID (from lowest to highest). If there are no participants explicitly entered for an Order, then all wells that delivered to the plant will be considered participants.

To see how the Order volumes were allocated down to the well-level, the Optix report Ideal Product Shrinkage Process should be used.

The following excerpt is the first page of the first Order in the plant (allocating Propane production).  It shows the first well that was allocated and subsequent pages with the same Order (not shown below) show each well being allocated.

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The following excerpt is the first page of the second Order in the plant (allocating Gas production).  You can see in the excerpt below that the Well/Tract Remaining Theoretical (GEQ) matches the Well/Tract Remaining Theoretical After Allocation (GEQ) of the previous Order (above excerpt).  This is how the net decline processing in the IPS allocation method ensures that the allocation of each Order impacts the Orders that are allocated after it.

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Potential Errors

Order Actual volume could not be calculated. Component for Inventory Adjustment was not fully allocated across Orders

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This error occurs when there is an Inventory Adjustment (delivering out of inventory or production going into inventory), using an entered Production Analysis, that contains a component that did not exist in any of the deliveries so it could not allocate the adjustment to the Order IDs.  This will only occur when there is more than one Order for the same Product (Gas Flow facility with Split Order By Delivery = YES) and the Inventory Adjustment must be split between the various Orders.

Check the Sales Meter Component Details report to see the component volumes for the Dispositions and the Inventory Adjustment.

• In the report excerpt below, you can see that the disposition volumes contain no C2, but the inventory adjustment does contain C2.

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• There are two possible solutions:

  • If possible, remove the Production Analysis, which will ensure that the Inventory Adjustment is allocated using the Generated Production Analysis (based on the actual disposition volumes).

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• If you do not want to remove the Production Analysis then your only other option is to modify the Production Analysis to reduce the portion of the component(s) causing the issue or modify the Disposition Analysis(es) to increase the portion of the component(s).

Order Actual volume could not be calculated.  Component for Inventory Adjustment resulted in negative volume on Order

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This error occurs when the facility is disposing of volume out of inventory and the Inventory Adjustment, using an entered Production Analysis, contains more of a component than the disposition volume so the adjustment cannot be made without generating a negative production volume for the component.

Check the Sales Meter Component Details report to see the component volumes for the Dispositions, Inventory Adjustment and Total Production.

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• There are two possible solutions:

  • If possible, remove the Production Analysis, which will ensure that the Inventory Adjustment is allocated using the Generated Production Analysis (based on the actual disposition volumes).

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• If you do not want to remove the Production Analysis then your only other option is to modify the Production Analysis to reduce the portion of the component(s) causing the issue or modify the Disposition Analysis(es) to increase the portion of the component(s).
  
  

Order not fully allocated 

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This error occurs when a specific Order was not able to allocate all its Actual volume down to the wells.  Typically, this occurs because one or more of the components in the Actual volume had no theoretical volume to allocate to.  There could be a few reasons as to why there is no theoretical volume for a specific component or components.  The following will address the three most common reasons in order from the easiest to determine to the hardest. 

Ensure each component in the Actual has some theoretical

The first reason that there may not be any theoretical for a component, is quite simply that there isn't.  This occurs when there is a component in the Actual volume that does not exist in any of the well inlet volumes being delivered to the plant.

• Check the Ideal Product Shrinkage Actual vs. Theoretical Variance report.  Look for components that exist in the Actual Volume but have no Theoretical Volume. 

  • In the report excerpt below you can see that in the Actual Volume there is IC4 but there is no IC4 in the Theoretical Volume. 

Open

• When you have a component in the Actual volume that does not exist in the Theoretical volume there is no single correct resolution that we can offer. 

  • If we continue to assume that the composition of the Actual volume is more accurate than that of the Theoretical volumes, then the solution would be to check your various well and facility-level analyses.

    • Even if your well composition includes the component (in this case IC4) it is possible that a facility-level analysis does not and so the volumes that ended being delivered to the plant no longer include IC4.   You may want to modify one or more of your well or facility-level analyses to ensure that you have theoretical volume at the plant for each component in the Actual volume.

  • Alternatively, depending upon the amount of the component in the Actual volume you may decide to modify one or more of the Actual analyses to remove the component.

    • For example, if you have a trace amount of IC4 in your Actual and none of the wells delivering to the plant have any IC4 in their analyses then it may be easier to simply remove the IC4 from the Actual and adjust one of the other components accordingly. 

Ensure participants have inlet theoretical for each component in the Actual

When at the plant-level it looks like there is theoretical for each component in the Actual there may be an issue with Participants entered on the Order. 

• If the Ideal Product Shrinkage Actual vs. Theoretical Variance report shows that you have theoretical for each component, as in the following example, you need to dig a little deeper.

Open

Open

• The first thing to check is to run the Ideal Product Shrinkage Process report and find the last page of the Order with the Error (in this example that is the Gas Order).  This should tell you which components in the Actual that were not fully allocated.  As you can see in the example below the Carbon Dioxide (CO2) in the Gas was not allocated because the Facility Participant Remaining Theoretical (GEQ) volume for CO2 was 0.  But how can that be when we saw that there was 1.6 CO2 Theoretical Volume on the Ideal Product Shrinkage Actual vs. Theoretical Variance report (shown above)?

Open

• There are a couple of situations that may lead to this, the easiest is that we have Participants on the Gas Order in the IPS Order Table and they do not have any theoretical for the component.  The more complicated situation is where the theoretical has "run out" of one or more components during the net decline process of Order Allocation.  This situation is covered in the next section Ensure each component in the Actual has remaining theoretical available.

  • For the easy situation, first check the Participants for the Order.  As we can see from the screen shot below, we have specified that the Gas production should only be allocated to three wells. 

Open

• Based on what we saw on the Ideal Product Shrinkage Process report, none of those wells have any CO2 in their inlet volume.  We could verify that by running the Ideal Product Shrinkage Theoretical Audit report.  As you can see below, the three wells that we attached to the Gas Order have no CO2.

Open

• When you have a component in the Actual volume that does not exist in the Original Theoretical (inlet) volume of Entered Participants there is no single correct resolution that we can offer. 

  • If it is imperative that only the selected participants get allocated any product (in this case Gas) production then there must be a problem with one or more of the analyses and you will need to modify the analyses to resolve this variance. Otherwise you can modify the participants to ensure that there is some theoretical for each component in the Actual volume. 

    • If we continue to assume that the composition of the Actual volume is more accurate than that of the Theoretical volumes, then the solution would be to check your various well and facility-level analyses.

      • Even if your well composition includes the component (in this case IC4) it is possible that a facility-level analysis does not and so the volumes that ended being delivered to the plant no longer include IC4. You may want to modify one or more of your well or facility-level analyses to ensure that you have theoretical volume at the plant for each component in the Actual volume.

    • Alternatively, depending upon the amount of the component in the Actual volume you may decide to modify one or more of the Actual analyses to remove the component.

      • For example, if you have a trace amount of IC4 in your Actual and none of the wells delivering to the plant have any IC4 in their analyses then it may be easier to simply remove the IC4 from the Actual and adjust one of the other components accordingly. 

• When you have a component in the Actual volume that does not exist in the Remaining Theoretical volume (with or without Entered Participants) there may be other possible solutions to resolve the problem.  This situation where the theoretical "runs out of a component" during the Order Allocation process is explained in the next example.

Ensure each component in the Actual has remaining theoretical available

When you have used all the theoretical volume of a specific component (with or without a list of Entered Participants) and you still have an Order Actual that includes that component there are a couple of things to check and changes you can make to resolve the issue.

Open

• Again, check the Ideal Product Shrinkage Actual vs. Theoretical Variance report to see if there is anything that stands out.

Open

• This is exactly what happened in this example, and you can see this from the messages in the Message Centre prior to the Error on the Gas Order.

Open

• There is not even enough C3 to fully cover the Propane Order, however, since the Propane Actual is prorated down to the Theoretical volumes, the allocation of the Propane Order completes successfully and when calculating the Well/Tract Remaining Theoretical After Allocation (GEQ) (as on the Ideal Product Shrinkage Process report) it will force the remaining to 0 because they are negative.

Open

• Since all the Well/Tract Remaining Theoretical After Allocation (GEQ) were negative and forced to 0 after the allocation of the Propane Order, there is no C3 theoretical volume left to prorate the C3 portion of the Gas Actual to which is why the Error message is generated on the Gas Order. 

• When you have "run out of a component" when processing an Order there are a couple of possible solutions.  

  • If you are not already using an IPS Adjustment Option at the plant, you may want to try setting the option to Adjust theoreticals by prorating actuals.  As mentioned previously this option will adjust all theoretical volumes to more closely match the composition of the actual volumes.

  Open

  

• In this example, doing the adjustment allows the allocation of all Orders to complete successfully.

• Instead of adjusting theoretical volumes (or in combination with, if adjusting does not resolve all your issues) you could also try modifying the sequence of the Orders.

  • Looking at the Ideal Product Shrinkage Actuals Audit report, the amount of C3 in the Gas is quite small compared to the C3 in the Propane so if the Orders were processed in the opposite order there will still be plenty of C3 left after processing the Gas Order, to be used as the theoretical for the Propane Order. 

Open

Open

• The final option is to modify one or more of your analyses to try to eliminate the variance(s) with the specific component(s).

  • If we continue to assume that the composition of the Actual volume is more accurate than that of the Theoretical volumes, then the solution would be to check your various well and facility-level analyses.

    • Even if your well composition includes the component (in this case IC4) it is possible that a facility-level analysis does not and so the volumes that ended being delivered to the plant no longer include IC4.   You may want to modify one or more of your well or facility-level analyses to ensure that you have theoretical volume at the plant for each component in the Actual volume.

  • Alternatively, depending upon the amount of the component in the Actual volume you may decide to modify one or more of the Actual analyses to remove the component.

    • For example, if you have a trace amount of IC4 in your Actual for one product and a more significant amount of IC4 in one or more other products then it may be easier to simply remove the IC4 from the product Actual that has a trace amount and adjust one of the other components accordingly. 

No valid Participants

Open

• This message occurs when there are no wells with theoretical volume for a given Order.  This typically occurs when there have been Participants entered for the Order on the IPS Order Table but none of the Participants had inlet volume at the plant. 

  • Check the Participants on the IPS Order Table and ensure that they are delivering inlet volume to the plant.

Gas Flow Allocation Methods

Within the Gas Flow Methodology, the user has a choice of 4 different allocation methods.  The four allocation methods, listed in order of the simplest to the most complex, are Gathered, Grouped Component,  Component, and Ideal Product Shrinkage.   Each of these allocation methods will be explained in more detail in the following paragraphs but a quick summary of each is as follows:

Gathered: Produced product is allocated down to the "theoretical" for each entity/owner that sent to the facility.  

Grouped Component: Produced product is allocated down to the "theoretical" for each entity/owner/component that sent to the facility.  With this allocation method, sales analyses are not required.  Instead, the user can indicate which components to include in the product and an analysis will be calculated based on the theoretical volumes of the included components.  There is an option to adjust the theoretical based on consumption that occurs at the facility, so that the production allocation is done on the theoretical net of allocated consumption.  Theoretical composition (sending facilities must be using a component-based allocation method, either Grouped Component, Component or IPS) is required.  

Component: Produced product is allocated down to the "theoretical" for each entity/owner/component that sent to the facility.  There is an option to adjust the theoretical based on consumption that occurs at the facility, so that the production allocation is done on the theoretical net of allocated consumption.  Theoretical composition (sending facilities must be using a component-based allocation method, either Grouped Component, Component or IPS) and composition of produced product disposition(s) are required.  

Ideal Product Shrinkage (IPS): Produced product is allocated down to the "theoretical" for each entity/owner/component that sent to the facility.  Theoretical composition (sending facilities must be using a component-based allocation method, either Component or IPS) and composition of produced product disposition(s) are required.  The allocated volumes for each entity/owner/component are netted off the "theoretical" for the entity/owner/component prior to the allocation of the next product.  The order in which the products are allocated is determined by the IPS Order Table that the user sets up for the facility.  This allocation method is also referred to as using a net decline allocation process, since each allocated volume is netted off before the next product is allocated.  Theoretical composition (sending facilities must be using a component-based allocation method, either Grouped Component, Component or IPS) and composition of produced product disposition(s) are required.

There is a fifth allocation method called Balance Only but this allocation method is basically a non-allocation method.  This method can only be used for Oil, Water and Wellhead Condensate; products that are not typically processed as part of gas and by-product allocations.  This allocation method is used to allow the user to enter receipts, dispositions, and inventories of these products but they are not allocated down to wells, the volumes are used solely for government reporting purposes at the facility level.  For more information see  Oil and Water at Gas Plants or GGS.

Summary of Gas Flow Allocation Methods

(1) If you are recombining your liquid into your gas at the wellhead, then the wellhead gas production used will include the gas equivalent of the recombined liquid volume.  In this case you will need a wellhead analysis with either a full component analysis to be used to calculate the Gas Equivalent Factor (GEF) or an entered GEF to be used when recombining the liquid volume.  However, the analysis will only be used in the calculation of the recombined volume and will NOT impact the allocation in any other way.

(2) Wellhead Analysis only required for entry/calculation of wellhead Heat Content if Gas Revenue Type is set to be allocated based on gigajoules.

(3) Wellhead net of liquids cannot be used. As there is no composition on produced products, it is not possible to net liquids from the gas to determine a net heat content.

(4) In order for allocated consumption/metering difference allocated to the entity-level through Consumption Usage IDs to be considered during the allocation process the Allocate Consumption By Usage IDs flag at the facility must be set to Yes.  When this option is set to Yes, all facility consumption at Usage IDs will be deducted from the facility theoretical to determine the adjusted theoretical that is then used to allocate production volumes. 

 (5) Consumption/metering difference at the facility become Consumption Orders that are allocated during the IPS process.  Plants will always use Consumption Usage IDs, when set up, a Consumption Order is generated for each Consumption Usage ID.  Batteries and gathering systems can use either Consumption Usage IDs or the system-generated consumption dispositions.  When the Allocate Consumption By Usage IDs flag at the facility is set to Yes, a Consumption Order is generated for each Consumption Usage ID.  Otherwise, a Consumption Order is generated for each system-generated consumption disposition.

(6) This allocation method is intended for use when a Sales Analysis is not known, however, if one is entered it will be used.  This will result in  the Grouped Component allocation being the same as using the Component allocation method.

General

With the bottom-up approach that Gas Flow allocations take, the initial theoretical volumes are calculated the same regardless of the allocation method being used.  The determination of the initial theoretical volumes will be discussed once in this General section, instead of being repeated for each allocation method. 

The theoretical volumes used in Gas Flow production allocations are sourced from three places:

1. When the facility is a battery with producing wells attached, the gas gathered for the wells within the battery is allocated down to the owners.  Gas gathered for a well is the wellhead gas production less wellhead consumption (not from receipt), split to the owners (and components if the allocation method being used at the battery is not Gathered).  For unitized wells, the well gathered is accumulated for all wells in the unit (and attached to the battery) and then allocated to all tracts in the unit, prior to allocating to the tract owners based on the appropriate tract DOI (and components if the allocation method being used at the battery is not Gathered).

   • This is calculated during Step01 - Allocations for the producing battery.

2. Any volumes being delivered to the facility from another processed facility for the purposes of Fractionation.  This excludes volumes delivered for consumption or Inventory Transfer.

   • This is calculated during Step02 - Sales and Transfers for the facilities sending the volumes and depends upon the Sending facility's production allocation and their Market Master setup.

3. Any Outside Receipts that are received at the facility for the purposes of Fractionation.  The owner is specified on the Outside Receipt and will be split to the components if the allocation method being used at the battery is not Gathered.

Due to theoretical source #2 above, Gas Flow allocations require that the facilities be processed in the correct order.  This is like how battery-to-battery oil transfers require the batteries to be processed in a specific order to ensure that the ownership of the oil at the sending battery has been allocated prior to the receiving battery being processed.  For Gas Flow allocations, the key is the Control Group Schematic. 

There are three reports that all Gas Flow facilities can use, regardless of allocation method, to review volumes being sent and/or received and the theoretical volumes that will be used for production allocation.

• Gas Flow Facility Volume Received  report

  • This report shows volumes that were received from other processed facilities, excluding those received for consumption purposes.  

• For most Gas Flow facilities, the volumes on this report will be the volumes that will be used as the theoretical for production allocations.  However, for more complex scenarios (liquid receipts for Fractionation, Outside Receipts, Inventory Transfers), the best report to use is the Gas Flow Theoretical report.

• Gas Flow Theoretical  report

  • This report consolidates all three sources of theoretical volumes and includes only those volumes that are applicable for production allocations.

• Gas Flow Facility Volume Sent  report

  • This report shows volumes delivered to another facility for processing or to another destination for sales/injection.  

Gathered

The Gathered allocation method is the simplest Gas Flow allocation method, as it is the only allocation method that does not require wellhead composition.  However, if you are recombining your liquid at the wellhead or you want your gas revenue allocation to be based on gigajoules then you need to enter a well analysis.  At minimum, this well analysis must be a Direct Input analysis with just a GEF and/or Heat Content entered. If you enter a full well gas/liquid analysis it will be used only to calculate a GEF and/or Heat Content but will NOT be used during production allocations.

When using the Gathered allocation method, the production is allocated back to the "theoretical" volume (calculated as described above).  There are two ways the Gathered allocation method can work.  The first is the standard or default way which uses the "theoretical" volumes as calculated above without any adjustments.  The second way is to have any facility consumption, that was allocated back to the entity level, subtracted from the "original theoretical" and then have the production allocation based on the "adjusted theoretical".  This functionality is triggered by setting the Allocate Consumption By Usage ID option to Yes on the Gas Flow screen of the appropriate facility maintenance screen (Battery Maintenance or Gathering System Maintenance). 

To further control which wells are allocated the consumption and have their "theoretical" adjusted accordingly then Consumption Usages must be set up.  Having a Usage ID set up with no Entities attached indicates that the volume for the Usage is to be allocated to all entities that have a non-zero "theoretical" volume.  For more information on consumption allocation see  Consumption Allocation.

Since we are allocating all gas and liquid by-products, based on the total "theoretical" volume, whether adjusted for consumption or not,  there is no consideration being made for one well being heavier relative to another.  Allocation of each produced product is based solely on total "theoretical" volume with no consideration for the composition of the volumes.

Disposition analyses are NOT required at the facility when disposing of the produced products.  If entered, they will be ignored during the allocation process.

To follow the allocation process when using the Gathered allocation method, the Optix report  Gas Flow Production Allocation should be used.

An excerpt from the Gas Flow Production Allocation report shows the "original" theoretical, prior to any consumption usage adjustments.  

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The next excerpt from the same report shows the Adjusted Theoreticals after the allocated consumption has been removed.  

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Notice that only the theoretical volumes for Well RLTGFGATHB2W01 seem to have been impacted.  To confirm the adjustments run the Consumption Allocation report.  An excerpt is shown below.

Open

The final excerpt from the Gas Flow Production Allocation report shows the allocation of the Raw Gas production down based on the adjusted theoretical volumes.  

Open

Potential Issues

The Gathered allocation method is very simple since it is based on total volume only and does not consider the composition of the volume so there is very little that could go wrong during the allocation of production.  There is one potential issue to look out for when you are allocating consumption by Usage ID:

Consumption Allocation for XXXXX: XXXXXX, Owner: XXXXXX exceeded Theoretical.  Adjusted Theoretical set to 0.

This is just an Alert message and will not stop the Step01 - Allocation process, however it does indicate a potential issue with your consumption Usage setup.  For more information see  Message Centre Messages - ALCCONS0007.

Grouped Component

The Grouped Component allocation method is the simplest Gas Flow allocation method that requires wellhead composition, as it does not require production/sales analyses.  This allocation method is somewhat like the non-Gas Flow Factored Gathered method, in that sales and/or production analyses are not required, and the user specifies the components that are to be included in each product using the Grouped Component allocation method.  It differs from Factored Gathered in that the components associated with each production are specified once at the producing facility, not at each well, and the components are used to calculate a derived analysis for the product based on the theoretical volumes for the specified components at the producing facility.  The actual production allocation is then done at the entity/owner/component-level as in the Component allocation method.

This allocation method addresses scenarios where a production and/or sales analysis is not known or when the analysis may not accurately reflect the composition of the product at your facility.  The analysis may not be accurate for many reasons, but a couple of the more common ones are:

• The analysis reflects the production/sale at a third-party sales facility that has many inlets blended and does not reflect the composition of the volume that your specific facility delivered to the sales facility.

• The production/sales volume is small and/or spread out over many entities such that component theoretical volume(s) are zero.

By grouping components together and determining a derived analysis only on those components you can allocate the production/sales volume without having to manually manipulate the analyses, as you would have to if you used Component or Ideal Product Shrinkage as the allocation method.  

When using the Grouped Component allocation method, the production is allocated back to the "theoretical" volume at the entity/owner/component level (calculated as described above).  There are two ways the Grouped Component allocation method can work.  The first is the standard or default way which uses the "theoretical" volumes as calculated above without any adjustments.  The second way is to have any facility consumption, that was allocated back to the entity level, subtracted from the "original theoretical" and then have the production allocation based on the "adjusted theoretical".  This functionality is triggered by setting the Allocate Consumption By Usage ID option on the Gas Flow screen of the appropriate facility maintenance screen (Battery Maintenance or Gathering System Maintenance).  

To further control which wells are allocated the consumption and have their "theoretical" adjusted accordingly then Consumption Usages must be set up.  Having a Usage ID set up with no Entities attached indicates that the volume for the Usage is to be allocated to all entities that have a non-zero "theoretical" volume.  For more information on consumption allocation see  Consumption Allocation.

Disposition analyses are NOT required at the facility when disposing of the produced products using the Grouped Component allocation method.  If an analysis is entered (disposition or production), it will be used, and an Exception message will be generated indicating that an entered analysis was used instead of the derived analysis.

Split Facility Production Volumes to Components

The first step done in the allocation is to split the facility production of each product down to the component-level.   When a product is using Grouped Component and there is no disposition and/or production analysis for the product, a derived analysis will be calculated based on the  theoretical volumes for the selected component(s).

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To follow how the production is split to the components, the Optix report  Sales Meter Component Details  should be used. It shows the production split to the component-level and which analyses were used. 

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Production Allocation

To follow the allocation process when using the Grouped Component allocation method, the Optix report  Gas Flow Production Allocation should be used.

An excerpt from the Gas Flow Production Allocation report shows the "original" theoretical, prior to any consumption usage adjustments.  

Open

The next excerpt from the same report shows the Adjusted Theoreticals after the allocated consumption has been removed.  

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To confirm the adjustments run the Consumption Allocation report.  An excerpt is shown below.

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The final excerpt from the Gas Flow Production Allocation report shows the allocation of the Pentane production down based on the adjusted theoretical volumes. 

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Potential Issues

The Grouped Component allocation method uses a straight forward proration of facility production at the component-level allocated down to the entity/owner by component so there is not much that can go wrong.  However, there are some potential issues to look out for:

No Analysis found for XXXXXX, Disposition Type: XXXXXX, XXXXXX: XXXXXX Sequence: XXXXXX.

This is an Error message that could occur if there are no theoretical volumes for any of the components selected as part of the Grouped Component allocation.  For more information see  Message Centre Messages - ANLY0004.

Consumption Allocation for XXXXXX: XXXXXX, Owner: XXXXXX exceeded Theoretical. Adjusted Theoretical for Component: XXXXXX set to 0.

This is just an Alert message and will not stop the Step01 - Allocation process, however it does indicate a potential issue with your consumption Usage setup.  For more information see  Message Centre Messages - ALCCONS0008.

Product/Facility is out of balance - Product: XXXXXX, Opening Inventory: XXXXXX, Total Opening Inventory: XXXXXX, Production: XXXXXX, Production Total: XXXXXX

This is an Error message that indicates that not all the production volume was allocated down to the entity/owner. For more information see Message Centre Messages - BAL0001.

Component

The Component allocation method requires wellhead composition and production/sales analyses.  The actual production allocation is done at the entity/owner/component-level.

When using the Component allocation method, the production is allocated back to the "theoretical" volume at the component level (calculated as described above).  There are two ways the Component allocation method can work.  The first is the standard or default way which uses the "theoretical" volumes as calculated above without any adjustments.  The second way is to have any facility consumption, that was allocated back to the entity level, subtracted from the "original theoretical" and then have the production allocation based on the "adjusted theoretical".  This functionality is triggered by setting the Allocate Consumption By Usage ID option on the Gas Flow screen of the appropriate facility maintenance screen (Battery Maintenance or Gathering System Maintenance).  

To further control which wells are allocated the consumption and have their "theoretical" adjusted accordingly then Consumption Usages must be set up.  Having a Usage ID set up with no Entities attached indicates that the volume for the Usage is to be allocated to all entities that have a non-zero "theoretical" volume.  For more information on consumption allocation see  Consumption Allocation.

Split Facility Production Volumes to Components

The first step done in the allocation is to split the facility production of each product down to the component-level. 

To follow how the production is split to the components, the Optix report  Sales Meter Component Details  should be used. It shows the production split to the component-level and which analyses were used. 

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Production Allocation

To follow the allocation process when using the Component allocation method, the Optix report  Gas Flow Production Allocation should be used.

An excerpt from the Gas Flow Production Allocation report shows the "original" theoretical, prior to any consumption usage adjustments.  

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The next excerpt from the same report shows the Adjusted Theoreticals after the allocated consumption has been removed.  

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Notice that only the theoretical volumes for Well RLTGFCPNB3W01, RLTGFCPNB4W01 and RLTGFCPNB4W02 seem to have been impacted.  To confirm the adjustments run the Consumption Allocation report.  An excerpt is shown below.

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The final excerpt from the Gas Flow Production Allocation report shows the allocation of the Raw Gas production down based on the adjusted theoretical volumes.

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Potential Issues

The Component allocation method uses a straight forward proration of facility production at the component-level allocated down to the entity/owner by component so there is not much that can go wrong.  However, there are some potential issues to look out for:

No Analysis found for XXXXXX, Disposition Type: XXXXXX, XXXXXX: XXXXXX Sequence: XXXXXX.

This is an Error message that could occur if there is product production but no dispositions this month and there is no Production Analysis entered. For more information see  Message Centre Messages - ANLY0004.

Consumption Allocation for XXXXXX: XXXXXX, Owner: XXXXXX exceeded Theoretical. Adjusted Theoretical for Component: XXXXXX set to 0.

This is just an Alert message and will not stop the Step01 - Allocation process, however it does indicate a potential issue with your consumption Usage setup.  For more information see  Message Centre Messages - ALCCONS0008.

Product/Facility is out of balance - Product: XXXXXX, Opening Inventory: XXXXXX, Total Opening Inventory: XXXXXX, Production: XXXXXX, Production Total: XXXXXX

This is an Error message that indicates that not all the production volume was allocated down to the entity/owner.  For more information see  Message Centre Messages - BAL0001.

Ideal Product Shrinkage (IPS)

The Ideal Product Shrinkage allocation method, or IPS for short, is the most complex method available for a gas flow facility.  This method considers the well, facility production and facility consumption composition and is the only method where the allocation of one product/consumption impacts the allocation of another product/consumption.   The product/consumption "actual" volumes allocated to each entity/component are netted off the "theoretical" for the entity/component prior to the allocation of the next product/consumption.  Since the allocation of one product impacts another, all products produced at the facility (except for the Balance Only products) must use Ideal Product Shrinkage or none of them can.  This method requires both wellhead and production/consumption/sales analyses. 

Before we get into more details regarding this allocation method there are a few terms that will be used that we should define.

• Facility Actual - this refers to the total gas equivalent volume of all product produced or consumed at the facility.

• Facility Original Theoretical - this refers to the total theoretical volume at the facility based on inlet volumes (prior to any adjustments and actual allocations).

• Facility Adjusted Theoretical - this refers to the total theoretical volume at the facility after it has been adjusted to better align with the composition of the facility actual volumes.

• IPS Order- this refers to the Metrix way of identifying each product and/or consumption usage that needs to be processed at the facility, so that they can be "ordered" (hence the name IPS Order) to ensure that the allocation of each is done in an order that reflects facility processing. 

• Remaining Theoretical - this refers to the theoretical volume that is available to be allocated at a specific point within the allocation process.  This volume changes for a given well as each IPS Order is allocated and the well's remaining theoretical is reduced by the amount allocated to the IPS Order.

There are several steps within an IPS allocation: calculate/allocate facility actual, calculate/allocate facility theoretical, adjust facility theoretical and allocate each IPS Order.

The order in which the products and consumption usages are allocated is determined by the IPS Order Table that the user sets up for the facility.  This can also control which entities and/or owners are to share in the allocation of each product.  

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Determine Facility Actual Volumes

As mentioned previously, the "facility actual" volume when using the IPS allocation method includes both production volumes and consumption volumes.  Also, for the net decline approach to the allocation to work properly all volumes must be in the same unit of measure which means that all liquid by-product component volumes must be converted to their gas equivalent.  

Split Facility Production Volumes to Components

The first step in determining the "facility actual" volume at the facility is to split the facility production of each product down to the component-level.  (This is done the same way as when using the Component allocation method and the same report can be used to follow the calculations.)

To follow how the facility production is split to the components, the Optix report  Sales Meter Component Details  should be used. It shows the facility production split to the component-level and which analyses were used. 

The following is an excerpt from the report.

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Determine Volume for Each IPS Order and Split to Components

The next step in determining the "facility actual" volume at the facility is to determine the "actual" volume for each IPS Order and split the volume down to components.  If the IPS Order is for a liquid by-product then each component is converted to a "gas equivalent".

To follow the calculation of the "actual" for each IPS Order, the Optix report Ideal Product Shrinkage Actuals Audit should be used. 

The following is an excerpt from the report.

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Determine Facility Original Theoretical Volumes

This is the first difference between non-Gas Flow and Gas Flow.  When using the IPS allocation method for Gas Flow properties, the "original theoretical" is based on the volumes received at the facility and they are already split to the entity/owner/component level.  As with the other Gas Flow allocation methods, use the following reports to review the theoretical volumes at the facility:  Gas Flow Theoretical Report and Gas Flow Facility Volume Received Report.  

Compare Facility Actual to Facility Theoretical

As mentioned before, one of the major requirements when using the IPS method is that you have good measurement at your facility inlet and outlet and that the analysis at the entities delivering to the facility are also accurate.  If there is not consistent, accurate measurement throughout the hierarchy it is difficult to do a net decline allocation.  However, we recognize that in some cases you are being asked to follow an allocation process that is not necessarily supported by the level of measurement that is available.  For that reason, we provide the ability to have the facility "theoretical" volume adjusted to better reflect the composition of the "actual" volumes.  

To review the differences between your facility "original theoretical" and your facility "actual" volumes at the component, the Optix report Ideal Product Shrinkage Actual vs. Theoretical Variance should be used. 

The following is an excerpt of the report.

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Theoretical Adjustment 

Based on the size and type of your variance you may decide to "adjust" your facility "theoretical" to more accurately reflect your facility "actual" by selecting Adjust theoreticals by prorating actuals in the IPS Adjustment Option on the Plant Production, Battery Gas Flow, or Gathering System Gas Flow screen, depending upon the facility type.  This will adjust your facility "theoretical" volume to match your facility "actual" volume (by component) and then prorate the "adjusted theoretical" volumes down to the entity/owner/component based on the "original theoretical" volume (by component).  

The following is an example using the Gathering System Gas Flow screen.

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To see how the facility "adjusted theoretical" volumes were calculated and allocated down to the entity/owner and to compare the "original" to the "adjusted", the Optix report Ideal Product Shrinkage Theoretical Audit should be used.

The following is an excerpt of the report.  

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The Detailed Entity Theoreticals represent the "original theoretical" volumes and the Adjusted Entity Theoreticals represent the "adjusted theoretical" volumes.  Notice, that not only were the C1, C3, IC4, NC4 volumes adjusted but the CO2 and C2 volumes that were in the "original theoretical" volume but not in the "actual" were adjusted to 0.

Allocate IPS Orders to Entity/Owner

This is where you see the second difference between non-Gas Flow and Gas Flow.  The allocation of the IPS Order volume is at the entity/owner level.  IPS Orders are allocated individually in the order based on their Order Sequence (from lowest to highest).  Within each Order, the participants associated with the Order are allocated to in the order based on the entity ID (from lowest to highest), and then the Owner ID (from lowest to highest). If there are no participants explicitly entered for an Order, then all entity/owners that delivered to the facility will be considered participants.  

To see how the Order volumes were allocated down to the entity/owner level, the Optix report Ideal Product Shrinkage Process should be used.

The following excerpt is the first page of the Condensate Order in the facility.  It shows the first entity/owner that was allocated and subsequent pages with the same Order (not shown below) show each entity/owner being allocated.

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The following excerpt is the first page of the Raw Gas  Order in the facility (first Order after the Condensate Order).  You can see in the excerpt below that the Well/Tract Remaining Theoretical (GEQ) matches the Well/Tract Remaining Theoretical After Allocation (GEQ) of the previous Order (above excerpt).  This is how the net decline processing in the IPS allocation method ensures that the allocation of each Order impacts the Orders that are allocated after it.

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Potential Errors

Although the actual allocation is done at the entity/owner level instead of the entity level as in non-Gas Flow, the potential issues that can occur are basically the same.  See above for more details.