Upstream Natural Gas Sales Verification

Author: Mark B. Fillman and Jayson A. PayneDownload File

Within the upstream sector of the oil and gas industry, the custody transfer of natural gas is usually determined by orifice measurement which is governed by a sales agreement between the producer and pipeline company. In most cases, the gas sales agreement references a combination of American Gas Association (AGA), American Petroleum Institute (API), and Gas Processors Association (GPA) standards which are to be incorporated into the custody measurement procedures. Verification that the physical deliveries of natural gas are accurate and accountable, for both parties, is fundamental to the business cycle that occurs each month. This paper reviews the relationships between producer and pipeline, the varying responsibilities of each party, and some useful methods to produce more accurate and accountable natural gas measurement results.