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  • Nick Bailey

Re-Imagining the LDAR Process

LDAR, or leak detection and repair, programs have long been part of the oil and gas asset management process; a necessary step in the environmental responsibilities of any facilities operator. Typically, two to three percent of production is lost through leaks in valves, pipes, seals and other assets in the value chain. This has traditionally thought of as a necessary cost of doing business and hence any efforts by government or environmental lobbies to clean up the process have generally been viewed in a negative light.


However, recent work by the IEA has demonstrated that targeted LDAR programs are not only capable of paying for themselves but are profit vehicles in their own right.


The IEA Methane Tracker estimates that annual global methane emissions are around 570 million tons with about 20% of this from the oil and gas production sector. Methane is significantly more potent a greenhouse gas than CO2; one ton of methane has an impact equivalent to around 30 tons of CO2 over a 100-year period. Clearly, with so much societal focus now on climate change, demonstrating that an organisation is committed to reducing fugitive methane output has significant marketing value.



Sources of methane emissions 2017, source: IEA Methane Tracker


However, there is a much more prosaic reason to reduce fugitive emissions. Simply, every fugitive emission represents a loss of product. The LDAR process can be re-imagined from being primarily a cost centre to one than has its own P&L. It is important, therefore, to look at where profits can be maximised in the process.


Again, the IEA has done the work for us. They have calculated a ‘marginal abatement cost curve’ for the oil and gas sector globally. This analysis shows that 40-50% of current methane emissions from the sector could be avoided at zero net cost and in most cases, significant profit.



Clearly, the low hanging fruit, in terms of monetised return would be in the Upstream LDAR technology group, along with improvements to assets such as pumps and seals. Here, effective LDAR becomes a useful source of additional revenue that would otherwise be wasted.


Of course, LDAR has its challenges and the IEA report also recognises this, singling out the high cost of detection systems traditionally available to LDAR teams. Once emissions are located, resolving them is relatively simple; it is the cost and effectiveness of surveying that tends to be a barrier.


A truck-roll survey of a small, remote facility, something typically carried out by operators on a monthly basis, costs in the region of $1000 and takes a skilled engineer away from other tasks for the best part of a day.


By moving towards static monitoring of these remote assets, operators quickly reduce detection costs. More importantly, rather than potential leaks going weeks before being detected, they can be found in real-time.


If on-site surveys are required, use of recent technologies such as Quantitative OGI (QOGI) or wide-area surveying by drone can, again, reduce cost.


If the LDAR system is also capable of quantifying the detected leaks, then those leaks could be prioritised, and engineers dispatched to the largest emission sources first. Product loss is reduced and the cost of monitoring for fugitive emissions is reduced. Because leak detection becomes a centrally managed task, rather than a field task, the data collected is both richer and more complete, meaning that it can be used as the basis for other operation decision making such as preventative maintenance, asset planning and facility operations management.


In conclusion, societal pressure will push operators to more rigorous LDAR regimes. Whilst there are several voluntary efforts in place to reduce methane emissions from oil and gas operations, operators’ actions lag the will of environmental pressure. By making the case for monetisation of the LDAR process, the argument becomes one of economics. Targeted LDAR programs provide benefits on multiple levels, satisfying environmental interests and providing marketing benefits on the one hand, whilst achieving rapid payback simply through the minimisation of lost product.

For more information about the IEA Methane Tracker visit the iea.org

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