Sensors hold the key to oil & gas survival

It is not often that well integrity and gas monitoring are talked about in the House of Commons, but that is exactly what happened last month when the Infrastructure Bill was debated.

Much of the debate was taken up by shale gas development, and the Labour party successfully added an amendment to the bill that required all future shale projects to meet 13 tests before being able to succeed.

Among these tests were the demands for the monitoring of a site for 12 months prior to any hydraulic fracturing activity, independent well integrity inspections and site-by-site measurement, monitoring and public disclosure of existing and future fugitive emissions.

Labour’s demands were accepted by politicians of all parties wanting to reassure the public that all possible measures were being taken to make sure that fracking is being done in a safe and environmentally responsible way.

The fact that site monitoring – and the sensors technology critical to such monitoring - looks set to play a key part in UK shale gas would be unsurprising to anyone familiar with the US market.

According to a report by Frost & Sullivan last year, Sensors Market in Shale Gas Industry, the market earned revenues of US$63.0 million (£41.5m) in 2013 and estimates this to reach $106.8 million (£70.3m) in 2020.

Currently, wellhead, fracking and separation are some of the key applications for flow, level, pressure and temperature sensors in shale gas production.

However, far from bowing to environmental pressure from politicians, the key driver for the take-up of sensors in the shale gas industry has been an economic one.

“These sensors are being used to maximise production,” says Frost & Sullivan Measurement & Instrumentation senior industry analyst V Sankara Narayanan.

While shale gas respresents a reasonable growing market for sensors, Narayanan says that the lion’s share of oil & gas industry demand for sensors is to be found in the offshore sector.

This is driven not only by the sector’s considerably greater size than shale gas, but also by the key challenges it faces.

“Early easy oil is gone,” says Emerson Process Management vice president for Roxar Flow Measurement global sales Ottar Vikingstad.

“Now you either have to drill very deep or go very far out to sea (sometimes both) to get good oil. The investment to get there is huge, and project operators want to put sensors on their assets to understand, for example, how each well operates. Some of the expensive deepwater wells are US$100 million to drill and complete. Installing sensing technology that could be up $1 million is a small fraction to ensure the well keeps operating.”

Nowhere is the need to understand how assets are operating made clearer than in the wake of major disasters such as the BP Deepwater Horizon explosion in the Gulf of Mexico in 2010.

The disaster was ultimately caused by a failure of the well’s integrity and an undetected loss of pressure.

“In the past the only way to monitor the pressure was to close the well and measure the pressure build up,” says Vikingstad.

“If the pressure didn’t build up, then you had a leak.”

In what Vikingstad describes as a revolutionary step, Statoil last summer deployed a device on its Skuld field in the Norwegian North Sea that can avoid these expensive shutdowns by continuously monitoring well pressure and temperature.

Emerson Process Management’s Roxar Downhole Wireless PT Sensor System is a wireless pressure and temperature sensing system that sits in the small gap between the well tubing and casing, known as the “B” annulus, to confirm the pressure integrity of subsea wells.

While continuous monitoring has a vital safety role to play, sensors take-up is, as Narayanan said, above all fuelled by the drive to improve productivity.

This, says Vikingstad, is something that applies to both new greenfield projects and older fields.

The newer projects maybe in deeper and in more challenging waters, requiring sensors to ensure the best production from major investments.

But older fields are also doing everything they can to ensure they remain viable for as long as possible.

With the price of oil now below $50 per barrel, the need to optimise oil & gas production on fields old and new is more pressing than ever.