Introduction

Allocation is the procedure for sharing production and products belonging to different users of shared facilities when such production and products result from processing and transport of streams in a commingled way (Figure 1).

For instance, allocation is performed to attribute oil, gas and water production back to production wells when these wells are produced and processed in the same facilities. Correct well allocation has a high impact on reservoir management and cost related to well overhauls.

More critically, allocation of hydrocarbons and associated streams is performed when different licenses with different equity share are tied into a shared process facility, pipeline or plant. Allocation calculations are used to determine each license’s and/or owner’s allocated share of the outgoing new comingled stream(s) directed to the delivery/sales point. The allocated share in volume, mass or energy is required for gross company revenue, tariffs, duties, fees and taxes.

Figure 1 — Schematic view of a typical allocation system

Key

1	wells production facility
2	processing facility
3	transportation cargo/pipeline
4	plant
5	market

The intention is to conduct allocation in acceptable terms to ensure the license/owners receive their fair share of the comingled stream and that no parties experience unnecessary or unknown losses.

The allocation of gas and other products is a result of field development, technical design, investments and commercial negotiation and agreements. There are multiple combinations of allocation methods and calculations. Most of the allocation systems and hydrocarbon value realization chains are unique. As more fields and licenses are connected to common process facilities or transportation infrastructure, the complexity increases to ensure owners get a fair return on investment and production. Small bias to measurements over time can result in errors that represent large amounts of money. However, it can be too costly to invest in a low measurement uncertainty of a minor production stream. Cost-benefits and uncertainty analyses of the value chain are a good way to understand the cost of maximizing return on investment.

To design, evaluate, audit or operate an allocation system/method for gas and associated liquids, it is necessary to have competence within fluid thermodynamic properties, flow characteristics, gas treatment/processing, measurement, process simulation, sampling, allocation principles, uncertainty calculations and the value realization chain for the given application.

As sustainable computer systems are necessary to handle the allocation calculation on a regular basis and storing data securely, IT skills are also required.

This document comprises the most common or recommended allocation principles, systems, uncertainty, and calculation of possible losses, including some evaluation of risk for losses. Some clauses are directly derived from HM 96 developed by Energy Institute which very generously allowed ISO to use them.