Comparing the Reverse Mass Balance Methodology and a Flow-Based Model for Leak Allocation in a Trunk Line

Abstract

The trunk pipelines in Nigeria are owned by few international Oil Company (IOC); therefore, marginal field owners, independent producers and some joint venture partners share the trunk lines in order to transport their crude oil to the terminals where the crude oil is sold. Currently, Reverse Mass Balance Methodology (RMBM) is the method approved by the government for the allocation of crude oil losses to the producers by the trunk line operators. Since its deployment in 2017, the Department of Petroleum Resources (DPR) has received a barrage of petitions of unfair deductions from producers sharing the trunk lines. The aim of this research is, therefore, to compare the RMBM with a new Flow-based model approach on the allocation of crude losses to respective producers in a trunk line. The results of the study showed that the RMBM unfairly penalized high volumes producers and those downstream of the leak location, and the economic impact of this unfair practice run into several thousands of dollars. The flow-based approach not only accounted for both individual and group losses, but also allocate the leak volumes at the point of leak. The flow-based approach described in this study is, therefore, considered a more reliable approach for equitable allocation of crude oil losses in the trunk line.