Do you need answers to any of these questions?
- How much is this new pipeline or pipeline expansion going to cost?
- What are the estimated operating or maintenance expenses going to be?
- What is the projected revenue stream if the system operates at 100% capacity?
- What is the projected revenue stream if the system operates at 80% capacity?
- What is the projected revenue stream (perhaps revenue loss), if the system operates at 60% capacity?
- Given projected costs of oil or gas, how much money can be made (or lost) over time by expanding the system next year instead of two years from now?
NextGen Revenue Tracking is the answer!
The revenue tracking module in NextGen lets you track Construction Costs, Operating Costs, and even Revenues for a pipeline system. When combined with hydraulic modeling, this feature can be invaluable in estimating the cost and profitability of new pipelines, proposed pipeline expansions, and proposed contracts.
Construction costs, operating costs, and revenues are tracked separately and are supported in all simulation types: Steady State, Sequential Steady State, Transient Predictive, Transient Online, and Transient Look Ahead.
The easiest way to introduce Revenue Tracking into a model is to enter in revenue data in the Facility Library. Once all of this data is entered into a Facility Library, all users can make use of it to build new pipelines, or expand existing pipelines, or just run operating scenarios on the current pipeline, and all construction costs, operating costs, and optionally revenues, will be automatically calculated when Revenue Tracking is enabled.
For the time based simulations, cumulative costs and expenses are also kept track of so that overall construction costs, operating costs, and revenues over time can be estimated.
How might I use this in my particular industry?
A Distribution company might use Revenue Tracking in Steady State to estimate construction costs for expanding their system.
A Midstream company might be modeling a gathering system in Sequential Steady State over a 10 year period, where new wells are being drilled, new pipe segments put into service, old wells being abandoned, and well production declining over time. The Revenue Tracking Module can be used to track constructions costs for each year, ongoing operating costs, and revenues from transportation or production.
A transmission company might track operating costs and revenues generated by different contracts and different capacities in a Transient Predictive simulation or even in real time with an Online system
The Service Status of all elements is also used to determine costs, where “In Service” facilities incur both facility and operating costs, “Out of Service” facilities do not incur either facility or operating costs, and “Decommissioned” facilities incur a facility cost but not an operating cost.
Construction and Operating Costs and Expenses can be viewed for individual locations, the entire system, or broken down by defined regions within the system, and the complete revenue and expense stream is modeled so you can even see revenue streams traveling down the pipeline, which is why hydraulic modeling combined with revenue tracking provides a unique way of analyzing the profitability of a pipeline.
Gas or Oil Well Revenue Tracking
There is also an added revenue tracking feature for gas or oil well producers who may want to use NextGen to model well production costs for wells or well groups defined under nodes and meters in a simulation model.
NextGen can model the production decline of wells over time, and also model periodic shut ins, well restarts, and has separate revenue variables for initial drilling cost, operating cost, and revenue from gas or oil sold so that the profit/loss for each well or group of wells can be modeled over time.
The revenue tracking features in NextGen nicely complement the hydraulic modeling features so that you can model both the flow of gas or liquid and the flow of revenues and facility and operating costs through the pipeline system.
The profitability of pipeline operations, planned expansions, proposed contracts and forecasted loads can now be estimated more accurately and more reliably since they are based not just on financial projections, but on a close integration of financial data and accurate hydraulic modeling of your pipeline system.