Mutual Benefits Realized By Pipe Line And Producer Through Cooperation In Large Tract Consolidation And Lact Projects
Authors: Wadlington W.H. , Clark L.H. 
Published: December 2007

Introduction

The problem of increasing profits by decreasing cost has forced many innovations on all sectors or the petroleum industry during the past few years. One of the most common methods of reducing costs has been through battery consolidation. Of course, with the advent of LACT units consolidation became even more attractive. To carry this one step further, generally the bigger the consolidation the greater are the savings to be realized.

While consolidation projects must be initiated by the producers, fortunately such programs are often beneficial to pipe line gathering companies as well as the producing companies. From experience, we have found that cooperation between the producer and the pipe line company in large tract areas, such as units, results in large savings by utilizing existing pipe line gathering systems, where possible, in order to consolidate existing facilities into one or more central batteries or treating points. The pipe line company should be brought into the initial planning of any consolidation project. The purpose of this paper is to discuss four such projects which have been completed by Pan American Petroleum Corp.'s Levelland Area office, in which both Pan American as unit operator, and Service Pipe Line Company have participated.

HISTORY

Consolidation and LACT are certainly not new to the oil industry. I am sure essentially every oil operator represented here today has used one or both of these methods to reduce costs. Yet, it is rather amazing to look back and see how far we-have come in so few years. The Pan American-operated Levelland Unit is an example of what can be done through consolidation and LACT. It is typical of the progress and the change in thinking which has been made toward consolidation in general.

The Levelland Unit lies in Hockley County, Tex., and contains 368 wells. The unit was formed May 1, 1954, at which time there were 112 batteries in operation, each consisting of tanks and an oil treating system. Fig. 1 is a map of the Levelland Unit which shows the location of these original battery sites. Immediately after the unit was formed, a few adjacent batteries were consolidated. This was the birth of consolidation on properties operated by Pan American in the Levelland Area.

Very little additional work was done along this line until 1957. At that time a major program to consolidate tank batteries from adjacent tracts into a central location was completed. Generally, this was accomplished by laying new flowlines or installing lines from old battery sites into these centralized batteries. At the same time a salt water collection system was installed and the consolidation helped materially in reducing the cost of this system. After this phase of consolidation was completed, the number of batteries had been reduced to 35. The map in Fig. 2 shows the location of these remaining battery sites.

As discussed in more detail later in this paper, a central LACT facility was installed in 1962 to handle all production from the unit. Therefore, over an 8-1/2 year period, the number of batteries in the Levelland Unit was reduced from 112 to one. All of this was brought about by new equipment developments and a change in thinking by the producers participating in the unit and the pipe line company.

PLAN OF CONSOLIDATION

This paper deals specifically with that phase of consolidation which involves a cooperative effort between the producer and the pipe line company. Four such projects which are to be discussed are located in Pan American's Levelland Area.