Hydrocarbon Accounting
Authors: Tiwari Vivek K 
Published: October 2013

Abstract
Hydrocarbon accounting is the process used to track gas and oil ownership from the point of production to the point of sale. Errors and delays in hydrocarbon accounting can result in significant financial loss. It is essential that every effort is made to ensure allocation rules are comprehensive and equitable, that computer systems which execute such rules are correctly programmed, that measurements are accurate, and that reporting is timely. The accuracy and timeliness of hydrocarbon accounting is essential in order to satisfy joint venture partners, allow operators to make the best commercial decisions, and to fulfill the requirements of the industry regulators. When you consider that even relatively minor errors and delays can ultimately add up to significant financial distortion, with the potential for millions to be removed from your account sheet, its importance becomes all the more evident. Therefore Hydrocarbon Accounting is a very important aspect of any refinery. This will allow to identify product losses as well as use the accurate actual results to compare against the plan. A good accounting system will ensure better performance monitoring, yield accounting, loss identification. It also forms the basis of any future study for improving current system. The process though seems to be simple requires lot of understanding of concept of oil accounting, follow up, team effort and rigors instrument maintenance regime for proper material balance.
The Hydrocarbon Accounting with respect to KNPC and Local Marketing depots will be the reconciled transfer quantities for transaction between Refineries and Local Marketing depots and also daily inventories for each refinery and local marketing depots. The reconciliation system will help KNPC generate the best achievable mass balance throughout the refineries and local marketing system by taking into account all the relevant measurements from each entity as well as all movements or transactions between refinery and local marketing system. This will allow KNPC to identify product losses as well as use the accurate actual results to compare against the plan
The hydrocarbon accounting becomes more important when it comes to custody transfer/fiscal transfer operations. As the money value is attached to these kinds of transactions, the transparency of system is of prime importance. A great effort has to be taken in this regards in order to have best possible reliable measuring instruments for accounting. The type of flow meter along with its design flow rate, calibration frequency, prover, prover calibration details are of prime importance in order to get the correct custody transfer quantities. This kind of operations requires the flow instrument with high accuracy as this is the main criteria for any custody transfer operations, online analyzers as this will help to get the correct specific gravity and mass conversion, redundancy in the system i.e. it has to have another measuring instrument to validate the earlier one. This will help to reconcile any differences arising due to quantity shown by instruments in the same flow skid or line. These kinds of custody transfer transactions are accounted with agreed procedure or a guideline which is to be followed during day today accounting, conflict resolution in case of any discrepancy and same has to be acceptable to all concerned stake holders.
The paper here considers the transaction between Refinery and Local Marketing depots of KNPC refineries. There is transfer of Mogas (UL-91/95), Mogas (UL-98), Gas Oil, Kero product through cross-country pipeline which cater to single grade or multiple grade i.e. a pipeline can be used for more than one grade of material. The changeover of material from one grade to another is done by in- line colorimeter which senses the dye which is injected in each grade of product, it is further validated manually by physical observation. The transfer of materials between refineries and local market is governed by the plan agreed between refinery and local market as per local demand. The plan is prepared by considering shutdowns in refineries units and outages of tanks in refinery and local marketing depots. Two refineries of KNPC cater to two Local Marketing depots. The as is procedure had issues or limitation which can be listed as below:
The suppliers figures is considered to be final figure of transfer however the discrepancy resolution procedure was of concern. The basis for accounting was different as refinery followed English System & Local Marketing followed SI system. This further leads to difference in the allocated quantity as they are derived by following different API standards. The system was not integrated the data flow was limited to each system as the system was not connected. Accurate and timely information generation was matter of concern.