Crude oil and petroleum products are one of the most valuable commodities on the market. As such it is important that each and every drop be carefully and accurately measured when it is being transferred from one party to another to ensure that everyone gets the compensation that they deserve. In order to accomplish this important requirement the oil industry has developed a sophisticated and invaluable tool: the LACT Unit.
What Are LACT Units?
“LACT” is an acronym for Lease Automatic Custody Transfer. “Custody transfer” refers to the transportation of the crude oil or petroleum product from one entity’s possession or custody to another’s possession. The “automatic” aspect refers to the automated nature of this transfers, and the “lease” references the legal arrangement that is in place between the two entities. Essentially a Lease Automatic Custody Transfer (LACT) Unit is a piece of equipment which facilitates accurate measuring of the volume and quality of a petroleum product as it is transferred by automated means from the custody of one legal entity to another.
What Are Leases?
A common example of a lease in the context of the oil and gas industry is a legal document between a landowner, who acts in the capacity of the lessor, and an oil company, who acts in the capacity of the lessee. In this example the lease would serve as a legal document granting the oil company exploration and drilling rights, typically in exchange for a cash bonus and a royalty percentage on the gross value of the crude oil recovered.
LACT Units come into play because they allow the recovered oil to be carefully and accurately measured so that the subsequent royalty payments as agreed upon in the lease can be correctly paid out. Lease arrangements vary but a common standard royalty amount is one-eighth of the value of the recovered oil. Thus LACT Units ensure that the oil company neither accidentally overpays the landowner, or underpays the landowner.
How Do LACT Units Work?
Different types of LACT units will operate slightly differently; however the general operation is as follows. The LACT unit will be connected to an open feedline and stock tank. As the crude oil level within the stock tank rises, it trips the level controller and turns on the LACT Unit, beginning the transaction. When the crude level drops sufficiently within the stock tank it will then turn the LACT Unit off again, ending the transaction.
LACT Units may be found in the field connected to a gathering pipeline, or to a main pipeline. At some remote locations that are not really accessible by existing pipelines Truck or Rail LACT’s may be used. Truck LACTs are LACT Units that are used to measure oil as it fills a tanker truck, while Rail LACT’s are LACT Units that are used to measure oil as it fills a railroad tanker. These trucks or trains may then transport the crude to a pipeline or refinery.
Factors Affecting Quality and Quantity of Crude Oil
The main purpose of LACT Units is to accurately measure both the quantity and quality of the crude oil which passes through them. An effective LACT Unit must have a high degree of accuracy and precision and should give results that are repeatable, linear, and stable. Additionally the LACT Unit should have a high degree of provability which refers to the ability to prove the meter’s performance and results and which affects the overall confidence level in the machine.
The following factors play a significant role in affecting both the quality and quantity of crude oil. As such it is crucial that the LACT Unit be able to accurately gauge and track these:
Temperature – The temperature of the crude oil affects its overall volume as the fluid expands or contracts in response to temperature change. However, the way temperature affects crude oil is not uniform across all crude oil because the crude oil itself is not uniform. Instead different levels of API gravity will cause the temperature to have a more or less significant effect on the crude oil.
API Gravity – API Gravity refers to American Petroleum Institute gravity. This is measurement developed by the American Petroleum Institute which describes how heavy or light crude oil is in relation to water. If the API gravity is more than 10 then the crude is light and will float on water. If the API gravity is less than 10 the the crude is heavy and will sink. API gravity determines how much the crude is worth because light crude will produce a higher yield of gasoline or diesel when it is refined.
Basic Sediment & Water – Basic Sediment & Water, typically abbreviated BS&W, refers to the sediment, water content, and emulsion in the production stream. Naturally, since these are impurities and not part of the actual merchantable oil, they must be carefully measured and factored into the value accordingly. LACT units are typically equipped with BS&W probes to collect the data, and BS&W monitors to store and manage the data.
Now that we have discussed what LACT Units are, how they work, and what factors affect their measurement, we hope this information will empower readers and customers to make more informed decisions about the equipment they need. Stay tuned for a follow-up article in which we’ll take a closer look at LACT Unit meters and parts and why the LACT Unit is such a good candidate for a modular process skid. Remember that STI Group offers high-quality, modular fabrication of LACT Units while meticulously meeting all industry quality and reliability standards.
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