As we covered in our last blog posts, the global oil and gas industry is witnessing drastic changes in the wake of the ongoing pandemic and the global recession. We’ll analyze the effects on the Indian oil and gas industry where the major chink of operation comprises of the downstream activities and also the role of AI in the O&G operations in the coming times.
Impact on the Indian Oil and Gas Industry
The Indian downstream industry will see minimal to no impact except for reduced throughput during Q2. Most refineries in India have already upgraded to BS-VI and no major CAPEX was planned for the near future. GRM (Gross Refinery Margins) will more or less remain the same.
The midstream industry is already experiencing major expansion in terms of LNG regasification capacity, gas and LPG pipelines infrastructure, and LPG bottling capacities. This is expected to continue without any impact of the COVID-19.
Impact on the LPG in India
LPG is a mix of Propane and Butane and each country has its own mix proportions. In some countries, it can also be pure propane. Propane is predominantly produced from gas processing while Butane is mostly from the crude oil refining column.
• In the future, there is going to be an excess supply of propane in the market and hence it will have a negative impact on the price.
• Supply of Butane may, however, reduce if the refinery throughputs reduce due to a reduction in gasoline demand.
• It would be prudent therefore for importing countries like India to adopt a more flexible approach towards the mix ratio and consider importing propane and butane separately to take advantage of price differentials.
All-new infrastructure and industries will be based on the principle of low carbon footprint i.e. energy efficiency and the source would be gas or renewables. Further, they will have a high level of automation and SCADA systems as applicable. The role of AI and data analytics for monitoring, predictive behavior, and decision-making tool will be significant.
The availability of spares in the short term will be constrained, forcing the existing companies to shift to AI-based maintenance philosophy of planned and pre-emptive maintenance. Also, spares and inventory management will shift to a past usage basis (based on data analytics).
O&G organizational application scenarios for AI
At this level, the role of analytics is for monitoring and producing focused reports regarding key performance indicators, key outliers/discrepancies. Data is usually picked up directly from SCADA systems. The manual processing is prone to biases and errors.
Technical Decision Makers (Product / Maintenance Managers)
Artificial Intelligence-based tools can be immensely useful for making informed decisions. Also, a predictive maintenance tool can help the decision-makers in deciding when to perform planned and pre-emptive maintenance.
Field Engineers / Operators
The operators can utilize machine learning tools used for the transfer of knowledge and standardization of responses to form the SOPs that include suggestions on how to react to various situations.
AI use cases for various O&G streams
For the LNG Liquefaction, predictive failure tools can be very useful for large rotating equipment – turbo expanders/compressors, etc. An AI-based predictive tool can also help with production optimization to enhance the liquid recovery process.
Here also, the predictive failure tools can be utilized for large rotating equipment, Spares & inventory management, Production monitoring & projections for planning future production. AI-based tools can also be utilized for corrosion & prediction of failures of pipelines.
In the midstream operations, AI-enabled technologies can help to predict corrosion in gas pipelines. Also, the reconciliation of transportation and storage losses in the tank farms can be enabled with the data-empowered predictive tools.
Salient features of Eugenie
Eugenie is an award-winning, end-to-end solution for improving operational efficiency and reducing wastage via digital transformation and AI.
Predictive Maintenance: Eugenie’s robust algorithms scan through vast amounts of data coming from sources like IoT sensors, SCADA or other data sources to identify inefficiencies in equipment, before scheduled inspections. Eugenie's insights consist of detection of anomalous incidents, root-cause for such an incident and, prescriptions about the corrective measures.
Predictive Quality: Maintaining quality standards is crucial for all the streams of O&G operations to achieve seamless operations and customer satisfaction. Eugenie’s digital platform provides real-time data processing, predictive alerts, and prescriptive insights to enable better and faster decision-making.
Waste Reduction: Eugenie’s AI-workbench enables minimizing production wastage through continuous monitoring and predicting wastage-prone processes, plants, as well as pieces of equipment by effective anomaly detection and root-cause analysis.
The scourge of COVID-19 and the ensuing recession had acted as an unlikely impetus for digital transformation in the O&G industry. For coping with the trying times ahead, it is imperative for the oil and gas industry to identify the value of data as a key asset.
To know more, about Eugenie, book a demo with us.