The virtual pipeline: Operations insight fuels marketing decisions
Marketers also have sophisticated information systems, which let them solicit and manage
nominations, and make decisions about which to confirm, reject, or curtail. This is roughly
analogous to the problem airline agents face: multiple agents are selling seats on many airplanes
at many prices. Each agent needs to know which seats are available at each price, and with each
sale the inventory and prices change. Like airline agents, pipeline marketers have little control
over prices, which are established in long-term contracts. But unlike airline agents, pipeline
marketers have little information about their inventory; typically, they have a weekly spreadsheet
showing how much gas can flow between each section of their pipeline. This "nominal capacity"
is their only regular source of capability information. As a result, pipelines are often undersubscribed,
costing the company revenue, or oversubscribed, upsetting customers or incurring
penalties.
In a deregulated spot market, pipeline marketers will operate less like airline agents and more
like airline ticket auctioneers. To succeed, pipeline marketers need to know the actual available
capacity of their pipeline and the marginal cost of transportation for each nomination. They also
need to know what the market is doing and will do over the next few days. Furthermore, they
need to access this information in real time, share it among all other marketers, and update the
database with each decision made. Each needs to know which seats are available. Unlike the
airlines, pipeline marketers also need to know their marginal cost of filling each seat and what
price the market will bear.
The only way to achieve this dream of informed, and hopefully profitable decision making, is to
integrate operational and marketing information and publish it throughout the business, in
accessible, current, and appropriate formats. Our research into this problem has led us to a
complex document we call a "virtual pipeline," which organizes both marketing and operations
information to be flexibly useful to many people in the company.
A virtual pipeline
A virtual pipeline is a set of informational displays - maps, charts, reports - that are broadly
accessible, and provide operational and marketing insight to support business decision-making.
These displays are built from information gathered from various technical and business
information systems, which is consolidated into a standard set of business objects, and delivered
on demand as maps, charts, and reports via intranet or Internet to marketers, operators, and
executives.
Through work with pipeline industry clients, we have established design criteria for several
aspects of virtual pipelines. The following sections present the technical architecture,
information requirements, presentation requirements, and organizational impact of a virtual
pipeline.
Technical Architecture
The technical architecture for a virtual pipeline consists of subsystems for information
generation, information transmission, and information distribution.
Information is generated from operations and marketing systems, including nominations and gas
management (product accounting) systems, SCADA systems, and hydraulic simulations of
pipeline operations. Optimizing and predictive simulations provide information about future
states of the pipeline. Forecasters are also used to predict supply and demand. Critical real-time
data comes from Internet-based feeds of weather and market pricing data.
Information is transmitted through a set of system interfaces that harvest information from many
sources and consolidate it into a standard set of business objects, representing all the important
constructs in the virtual pipeline. These objects range from tangible operations assets such as
compressor stations, to more abstract marketing objects such as contract pools. For these objects
to deliver value they must be comparable and available. This implies a logical data model that is
consistent among objects, especially with regard to names and units of measure. It also demands
a standard corporate communications layer, including a standard object request broker. Our
experience suggests that an open standard technology such as CORBA/IDL is most robust and
maintainable in the corporate environment.
Information is distributed as web-based displays, created on demand, to present highly processed
information in compelling, graphical images. A virtual pipeline requires many graphical tools for
rendering appropriate displays, depending on information content and user preferences. Much
valuable information about a pipeline is dynamic, which requires the information distribution
technology to render displays on the server but subsequently provide active updates to an
interactive browser-based client. Technologies critical to data distribution include geographic
information systems (GIS) for map-oriented display and interaction, ActiveX or equivalent
controls for schematic displays, and graphing, charting and reporting components for other
displays.
