Building A Pipeline Monitoring System That Actually Works

“If you do have an incident occur, we are able to pick it up in real time – in seconds,” Steve Koles says. “Not weeks, seconds.”

November 02, 2015

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Hifi CEO Steve Koles with his demonstration unit, which lives at the GE Customer Innovation Centre in downtown Calgary
Photograph Joey Podlubny

When a CNOOC-Nexen pipeline spilled 31,500 barrels of oil, water and sand into the muskeg 36 kilometers southeast of Fort McMurray, it was a blow for virtually everyone associated with the business of building and maintaining pipelines. After all, the line in question, a 16-inch-diameter double-walled pipe that connected Nexen’s well pad to a processing facility, was less than a year old and outfitted with a warning system – albeit one that apparently didn’t bother to warn anybody. For those who had been telling the public that pipelines were, by far, the safest means by which to transport hydrocarbons, the incident was an embarrassing counterpoint. But for Steve Koles, the CEO of Hifi Engineering, it amounted to free advertising – and lots of it. That’s because his company is in the business of selling a pipeline monitoring system that actually works.

Hifi started off selling its HDS technology to downhole operators, who used the fiber optic cable to ensure the integrity of their wells and proactively locate problems like casing failures and surface casing vent flows. And while it continues to offer the HDS system to producers, it’s the applications it has above ground that could truly change the industry. By using high-quality fiber optic cable that’s calibrated specifically to detect and record changes in acoustic energy, temperature, strain and vibration, Hifi can help pipeline operators monitor their assets throughout both space and time. That doesn’t mean Hifi can guarantee that incidents won’t happen, Koles says, but it can help minimize the impact of the ones that do. “If you do have an incident occur, we are able to pick it up in real time – in seconds,” he says. “Not weeks, seconds.”

What makes Hifi’s customers excited is the fact that its technology also helps save them money. Never mind the potential savings when it comes to their reputation, or the millions in revenue that might be realized if putting Hifi’s technology on their pipeline improves the public’s confidence in their safety procedures and gets it built more quickly as a result. Koles says that the company did a business case study recently around the value of preventative leak detection based on readily available statistics from the AER and NEB around the average number of leak incidents per thousand kilometers of pipeline and the known costs per leak, which include things like remediation, regulatory penalties and operational downtime. “Factor that in,” he says, “and our preventative pipeline leak detection pays for itself in eight months. And that’s just for leak detection.”

On new builds, strapping the fiber to the pipelines costs roughly 0.8 per cent of the overall project’s capital costs. “It’s a rounding error in the grand scheme of things,” Koles says. And while deploying them on existing lines, which tends to involve retrenching, is a little more expensive, that’s also where the majority of the business probably lies for Hifi. “There’s 400,000 kilometers of main transmission pipelines that criss-cross North America, and unfortunately the age of that asset continues to grow,” Koles says. “We’re talking 40-, 50-, even 60-year-old pipelines. They’re the ones we need to be worried about. So having a solution that can even just focus on the high-consequence area of those kilometers is where the opportunity exists, as well as the new builds, which we think are pretty much a slam dunk.”

Even so, Koles understands the challenges associated with introducing new technology to the oil and gas industry. “I’ve sold technology into the energy industry many times, and it’s the same thing. It takes so long to prove the level of adoption because there’s really no incentive to do anything different.” That’s why Hifi decided to partner with GE on the Intelligent Pipeline Solution, a system that integrates existing asset data with digital visualizations, analytics and shared situational intelligence in order to improve operational safety and efficiency. It launched last year at the International Pipeline Expo, and Koles thinks Hifi’s participation will go a long way towards speeding adoption. “It comes back to the credibility. We feel like we’re trying to solve an industry problem with a company that has 15 guys and a shop dog. We have a big uphill challenge ahead of us, and we’re willing to do it. But I much prefer to do it with bigger friends than just on our own.”

GE isn’t Hifi’s only big friend, mind you. In February 2014, it closed a financing round that brought Enbridge and Cenovus on board as equity stakeholders in the company. And its leak sensing technology isn’t its only big idea, either. It’s currently working on an improvement that would allow it to offer ongoing operational sensing that could allow operators to better understand exactly what’s happening inside their pipelines when it comes to detecting product changes, wax buildup, turbulent flow rates and pump health. “We can, for lack of a better word, see that occur as flow occurs in the pipeline. We can tell, definitively, where product changes have occurred – and on a distributed basis, in full space and time. You can literally watch product flows go through the pipeline and know exactly when they’ve cleared certain substations and valves.” That information, in turn, could help make existing pipeline safety technologies such as pigging more efficient and effective. “Instead of pigging on a calendar basis because that’s the way we’ve been doing it for 25 years, the system could tell you when and where you should be pigging. That’s a change.”

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