Thermal Billing using Calorific Values

provided by Pipeline Simulation

by
Jrg Seeliger, VNG - Verbundnetz Gas Aktiengesellschaft, Leipzig - Germany
Gnter Wagner, LIWACOM Informationstechnik GmbH, Essen - Germany

1 Abstract
Pipeline simulation is currently usually perceived merely as an engineering
tool for solving technical tasks. The new idea presented in this paper is to
extend the scope of pipeline simulation to include commercial applications.
The paper reports on how this new application is used at VNG Verbundnetz Gas Aktiengesellschaft, a gas importer and pipeline operator.
The pipeline simulator computes calorific values as input data for thermal
billing. The application has received statutory approval for billing purposes,
and has been routinely used since fall of the year 2000.

2 Background
VNG is a major natural gas importer and pipeline operator in Germany, with
a market share of 16 %. VNG wholesales natural gas of different
composition, mainly from the North Sea and from Russia. In 2000, deliveries
totaled 520 trillion BTU (152.2 billion kWh).
To conduct this business, VNG owns and operates a high-pressure
transmission system spanning 4,500 miles throughout the eastern part of
Germany. For comparison, VNGs supply area matches New York state,
both in size and population. For seasonal load management and for
ensuring reliable gas deliveries to customers, VNG also operates
underground storage facilities with a total capacity of 15 % of annual
deliveries.

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Figure 1:

The VNG high-pressure pipeline grid with the locations of the

four main inlet stations and the underground storage facilities.

Since the composition of natural gas varies and since there are frequent
changes in the composition of the gas purchased, VNG needed to
implement a thermal gas billing procedure. However, the necessary
metering infrastructure was not available at the time VNG began to operate
following unification of the two German states. This situation sparked the
innovative idea of using pipeline simulation to compute gas composition for
customer billing, in order to cut investment and operating costs in gas
analysis metering equipment that would be otherwise have been inevitable.
VNG opted for the SIMONE pipeline simulator sold by LIWACOM. The
solution has been in use since fall 2000. It has received statutory approval
for use in customer billing from the Bureau of Weights and Measures. This
approval was mandatory, as consumer protection interests are affected. The
simulation-based thermal billing approach has not only reduced costs for
VNG, but has also resulted in excellent transparency of business processes.
This has improved customer retention, and provides a good basis for
optimizing VNG's commercial and technical operations.

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3 Thermal Billing
In the past, gas deliveries were often simply billed on the basis of the volume
delivered. More accurate billing taking into account the thermal energy of the
gas delivered is acquiring greater importance for many reasons. As gas
pipeline systems become increasingly interconnected, variations in the
composition of the gas they carry tend to be more frequent and intense. In
addition, gas consumers wish to have freedom of choice regarding natural
gases of different compositions offered by various vendors, and rising gas
prices require more accurate billing. Last but not least, thermal billing is
mandatory for deregulated energy markets to allow fair accounting between
the gas shipper and the pipeline operator.
Thermal billing requires the re-scaling of volume measurements (SCF) into
calorific quantities (BTU). Hence, the energy content of the gas delivered
must be known in addition to the volume. Usually, the energy content is
defined as the heating value (BTU/SCF). It is classically measured by
calorimeters. Nowadays, these have been substituted by process
chromatographs (PGC). They also supply other important gas composition
data, such as density or CO2 content.
Due to the high costs involved, gas analysis is only carried out at strategic
locations along the pipeline grid. A rough estimate by VNG puts the
investment cost of one gas composition measurement sequence at US$
100,000, plus annual operating costs of some US$ 10,000. This is why VNG
usually measures gas composition at the custody transfer stations where the
gas is fed into the VNG system, and when the gas leaves underground
storage.
The task, therefore, is to assign the gas composition measured at a different
location to the volume measurement at a custody transfer point where VNG
delivers gas to a customer in such a way that the assignment is accurate in
terms of both location and time.

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4 Assigning Calorific Value Correctly

If gas composition and volume are measured at different locations, the gas
needs some time to flow between the two measurement locations. If the gas
composition changes over time, this delay must also be considered. At VNG,
for example, the composition of the North Sea blend gas is only measured at
the main inlet station. The variation in the calorific value of this gas blend
within a 24-hour period may be 5 % of the mean value. A fluctuation of 8%
within a few hours is not uncommon. The time the gas takes to travel to the
custody transfer location of a VNG customer may, however, be considerably
longer. In the past, VNG was obliged to grant such customers the privilege
of being billed on the basis of the lowest calorific values measured during a
billing period. The new simulation-based procedure now guarantees the
correct assignment of calorific values at any time.
In the case of highly looped pipeline networks and several supply locations
with different and fluctuating gas composition (the VNG scenario), the gas
may flow between the gas analysis and volume measurement locations via
different routes. Sometimes, a gas blend arriving at a custody transfer
location may be made up of components which passed the gas analysis
measurement location at different times. This means that the correct
variation in the calorific value at the custody transfer location can only be
reconstructed by a simulation-based approach.
In the case of a network area receiving gas from two sides, there is a zone
where the pressure reaches its lowest value and where the flow direction of
the gas reverses. This area tends to travel as the load situation changes.
Without simulation, correct assignment of the calorific value delivered is
impossible. Using pipeline simulation, flow reverse can be pinpointed
accurately, provided there is a suitable measurement infrastructure.

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5 Simulation of Calorific Values

One feature of state-of-the-art transient pipeline simulation software is to
calculate the development in time of gas composition parameters for any
location in the simulated network. Gas composition parameters comprise the
chemical components, and derived quantities such as gas density, or, as in
our case, calorific value. The respective functionality of the simulation
software is called 'Composition Tracking'. The composition parameters to be
tracked are sampled at the locations of the respective measurements. Such
a sample is called a flag. The flags enter the pipeline network at the supply
points, are then moved through the pipelines with the speed of gas that has
been computed by the transient simulation software, and finally leave the
system at the offtake locations. If gas streams merge at pipe junctions, the
downstream gas will be a blend of the upstream components. This is taken
into account by merging the incoming flags in the downstream section and
by changing the flag values in proportion to the volumetric flow rates of the
incoming streams.
Gas composition can be tracked in real-time or offline. For dispatching
purposes, VNG tracks gas composition parameters in real-time. However,
for the billing application the offline approach has been adopted due to the
high accuracy and reliability required for billing. This decision was based on
the following considerations:

For costs reasons, volume measurements of smaller offtakes may not

be available in real-time. At VNG, real-time volume flow
measurements are available for only half of the 450 custody transfer
stations, corresponding to 93 % (winter) and 62 % (summer) of the
real-time accumulated offtake volume. However, the billing application
requires 100 % availability of offtake volume data. The complete
volume data are only known at a later time.

An error entered into the simulation model cannot be excluded. There

may be a measurement error or a wrong manual valve position
setting. Good real-time simulation models recognize discrepancies
between the real world and the model. However, analysis of what has
caused a discrepancy and error correction require offline handling.

Gas composition has quite a long 'memory'. When, due to a model

error, the distribution of gas composition parameters in a network has
become incorrect, all the gas must have left the system after model
repair before correct distribution is again restored. At VNG, this may

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take well in excess of 24 hours. That is why the respective time period
affected by the model error has to be re-simulated after model
correction, starting with the last correct distribution of the gas
composition parameters.

6 The VNG Solution

The calculation of gas composition parameters for billing purposes is part of
the VNG gas management system. The solution implemented reconstructs
the spatial and temporal distribution of the billing-relevant gas composition
parameters for the run-down month. The calorific values are of special
importance. However, additional composition parameters (blend-flow
proportional) are also computed; these include the normal density and the
CO2 content of the gas. These two parameters are required for adjusting the
gas law deviation coefficient. The results of the reconstruction process are
hourly values that are used to compute daily and monthly mean values for
each custody transfer location.
The prime basis for successful reconstruction of billing-relevant composition
parameters is adequate simulation software coupled with a well-tuned
simulation model and a suitable data acquisition system to provide the
required quantity and quality of input data.
At VNG, the simulation model currently includes approx. 3,000 valves, 1,800
pipeline segments and 37 regulating stations. The fine tuning of the model
required some months of work. Moreover, the simulation model is subject to
attentive, ongoing maintenance.
An important feature of the solution is that the very same model is used both
for real-time simulation and for the offline reconstruction of the billingrelevant composition parameters. Modifications needed to match the
simulation model with the real world are activated in the real-time model at
an arbitrary time. The offline model used for the billing application receives
the same model updates at exactly the same (simulation) time. Thus, realtime and offline models are synchronized. The model is therefore maintained
only at a single simulation instance, simultaneously for the real-time and the
offline model, making the model update service very efficient.
Two different, largely independent data acquisition paths provide the
required input data.

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The real-time acquisition path supplies spontaneous values (such as valve

positions) and cyclical values (offtake flows, pressures, set points, etc.).
Different communication carriers are used for real-time acquisition (cable,
satellite, Telecom service, Scada-to-Scada link). This provides all volume
and gas composition parameters at the intake locations and about 80 % of
the accumulated offtake flow (more during summer, less during winter). Full
valve switching information is available from the Scada system, either as
telemetered data or as data manually entered by a dispatcher.
The offline data acquisition path uses the infrastructure of the VNG gas
billing system. It acquires all volume flows at the intake and offtake locations
once per day, plus gas composition at all intakes. All these values are stored
as hourly values in the gas billing system database. Hence, the input data
not available in real-time are supplemented 100 % by offline data. Moreover,
this yields a redundant data acquisition for all information available through
both paths; for the reconstruction of billing-relevant composition data the
offline values have priority.
At the end of the month, the complete set of input data is given a final check
by authorized personnel and approved for use in reconstructing gas
composition parameters. Using this data, the pipeline simulation software
computes the gas composition parameters. The results are stored, together
with the input data, in a manipulation-safe data base and are transferred to
the gas billing system.

7 Statutory Approval Procedure

This simulation application provides commercial information used for billing
and hence affects public interests such as consumer protection. Statutory
rules that may vary from country to country possibly therefore have to be
complied with in order to receive official approval from the local Bureau of
Standards or a similar agency.
VNG has received official approval according to the harmonized rules
applicable in European Union Member States. This means that the statutory
procedure is the same as for the approval of any measurement device
intended for metering a physical quantity, on the basis of which a
commercial transaction is performed. Approval has been issued by the PTB,
the local Bureau of Standards, and has been verified by the Federal Office of
Weights and Measures.

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Verification of the correct operation of the gas composition tracking system

by reference measurements (calorific values, normal density, CO2 contents)
which may not be used as input data in the simulation application is crucial
for the approval. Synchronizing with VNG, the approval agency specifies the
locations for reference measurements. VNG has purchased two mobile
PGCs in order to be able to react flexibly to the wishes of the approval
agency. In addition, several gas samplers are used to provide additional
reference data for comparison with the simulation results.
The application for which VNG has received official approval is currently
valid for daily mean values of the calorific value (range 677 to 1,352
BTU/SCF or 7 to 14 kWh/m3), normal density (range 0.0437 to 0.0624
lb/SCF or 0.7 to 1.0 kg/m3) and CO2 content (range 0 to 15 molar %).
The deviation between the reconstructed and the reference values may not
exceed 10.82 BTU/SCF (112 Wh/m3) for the calorific value, 0.5 % of the
measured normal density, and 1.0 % (absolute) for the CO2 content. Monthly
evidence must be furnished.
In addition, input measurements for the reconstruction application are
subject to an intensified revision cycle. The software application must be
locked to remain unchanged. In the event of a software modification,
separate proof of evidence must be furnished.

8 Operating Experiences
Having obtained official approval, the application presented in this paper has
been operational at VNG since fall of the year 2000. Operating experience to
date shows good application stability.
The official approval issued proves that it is possible to fulfill the high
accuracy requirements prescribed by the Bureau of Weights and Measures.
Several criteria are used to judge the quality of the simulation results.
The simulation application is often assessed by comparing the computed
pressure profile with reference measurements. The implemented simulation
package meets this criterion in full.
For the billing application, however, the quality of modeling flow processes
governs the accuracy of flow process modeling. This is because the
composition parameters crucial for the billing application are transported
through the pipeline system with the speed of the gas flow.

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In practice, the quality of flow process modeling may vary, having in all
cases good simulation results with respect to the pressure profile. The
quality can be assessed by comparing the temporal trends of simulated gas
composition parameters with reference measurements.
The ideal case is the exact coincidence of the two temporal trends.
Diverging from this ideal case, but nevertheless still with an accurate
pressure profile, the temporal trend of the simulated flow process may have
the same shape as the one given by the reference measurement, but with a
shift in time. If the composition transients are in the normal range, a shift of
several hours can be considered non-critical. This is due to the fact that for
billing, daily mean values are calculated, thus tending to compensate the
error over time.
The values that are used in billing may be degraded only if the time shift
becomes extreme (more than 10 hours) and in the event of significant
composition transients.
The status of the application as achieved at VNG is the result of a lengthy
period of fine tuning over quite a time, implementing different measures
along the way.
In order to track the correct shape of the temporal trend of composition
parameters even for very low flow situations such as those which may occur
during summer time, the storage area for composition flags assigned in the
simulation software has been increased to a value of 400,000 (this is for the
4,500 miles of pipelines at VNG). This yields a fine spatial discretization of
the composition parameters. However, areas of the pipeline system where
the flow speed is 0.3 ft/s or less over a longer period are still problematic.
Under these conditions, simulation software is no longer able to reliably
predict the speed of flow, as the software must rely on the input data
provided by field instrumentation which only has limited accuracy.
Simulation accuracy can be increased by modeling outlet pressure control
valves as flow-driven devices (for this, flow measurement must be available).
This forces the simulation model to exactly follow the temporal trend of the
flow through the control valve.
With respect to the user of such an application, it is crucial to ensure good
input data acquisition. This means, for example, that a time manually
entered for a valve position change needs to be close to the actual time of
valve movement.
The real-time model can supply additional useful information. For example,
artificial gas composition parameters can be defined for each intake

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location where gas enters the pipeline system. Such parameters

characterize the origin of the gas that is supplied to a customer. For each
location in the system, this answers the question what gas is actually
delivered to a customer. If the gas has been blended along the transport
route, the percentages of the respective origins are computed. This
information may be valuable for gas balancing applications, and for
compiling commercially-relevant contractual information.

9 Biographies
Jrg Seeliger is a senior engineer in the Gas Transport Process Information
Department at VNG - Verbundnetz Gas Aktiengesellschft. He holds a
Master's Degree in electrical engineering from Leipzig Technical University.
Mr. Seeliger played a key role in the specification and implementation of
VNG's gas management system. His main task was pipeline simulation,
especially thermal billing applications.
Joerg.Seeliger@vng.de
Gnter Wagner is director, shareholder and co-founder of LIWACOM. He
holds a PhD in electrical power engineering from the University of Aachen
(Germany). Mr. Wagner has twenty-five years of experience in simulation
and optimization of pipeline and power systems.
gw@liwacom.de

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