Custody Transfer
In the oil & gas industry, custody transfer refers to the transactions involving transporting physical product from one operator to another. Examples would include petroleum between tanks & tankers, tankers and ships, or platform to barge, railcar or truck. Custody transfer in fluid measurement is defined as a metering point where fluid is being measured for sale from one party to another.
Why it’s important to us
Custody transfer is a common occurrence throughout the oil & gas industry. Because a change in ownership takes place, accuracy is of the utmost importance to ensure that the following are adhered to:
1) Industry standards
2) National metrology standards
3) Contractual agreements between partners
4) Government regulation & taxes.
For these reasons, the flow meters used to perform transfers are subject to approval from the American Petroleum Institute. Oftentimes we will encounter volumes read and reported at one of these sanctioned flowmeters, which will then be allocated back to the wellhead.
