• What is a Custody Transfer System?

Biofuel Industry News

What is a Custody Transfer System?

Jan 13 2022

From West Texas Intermediate (WTI) crude to natural gas, custody transfer systems are widely used across the energy industry. The ultra-precise measurement systems are designed to streamline the ownership transfer process and ensure the transaction is as transparent and accurate as possible.

Custody transfer systems are engineered by a range of different companies and can utilise the following technologies:

  • Differential pressure (DP) flowmeters
  • Turbine flowmeters
  • Positive displacement (PD) meters
  • Ultrasonic flowmeters
  • Coriolis flowmeters

Why custody transfer matters

Below, we explore some of the main goals of custody transfer systems and why the technology is so highly valued in the oil and gas sector.

  • Maximising accuracy

The chief goal of a custody transfer system is to ensure measurements are as accurate as possible. For high value resources such as oil and gas, even the smallest discrepancies can translate to big losses for the short changed party.

For example, Brent crude is currently priced at around US$86 per barrel. Some of the biggest oil tankers currently can carry up to two million barrels of crude, meaning the custody transfer transactions that take place at industrial ports can be enormous. While a 1% measurement error may seem negligible, it can result in a loss (or gain) of more than US$1.7 million per load.

The 800-mile long Trans-Alaska Pipeline System features pump stations capable of processing 227 cubic meters of oil per minute. Even a minute measurement error of 0.1% translates to more than 2000 barrels of oil per day. Over the course of a year, this small error could result in losses of more than US$50 million, depending on the price of oil. These losses could be passed on to either the seller or the buyer.

  • Meeting local and international regulations

Another key goal of custody transfer systems is to ensure both parties meet the strict regulations enforced by local and international authorities. This includes adhering to national metrology standards and laws enforced by governing bodies such as the American Petroleum Institute (API).

Examples of custody transfer systems

For the LNG sector, the Rosemount Custody Transfer System from Emerson is considered one of the most accurate and precise solutions. The state-of-the-art fiscal measurement system builds on the company’s existing Overflow Control technology and features a dual radar setup. This not only improves data precision but maximises system uptime and boosts efficiency during the loading and offloading process.

Want to know more about custody transfer processes and the advanced systems used to maintain accuracy and precision? Don’t miss our complete guide - ‘Custody Transfer in Oil and Gas: Your Questions Answered’.


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