It is important to define the intent and scope of an audit before commencing. Contracts, tariffs, and other legal agreements define how natural gas is produced, purchased, exchanged, processed, transported, measured, and otherwise accounted for. These documents commonly include at least general audit language, and occasionally address measurement auditing specifically.

      When specific measurement auditing language is missing, agreements often contain other information that can be useful in preparing for a measurement audit, including:
• Measurement definitions (volume, energy, etc.);
• Measurement methods (general);
• Meter types (general or specific);
• Measurement standards (industry, internal, exceptions, combinations, etc.);
• Gas heating value (definitions and determination);
• Minimum gas heating value (definitions and determination);
• Hydrocarbon dew point requirements;
• Maximum allowable water vapor content;
• Maximum allowable concentrations of carbon dioxide, nitrogen, hydrogen sulfide, oxygen and non-hydrocarbon fluids;
• Contract pressure base;
• Average atmospheric pressure used, if applicable (or means of determining atmospheric pressure);
• Contract temperature base;
• Averaging methods (pressure, temperature, flow, etc.);
• Equipment calibration methods and frequency; and
• Witnessing and auditing.

      In fact, anything relevant to determining gas quantity or volume (Acf, Mcf, or mass flow), gas composition, and total energy flow (MMBtu) is of interest. The thorough review of agreements and other relevant documents is fundamental to the audit planning process.

      A gas measurement audit requires a thorough understanding of three fundamental items, which should be included in the planning process: the audit scope and objective, the overall gas measurement and volume processing process, and the gas accounting process relative to adjustments and corrections.

      This list may seem obvious, but measurement and accounting audits often begin without considering any of them–especially the second item, the overall gas measurement and volume processing process.

2008 Stark & Associates, Inc.
www.StarkAssoc.com