Gas Pipeline Uses Digital Technology in ‘Smart Way’

Cenagas, Mexico’s natural gas control center, has moved three-quarters of its operations to the cloud to keep costs low and reliability high.

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Oil and gas is undergoing a major digital transformation. This can be difficult for an industry that was built on the idea of just punching a hole in the ground and getting as much out of it as possible. Today, producers face much more competitive pressure, with increased need to lower costs, reduce business risk and create more efficient operations—all while worrying about environmental and public safety, cybersecurity, and a shifting workforce that can no longer rely on 20+ years of industry experience.

But it’s certainly not digital technology for technology’s sake. It’s for the sake of what business has always been about: business. With this in mind, digital transformation needs to come from the top. “All these changes are happening, but they require a big change and a big push from the top,” said Tobias Scheele, senior vice president of software for Schneider Electric.

For Cenagas, the natural gas control center for all of Mexico, the directive came from the very top. The very existence of Cenagas—established as part of constitutional reform to break apart the vertical integration of Pemex—was aimed at boosting productivity for the Mexican economy. And Mexico started immediately to modernize the way gas is sold in the country, according to Cenagas CEO David Madero, who detailed Cenagas’s digital story at the Schneider Electric Innovation Summit: Software Conference 2017 this week in San Antonio, Texas.

Formed just a few years ago, Cenagas is now responsible for managing Mexico’s natural gas transportation and storage network, and also serves as a large gas transportation company, with more than 5,000 miles of pipeline. The company is in an interesting position of being relatively young and nimble, while at the same time working with SCADA technology from Pemex. Cenagas had to build the company from scratch, without inheriting any people or processes from Pemex, but that also pushed it to bring best practices in rather than just operate the way Pemex had been operating.

Ultimately, the Pemex SCADA system will stay at Pemex to handle liquid hydrocarbon transportation, Madero said, and Pemex will close its gas segment. Cenagas is working on setting up a new SCADA system now, but must first validate everything it sees from Pemex.

Like any other midstream player, Cenagas has three key objectives: safety, reliability and the lowest costs possible. And Cenagas has embraced digital technology to achieve that.

“Using technology in a smart way is key for operational excellence in gas pipeline transportation,” Madero said. Information and operational technology (IT and OT) strategy needs to evolve together, he added, explaining that low cost and high reliability can be obtained as a service.

In fact, Cenagas has moved a surprising three-quarters of its operations to the cloud already, and will only be looking to do more there, according to Madero. “We have to keep ourselves low cost and high reliability,” he said. “We don’t want to build the technology based completely in-house. That’s why we chose Schneider Electric to help us.”

Through processes, people and international standards, Cenagas is trying to keep variable and fixed costs as low as possible. “We’re trying to move into the cloud as much as possible,” Madero said. “We’re finding ways to use platform as a service and software as a service instead of putting everything on premises.”

In fact, asked by Scheele if Cenagas will look to move even SCADA to the cloud eventually, Madero responded with a definitive yes. “We believe that’s the future. All of our technology services will probably be outsourced in the future,” he said. “We can get better reliability that way.”

The main caveat is that security be taken care of. “When we go to service providers, they can have better safety and reliability standards than we can ever possibly dream of,” Madero emphasized. “We just have to be comfortable with the cybersecurity aspect. Then we will move into their plan.”

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