February 2019, Vol. 246, No. 2
Features
SCADA Operations Controlled Remotely
By Joe Hollier, Editor
Houston-based Remote Operations Center (ROC) connects operators to their data and provides an offsite monitoring workforce that can improve efficiency while reducing risk and is the only third-party provider solely focused on executing control center services for liquid and gas pipeline operators.
Led by Louis Krannich, and backed by Doug Foshee, founder and owner of Sallyport Investments, LLC, the company launched almost three years ago and has executed multi-year contracts with several clients that encompasses over 7,000 miles of pipeline spanning crude, natural gas, saltwater disposal and refined products.
Operating in their new state-of-the art facility, ROC monitors and controls energy and utility assets 24/7 to execute normal operations procedures while being able to respond to emergency conditions. The start-up company provides all control room and measurement compliance plans, documentation, training, qualifications, testing, documentation retention and audit support. Their integrated service also provides reliable data, streamlined for decision making. P&GJ caught up with Krannich and Foshee to see how this unique venture monitoring facilities is changing the norm.
P&GJ: How did the idea of a Remote Operations Center come about?
Foshee: The Idea for the ROC came from a local entrepreneur in the pipeline service business who saw an unfulfilled need for his existing midstream clients. We were fortunate to have been invited to a meeting to discuss the idea, and we saw immediately the potential. So, we committed to invest, to build our temporary control room, and to recruit a talented CEO – all in about 90 days!
P&GJ: Are there any plans to expand ROC?
Foshee: The great thing about the ROC is that we have very patient, long-term shareholders and no debt. We are fortunate to have the opportunity to continue to significantly grow our client base, our primary focus currently. In addition, we continue to look for ways to add more products and services needed by our existing client base. ROC’s customers can be grouped into a few major categories, including Midstream, E&P and chemical companies. We currently provide services for over 20 customers operating in 12 states.
Krannich: Business has grown by approximately 200% per year for the last two years. We designed our facility with the flexibility to expand as needed depending on our pace of growth. We anticipate filling our existing control room capacity in 2019, which is why in 2018, we exercised our option to secure the adjacent space next to our current facility.
With this additional space secured, we can continue our growth curve without making significant capital expenditures. While we are currently operating for U.S. customers only, we are actively pursuing opportunities outside the US and anticipate this becoming a meaningful part of ROC’s growth strategy in 2019.
P&GJ: Has ROC provided a return on investment?
Foshee: The ROC was a greenfield start-up in a virtually brand-new industry. I am happy to say that we are profitable and continue to grow at a significant rate. We currently have 16 full-time employees that work 12-hour shifts. ROC has focused on getting people with 5 to 10 years combined experience of field and control room work so we have had very little turnover.
P&GJ: What are the biggest challenges ROC faces?
Foshee: Our first and most important mission is to our clients, to operate their assets safely, efficiently and dependably. Beyond that, we know that it is a non-trivial decision for clients to entrust us with these important tasks, so we are constantly looking for ways to make our value proposition more apparent and more compelling, continuing to shorten our sales cycle.
Krannich: Our focus on safety is best described through our people, processes and infrastructure:
People — We strive to create a work environment where our control room operators are proud to come to work. Given the shift schedules involved in control room operations and the fact that, in most organizations, control rooms are often physically separated from the majority of other business functions, control room employees can feel disconnected and sometimes forgotten.
At ROC, the control room operators are literally at the center of our business and know that they are the most important part of our success. No one at ROC has a business card with a title – if we are not working within the walls of the control room, our job is to support the people that are.
Processes — ROC is a process driven organization and our management of those processes include daily quality assurance on process adherence and documentation. Because we are operating diverse assets in different geographies for over 20 entities, we can draw on and implement best practices in process management with our customers. Also, given that we are operating assets for many companies, we interact with more agencies than a single operator would. Therefore, we continuously improve our operation based on interactions and feedback from agencies across the US. All our customers benefit from this continuous feedback as we enhance processes regularly.
Infrastructure — We designed our facility and associated infrastructure with reliability and security front of mind. ROC completes a robust risk management process every year. Our understanding of our risks drives our strategy and in turn, our strategy informs ROC’s resource allocation. After analyzing and prioritizing our risks, we can plan for and make risk-informed investments in our business. Through economies of scale, our customers can save costs while also having access to quality infrastructure that is maintained 24/7 and supported by a risk-based investment plan.
P&GJ: How has your experience in the pipeline industry helped ROC?
Foshee: Each of the ROC’s investors, including me, have substantial midstream experience and/or contacts. This has helped in recruiting talent, in sales and marketing, and in helping create and implement strategy.
Krannich: I have spent my entire career in the pipeline industry, and in fact, grew up around the industry. My mom spent most of her career at Sonat, at a time when gas companies were an extension of family. I spent 10 years at El Paso Corporation before joining Pacific Gas and Electric (PG&E) in 2012 and was fortunate in my career to gain broad experience in engineering, operations, finance, strategy and business development.
My experience at El Paso and PG&E engrained a commitment to pipeline safety and I have always personally felt most fulfilled when building something or in the creative process. Also, at PG&E, I was able to see first-hand the positive impact of best-in-class control room design and operation when PG&E commissioned a new, advanced control center.
When approached with the opportunity to help build ROC and make a positive impact on pipeline safety, I couldn’t say no. Of course, a day after accepting the role, we found out that my wife was pregnant with our first child. So, in 2016, we quit our stable jobs in the Bay Area, moved across the country, joined a start-up company and had a baby. I am not sure I would offer that as career or personal advice, but it has been an incredible couple of years for us, and I could not be more excited about ROC’s future.
P&GJ: What concerns do potential customers come to you with most often regarding how they are handling their own operations?
Foshee: Each of our customers have different strengths and weaknesses. I think the ROC is appealing to folks as they know that our sole focus in life is control room operations. For a small- to mid-sized midstream company it is difficult for them to match our control room talent, our processes, and our costs on their own.
Krannich: Whether or not an operator decides to partner with ROC, we enjoy consulting with companies as they consider various control room options for asset purchases or asset expansions. We can perform due diligence on existing controls infrastructure and provide alternatives analysis for consideration. Given that we have experience across many asset types and strive to develop customized solutions depending on customer need, operators can lean on us for ideas.
P&GJ: How do you go about reassuring potential customers who may be reticent to have their control center off-site?
Foshee: In the beginning our clients were taking it on faith to some degree that this model was good for them. Now that we have many, many clients and many thousands of miles of pipe under our direction, in effect our employees, our state-of-the-art facilities, and our performance track record really sell themselves, as proven by the fact that our sales cycles continue to get shorter and shorter from initial contact to conversion.
Each of our customers has different strengths and weaknesses. I think the ROC is appealing to folks as they know that our sole focus in life is control room operations. For a small- to mid-sized midstream company it is difficult for them to match our control room talent, our processes, and our costs on their own.
Often, operators of regulated midstream assets are faced with tackling inefficiencies across multiple local control rooms. These operators also periodically face the need to invest in upgrading an existing SCADA system.
ROC can provide the opportunity for operators to consolidate multiple control rooms into ROC’s operation, an immediate recognition of efficiency savings. Operators can also leverage ROC’s existing SCADA platform and onsite SCADA developers to eliminating costly SCADA upgrades. ROC will handle all SCADA development and compliance requirements while operating with high-quality controllers within a best-in-class control center.
Krannich: ROC is incentivized to approach every aspect of its business with the intent to increase safety and reduce risk associated with control room operations. Our goal is to make every pipeline operated by ROC safer in our control room than with any other control room alternative available.
Given our business model, we can do this while also saving our customers upfront capital and ongoing operating expenses. Our main customer demand comes from operators that are either constructing a new asset, have purchased an asset from another entity, are looking to capture efficiencies from consolidating multiple controls rooms or are facing costs associated with major SCADA/control room upgrades. P&GJ
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