Executive Q&A: At the forefront of digital innovation with fast, accurate, decision-ready data

Gas Processing & LNG had the opportunity to speak with Quorum Software CEO Paul Langenbahn (PL) about the company’s services and applications, customer concerns, and its plans for future growth.

 

GP&LNG: Quorum Software has grown significantly in the past four years, including six acquisitions and a merger with Aucerna. What are your plans to drive growth in the next several years?

PL: Our recent acquisitions were strategic decisions made to position the Quorum Energy Suite to provide end-to-end value for energy companies. We are excited about these moves and are now focusing additional attention on progressing our cloud-first strategy and further integrating workflows across our product portfolio to deliver additional value for customers.

We announced the Quorum Energy Suite (QES) in 2022, which is Quorum’s comprehensive portfolio of applications that unite data and workflows across the global energy ecosystem, digitizing operations for energy companies around the world. The QES portfolio represents the broadest and deepest suite of applications and services in the market, bringing immense value to our customers. Integrating a company’s workflows and data across the various functions in an organization provides the critical insights to promote growth and profitability and reduce operational risk. There are key connections across the portfolio that will drive our midstream growth, specifically when we look at our midstream and hydrocarbon measurement leadership in the U.S. combined with our global leadership in the LNG market with Energy Components, our flagship solution for both import and export terminals.  

Today, more than 50% of the world’s LNG and more than 80% of U.S. natural gas is managed in solutions provided by Quorum Software. With the current energy crisis and significant shortage of natural gas supply in the European Union (EU), the market’s response has driven the creation of new terminals and midstream infrastructure to support the growing need for both import/export. In the global market, Energy Components offers an end-to-end LNG solution that supports the acceleration of new terminals, even proven to operationalize an LNG facility in just 3 mos–5 mos. In the U.S., we have the ability to support the growth in natural gas production with an end-to-end solution from gas gathering through the LNG terminal, bridging transactions globally across import and export.  

Measurement is another key driver—it is a critical workflow throughout the energy value chain. Our measurement application, FLOWCAL, is the leader in this space, providing accuracy, accountability and compliance. FLOWCAL’s integrated measurement platform enables users to manage all oil and gas data with a process that allows them to easily validate field data. In addition, as regulations become more stringent and data is scrutinized more than ever, companies realize the value of a complex measurement solution with granular data validation capabilities and auditability. Today, more than 1 MM m (meters) are processed daily using FLOWCAL—that number continues to rise, especially in midstream when product changes hands so frequently.     

GP&LNG: Where do you see opportunities for growth in the midstream oil and gas industry? How can cloud-first software play a role in that growth?

PL: Digital transformation is top of mind for midstream oil and gas with the objective of increasing efficiency. With cloud software, organizations are now able to run complex transactions faster and with fewer people. Using Quorum’s integrated solutions like FLOWCAL and our My Quorum TIPS plant accounting software, midstream teams are experiencing huge reductions in the end-of-month close cycle, allowing for more time to evaluate and analyze the results. Access to fast, accurate and decision-ready data significantly increases efficiency across departments and provides leadership with unparalleled insights into the business, allowing them to identify potential growth areas to capitalize on the opportunity at hand, along with forecasting market shifts and responding in an agile manner. For example, Quorum’s Energy Components solution allows both international oil companies (IOCs) and national oil companies (NOCs) around the globe to integrate their midstream operations alongside upstream production, giving them an end-to-end view of their integrated supply chain.

LNG is another strong growth opportunity given the energy crisis in the EU, causing companies to seek more sustainable and affordable energy alternatives, which will only contribute to accelerated growth in the global midstream sector.

GP&LNG: When speaking with midstream customers, what challenges do they say are currently top of mind?

PL: When working with our midstream customers, we hear about four main challenges:

• First, emissions management. The reality is that transitioning power plants from coal to natural gas around the globe is the fastest way to significantly reduce emissions—in fact, U.S. Energy Information Administration (EIA) electricity data found that replacing coal with natural gas would cause a 60% reduction in carbon dioxide (CO₂) and would require fewer power plants. Environmental, social and corporate governance (ESG)-focused companies value renewable natural gas (RNG) as part of their decarbonization plans because it makes a direct impact while channeling funds needed to support further supply development in the market. However, RNG can cost three to five times more than traditional natural gas. To keep costs manageable, companies can couple RNG with carbon offset credits to further the scope of their decarbonization efforts. However, there are commercial implications around this strategy with regards to cost and the potential carbon taxes that result from this. While most midstream companies are not dealing with this specific challenge today, it is one they will face in the near future, and should start to consider sooner rather than later.
• Cybersecurity is another challenge. Midstream companies are particularly vulnerable due to the massive datasets related to supply and transactions. They are dependent on their technology vendors to maintain the proper security measures and ensure their critical data is safe from attacks.
• Similar to most industries, efficiency is always top of mind in terms of people, processes and systems. With inflation, supply chain issues and other contributors, the cost of doing business continues to rise. By increasing digital capabilities through automation and data integration, companies can reduce overhead and ultimately reduce costs to the business.
• Finally, navigating the energy transition. As companies strive to reduce emissions, transition to cleaner forms of energy and lower their carbon footprint, midstream companies are at the center facing challenges around the ability to meet the demand in the markets they serve. Carbon capture, utilization and storage (CCUS) is necessary for the oil and gas industry to achieve decarbonization goals identified by the U.S. government. For CCUS to work, carbon capture, removal and utilization technologies require a backbone system of shared CO₂ transport and storage infrastructure to enable large-scale deployment, realize economies of scale, and create an interconnected carbon management market. This aligns with the core competencies of the midstream sector. However, without the systems and processes in place, sustainability at scale be unachievable.

GP&LNG: Many oil and gas majors are prioritizing the transition to cleaner forms of energy. How does liquefied natural gas (LNG) help bridge the gap?

PL: LNG is a cleaner fuel alternative that is key to reducing environmental impact in the near term and providing a means to push forward emissions targets in the long term. However, it can be intimidating for oil and gas companies to consider alternative sources of energy, and oil and gas will likely retain a share of the new energy mix for decades to come. The key will be to produce and consume fossil fuels with a lower carbon footprint, which LNG helps accomplish.

LNG is also a more affordable solution to supply emerging markets with fuel for power generation. The U.S. is in a prime position to supply clean and ethical natural gas via LNG to the world and is on track to be the top exporter of LNG this year. Who could have imagined just four years ago that the U.S. would be exporting enough LNG to meet approximately one-fifth of current global LNG demand? Most of the credit belongs to the U.S. natural gas industry, which has successfully developed and deployed new technologies to make the U.S. the world’s largest natural gas producer.

However, implementing data and technology—such as asset and business planning tools—will be vital to optimize short- and long-term plans, evaluate risks and trade-offs, and monitor the progress of these plans to ensure the transition is achieved successfully. For example, Energy Components is deeply embedded in the integrated value chains operated by many oil majors, and many of them today are our largest LNG export customers. This supply chain efficiency must be replicated through automation and connected ecosystems that bring together market stakeholders.

GP&LNG: As the energy transition continues to develop and evolve, how important will it be to integrate cross-domain data and workflows, connecting all organizational functions?

PL: Integrating cross-domain data and workflows is key to turn net-zero plans into action. Full visibility into a company’s operations allows for an integrated approach to develop a comprehensive energy transition strategy.

While emissions used to be a priority for the health, safety and environment (HSE) function, it has now transitioned to a company-wide effort. Collaboration across departments—including HSE, regulatory, operations and finance—is key to ensuring information is shared across the organization.

It is critical for all parts of the organization to meet increasingly stringent requirements from the U.S. Securities and Exchange Commission (SEC) on governance and data auditability. Here is where integrating cross-domain workflows into a solution that provides visibility into emissions data is key. Having integrated systems, which includes measurement, is critical to real-time business decisions. When all organizational functions have daily access to decision-ready data, they can take the right measures to adjust future plans and emissions forecasts to ultimately drive down carbon impact.

GP&LNG: What are some of the key differences in how the midstream/LNG segment needs to look forward compared to the upstream and downstream segments?

PL: With the energy transition on everyone’s mind, there are many similarities around how they should approach the future. From managing emissions, expanding into renewable natural gas and alternate fuels, and preparing for a sustainable future, the market as a whole faces similar challenges.

However, how they are managing, tracking and reporting emissions to meet climate change regulations are quite different. From a midstream perspective, the focus is more on the Scope 2 and 3 emissions and companies have much less control and oversight when managing emissions indirectly. By reducing methane through improved work practices, such as leak detection and repair (LDAR), midstream companies can help control and reduce these types of emissions. Enabling the use of RNG and leveraging existing infrastructure in new ways also allows the reduction of Scope 2 and 3 emissions in the midstream sector.

LNG specifically is also navigating a unique shift in the market given the economic crisis driving global demand through the roof and increasing the need for more terminals in the EU. Even once a terminal is fully built, systems and processes must be in place to support the operations. Quorum’s Energy Components is primed to take advantage of this market opportunity and has been proven to operationalize a facility in record time. Ongoing releases and technical advances ensure that Quorum’s Energy Components customers remain at the forefront of digital innovation with fast, accurate, decision-ready data to track hydrocarbons from production to revenue.

GP&LNG: What can companies do to protect themselves from significant losses due to supply outages, supply chain issues, heavy price fluctuations, etc.?

PL: Investing in technology is critical. Building up digital capabilities is the most effective way for oil and gas majors to monitor fluctuations in the market and supply chain stoppages that may impact them. In a rapidly changing market, data has to be at the forefront of every business strategy to spot trends and anomalies before they become an issue.

With a connected technology platform that integrates data from the field to office and connects each complex workflow, companies have the visibility into their operations to increase productivity and ultimately drive down the cost of business. Accurate, decision-ready data significantly reduces risk and is key to prepare for fluctuations and protect against a volatile market. GP

 

ABOUT THE AUTHOR

As President and CEO of Quorum Software, Paul Langenbahn is responsible for worldwide customer-facing operations. Langenbahn has more than 25 yr of experience leading large, vertical software and technology businesses. Most recently, he was the Executive Vice President and President of the Commerce Business unit of NCR Corp. (NCR), a global enterprise technology provider for the financial, retail and hospitality industries. Prior to NCR, Langenbahn served as the Executive Vice President and President of the Hospitality division of Radiant Systems (Radiant) from 2007 until the company’s successful sale to NCR in 2011. He held several senior leadership roles in sales, channel management and professional services throughout his 25 yr with Radiant and NCR.