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North American energy leader TransCanada partnered with TEKsystems to build an application to run its Keystone Pipeline. When the pipeline was expanded to serve more markets in Canada and the American Midwest, TEKsystems was once again tapped to enhance and expand the business-critical application.
TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure, including natural gas pipelines, power generation, gas storage facilities and projects related to oil pipelines. With over 60 years of experience, TransCanada now operates one of the largest natural gas transmission networks in North America (42,500 miles) and transports approximately 20 percent of the continent’s daily natural gas supply.
The oil and gas industry is one of the most dynamic industries on the planet. Over time the industry has evolved into multiple operations, with companies narrowing their focus to address upstream, midstream or downstream lines of business in order to deliver energy to their customers. A critical part of the energy ecosystem, the midstream segment is responsible for the pipeline “highways” that circumnavigate much of North America and the world to transport oil and natural gas to refineries for processing.
Historically, the operational side of the midstream business was very manual—from scheduling and nominating batches of crude oil to physically inspecting pipeline integrity for leak detection. As technology evolved, many companies began slowly automating these functions by either building their own solutions or looking for an off-the-shelf product.
Many off-the-shelf products were developed as byproducts of development partnerships between oil companies and outsourcing providers to address specific needs not currently met by their in-house manual systems. The products leveraged through these partnerships were typically designed and built with the latest technologies of the day, such as PowerBuilder and Sybase. The driver for these technologies typically came from the lack of available resources within the organizations and small IT talent pools. The systems were designed and built using the now antiquated Waterfall development methodology and architectural standards that aren’t scalable to take advantage of the browser-based system used commonly today.
Furthermore, the companies that invested in these products found it difficult to get the support and customization that they required over time. Prohibitive costs charged by the vendors to make wholesale changes to a system for only a portion of the user community, and a lack of justification to modernize these applications (i.e., if it’s not broke, don’t fix it) resulted in companies being held hostage by licensing agreements and degrading support capabilities.
Off-the-shelf products have helped some companies see increases in efficiencies, however the weighing need for greater flexibility, customization and support have led more energy companies to consider the “build” option for developing cutting-edge systems that meet their pressing functional and technical requirements but also enable them to support future business growth. For a successful build, these companies are leveraging outsourcing providers who can offer a core competency in developing enterprise-wide custom systems.
In 2005 TransCanada proposed building an oil pipeline that would begin in Hardisty, Alberta, Canada, and reach Patoka, Illinois, with plans to connect the pipeline to Houston through future phases. When complete, the pipeline would support the largest transportation of crude oil from Canada to the U.S., with capacity to move 1.5 million barrels per day. A $16 billion investment initially, the pipeline would be an important addition to North American energy infrastructure, connecting Canadian oil suppliers with new markets in the U.S.
TransCanada knew it needed high-quality software to run the pipeline. The application would be the heart and soul of the business—critical to TransCanada’s operations and bottom line, it would manage and report on the flow of oil in the new pipeline and also manage invoicing and receiving payments.
After exhaustive efforts to find an off-the-shelf product that could meet their needs, TransCanada’s IT leaders realized they would need to custom-build an application. They conducted a thorough search for development partners to create a state-of-the-art, fully automated commercial system that would enable superior agility to respond to market changes. Out of 17 organizations that vied for an opportunity to create the custom system, the client chose TEKsystems due to our understanding of the complexity in building systems of this magnitude, our experience and capabilities in quickly mobilizing talent through our Montreal Innovation Centre, and our ability to meet an aggressive and immovable timeline.
We assembled a 58-person team—that would work 90 percent in Montreal and 10 percent in Calgary—to design and develop the application’s five modules: nominations, scheduling, shipper account balancing, custody ticketing and invoicing. TransCanada’s Agile development environment enabled us to work through originally undefined business processes, develop quality software aligned to functional priorities and meet the demands of an aggressive timeline.
From 2008 to 2010, TEKsystems worked with TransCanada to build Keystone Commercial Systems (KCS), a collection of applications and services intended to meet the Keystone Pipeline’s forecasting, operational and accounting business needs. Commercial operations began in June 2010, with the Keystone Pipeline transporting crude oil from Hardisty to U.S. Midwest markets. This pipeline was under a single commercial entity with a single injection point and single delivery point. In 2011 the Keystone-Cushing Pipeline was routed from Steele City, Nebraska, to Cushing, Oklahoma.
An expansion to the Keystone Pipeline, Marketlink, was approved in 2012. The pipeline would start in Cushing, where American-produced oil could be added to the pipeline and go to delivery points in Houston / Port Arthur, Texas.
Multiple entry and delivery points would greatly impact TransCanada’s business model. Traditionally, their customers were oil shippers (to whom they sold capacity on the pipeline) that sent Canadian oil to the U.S. Now, new U.S. terminals and injection points would enable new contracts with American producers.
As such, this expansion would require changes to KCS. In addition to the physical impacts to the pipeline on the business side, they would need to maintain two separate commercial entities, one American and one Canadian. On top of these added functionalities, the client also wanted to enhance KCS’ scheduling engine to run faster and more efficiently in order to better serve their customer base.
After the original application was built, TransCanada and TEKsystems maintained a close partnership. When it was time to expand functionality and improve scalability and maintainability of the application, TransCanada once again tapped us for the job. The client had an aggressive timeline to go online before the pipeline was set to begin operation in 2014.
TransCanada created a separate operating company called Marketlink that would resell the leased pipeline capacity (from Keystone) to American oil shippers. We would build out KCS to support multiple commercial entities: Keystone in Canada and Marketlink in the U.S. The differences between the two included different business processes, language nuances, currencies and measurement units.
Plus, all internal and external user interface screens and reports would be different, depending on which of the two commercial entities they pertained to. Another assurance we would need to build in would be that one entity’s data would only be accessible to authorized users of that entity. For example, Marketlink data such as nominations, schedules, invoicing and account balances would only be accessible by internal and external users in Marketlink-related roles. As both Marketlink and Keystone are regulatory businesses, internal users who have regulation-related roles would require access to data from both. The ability to support and keep additional commercial entities would be required for the system to be scalable for possible introduction of future legal corporations.
Enhancing the scheduling engine to support the new pipeline infrastructure was critical as scheduling directly affected the pipeline’s ability to receive and deliver crude oil at new points effectively. TransCanada also wanted to perform more sophisticated simulations to determine the most effective schedule for the pipeline. When there was only one entry and one delivery point, simulations were more simplistic. However, when adding multiple entry and delivery points, the KCS scheduling algorithm often took several minutes to run, when it should take seconds. To improve this, we would decouple the engine from KCS and build a stand-alone module.
Other enhancements would include lease management, new infrastructure components (terminal delivery/receipt facilities), tank infrastructure, third-party receipt/delivery facilities and custody ticket nominations, to name a few. Additionally, we would tackle a backlogged list of pre-existing bugs and upgrades that TransCanada’s internal Application Maintenance and Support (AMS) team had not been able to address due to a lack of internal bandwidth.
The revamped KCS and the new pipeline segment went online in early 2014. TransCanada now has fully functional software that runs the Keystone Pipeline, a multibillion-dollar investment that transports 25 percent of Canada’s crude oil exports to the U.S. The tool enables TransCanada to be highly effective and efficient by eliminating what would otherwise be arduous manual tasks.
We made over 20 enhancements to KCS, including scheduling rules, concurrent users, pipeline flow rates and terminal schedule requirements. Throughout the process, we worked closely with the AMS group so they could support KCS to meet evolving business needs moving forward. Post-launch, the AMS team assumed responsibility for managing incidents, service requests and small enhancements to the core application, while we remained on call for support. In addition to application development and support, we also provided invoicing support and improved regression testing through user acceptance testing.
The scheduling engine’s internal mathematical scheduling algorithm was completely rewritten to improve simulation and calculation performance of oil flow operations; the time it took to run complex simulations went from a minutes-long process to mere seconds. TransCanada’s oil schedulers are now able to run many more scheduling simulations, receive better and more realistic results and achieve optimal pipeline planning and operation.
The main customer and business portal for KCS went through major changes and upgrades; a new multitenant approach was developed to address the new challenges brought about by the introduction of new business entities, carriers, which lease capacity and resell it. This was a fundamental change to the business relationships that TransCanada had with its oil shippers. Change and upgrade highlights include:
Prior to investing in the pipeline, TransCanada successfully committed shippers to 15-year contracts accounting for 80 percent of pipeline capacity. Upon completion of all the phases, the oil flowing through the Keystone Pipeline will account for about 10 percent of U.S. consumption. The energy industry is also under immense pressure to ensure adequate safety both via the infrastructure itself and by using the latest raw materials, leak detection and environmental impact analysis. This high demand and pressure drove TransCanada’s investment into their pipeline and the sophisticated, custom software to keep it running. The expanded KCS provides greater visibility into the day-to-day demand on the pipeline and insight to help make long-term business decisions, giving TransCanada the ability and flexibility to grow organically or through merger and acquisition activity.
The partnership between TransCanada and TEKsystems has been successful because of our trusted history and our high-quality service throughout the engagement.
Because we had built the original KCS several years earlier, the client felt confident that we would be able to adapt the system to meet the new functions of their expanding business. We partnered greatly with the client’s internal team to understand their desired customizations and to work through the backlog of bugs and upgrades that had accumulated since our original development. After the system’s launch, we supported the AMS team on an as-needed basis as they managed incidents, service requests and small enhancements to the core application.
We have more than 10 people on our team that have focused on this narrow part of the energy industry for the last five years. Plus, our Energy Services practice partners with nearly 300 major energy organizations annually.
It was important to the client that we had a presence on site at their location in Calgary. So although our full-time TEKsystems consultants assigned to the project typically work out of Montreal, we split our team’s time to 90 percent in Montreal and 10 percent in Calgary to meet the client’s needs.