Oil & Gas Giants: Amidst Market Volatility, LNG Market looks to Artificial Intelligence

The Liquefied Natural Gas (LNG) market is increasingly being defined by its volatility. From increases in spot prices to intense commercial demand expectations, cargo cancellations, shipment delays and more, it is widely reported that, “unplanned maintenance at LNG export facilities from Australia to Qatar to Malaysia has led to a tighter than expected market in the second half of the year [2020].” This unplanned maintenance, combined with “pandemic prompted dramatic price swings” has led to the halt in growth in the LNG market in 2020. As a result, LNG has been looking to digital transformation to ramp up recovery, avoid stagnant growth and deliver on increasing market pressure.

While the cost of oil drops for consumers, due to social impacts of COVID-19, the LNG market is preparing for long-term implications. LNG is poised to experience more growth in comparison with the traditional use of oil and coal in consuming countries as the spot market has made LNG a more attractive option. Consumers have been incentivized by low LNG prices, relative to oil and gas prices, to make a switch.

Though the outlook for LNG growth in 2021 is quite strong at this point, the market is still unpredictable. LNG, in the position of a relative newcomer in respect to oil and coal, will benefit from swift implementation of digital in their early stages of growth. Gaining an even greater competitive edge in LNG is dependent upon digital adoption where speed to value becomes the most critical element in a technology deployment.

Source: Nobel Upstream

For years the LNG and larger Oil & Gas market have been turning towards digital technologies for their many benefits, not the least of which being promises of decreased costs and increased efficiency. However, they have never felt a more significant pressure to extract value from digital then what they are experiencing right now. Many O&G corporations that were early adopters have previously been failed by tech companies touting pie in the sky Artificial Intelligence platforms which merely turn out to be static algorithms at best. After a failure to deliver on hype and promised benefit, these tech companies have only left behind frustration and a distrust in AI’s true capabilities.

These early adopters can rest assured that the marketplace has seen a significant shift from the early days of promises and theoretical AI to concrete benefits in practiced AI. What was once seen as potential benefit is now being realized. As mentioned in the above graphic, making the best of existing technology, through the implementation of Artificial Intelligence which utilizes existing infrastructure, like Maestro, can yield significant cost savings. LNG producers, driven by everchanging costs, need to adopt Artificial Intelligence to survive in todays’ landscape.

The pandemic has been a great shock to the market but with this shock comes an exciting opportunity for change. Leaders have been given the opportunity to evaluate existing business strategies and identify opportunities for growth. LNG producers have the potential to extract significant financial value and increased profit from digital and further their growth position in the O&G market. Digital value chain transformation will afford LNG opportunities in increased flexibility and responsiveness of their production to market conditions. 

A critical element in the LNG and overall O&G journey to choosing a partner to adopt Artificial Intelligence with is the partner’s ability to deliver immediate value. Speed to value is driven by many factors but industry expertise, like that of Elutions’ Maestro, is paramount. To learn more about Maestro and individual case studies in the Oil & Gas sector, please contact us

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Oil & Gas Giants: AI & the Vulnerability of Supply

Since 2016, the Global Liquified Natural Gas (LNG) imports industry has enjoyed a CAGR of more than 10%. Due to oversupply, unpredictable demand and varying price as a result of COVID-19, this CAGR came to a screeching halt in 2020. In an industry that was experiencing oversupply prior to the impact of COVID-19, the decrease in demand has lead to even greater excess and market volatility. Many LNG producers are looking to cut spending across the board and the rush to implement these measures has led to, in some instances, significant negligent maintenance practices.

These measures snowball into the real pressing issue for LNG producers, forcing them to ask the tough question:

“How can we maintain/ increase profitability in such a volatile environment?”

The answer lies in Artificial Intelligence, specifically Maestro.


Oversupply is a significant issue as it forces producers to reduce operational costs, often from critical areas in the production process, since they are unable to sell all their supply. Cost cutting measures, along with workforce disturbance caused by COVID-19, have led to prolonged maintenance backlogs for many of the world’s LNG plants.

By way of example, a look at the fire that occurred in the Hammerfest LNG plant in Norway in September 2020. This fire was a result of negligent maintenance due predominantly to poor planning and a backlog of cost-cutting measures that had to be implemented due to urgency. The plant narrowly missed destruction, but the event could have been prevented in its entirety while still maintaining cost reduction if an AI engine, like Maestro, been implemented.

The oil leak that caused the fire was foreseeable, it was determined to be one of many leaks that were called out by a safety audit issued by the PSA. However, due to the vulnerability of the market, the plant elected not to address it. On the day of the fire, the fire-alert system malfunctioned and even still, it threw out several faults which the plant, likely understaffed, decided not to address. The fire was ultimately discovered by staff as it occurred. What is known for certain is that the fire was preventable in many ways.

The president and founder of Bellona, an international environment agency, Frederic Hauge, noted of the fire that,

“Our information points to serious design and construction weakness at the plant, serious negligence in follow-up of maintenance issues, and an astounding lack of attention to safety by top management.”

Frederic Hauge, Bellona

In a survey conducted by Oil & Gas IQ in 2020 (illustrated below) and administered to over 200 O&G professionals, almost 75% of respondents believe that intelligent enterprise applications can save money on CAPEX/ OPEX.

If yes. how much could it save? 
Yes 
No 
Unsure 
Can intelligent enterprise applications save 
your company money on capex/opex? 
2%
Source: Oil & Gas IQ

Most respondents went on to say that the amount of which this could save was unquantifiable at the time.

Further, the respondents shared that the two most significant areas for impact with intelligent enterprise applications are predictive analytics & intelligent automation, both of which are not only wheelhouse benefits delivered by Maestro AI, but are also just the tip of the iceberg in transformational impacts that Maestro autonomously implements.

Which intelligent enterprise areas do you think will have the most significant impact on your business? (Respondents could choose up to three) 
Predictive analytics 
Intelligent Automation 
• Cognitive analysis 
/ computing 
Machine learning 
57% 
50% 
28% 
25% 
23% 
23% 
Smart devices 
Chatbots 
/ virtual assistants 
Text / speech analytics 
DevOps and API 
Other (please specify) 
23% 
5% 
4%
Source: Oil & Gas IQ

Instinctually, any business aims at reducing cost if it is experiencing an oversupply and is in a market that is vulnerable. However, cost-reduction must never come at the expense of safety, something that the Hammerfest LNG plant failed to prioritize and has now cost them an entire year of unplanned downtime. The question remains,

“How could this fire and shutdown, as well as future maintenance related disasters, be prevented while still maintaining and even increasing profitability?”

Maestro Artificial Intelligence and the team at Elutions have extensive experience in the LNG market, working with clients to increase profitability as well as preventative plant failure, an overall reduction in downtime and more whilst maintaining proper reporting and safety standards.

In the case of the fire at Hammerfest, had Maestro been deployed, the automated directives, as part of the Maestro Autonomous Value Chain, would have been able to address not only any potentially faulty alarms but also the entire maintenance backlog with ease and with priority assigned to those issues that impact profitability and safety the most. Unplanned and overdue maintenance is a serious issue in the LNG industry, one that has lead to a tighter market and an increase in prices, but it doesn’t have to be with the help of AI.

Unplanned maintenance is just one of many issues that Maestro can address in the LNG industry due to it’s unique end-end holistic approach to the value chain. The Maestro Autonomous Value Chain overcomes chaos theory in a measurable dynamic environment like a refinery, understanding the input characteristics in real time as they change, and accounting for cause and effect up and down the value chain automatically as a result. To learn more about the Maestro Autonomous Value Chain applied and how our team can help your business combat the volatile markets please contact us.

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January Series- Artificial Intelligence and the Oil & Gas Giants

The Oil & Gas industry is recognized as one of the largest valuation markets in the world and it is universally recognized for the reliance that the global markets hold on oil as a natural resource. Additionally, Oil & Gas corporations employee tens of thousands of individuals and often contribute significantly to their country’s GDP, resulting in increased political influence. Given their reliance as both a regional and market driver, it is no surprise that this industry is heavily investing in Artificial Intelligence to increase the value of their entire supply chain.

All equally 
Upstream 
Downstream 
Midstream 
What part of the industry can be most 
helped by intelligent enterprise? 
65% 
21% 
10% 
4% 
Which parts of the oil and gas value chain will be most affected 
by intelligent enterprise? (choose three) 
Asset integrity & maintenance 
Field development 
Geophysical 
Pipelines 
Drilling 
Refining 
Power generation 
Transportation (tankers & trucks) 
Construction 
Gas processing 
Product marketing 
Liquefaction 
Other 
Storage 
69% 
35% 
32% 
30% 
28% 
25% 
21% 
18% 
13% 
12% 
5% 
1%
Source: Oil & Gas IQ

Around 200 oil and gas professionals from around the globe took part in Oil & Gas IQ’s in-depth research into the intelligent enterprise landscape and the impact of AI as the next driver of change within the industry. Some interesting results above illustrate that a majority of these O&G professionals believe the industry will be helped by intelligent enterprise equally, upstream, midstream, and downstream. Additionally, a majority of respondents top choice for their number one value chain improvement with intelligent enterprise was asset integrity & maintenance.

This New Year, Solve the Unsolvable will be drilling into the world of Oil & Gas and how Artificial Intelligence will exponentially increase the value of this industry, especially in the areas industry professionals have identified as most important. In Q1 2021, we will be exploring how AI addresses the vulnerability of supply within the O&G ecosystem, including a deep dive into AI’s ability to eliminate unplanned maintenance and prevent failures at scale. A look at how the decreasing cost of Oil is driving corporations towards AI in order to increase profitability by re-evaluating their value chain operations. And finally, a view into the rapidly expanding US Shale market, which is uniquely poised to benefit from AI at the very early stages.

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