What pipeline operators should look for when buying midstream software
Shipper agreements get renegotiated. Joint operating agreements get revisited when a partner farms in or out. Tariff structures get reviewed when regulations change. Most commercial arrangements around a pipeline have a shelf life, and everyone plans for it.
The software underneath all of it rarely gets the same treatment. It goes in once, and it tends to stay for a very long time, often outlasting several rounds of the very contracts it supports. Firstgas has been running on the same platform since 2006, nearly two decades, through shifting regulation and growing complexity. That is not an unusual outcome in this sector. It is closer to the norm.
Which makes the buying decision a strange one to rush. Most software purchases get the scrutiny of a single procurement cycle. This one deserves the scrutiny of a multi-decade commitment, because that is what it usually turns into.
Why switching is harder than it looks
It is worth being honest about why operators so rarely rip out midstream software once it is in, even when it is not serving them well.
By the time a system is live, it holds the nominations logic, the allocation rules, and the audit trail that shippers, partners, and regulators all rely on. Pulling it out means rebuilding that logic, revalidating it, and re-establishing trust with everyone who depends on the outputs. Gartner’s research on enterprise software has made this point plainly: vendor lock-in becomes most visible at contract renewal, when the switching effort is prohibitive enough that operators simply pay the higher renewal rate rather than face the disruption of leaving. The lock-in is not always intentional on the vendor’s part. It is just a natural feature of software this deeply embedded.
That is precisely why the traps below matter more here than in most software categories. A mistake is not a bad quarter. It is a decade.
Traps worth avoiding
- Buying for the proposal, not the relationship. A vendor’s RFP response is optimised to win the evaluation. It is not automatically a preview of what year eight feels like. Ask what happens after the ink dries, not just what the demo shows.
- Mistaking a fast pilot for genuine fit. A quick, clean pilot on a narrow scope proves the easy case. It says little about your messiest agreement, your most awkward regulatory requirement, or the edge case you already know is coming. Ask to see that one, not the tidy one.
- Not costing the exit. Ask what leaving would actually cost, in both money and time, and whether your data and calculation logic would come with you in a usable form. If nobody can answer that plainly, you already have your answer.
- Leaning on the wrong reference customer. A reference from a single-owner asset with one regulator tells you little if you operate a multi-partner joint venture reporting to several. Ask for a reference that matches your complexity, not just your sector.
- Pricing that hides its own shape. A lower headline fee that comes with a paid project every upgrade compounds badly over fifteen years. Get a straight answer on both, not just the number in the proposal. We have written more on the four questions worth asking before you sign, and they apply here too.
None of these traps is exotic. They are just easy to miss when a proposal looks good and a deadline is close.
What to look for instead
Once the traps are out of the way, three questions do most of the useful work.
Does your team gain capability, or just access? Software that hands your engineers a login is not the same as software that hands them control. The difference shows up in year three, when the operation has changed, and someone has to decide who is allowed to change the system in response. It is worth asking for evidence that this actually happens: when GLNG replaced its legacy nomination, allocation, and trading systems, the joint venture’s own team delivered the whole implementation in-house, with no consultants needed. That is what capability transfer looks like in practice, not a promise on a slide.
Has the configurability been proven on a hard case, not an easy one? Ask the vendor to walk through their most complex live deployment, not their simplest one. If shared ownership, multiple shippers, and bespoke tariff structures are normal for you, they need to be normal for the software too. We have gone deeper on what that looks like specifically for pipelines in our piece on pipeline management software.
What is the honest cost across a realistic lifetime, not year one? Ask for the total cost across ten or fifteen years, including every upgrade, every change, and every support contract you would need. Compare that number, not the headline licence fee.
The twenty-year question
Here is a fair test for any midstream software you are evaluating, ours included. Picture the operator in year fifteen: different shippers, different regulations, maybe different owners entirely. Would that operator still recognise the system as theirs, or would they be waiting on whoever built it to make the next change for them?
That is the real question behind Firstgas’s two decades on one platform. The system kept up because the people running it were the ones allowed to change it, not because nothing ever needed changing.
Book a call, and we will match you with a partner who knows midstream and who is happy to answer the twenty-year question honestly, not just the one on this quarter’s evaluation scorecard.
