Articles » What Is Custody Transfer? - A Detailed Guide

What Is Custody Transfer? - A Detailed Guide

Written by Stephane Roux

Published on 2022-01-24 & Updated on 2022-03-11

What Is Custody Transfer? - A Detailed Guide

In the oil and gas industry, did you know about the most accurate technology being used for transferring liquid products from one owner or producer to another? Yes, it's a custody transfer.  

In case you don't know what custody transfer is, then this article is an in-depth guide covering all details related to custody transfer in the liquid (oil and gas) industry. 

What Is Custody Transfer? 

In manufacturing industries, transportation and receiving raw materials, goods, and liquid substances is a day-to-day job. 

The transferring can be done between tanks and tankers, pipelines, producer to pipelines, producer to ships, or wherever the transferring is needed. 

However, transferring any raw material, liquids, fuel, or physical substances between tanks, tankers, ships, or any other segment requires a proper channel, so all the materials are transported with accurate measurement. 

This is where custody transfer or custody transfer measurement comes in handy.  

In the oil and liquid industry, custody transfer is the transfer of liquid between two parties. Custody transfer or custody transfer measurement is also known as fiscal metering; a name used to describe transactions where fluids are exchanged or transferred between companies. The transfer process can occur through any chain, for example, ships, tanks, or tankers. Whenever the fluids are transmitted from one place to another, custody transfer takes place.  

Custody transfer in the liquid industry does not only involve the transaction of fluid from one place to another, but it also includes accurate fluid measurement before and after the transfer using flowmeter devices. 

How Does Custody Transfer Work? 

During the process of fluid transfer, custody transfer flow meters are used to measure the mass or volume of the liquid before and after the transfer process to assure accurate measurement of the fluid.  

The major difference between custody transfer and traditional flow meters is that custody transfer is higher in terms of accuracy and repeatability. Therefore, custody transfer is an advanced version of conventional flow meters as it offers highly engineered and accurate flow measurement and transfer applications with the use of metering systems. 

Components of A Custody Transfer: 

A custody transfer point isn't just a vehicle that transfers liquid, but it is engineered as an entire metering system to perform various functions, for example, transfer and flow measurement of fluid. 

Liquid custody transfer systems consist of the following components/devices: 

  • Flowmeters
  • Meter provers; used for the calibration of meters. Calibration is performed before, during, and after the batch transfer.
  • Flow computers
  • Supporting automation
  • Quality measurement (Sampling and water monitoring system for liquids, online gas chromatography for measuring the energy content of gas)
  • Pressure and temperature transmitters

Flow meters are the essential component of the custody transfer system. Various types of flow meters can be used in the custody transfer of liquid, but each one of them has its own benefits and drawbacks. 

Approvals For Custody Transfer: 

The crucial requirement for custody transfer is accuracy and repeatibility. Hence, gaining approval from organizations for the transfer between both parties and the use of equipment like flowmeters during the transfer is necessary. Approvals are given by organisations like NMI's (National Metrology Insitutes). Flowmeters should also be compliant to organizations like American Petroleum Institute (API) or American Gas Association (AGA). 

Hence, the metering system selected for custody transfer must meet the requirements set by the organizations mentioned above.

API and AGA work in collaboration for both the custody transfer of gas and liquid, but AGA concentrates more on dealing with the custody transfer of natural and industrial gas while API prioritizes work on the transactions and measurements of petroleum liquids.  

This is the reason why API has mostly presented guidelines about flowmeters that involve the custody transfer of petroleum fluids. Examples of flow meters that mainly deals with the custody transfer of liquid include: 

  • Turbine meters
  • Ultrasonic meters
  • Coriolis meters
  • Positive displacement flowmeters.

Why Is Accuracy Important In Custody Transfer Measurement? 

The ability of the flowmeter to measure to the nearest or actual value of the flow is termed accuracy. During custody transfer measurements, the accuracy of the meter and measuring system is of utmost importance. 

Because of the large amount of fluids being transferred and the high value of these goods, the measurement system in custody transfer must be highly accurate, properly designed as per the oil industry standards.

Moreover, payment is usually made based on the amount of gas or liquid fluid being transferred. Hence inaccuracy or small measurement errors can easily cause financial loss to the parties. 

Types of Flowmeters Used In Custody Transfer

Nowadays, four types of flowmeters are available and mainly used for the custody transfer of liquids.

Following are the four types of flowmeters: 

  • Turbine Flow Meters
  • Ultrasonic flowmeters
  • Coriolis flowmeters
  • Positive displacement (PD) flowmeters

These flowmeters can be used for custody transfer and non-custody transfer applications. For example, ultrasonic flowmeters being used for custody transfer applications need three or more (multiple) measurement paths inside the meter.  

When the ultrasonic signals travel from one side of the pipe to another and come back, it is called a path. If the signal travels directly through the pipe without any bouncing, it will be called a one-chord path. On the other hand, if the ultrasonic signals bounce back from the pipe wall or anything else, it will be considered a multi-chord path. However, multi-chord paths (multi-path ultrasonic meters) offer an advantage in that it causes the flowmeter to measure the flow at multiple locations of the pipe. 

1. Turbine Flowmeters 

As the name indicates, turbine flow meters have a rotatory mechanism. Its rotor consists of propeller-like blades which rotate as the liquid passes through it.

Unlike ultrasonic flowmeters, turbine flow meters have moving parts, but it offers the same linearity as other technologies with a notorious advantage: repeatability.  Ranging from 0.04% (5 runs) to 0.02% (5 runs), this latter one being the Master Meter class repeatability.

Helical turbine meters are a specific type of turbine meter technology. The helical rotor allows it to operate in harsh crude oil applications (viscosity & solid conditions). 

To avoid wear and tear, or inaccuracy, durable materials such as Tungsten Carbide, Titanium are used in Helical turbine meter technology.

Benefits of helical turbine flowmeters 

  • Easy to install 
  • Easy to calibrate against all kind of proving systems including Small Volume Provers 
  • Minimal and easy maintenance  
  • Much lower pressure drop than Coriolis and PD meters. 
  • High accuracy 
  • Outstanding repeatability 
  • Robust  proven technology  

Faure Herman is the global specialist

Faure Herman is the global specialist for designing, manufacturing, calibrating and servicing helical turbine meters with applications across the oil supply chain.

Learn more

2. Ultrasonic Flowmeters 

Ultrasonic flowmeters measure the volumetric flow rates of petroleum liquids being transported through pipelines. In simpler words, ultrasonic flowmeters are volumetric devices used to determine the fluid velocity passing through the pipelines. And that velocity is used to calculate the flow rate of liquid.  

Ultrasonic flowmeters work on the principle of transit time. The difference in time when ultrasonic signals are transmitted from the first transducer (present on the upstream of the meter body), crosses the pipe, and reaches the second transducer (present on the downstream of the meter body) is measured. And the difference in the transit time becomes proportional to the fluid velocity. 

Compared to others, ultrasonic flowmeters offer a wide range of benefits because of which the use of this flowmeter type is growing steadily in the gas and oil industry.  

The benefits of ultrasonic flowmeters are: 

  • Easier to install 
  • Minimal maintenance  
  • Negligible pressure drop 
  • No moving parts 
  • High accuracy and reliability 
  • High turndown capacity 
  • It can be used for various applications, including transportation, processing, and crude oil production. 

3. Coriolis Flowmeters 

This type of flowmeter works by measuring the mass flow rate of the substance. The difference between ultrasonic flowmeters and Coriolis flowmeters is that they measure mass flow directly, while ultrasonic flowmeters measure the volumetric flow rates. Coriolis flowmeters are employed for flow measurement and custody transfer of both gases and liquid but do not work well for two-phase systems, i.e., the combination of liquid and gases. 

Coriolis flowmeters consist of two parts: 

  • Oscillating flow tube including drivers and detectors.
  • Electronic transmitter for analyzing the results and transmitting the information.

As fluid passes through the Coriolis flowmeter, the oscillating flow tube undergoes additional rotation due to the liquid's inertia. The vibration produces Coriolis force which is used for measuring the mass flow rate of the fluid passing through the tube. 

Like ultrasonic flow meters, they do not have any moving parts but are available for measuring pipeline sizes of up to 8-16 inches only. Hence, this is considered a drawback of Coriolis flowmeters because many natural gas pipelines are 20 inches, and the Coriolis flowmeter is not suitable for measurements above 16 inches. 

The tradeoff of Coriolis Flowmeters is the overall footprint as well as the pressure drops.

4. Positive Displacement (PD) Flowmeters

Positive displacement flowmeters (PD flowmeters) function well when measuring fluid of low flow rates (highly viscous liquids) and are available for small line sizes below 10 inches. The drawbacks of positive displacement flowmeters are that they have moving parts and involve pressure drop during the measurement. 


In the liquid industry, custody transfer takes place whenever fluid is being exchanged between two parties. Accuracy and repeatiblity is of great importance during the process of custody transfer for both parties while transferring and receiving the product because a slight error can cause financial loss to industries. Hence, accurate flow measurement is a critical requirement during the transfer process. 

To fulfill this purpose, numerous technologies for flow measurement are available for custody transfer, including helical turbine flowmeters, coriolis flowmeters, ultrasonic meters, or positive displacement flowmeters.