Case Study 4: Strategic Partnership Between Marathon Petroleum Corporation, the Largest Hydrocarbon Refiner in the US, and Startup Flyscan Systems
- Marathon Petroleum Corporation Executed a Direct Investment in Flyscan Systems through the Advisory Support of Pegasus Tech Ventures -
Joint Development of a Leak Detection Hardware & Software Package
＜Overview＞
In 2023, Marathon Petroleum Corporation, the largest refiner and renewable fuels producer in the United States, entered into a strategic collaboration with Flyscan Systems to assist in the deployment and development of their hydrocarbon leak detection platform. The purpose of this initiative was to ease the operations of pipeline inspection and identify leaks with significantly greater accuracy, compared to traditional manual inspection techniques.
Flyscan Systems, headquartered in Quebec, has developed an integrated hardware and software package for pipeline operators to ensure safety and compliance. The hardware component easily attaches to the bottom of a small commercial aircraft and flies the length of the pipeline, using an array of optical sensors. The data is then funneled through their AI platform to effectively analyze any existing leaks.
To expand Marathon’s emerging tech initiative, the company engaged Pegasus Tech Ventures to support the diligence and execution of early-stage investments. Cooperating with business units to identify technology that enables efficiency in daily operation.
＜Challenges and Solutions＞
The United States currently has over 2.5 million miles of oil pipeline in operation, moving millions of barrels of product per day. The US Federal Government has created a series of regulations mandating consistent pipeline inspection and record keeping. Each pipeline owner and operator must facilitate consistent inspections of each mile of pipeline, create a record base of data for traceability, and have an action plan in place for any required repair/maintenance. There is the additional risk of any pipeline operator facing significant reputational damage in the event of a pipeline leak, especially around a population center, can cause large-scale environmental and health hazards.
With the scale of pipelines across the US and the stringent regulations, energy companies are looking for alternatives in the market to reduce the overall burden of monitoring and detection, while remaining in compliance. This is the mindset that fueled the relationship between Marathon and Flyscan.
With clear strategic alignment, the two companies engaged in an investment and partnership structure, with Marathon providing internal resources and opportunities to pilot new systems on active assets, in the development of new leak detection technologies. As part of this collaboration, Marathon is assisting in the hardware and software development of a new methane detection feature of the Flyscan system, significantly expanding Flyscan’s business opportunity and providing Marathon NG pipelines with an alternative solution. Marathon’s expertise in hydrocarbon signatures and existing monitoring solutions on the market has provided Flyscan with a competitive edge compared to other startups in the leak detection space.
Through this partnership, Marathon and Flyscan Systems have effectively developed new leak detection technologies, allowing continued compliance with government regulations and reducing operational expenditures.
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