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UNIT - 1

Question and Answers

Long Questions:

1. Describe the purpose/ importance of pipelines in petroleum industry.

In the petroleum industry, pipelines are used for a variety of purposes. These include:

Gathering crude from individual leases and delivering it to a central location for processing,

Transporting crude oil from fields to port terminals for tanker transportation,

Moving crude oil from processing centers and supply points to the refineries and other market

destinations,

Moving gas from fields to gas processing plants and from these plants to markets or LNG facilities,

Distributing petroleum products from the refineries to the distribution centers.

The products from the field or the processing facilities cannot be consumed in the area of their

production. The products need to be transported for consumption. Various modes / alternatives are

available for the purpose.

Different modes as conceptualized are required to be listed and analyzed separately wrt conditions /factors

involved that may affect complete process design, availability of the state of the art technology, availability

of resources (men & materials), Finance, products marketing/ purchase commitment etc throughout the

project life & most importantly based on which the techno economic studies have been prepared for the

conceptualized project.

The most economic alternative is selected from the above conceptualized projects. The project remains

economical till the time the project implementation is without cost overrun and time overrun.Pipelines perform vital functions. They serve as arteries, bringing life-dependent supplies such as water,

petroleum products, and natural gas to consumers through a dense underground network of transmission

and distribution lines. They also serve as veins; transporting life-threatening waste (sewage) generated by

households and industries to waste treatment plants for processing via a dense network of sewers.

However, as our highways and streets become increasingly congested with automobiles, and as the

technology of freight pipelines continues to improve, the public is beginning to realize the need to reduce

the use of trucks and to shift more freight transport to underground pipelines. Underground freight

transportation by pipelines not only reduces traffic on highways and streets, but also reduces noise and air

pollution, accidents, and damage to highways and streets caused by trucks and other vehicles. It also

minimizes the use of surface land. Surely, we can expect an increase in the use of pipelines in the 21st

century.

2. Compare various modes of transportation and their limitations and advantages.

Tankersare generally cost effective for medium to large volumes when transported over very long distances.

They also offer flexibility in loading and unloading point. They can be chartered at short notice (when

available) without any capital cost. Tankers are usually employed in combination with a pipeline at the

export and/or import location.

Rail carsare mostly used for products, but have been used to transport small and medium quantities of

crude oil where there is existing rail infrastructure.

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Figure 1

Road transportation by truck is viable only for transporting small quantities over short distances. Road

transportation is mainly used for products, but has been used for crude oil.

Bargesare mainly used for transporting products over short to medium distances. They are normally used in

coastal areas or where there is an existing river/canal infrastructure. Barges, rail and road are usually only

attractive for transporting small volumes over relatively short distances.

Pipelines, on the other hand, can be used for oil, gas and products, and are usually the only viable option for

gas. Pipelines can be used over a range of volumes and distances. However, for very short distances and

small volume or seasonal demand or for very long distances, Pipeline is unlikely to be cost effective.Figure 2

illustrates the unit cost curves for various alternatives.Figure 1shows the different methods available to

transport crude oil or petroleum products.

3. Comment on benefits and limitations associated with pipeline mode of transport.

Cost comparison among modes of transportations:

Pipelines are most cost-effective for higher ranges of Cost/ ton-km. For small volumes and/or for short

distances, Pipelines are not very economical; in such cases, other alternatives should be considered. The

Cost comparison is shown as under:

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The economy of pipeline transport as an alternative to any other form of transport arises from the

following:

(a) Pipelines are able to move voluminous batches of fluids uninterrupted in a continuous stream over long

distances at a low unit cost and low risk. Although the transit speed is low (estimated to be between 5

and 15 km/h), commodity intake, carriage and discharge are combined in one process the commodityis immediately discharged into storage tanks upon arrival. This, coupled with the fact that the pumping

process can take place continuously, without the need for a return journey or empty running or

stoppages or transshipment delays, reduces the total transit time.

(b) A commodity which is transported by pipeline to its destination requires no wrapping and packaging.

Only the commodity itself moves, the pipeline provides the necessary containment and protection of

the commodity. Therefore there is no dunnage dead weight, dunnage volume as well as movement of

vehicle or handling equipment. There also are no empty containers to be stored, handled or returned to

the origin and no packing or unpacking problems at the start and completion of the haul.

(c) Among all transport modes, pipelines require the least human resources expenditure and consume the

least energy per unit of commodity moved. Fuel consumption by road tank trucks, for example, is

several hundred times higher than pipeline to deliver the same quantity of commodity.(d) Pipelines are the safest mode of transport to carry petroleum commodities. There are an extraordinarily

small number of deaths and injuries associated with pipeline operations. The high degree of

automation throughout pipeline systems accounts to a large extent for their outstanding safety record,

because human error is the principal cause of most transport accidents. High standards of design,

construction, testing, preventive maintenance and monitoring techniques also contribute to the great

safety of pipeline transport.

(e) The goods security record of pipeline transport is outstanding. The risks of shrinkage or loss by theft,

fire, damage, spillage and evaporation are insignificant. However, laying a pipeline in Geographical

unstable areas and locations where surface conditions are affected detrimentally by mining activities

has to be avoided. Electronic monitoring of facilities as well as insignificant influence by the elements,

results in minimal loss and damage (through quick detection of leaks) and in highly reliable deliveryschedules. The high accuracy and reliability of forecasted delivery times diminish the need for safety

stock at the receiving end, while free storage is offered for as long as the order is on the way to

delivery.

(f) Large areas of land are not diverted to exclusive use. The area required is a narrow ribbon, and diversion

of land from other uses is lessened if the pipes are buried beneath the surface of the ground (as they

usually are). In addition to the productive use of internal pipe volume, pipeline transport is very

economic in utilization of external space. Once the pipeline is laid, the land above it can continue to be

used for alternative purposes, except for activities that disrupt the ground surface seriously and the

construction of permanent structures, subject only to the right of access for the pipeline operator to

conduct inspections or when repairs and replacement become necessary. This lessens the opportunity

cost of a pipeline right-of-way. Once location and construction problems have been overcome, pipelinetransport causes the least external cost and ecological damage of all modes of transport.

(g) Pipeline transport can offer international service. However, such services were confined to Overland

crude oil and natural gas supply, and in limited cases petroleum products carriage between neighboring

countries. Although pipelines can be built under the sea, such a process is both economically and

technically highly challenging, so the majority of oil at sea is transported by tank ships. All international

trade of crude oil and petroleum products that involves long-distance and trans-oceanic carriage is

done by ship. Despite the fact that tank ships run empty during return trips, pipeline transport can only

compete with sea transport between the same origin and destination if the pipeline route is

considerably shorter than the sea route, or where sea transport is subject to exceptionally high charges.

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In general, pipelines offer the following advantages over other modes of transportation:

Low unit cost ($/ton/km),

High reliability, such as immunity to weather condition among others,

Safety (low number of incidents/km/year),

Low environmental impact, including low spillage,

High land utilization. Right-of-way may use multiple lines.

For the volumes and distances encountered in typical Exploration & Production applications, pipelines

usually offer the most cost-effective solution. When compared to other forms of transports, pipelines are

considered one of the safest forms of transporting hydrocarbon.

Although during the construction phase, some limited environmental impact is unavoidable, during the

operational phase, pipelines have the least environmental impact compared to other modes of transport.

Limitation of pipeline transportation of Petroleum, Petroleum products & Natural gas

Pipelines on the other hand, do have certain disadvantages, including:

Fixed location,

High capital cost,

Long lead-time for construction, and

Limited throughput flexibility.

Once installed, a pipeline offers no flexibility to change inlet or outlet point. Although operational costs are

low, pipelines are relatively expensive to install and usually take 2 to 3 years to become operational.

Moreover, a pipeline presents only limited flexibility with respect to throughput changes.

4. Explain feasibility study of pipeline development in detail.

Feasibility Study: A project begins with a feasibility study. The objective of a feasibility study is to investigate

and establish whether a prospective project merits further consideration. Usually this phase is spearheaded

by the sponsor department, with engineering, cost and market specialists playing significant roles.

Several alternative engineering options are typically developed. Each option is fully evaluated with respect to

the following:

Physical, technological and statutory constraints,

Project options

o Advantage and disadvantages,

o New/novel techniques required,

o Possible problem areas,

o Resource requirement,

Areas requiring additional data,

Technical risk evaluation, and

Capital and operating cost estimates (accuracy +/- 25 %)

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Preliminary design at this level is limited to system layout, capacity requirement, calculation of preliminary

pipe diameter and wall thickness, material selection and corrosion protection. In offshore projects, the

method of installation is also identified.

Feasibility study includes but not limited to the following:

Planning and Evaluation: Before initiating a pipeline as a commercial venture, it must be shown that

for the economic life of the pipeline the users will ship sufficient volumes at the established tariff to

enable the owners of the pipeline to repay their loan, meet the operating and maintenance costs, and

return a profit to compensate for the risk element and warrant the investment. The disadvantages of

pipeline transport lie mainly in its extreme functional specialization and dependence upon sustained

high volume traffic. The initial cost of installation is high and justified only when both the demand and

supply will continue for a long time. Exhaustion of wells brings the utility of the pipeline to an end and its

salvage value may be low (i.e. the sunk cost proportion is high). For this reason (in oil producing regions)

gathering pipelines are mostly laid on the surface of the ground, because they may need to be movedfrom time to time as wells become depleted.

When the opening of a new oil-producing area is considered, geologists need to confirm the significance

of the oil find, estimate the reserves and determine production capacity. This is the basis for estimating

expected throughput. Petroleum industry specialists study potential markets and the value of future

production. They forecast conditions that might affect the pipeline, directly or indirectly, over the next

15 to 20 years, such as the state of the economy; shifts in population; product demand growth; refinery

construction; expansions and shutdowns; domestic and foreign crude oil production; prospects for

competitive pipelines; industry changes; and government actions. These aspects are considered in

detailed technical, financial and economic appraisals.

Technical appraisal is concerned with, among other aspects, physical, design and environmental

matters as they relate to the construction process and the operation of the project after it is completed.

The financial evaluation process focuses on the business and financial details, primarily the expected

costs and revenues of the enterprise responsible for the project. Financial appraisal is used to determine

the quantum of funds that will be required and whether the venture is likely to be financially viable

that is, whether it can meet its financial obligations, produce a reasonable return on the capital invested,

and make a contribution from earnings toward the cost of future investments. If the pipeline is a joint

venture, those involved form a company, secure throughput agreements and arrange for financing.

Economics of pipeline transportation

The Economic Assessment of a pipeline necessitates the investigation of several alternatives inorder to determine whether the project is justified in terms of the economic resources its

commercial existence will require.

o Firstly, alternative locations/ routes for laying of the pipeline may have to be compared. The

shortest and most direct alignment between origin and destination might initially be preferred (for

example, in the case of a crude oil pipeline that delivers its entire payload at one destination).

However, deviations may be necessary because of topographic obstructions and other

environmental considerations, present land uses, difficulty in obtaining rights-of-way, and the need

to pass near some supply or delivery point or to skirt heavily populated areas (for example, in the

case of a products pipeline that has delivery points along the route). Bearing in mind that the

largest delivery point (or customer) is usually the one at the end of the line, the route alignment

should not be located so circuitously that it unnecessarily puts the customer(s) at the end of the line

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at a distance and tariff disadvantage in favor of intermediately located delivery points/customers. In

this case the economic trade-off is between a circuitously located pipeline and one with a direct

alignment, but with small lateral branch delivery lines along the way.

o A second consideration may be the size of the pipeline, since one with a larger diameter, able to

handle a greater traffic volume, involves higher initial investment cost but lower costs for pumps

and energy to propel the pumps. Large-diameter trunk pipelines are an important factor in making

it viable to extract crude oil in remote regions and convey it to refineries or exporting seaports. This

is because the unit cost of transporting commodities by pipeline decreases as the diameter of the

pipe increases. This economy requires that the total quantity handled be sufficient to keep the

pipeline full. A prerequisite for successful pipeline transport is proper sizing for the quantity of oil

that will be carried.

o A third decision concerns the choice of pump technology. Most pumps are driven by electric

motors, although diesel engines or gas turbines can also be used. The benefit of electric propulsion

is its low cost and the economy of remote-controlled operation. However, with the likelihood of

high electricity price increases and that service reliability can be jeopardized by electric powerfailures, diesel propulsion may become an economic contender for electric propulsion.

o A fourth important consideration is whether the refinery should be located at the beginning of the

line (upstream, close to the oil field or the port of entry) or at the end of the line (downstream,

close to the market). The need for the latter investigation arises from the fact that the cost of

carriage varies between commodities. The greater the viscosity and the density (i.e. mass in relation

to volume) of the commodity to be carried, the more difficult it is to pump and therefore the higher

the cost. For example, crude oil is substantially more expensive to carry over long distances than

the lighter and more fluid petroleum products that are refined from it. The greater the volumes to

be carried and the longer the distance concerned, the more economical it may become to locate

the refinery at the lines origin. Upstream refinery location also enables the provision of

downstream delivery points along the line, which can improve the efficiency of product distribution.

o The fifth step in the economic evaluation is to compare the pipeline cost with the cost of the next

best transport alternative, which is usually rail transport.

o If the above-mentioned investigations indicate that a pipeline promises to be technically feasible,

financially viable and economically justified, detailed design of the pipeline may commence.

o The major feature in the system's design is the pipe, even though it is usually almost entirely buried.

o Selecting the specific pipe for a given project is affected by economic factors as well as by the

nature of the commodity, expected throughput, terrain and construction conditions.

Market Structure and Ownership Patternso Pipeline transport is usually provided by private users for their own (ancillary) purposes, or by

common carrier acting on behalf of all the shippers linked to the pipeline. The supply of pipeline

transport, in terms of the number of market participants, is the most highly concentrated of all

transport modes. The absolute number of firms is low, but the significant measure of concentration

is the number of participants in a specific transport market segment or transport corridor. With a

few exceptions, there is but one crude oil, one products and one natural gas pipeline connecting

producing areas or refineries and areas of consumption. High degree of monopoly power results

from declining unit costs with increases in capacity, so that the lowest costs are achieved by a

concentration of output in a single pipeline. A high degree of concentration is efficient, and changes

toward a more competitive market structure through economic regulation would entail high losses

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in efficiency. Therefore, pipeline operations that can fulfill entire market demand are pure natural

monopolies.

o Where the distance between supply points (such as geographically separated oil fields or ports of

entry) is high in relation to the delivery distance to the market area, such an areas fuel demand can

often be most efficiently fulfilled by two or more different pipeline operations.

o Because of the high capital costs of a pipeline, the financial barrier to entering the market is high.

Owing to the inflexible capacity limits of a pipeline once installed and the maximum flow rate at

which pumping can take place, a new method of moving the product (such as by road or rail) needs

to be found once the flow rate reaches pipeline capacity and replacement with a pipe of larger

diameter or a second pipe is not feasible.

o In view of the above-mentioned considerations financial stakeholders in pipeline operations tend to

consolidate and start with a large initial investment, which tends to yield higher returns, partly

because of economies of scale and partly because of inherent performance characteristics (for

example, a 30-cm pipe operating at capacity transports three times the quantity carried by a 20-cm

pipe).o The gains from scale are substantial. For example, the lowest cost for a throughput of 100,000

barrels of crude oil per day in a 45-cm pipeline would be approximately double the cost per barrel

when compared to carrying 400,000 barrels per day in an 80 cm pipeline over the same distance.

o The implications for the industry are important. It would be extremely wasteful, for example, for

four competing refineries in a consuming area in which each used crude oil from the same area of

origin to build four pipelines. If, for example, each required 100,000 barrels per day, then building

four parallel 45-cm pipelines instead of a single 80-cm pipeline would double the cost per barrel for

transport. Efficiency dictates a common system for use of the same pipeline in such circumstances.

It also follows that costs for carrying petroleum on a route that has a large pipeline will be much

lower than on other routes not thus provided. There will be external economies in locating large

refining capacity in the same area.

COST STRUCTURE: Pipelines provide their own right-of-way. Once the investment is made, the

remaining operating costs are low. Since the pipe component, the pumps, and the tank and plant

facilities are highly specialized and durable, fixed cost constitutes a high portion of the total cost the

highest proportion of all modes.

Fixed Cost:The fixed costs of pipeline transport can be classified in a sequence from almost permanently

fixed through to items those are fixed for a one-month period:

Pipeline right-of-way (right-of-use);

Pipes;

Storage facilities;

Operations-related terminal buildings;

Pumps;

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Management and administration overheads;

Routine maintenance of facilities, pipes and pumps; and

Monthly charge for a continuous minimum availability of electricity supply.

In the construction of the long-run cost function, the three principal fixed cost components are as follows:

(a) Those that change with pipe diameter;

(b) Those that change with pumping power; and

(c) Those that change with length of pipeline.

Fixed costs that change with pipe diameter include the interest and the depreciation on the pipeline itself,

the costs of constructing/laying the pipeline, the costs of steel, pipe coating, valves and corrosion protection,

and scheduled maintenance costs of the pipeline. Although these costs rise as pipe diameter increases, the

rise in costs is less than proportional to the increase in diameter. For example: the width of the pipeline

right-of-way (i.e. the cost of the servitude) remains the same regardless of pipeline diameter; in most cases

the width of the trench in which the pipe is laid remains the same (or increases very little); whenever wall

thickness remains the same or it increases to a lesser extent than the increase in the diameter,

proportionally less steel is needed as the inside diameter of pipes increases; unavoidable routine inspection,

monitoring and general management costs for a large pipeline are only fractionally more than for a small

pipeline of the same length.

Fixed costs that change with pumping power include the interest and depreciation on the investment in

pumping stations and the outlays for electric power, plus the unavoidable labor used in the routine

maintenance and the operation of pumping stations. Fixed costs that change with length of pipeline rise in

direct relation with increases in distance. These costs include the initial costs of surveying and obtaining

right-of-way and of the pipe, additional pumps, tankage, trenching and laying the pipe, backfilling the trench

and restoring the surface, damages to terrain crossed, and scheduled (preventive) maintenance and

operation of a communications system. Hence longer pipelines do not give rise to significant economies of

distance, as directly proportional longer or more of each of these items is required for longer haulage

distance.

Furthermore, the terminal costs are relatively small. Thus the cost per ton-kilometer is sensitive to the

regularity of flow but not to the length of the pipe. Consequently there is no distinct taper in the tariffs

charged per ton-kilometer as the length of haul increases.

Variable Cost: The only discernible variable costs (where variable costs refer to cost items with a

commitment period of less than one month) in pipeline transport is the electricity (or other energy)

consumed during pumping over and above the volume that is paid under the fixed availability charge,

overtime wages paid to maintenance staff to repair faulty components, and the actual repair costs over and

above routine or preventive maintenance. On the principle of economies of density, an increase in pipe

diameter can result in a lower unit cost. An uninterrupted and prolonged throughput of a large volume ofhomogeneous commodity increases economies of density. Should such continuous pumping with a specific

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commodity not be sustainable, common production can make petroleum products pipelines more efficient,

since a variety of petroleum products can be pumped consecutively, thereby enhancing the achievement of

economies of scale through economies of scope.

The fundamental relationships involved depend upon the principles of geometry concerning the relation

between the surface of a cylinder and its volume. Consider a circular cross-section of a pipe: because the

area of a circle is r2, the area of the circle will increase with the square of the radius. The circumference will

increase only in proportion to the radius, since the circumference is 2r. The friction that must be overcome

to move a liquid commodity through a pipe is the friction between the liquid and the wall of the pipe.

Therefore, increasing the diameter of a pipe will increase the quantity of liquid in the pipe faster than it will

increase the area of the wall of the pipe in contact with the liquid. Consequently, there are gains in

economies in the propulsion power required to pump the same quantity of commodity from increasing the

diameter of the pipe. There are also economies in the cost of the pipe itself: For larger pipes the number of

tons of steel for casings per unit of pipeline capacity is less than for smaller pipes. The only effective limit on

the diameter of a new pipeline comes from the demand-side of the market. There is no sense in buildingpipelines of larger capacity than will be used in the future.

The economic problem in planning and pricing pipeline services is determining the lowest possible unit cost

per ton-kilometer for the level of expected throughput. This, in turn, requires determining the optimum

combinations of pipe diameter and pumping power required for each level of throughput. The size of the

pipeline is important, since a larger one, able to handle a greater traffic volume, involves higher capital costs

but lower costs for pumps and operations, and less electricity or other energy costs to run the pumps.

5. Explain designing of pipeline project.

Once the feasibility study has identified the best option, approval is usually given to proceed to the definitive

phase. At this stage, a conceptual design is carried out in which the feasibility study is taken to a higher level.

During this conceptual design stage, option selection, route survey, hydraulic analysis and any optimizations

remaining from the feasibility study are carried out. Any outstanding issues remaining are addressed.

Baseline documents such, as the Basis for Design (BFD), and Project Specifications are normally prepared.

During conceptual design, the following factors are usually considered.

Projection of supply: reserves and production rates.

Route selection, Line sizing based on

o Hydraulics requirements,

o Mechanical requirements,

Corrosion and material selection,

Corrosion protection,

Coating requirements/selection, and

Safety and environmental considerations, including environmental impact and risk assessment.

A detailed cost estimate is developed at this stage to prepare a firm budget proposal, which serves as the

basis for final investment decision (FID). It is based on an estimate of material, construction, operating and

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maintenance costs. Usually, the estimate for capital cost, at this stage is refined to +/- 15 percent accuracy.

Operating costs at this stage is often modeled as a percentage of capital costs plus a variable charge based

on per barrels of oil, or cubic meter of gas throughput rate.

Economic Pipe Diameter: For a given flow rate of a given fluid, piping cost increases with diameter. But,

pressure loss decreases, which reduces potential pumping or compressing costs. An economical balance

between material costs and pumping costs is important for designing the pipelines.

The optimum pipe size is found by calculating the smallest capitalization/operating cost; or using the

entire pressure drop available; or increasing velocity to highest allowable.

The economic diameter will be the one which makes the sum of amortized capital cost plus operating

cost minimum. The total cost can be per unit time or per unit of production.

An approximate correlation for estimation of economic diameter is as below:

Am

0.45

0.027

de = ------------------

0.31

Where

de = Economic diameter, inch

m = Mass flow rate lb/hr

= Fluid density, lb/ft3

A = Constant = 1.7

= Viscosity, cp

Detailed Design

After the final approval is given for the project to proceed, the detailed pipeline design commences. The

design of a pipeline is a complicated process involving computer analysis, and is usually done by in-house

specialists, engineering consulting companies or pipeline contractors. Pipeline design usually includes the

following:

1. Route selection and survey,

2. Environmental impact and risk assessment study,

3. Corrosion and material selection,

4. Coating selection,

5. Mechanical Pipeline Design, and

6. Hydraulics Analysis and Line Sizing.

Route Selection and Surveying

Several possible pipeline routes are surveyed by aerial photography and surface mapping usually during the

conceptual design stage. The final route is selected to optimize its economic design, construction and cost

effective operation with minimal environmental impact. The following factors are taken into consideration in

selecting a pipeline route:

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Safety of public,

Safety of construction and operations personnel,

Protection of the environment,

Protection of other property and facilities,

Geothermal and hydro-graphical conditions,

Requirements for construction, operation and maintenance,

National and local requirement,

Terrain feature, topography and population centers,

Economics considerations.

After finalizing the pipeline route, a detailed site survey is made, and the route is staked with firmly fixed

markers.

Offshore pipeline route selection includes considerations of the following:

Shore approach,

Nature of the seabed,

Avoidance of obstructed or rocky zones,

Sea traffic,

Undesirable bottom feature, and

National sovereignty consideration.

Environmental Impact and Risk Assessment Study

Environmental impact and risk assessment studies are a major consideration in selecting the pipeline route.Both short term and long term environmental impacts need to be considered. Short-term impact involves

damages during the construction phase, while long-term impact considers the presence of the pipeline

during its operational life and potential loss of fluid due to accident or pipe rupture. Normally, this work is

contracted out to a consulting company, specializing in environmental impact studies.

Corrosion and Material Selection

Selection of the pipeline material type is a fundamental issue, which is usually decided during the conceptual

design stage, but again revisited during the detailed mechanical design. The most frequently used pipeline

materials are metallic. Non-metallic materials, such as GRP/GPE may be cost effective for specific low-pressure operation, especially when transporting corrosive fluids. See Pipeline Mechanical Design

Considerations under the Mechanical Design subtopic for more information on pipeline material and

property.

Coating Selection

All metallic buried pipelines need to be coated externally by a suitable anti-corrosion coating, supplemented

by cathodic protection. The type of coating depends on operating temperature. Common coating types are

Polyethylene (PE) and Fusion Bonded Epoxy (FBE), which may be used up to 60C and 70C respectively.

Some higher temperature coatings are available but at significantly increased cost. For offshore applications,

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asphalt enamel corrosion coating is often used, especially in combination with concrete weight coating. See

Onshore Construction of the subtopic Construction for more information on pipeline coating.

During detailed design, the same parameters considered in the conceptual study are re-examined, but in

greater detail. The end product of detailed design is the Tender Documents. These documents usually

contain the following:

All basic project data

Design data

All specifications,

Material list,

All fabrication and construction phase drawings, and

Company requirements, such as,

o Operational philosophies,

o Know-how,

o Standards,

o Practices,

o Procedures, and

o Contractual information.

Further discussions on detailed pipeline design can be found in the Hydraulics and Mechanical Design

subtopics.

Medium Length Questions:

1. Explain the role of a pipeline engineer.

Pipeline engineering is a multi-faceted, complex and challenging occupation where you can apply your

engineering skills to real time operations of the oil and gas industry. Oil and gas pipelines function much

like a railway network, with long and short lines and numerous pick-up and drop-off points along the way.

While trains carry people, freight, tankers and grain cars above the ground, pipelines move oil and gas

products such as crude oil, natural gas and refined petroleum products beneath the ground. Products we use

everyday such as fuel for our cars, or gas to heat our homes are transported through these pipelines.Pumping stations, storage terminals, gas compressor stations, pipelines, manifolds, and control systems are

some of the facilities that Pipeline Engineers design, construct, operate and troubleshoot.

What does a Pipeline Engineer do?

Pipeline Engineers typically perform duties associated with:

Planning and design

Construction

Integrity and corrosion control

Troubleshooting Consulting and project management

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Every field of engineering is used to ensure the safe and efficient operation of this vital component of the oil

and gas industry.

Pipeline engineering is a multi-faceted, complex and challenging application of engineering skills to real

time operations of the oil and gas industry. Oil and gas pipelines function much li ke a railway network, with

long and short lines and numerous pick-up and drop-off points along the way. Pipelines move oil and gasproducts such as crude oil, natural gas and refined petroleum products beneath the ground. Products we use

everyday such as fuel for our cars, or gas to heat our homes are transported through these pipelines.

Pumping stations, storage terminals, gas compressor stations, pipelines, manifolds, and control systems are

some of the facilities that Pipeline Engineers design, construct, operate and troubleshoot.

2. Draw a general layout of a pipeline system. Name different types of pipelines.

VARIOUS PIPELINES

Cross Border Pipelines,

Cross Country Pipelines,

Transmission Pipelines,

Regional Pipelines,

Spur Pipelines,

Flow Pipelines,

Group Gathering Pipelines,

Dedicated Pipelines,

3. Explain various components pipeline.

1. Line pipe is the basic component of every pipeline. Line pipe is usually metallic, such as carbon steel or

corrosion resistant alloy. Non-metallic materials are also becoming increasingly used. Line pipe is

normally supplied from approved pipe mills in 12-meter lengths with a specified external coating.

1 Pig Traps are required to allow the safe loading, launching, receiving and retrieval of pigs without

disrupting the fluid in the pipeline. Most pipelines usually require routine as well as intelligent pigging to

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monitor the condition and the integrity of the line. Pig traps are always installed on all pipelines, unless

it can be justified not to install them.

2 Block Valve Stationsare used to isolate section of the pipeline and limit the release of line contents in

the event of a leak or pipeline rupture. For liquid lines, the spacing is usually based on limiting potential

spill volume for pollution consideration. For gas lines, spacing is mainly based on safety and economic

factors. Topography and ease of access are also taken into consideration.

3 Emergency Shut-Down Valves (ESD) are installed at both end of a pipeline to enable automatic

shutdown of the line in the event of an emergency.

4 ASlug Catcher is installed at the end of a multi-phase pipeline to intercept the liquid slugs and to ensure

a continuous flow of gas into the receiving station.

5 Cathodic Protection System is usually installedas a backup to the external coating to prevent corrosion

of the external surface of the pipeline.

6 A Pressure Protection System is required to protect a pipeline when the line pressure exceeds the

Maximum Allowable Incidental Pressure (MAIP). Either a Pressure Safety Valve (PSV) or a High Integrity

Pressure Protection System (HIPPS) is usually installed.7 A Telemetry System is required to permit pipeline monitoring and remote operation from a central

location.

8 Leak Detection Systemis often installed in a pipeline to warn that a leak has occurred. The requirement

and the type of leak detection system depend upon the transported fluid, sensitivity of the environment

and the location class.

Figure -4illustrates some of the components of a pipeline.

4. Which are the factors considered while selecting a route for pipeline?

Several possible pipeline routes are surveyed by aerial photography and surface mapping usually during the

conceptual design stage. The final route is selected to optimize its economic design, construction and cost

effective operation with minimal environmental impact. The following factors are taken into consideration in

selecting a pipeline route:

Safety of public,

Safety of construction and operations personnel, Protection of the environment,

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Protection of other property and facilities,

Geothermal and hydro-graphical conditions,

Requirements for construction, operation and maintenance,

National and local requirement,

Terrain feature, topography and population centers,

Economics considerations.

After finalizing the pipeline route, a detailed site survey is made, and the route is staked with firmly fixed

markers.

Offshore pipeline route selection includes considerations of the following:

Shore approach,

Nature of the seabed,

Avoidance of obstructed or rocky zones,

Sea traffic,

Undesirable bottom feature, and

National sovereignty consideration.

5. Describe different types of cost associated with a pipeline project.

Pipelines provide their own right-of-way. Once the investment is made, the remaining operating costs are

low. Since the pipe component, the pumps, and the tank and plant facilities are highly specialized and

durable, fixed cost constitutes a high portion of the total costthe highest proportion of all modes.

Fixed Cost: The fixed costs of pipeline transport can be classified in a sequence from almost

permanently fixed through to items those are fixed for a one-month period:

Pipeline right-of-way (right-of-use);

Pipes;

Storage facilities;

Operations-related terminal buildings;

Pumps;

Management and administration overheads;

Routine maintenance of facilities, pipes and pumps; and

Monthly charge for a continuous minimum availability of electricity supply.

In the construction of the long-run cost function, the three principal fixed cost components are as follows:

(a) Those that change with pipe diameter;

(b) Those that change with pumping power; and

(c) Those that change with length of pipeline.

Fixed costs that change with pipe diameter include the interest and the depreciation on the pipeline itself,

the costs of constructing/laying the pipeline, the costs of steel, pipe coating, valves and corrosion protection,

and scheduled maintenance costs of the pipeline. Although these costs rise as pipe diameter increases, the

rise in costs is less than proportional to the increase in diameter. For example: the width of the pipeline

right-of-way (i.e. the cost of the servitude) remains the same regardless of pipeline diameter; in most cases

the width of the trench in which the pipe is laid remains the same (or increases very little); whenever wall

thickness remains the same or it increases to a lesser extent than the increase in the diameter,proportionally less steel is needed as the inside diameter of pipes increases; unavoidable routine inspection,

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monitoring and general management costs for a large pipeline are only fractionally more than for a small

pipeline of the same length.

Fixed costs that change with pumping power include the interest and depreciation on the investment in

pumping stations and the outlays for electric power, plus the unavoidable labor used in the routine

maintenance and the operation of pumping stations. Fixed costs that change with length of pipeline rise indirect relation with increases in distance. These costs include the initial costs of surveying and obtaining

right-of-way and of the pipe, additional pumps, tankage, trenching and laying the pipe, backfilling the trench

and restoring the surface, damages to terrain crossed, and scheduled (preventive) maintenance and

operation of a communications system. Hence longer pipelines do not give rise to significant economies of

distance, as directly proportional longer or more of each of these items is required for longer haulage

distances.

Furthermore, the terminal costs are relatively small. Thus the cost per ton-kilometer is sensitive to the

regularity of flow but not to the length of the pipe. Consequently there is no distinct taper in the tariffs

charged per ton-kilometer as the length of haul increases.

Variable Cost: The only discernible variable costs (where variable costs refer to cost items with a

commitment period of less than one month) in pipeline transport is the electricity (or other energy)

consumed during pumping over and above the volume that is paid under the fixed availability charge,

overtime wages paid to maintenance staff to repair faulty components, and the actual repair costs over and

above routine or preventive maintenance. On the principle of economies of density, an increase in pipe

diameter can result in a lower unit cost. An uninterrupted and prolonged throughput of a large volume of

homogeneous commodity increases economies of density. Should such continuous pumping with a specific

commodity not be sustainable, common production can make petroleum products pipelines more efficient,

since a variety of petroleum products can be pumped consecutively, thereby enhancing the achievement of

economies of scale through economies of scope.

The fundamental relationships involved depend upon the principles of geometry concerning the relation

between the surface of a cylinder and its volume. Consider a circular cross-section of a pipe: because the

area of a circle is r2, the area of the circle will increase with the square of the radius. The circumference will

increase only in proportion to the radius, since the circumference is 2r. The friction that must be overcome

to move a liquid commodity through a pipe is the friction between the liquid and the wall of the pipe.

Therefore, increasing the diameter of a pipe will increase the quantity of liquid in the pipe faster than it will

increase the area of the wall of the pipe in contact with the liquid. Consequently, there are gains in

economies in the propulsion power required to pump the same quantity of commodity from increasing the

diameter of the pipe. There are also economies in the cost of the pipe itself: For larger pipes the number of

tons of steel for casings per unit of pipeline capacity is less than for smaller pipes. The only effective limit on

the diameter of a new pipeline comes from the demand-side of the market. There is no sense in buildingpipelines of larger capacity than will be used in the future.

The economic problem in planning and pricing pipeline services is determining the lowest possible unit cost

per ton-kilometer for the level of expected throughput. This, in turn, requires determining the optimum

combinations of pipe diameter and pumping power required for each level of throughput. The size of the

pipeline is important, since a larger one, able to handle a greater traffic volume, involves higher capital costs

but lower costs for pumps and operations, and less electricity or other energy costs to run the pumps.

6. What is an economic diameter of pipeline ?

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For a given flow rate of a given fluid, piping cost increases with diameter. But, pressure loss decreases,

which reduces potential pumping or compressing costs. An economical balance between material costs and

pumping costs is important for designing the pipelines.

The optimum pipe size is found by calculating the smallest capitalization/operating cost; or using the

entire pressure drop available; or increasing velocity to highest allowable.

The economic diameter will be the one which makes the sum of amortized capital cost plus operating

cost minimum. The total cost can be per unit time or per unit of production.

An approximate correlation for estimation of economic diameter is as below:

Am0.45

0.027

de = ------------------0.31

Where

de = Economic diameter, inch

m = Mass flow rate lb/hr

= Fluid density, lb/ft3

A = Constant = 1.7

= Viscosity, cp