CHANGING DYNAMICS

OIL & GAS PIPELINE

10/5/2011

BY: K. K. Sinha, CEO & Director

Essar Ports Limited

CONTENTS

• Introduction

• Present Scenario and Growth

• Technological Developments

• Regulations

• Issues and Challenges

• Conclusion

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INTRODUCTION

• First “pipeline“ in history was installed for transporting the Cirò, during old

Italy/Greece civilization.

• A 31 KM brine line in Reichenhall and Traunstein in Germany, built between 1617

and 1619

• The first potable water pipeline of 30 Km length built in 1860 in Australia.

• Discovery of Oil resulted in development of pipelines for transporting Oil

• Pipeline is the most economical and eco-friendly way of transporting liquid and

gaseous fluids.

• Pipelines needs Huge investment and therefore the Focus is on Project Cost

Reduction and safe and efficient operation. Technological developments support the

same.

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PRESENT SCENARIO AND GROWTH

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Around 6200 Km of Crude, 10600 Km of Product and 2200 Km of LPG Pipeline

PRESENT SCENARIO AND GROWTH

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• India had around 6200 Km – 93 MTPA of Crude, 10600 Km – 66 MTPA of Product

and 2200 Km- 4 MMTPA of LPG Pipeline cross country pipeline as on March 2010.

Besides we have around 10,800 km with capacity to carry 270 million standard cubic

metres of gas per day (mmscmd).

• India is net importer of Crude, and exporter of Petroleum Product,- with Present

Refinery capacity of around 184 MMTPA. Further addition at Bhatinda, Vadinar, Bina

and Paradeep

• Natural gas, almost negligible at the time of independence – around 47.51 billion

Cubic meters in 2009-10 further going up.

• Major pipeline projects are underway, which will add another 7,450 km and 248

mmscmd to our gas transport infrastructure.

• International Gas pipeline from Iran to India via Pakistan is also planned but it

depends upon the Political situation.

PRESENT SCENARIO AND GROWTH

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• The City gas distribution (CGD) is a fastest growing segment in the natural gas

industry in India

• Analysts say that CGD sector currently consumes 5-6 per cent of the total available

gas, but is set to quadruple in a few years.

• PNGRB expects the city gas distribution network to spread to 100 cities by the end of

the Eleventh Five-Year Plan (2012).

• Presently, gas demand exceeds supply by 30 per cent and further rising sharply.

• Coal Based Methane (CBM) production has already started and will play an

important role as one of the prime energy sources in near future

• Shale Gas can be another source of energy in future for India. Schlumberger, has

pegged the reserves of gas in shale deposits across the country at 300 times higher

than KG basin

PRESENT SCENARIO AND GROWTH

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• Once Shale Gas gets is produced , it will lead to huge demand for corresponding

pipeline network

• Above clubbed with sustained GDP growth the pipeline network and capacity

specially the Gas pipelines is poised to grow substantially

• Technological developments in Construction and Operation of pipelines should be

adapted by industry to support the growth

TECHNOLOGICAL DEVELOPMENTS

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Construction:

Automatic Welding:

Designed to outfit pipeline welders with a seamless,

rugged solution for pipeline welding, resulting in

• Increase of Production rate

• Quality improvement

TECHNOLOGICAL DEVELOPMENTS

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Automatic Ultrasonic Testing:

• Automatic Ultrasonic testing delivers instant online

NDT results

• Avoid Health Hazard of Radiography

• Works in vicinity do not get affected, reducing

overall construction time.

TECHNOLOGICAL DEVELOPMENTS

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Horizontal direction drilling (HDD):

• HDD facilitates crossings of huge water bodies and other structures falling in pipeline

routes.

• Particularly useful the linkage of offshore with onshore plants

HDD Offshore Application

TECHNOLOGICAL DEVELOPMENTS

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Coating of pipeline:

• Introduction of polyethylene and poly propylene coating of pipeline has increased the

life of pipeline.

• Sleeve coating has significantly reduced the field coating application time.

Vacuum drying of pipelines:

• Old methods like running a pig train and super drying are being phased out by

Vacuum Drying.

• For Vacuum Drying the pipelines are brought to 4-5 Torr ( 1 Torr = 1.3 mbar),

reducing the moisture content to Dew Point of -5 Deg C, the desired value for

introducing gas in the pipeline.

• Cost effective in comparison to Pig Train and super drying.

TECHNOLOGICAL DEVELOPMENTS

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Operation:

Intelligent pigging of pipeline:

• Intelligent pigging helps in determining the present health and balance life of pipeline.

• Assists in determining flaws developed in the pipeline, in turn helps to avert

disastrous incident.

Tubelining Technology :

• Delivers a harden, corrosion resistant thick-film coating on the inside surface of

existing buried pipe

• The process is good to add significant strength to heavily corroded/pitted pipelines. a

• Potential to provide operators a low-cost alternative to pipeline replacement. Can be

evaluated and implemented as per the requirement

TECHNOLOGICAL DEVELOPMENTS

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New Technology to Reduce Oil Transportation Costs via Viscosity Reduction

• Viscosity reduction can improve the flow ability and rate thereby reduction in energy

consumption., thereby the cost

• Traditionally Viscosity reduction is achieved through heating the crude especially in

heavy / waxy crude.

• Research shows that using electromagnetism, with an innovative in-line device short,

precise electric pulse when bursts in the fluid flow, can reduce the Viscosity

• It takes around 12 Hrs for the oil to come to its original Viscosity.

• Flow increase by around 10 percent

• Still under field trials . Can be an alternative method for viscosity reduction when the

technology becomes proven in future.

POLICY AND REGULATIONS

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• Laying of Pipelines is governed by Petroleum and Minerals Pipeline Act 1962

• In Nov 2002 Govt. of India issued guidelines for laying Petroleum Product Pipe

Lines, wherein Pipeline were categorized and captive usage Pipeline and common

usage.The procedure for installation of Common usage Pipelines was announced.

• The Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted under

The Petroleum and Natural Gas Regulatory Board Act, 2006 notified via Gazette

Notification dated 31st March, 2006.

• In Dec’06, MOPNG announced policy for Development of Natural Gas Pipelines and

City or local Natural Gas distribution Networks with a objective promote investment

from public as well as private sector

Regulations have a significant bearing on investment flow in infrastructure

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POLICY AND REGULATIONS

ISSUES AND CHALLENGES

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• Timely completion of pipeline Project largely depends on the Land ROU/ Acquisition,

environment/ forest/ CRZ clearance etc.

• Leak due to corrosion, accidents, theft and sabotage is a challenge during Operation

• Repair of leaks is also an issue, especially in remote areas, submerged and densely

populated City areas. On Line repairs are used to rectify the leaks emptying out is

very difficult.

• Non availability of consolidated Drawing of all facilities in City Gas distribution

pipelines is a major hurdle .

• Multiple agencies like Municipality, P&T, Electricity Boards etc. thereby several

clearances for City Gas distribution Pipeline

CONCLUSION

Pipeline owners/operators to critically examine every aspect of pipeline

development including Design/Engineering, cost of procurement,

construction and safe operation to reduce the overall cost of transportation.

This will allow long term sustenance of pipeline as the most preferred mode

of transportation.

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