Regulations, technologies aim at safer, more reliable pipeline systems

Jan. 7, 2002
Government actions and markets will combine in 2002 to set pipeline operators´ priorities for several years.

"The roiling effects of Sept. 11, 2001, have turned the US Congress toward protecting the nation´s energy infrastructure against outside threats."

Government actions and markets will combine in 2002 to set pipeline operators´ priorities for several years.

Deadlines for major US regulatory initiatives, which often set the bar for operators´ decisions and actions in the rest of the world, will focus attention on safer more reliable systems and on ensuring qualified personnel operate them.

The marketplace as well as regulatory pressures have already brought about numerous technological changes in pipeline design, construction, operations, and maintenance. An analysis by Canadian researchers focuses on recent and future trends.

Major projects completed in 2001 or well under way in 2002 point towards the future of pipeline construction-opening major producing areas and connecting major consuming markets.

US pipeline legislation

Reauthorization through 2003 of both the Natural Gas Pipeline Safety Act and the Hazardous Liquid Pipeline Safety Act seemed assured a year ago (OGJ, Jan. 7, 2001, p. 70). Both expired Sept. 30, 2000. US Senate-passed versions only awaited House of Representatives´ action, then compromise and final passage.

But 2001 has ended with no further action. And, even if Congress had made progress toward final enactment, that would likely have fallen victim to the roiling effects of the events of Sept. 11. Congress has turned to protecting the nation´s energy infrastructure against outside threats (OGJ Online, Oct. 2, 2001).

The House may take up the legislation again in first quarter 2002, possibly as early as February. But there appears no sense of urgency.

And that has frustrated industry. In November 2001, a group of its leaders along with such major associations as American Petroleum Institute, American Gas Association, the Association of Oil Pipelines (AOPL), and the Interstate Natural Gas Association of America issued a call for effective, national pipeline safety legislation.

The letter to US Department of Transportation Secretary Norman Mineta said such safety legislation should be guided by principles that include increasing safety and enhancing public confidence in the nationwide pipeline network, providing for an adequately staffed and appropriately funded Office of Pipeline Safety, and recognizing DOT´s actions to implement new rules for enhancing pipeline integrity and ensuring pipeline operator job qualifications.

The heat was already on DOT from a report in September 2001 from the nonpartisan General Accounting Office warning Congress that OPS still had not met some key recommendations from the National Transportation Safety Board, some 10 years old.

GAO said the agency had not acted on 11 of 22 NTSB recommendations. They include items such as periodic internal pipeline inspections and automatic shut-off valves.

OPS told GAO last summer it anticipated the last series of rules could be ready by fall 2002, but the events of Sept. 11 have redirected agency attention.

And only last month, top oil pipeline industry representatives urged immediate enactment of four pipeline safety regulations, currently pending DOT final review.

In letter to Sec. Mineta, AOPL and API said that "effective pipeline safety oversight and regulation [by DOT] are essential to ensure public confidence in our nation´s pipeline system."

In 2001, said AOPL in an accompanying statement, DOT completed action on several important oil pipeline safety regulations. These four additional regulations will:

  • Provide for additional repair criteria when test results become available.
  • Delineate integrity management in high-consequence areas (HCAs) for small liquid pipelines; similar regulations for larger lines are already in place.
  • Update corrosion control and prevention rules.
  • Lower accident reporting thresholds (to 5 gal from 2,100 gal).

Regulation

But significant pieces of safety regulation for US pipeline operators, already in the pipe before Sept. 11, will culminate in 2002.

Major deadlines will fall on hazardous liquids pipelines under the integrity-management rules promulgated by DOT´s Research and Special Programs Administration. In addition, a separate integrity-management rule for US gas transmission pipelines may be finalized.

This year will also bring the final effective date for RSPA´s Operator Qualification rule that requires a pipeline operator to develop and maintain written qualification programs for individuals performing defined "covered" operational tasks on pipeline facilities.

Integrity management

The pipeline integrity-management regulations have come into being in a series of rulemakings beginning with a rule that applies only to operators of hazardous liquid pipeline systems of more than 500 miles with any portion passing through or near HCAs.

RSPA states this rule applies to nearly 87% of hazardous liquids pipelines, or about 136,000 miles of 157,000 miles in question.

Through internal inspection, pressure testing, or equivalent alternative technologies, operators must continually assess pipeline segments that could affect populated areas, areas unusually sensitive to environmental damage, and commercially navigable waterways. These are the HCAs.

Effective date of this first of the three rules was May 29, 2001. By Dec. 31, 2001, all operators were to have identified the HCAs on their systems. And a written system-integrity plan must be completed and on file with RSPA no later than Mar. 31, 2002.

Line pipe is loaded earlier this year aboard the 350-ft pipelay barge DLB-801 in preparation for construction of the offshore section of the 753-mile Gulfstream pipeline across the eastern Gulf of Mexico between Alabama and Florida. The $1.6 billion system will be able to move about 1.1 bcfd. Photograph is from Gulfstream Natural Gas System, Houston.
Click here to enlarge image

Moreover, the rule stipulates that at least half the initial system-integrity assessments must be completed within the next 6 months, by Sept. 30, with the remaining segments assessed by Mar. 31, 2008. Reassessment is every 5 years.

RSPA estimated the cost of developing the necessary programs at about $9.64 million, "with an additional annual cost for program upkeep and reporting of $1.8 million."

Close upon this first rule came the second that applies to pipelines operating fewer than 500 miles but also through or near HCAs; these systems represent the remaining 13% (5,400 miles) of hazardous liquids pipelines.

This rule was floated on Mar. 21, 2001, and noted that effective dates for actions by this set of pipeline operators would be pushed back to accommodate the later final date. RSPA´s focus on "homeland security" issues since Sept. 11, however, has delayed the setting of deadlines in 2002.

The final rule in this series will cover natural gas transmission pipelines. RSPA at yearend 2001 was still gathering information.

After a series of meetings through 2000 with natural gas industry representatives and associations, RSPA held a public meeting in February 2001 to present results. In June 2001, the administration issued a formal call for comment that expired in August-less than a month before Sept. 11; RSPA expects little action on this rule in 2002.

RSPA said in its June 27, 2001, Federal Register notice that "any standards we eventually propose on gas integrity management will apply to all gas transmission lines and support equipment, including lines transporting liquefied petroleum gas, hydrogen, and other gas products covered under" Code of Federal Regulations (CFR) Part 192.

RSPA acknowledged in the notice the potential impact on natural gas supply of pipeline activities associated with satisfying any integrity-management rule that applies to gas transmission pipelines.

Operator qualification

The other regulatory action that will come fully into play for US pipelines in 2002 is the Operator Qualification rule.

The rule requires a pipeline operator to "develop a qualification program to evaluate an individual´s ability to perform covered tasks and to recognize and react to abnormal operating conditions that may occur while performing covered tasks."

Covered tasks under the rule are those performed on a pipeline facility, an operation or maintenance task, a task performed pursuant to a requirement in 49 CFR Part 192 or 195, and a task that affects the operation or integrity of the pipeline.

The rule applies to anyone who performs these tasks, whether employed by the operator, contractor, subcontractor, or any other entity performing covered tasks on behalf of the operator.

Just what are the specific covered tasks on a specific pipeline is identified by the individual operator with an allowance for regulatory review. They are:

  • Tasks performed on a pipeline facility that primarily include activities involving components physically connected to a pipeline system.
  • Operations or maintenance tasks that include, for example, monitoring corrosion control systems and taking actions to combat and remediate corrosion and welding as part of pipeline operations and maintenance but not of initial construction.
  • Tasks pursuant to 49 CFR Part 192 that include purging a pipeline, conducting lead surveys, and operating a compressor station, to name only a few.
  • Tasks affecting the operation or integrity of a pipeline are self-evident.

Pipeline operators must complete the qualification of everyone performing covered tasks on their systems by Oct. 28, 2002.

RSPA estimated the cost for the entire industry, based on an estimated 175,000 covered pipeline employees of both operators and contractors on natural gas and hazardous liquid pipelines, and identified three major cost categories for implementation and compliance:

  • Cost for qualification program set-up: $210 million. Amortized over 9 years at 7% interest, this cost amounts to $29.3 million/year.
  • Cost of transitional evaluation and qualification: $140 million. Amortized over 6 years at 7% interest, this cost amounts to $28.6 million/year.
  • Cost of subsequent evaluation and qualification: $87.5 million. Amortized over 3 years at 7% interest, this cost amounts to $32.4 million/year.

The result of these calculations is a cost of $57.9 million/year for Years 1-6, said RSPA, and a cost of $61.7 million/year for Years 7-9.

Technology

Analysis by Canadian researchers has noted that the need to build and maintain safe and reliable pipeline systems and to reduce costs have led industry to devise some innovative technologies (OGJ, Nov. 26, 2001, p. 60), and these same forces will continue their pressures in 2002.

Future pipelines, the analysis said, will utilize a combination of high-pressure technologies and high-strength steels. From the late 1990s and into 2000, new projects are planned with pressures up to 2,900 psi but relatively small diameters.

The major changes occurring in construction technologies relate primarily to the continued expansion of mechanized and automatic techniques.

Now a standard technology, mechanized welding has made considerable advances in recent years, including use of one-sided welding, multiple-arc technologies, and alternative welding technologies.

The analysis pointed out that the major change in steel pipeline technology was introduction of high-strength, low-alloy steels. That led to higher strengths, improved toughness at low temperatures, improved weldability, improved resistance to sour service, improved ductile fracture resistance, and cost-effectiveness.

And these changes have been incorporated into a new generation of pipeline steels, for example Grade 690 (X-100), currently under development for high-pressure systems.

These steels utilize modifications to the low alloys somewhat but also incorporate changes to the process control in the form of controlled rolling and accelerated cooling. The next generation of pipeline steels, said the analysis, will have strengths on order of Grade 830 (X-120).

Projects

In fourth quarter last year, first oil from the Tengiz field east of the Caspian Sea began flowing through the 900-mile pipeline to the Russian port of Novorossiysk on the northern Black Sea. The project represents a major breakthrough for shipments from the oil-rich area.

Also in the region, construction is well underway this year on the first major natural gas pipeline, the Blue Stream, from Russia across the Black Sea to Turkey. Parts of the line will be laid in waters more than 2,000 m deep.

And in North America, construction of another major offshore gas pipeline will culminate in 2002. The 753-mile Gulfstream pipeline will run from just onshore in Mississippi and Alabama, across the eastern Gulf of Mexico, and land in Florida. Gas will drive major electric power generation projects for the state.

These projects are possible after years and billions of dollars of research by pipeline and pipeline contracting companies to make construction in harsh areas not only possible but also safe.

Caspian line

Oil began flowing in 2001 through the $2.65 billion Caspian Pipeline Consortium system from Kazakhstan, across the northern edge of the Caspian Sea, to a new Black Sea terminal at Novorossiysk after nearly a decade of planning, partial construction, delays, and debates. By first quarter 2002, the terminal was to be operating at its 600,000 b/d capacity.

Russian and regional governments will receive $23.3 billion in taxes and revenues, and Kazakhstan $8.2 billion, over the 40-year lifespan of the project.

The Tengizchevroil joint venture operates Tengiz field, which has potential reserves of 6-9 billion bbl. ChevronTexaco has 50% of Tengizchevroil, ExxonMobil Corp. 25%, Kazakhoil LC 20%, and LukArco BV 5%.

Primary owners of CPC are Russia 24%, Kazakhstan 19%, ChevronTexaco Caspian Pipeline Consortium Co. 15%, LukArco 12.5%, Oman 7%, Rosneft-Shell Caspian Ventures Ltd. 7.5%, and ExxonMobil Caspian Pipeline Co. 7.5%.

Although finally providing an outlet for oil from one of the world´s major producing areas, the pipeline will likely only aggravate the shipping crunch at the Bosporus and Dardanelles straits. These traffic choke points limit the size of tankers that can carry Tengiz crude from Novorossiysk.

Blue Stream

Elsewhere in the former Soviet Union, Russian giant Gazprom last summer began building the subsea portion of the Blue Stream pipeline. The first sections were welded in Samsun, Turkey.

The Saipem 7000 lay barge is laying the pipe after more than 18 months of retrofitting in preparation for work in more than 2,000 m of water. Sections of the line will be laid in some of the deepest waters for pipelaying on record.

Signing the $1.7 billion contract in late 2000 were Blue Stream Pipeline Co. BV, Saipem, Bouygues Offshore SA, and a consortium of Mitsui & Co, Sumitomo Corp., and Itochu Corp., contractors for the project.

Gulfstream

And in North America, the Gulfstream natural gas system, a $1.6 billion pipeline project designed to deliver natural gas to fuel new electric generation capacity throughout Florida, began construction in 2001.

As 2002 began, offshore pipelaying was about 85% complete and pipe burial in Tampa Bay was under way. Onshore pipelaying was more than 27% complete in Florida and 34% complete in Alabama. Compressor station construction was more than a third complete.

The 753-mile pipeline originates near Pascagoula, Miss., and Mobile, Ala., crossing the Gulf of Mexico with 431 miles of 36-in. OD pipe to Manatee County, Fla. Once ashore, 306 miles of 16-36 in. pipe will reach across southern and central Florida to Palm Beach County. The system also includes 16 miles of gathering pipeline in Mississippi and Alabama. With a capacity to move 1.1 bcfd, the system is the first new natural gas transportation system constructed to serve Florida in more than 40 years, says the company.