Economy, third-party damage pressure liquids pipelines

A combination of customers' growing preference for just-in-time inventory practices and the proliferation of boutique fuels have placed additional pressures on an already complex US hydrocarbon liquids pipeline system.

Christopher E. Smith
OGJ Pipeline Editor

FORT WORTH, Apr. 23 -- A combination of customers' growing preference for just-in-time inventory practices and the proliferation of boutique fuels have placed additional pressures on an already complex US hydrocarbon liquids pipeline system, according to Deborah Fretz, president of Sunoco Logistics Partners.

Speaking this week at a presidents' roundtable discussion at the 60th annual API Pipeline Conference, Fretz's observations were expanded upon by Kinder Morgan Energy Partners Pres. Tom Bannigan, who said the government needed to be told that "more boutique fuels create more problems," including increasing the difficulty of responding in the wake of an emergency.

Regarding the economic slowdown's effect on the liquids pipeline industry, Bannigan noted that the scaling back of some projects had increased the availability of contractors and lowered their rates. He also saw it as a good time to acquire assets.

A cautionary note, however, was raised by James Lamanna, president of BP Pipelines North America, who emphasized the need avoid the perception that any gains in efficiency were coming at the cost of safe, reliable operations or other license-to-operate issues. Bannigan agreed, while pointing out that KMEP had managed to find cost savings in its integrity digs as one example of increasing efficiency without compromising safety.

Each of the executives recognized the need for continued work in reducing excavation damage. Bannigan mentioned implemented policies such as no longer allowing third parties to mark KMEP pipelines, establishing mandatory distance requirement for contractors, and upgrading equipment, while at the same time emphasizing the need to improve communication between crews working on a particular site and push for improved one-call systems and state oversight.

The economic stimulus package will increase activity along pipeline right-of-ways, according to Lamanna, raising the pressures placed on pipeline operators to keep their facilities safe. Bannigan agreed, noting that in just the past 30 days KMEP had seen a 20% increase in requests for relocations, most of them related to transportation infrastructure projects.

One method considered by BP Pipelines to prevent third-party damage is building barricades along right-of-ways to force contractors in the area to contact the company. BP Pipelines has also considered installing underground netting above the pipes, Lamanna noting that the operator is ultimately held accountable for whatever happens.

Fretz agreed that the parties causing third-party damage are seldom on the hook, while Bannigan noted instances in which KMEP had successfully criminally prosecuted parties it found to be intentionally ignoring one-call procedures.

According to Bannigan, KMEP doesn't barricade its right-of-ways, but does heavily sign them. The company also attaches advisory tags to heavy equipment it finds operating near its lines and photo-documents all of its preventative activities to help in any post-incident investigation.

The executives concluded the third-party damage segment of their discussion by emphasizing new technological solutions including remotely operated area monitoring, placing sensors on backhoes and other heavy equipment, and using fiber optics in replacement pipes.

Contact Christopher E. Smith at chriss@ogjonline.com.

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