Case study

Tipping the scale fromrisk to reward
Challenge

It’s generally accepted
across the pipeline industry that aquantitative, risk-based approach
to integrity management is thebest way to protect the safety
and productivity of oil and gas
pipelines. But successfully setting
up the appropriate system is acomplex task that discourages many
operators from proceeding.

Solution

Baker Hughes worked closely withthis customer to create both thetechnical infrastructure and thecommitted data culture within theorganization to successfully quantify
risk and improve decision-making
by all business functions, for all its
onshore and offshore pipelines.

Benefits

During setup, we helped
deal with a number of
red flags, including mechanical andcorrosion risks, and identified several
improvements to their Emergency
Pipeline Repair System. In total, ourPVi PIMS has reduced their annual
inspection costs by 31%, and users
throughout the organization arecommitted to its long-term upkeep.

How Baker Hughes helped one customer
overcome the daunting task of creating andrunning a highly effective, risk-based, pipeline
integrity management system
Challenge
Pipeline integrity management
comprises all the activities required toprevent pipeline failure. An operator’sability to make informed integrity
management decisions will depend
primarily on its ability to assess andprioritize risk, which is a function of theprobability of failure (driven by the natureof threats and how they change overtime), and the consequences of failure(driven by safety, environmental, andfinancial impacts). To that end, a riskbased pipeline integrity management
system (PIMS) is intended to help
efficiently allocate operational andmaintenance resources — to avoid
failures and minimize consequences.
The typical cycle of activities fora risk-based PIMS includes:
1. Data gathering, verification,formatting, and analysis
2. Identification of integrity threats andfailure consequences
3. Risk assessment and ranking
4. Prioritized integrity assessment
5. Repair, remediation, and prevention
measures
6. Planning for continued integrity
management

The typical cycle of activities for arisk-based PIMS is generally accepted
to be logical and valuable, yet many
pipeline operators still don’t use a robust
PIMS to effectively manage resources
and protect their assets. For some, theworkload is thought overwhelming or
the cost too high. Others make the initialinvestment, but personnel limitations
or employee turnover makes it difficult
to properly maintain in the long term.
A number of vendors sell software
packages, but pipeline integrity expertiseis typically beyond their support
capabilities, so the systems often
get used to limited effect or they areabandoned out of frustration.
One of our customers saw clear value ina quantitative risk-based PIMS, but theyalso understood the challenges. They
asked for our help in creating a systemthat could quantify risk in a way that canbe consistently utilized by all business
functions, and objectively acted upon bydecision makers regardless of personnel
turnover, organizational changes,
or growth of their network — whichcurrently includes around 280 miles ofpiggable and unpiggable pipelines, both
onshore and offshore.

Solution

Benefits

Instead of just implementing software and then walking away,
we stayed with our customer’s team to implement every aspectof the system into their organization. Most of the work wastechnical and procedural, but there was also a surprising culturalcomponent that turned out to be crucial.

The software requires nearly 100 attributes to carry out thebaseline risk assessment—but results won’t reflect the realsituation if conservative default values are used for risk
calculation. For example: a red flag went up due to high external
corrosion risk for a section of pipeline between two subsea end
manifolds. Our investigation found that there was no cathodic
protection (CP) data available for this segment, even though it
had been surveyed a year ago by a third-party supplier. The nonconformance concern was raised with the inspection company,
and this segment was logged for special review during the next
inspection campaign. Meanwhile, we assessed CP readings fromadjacent anodes and the anode condition trend, and concluded
that CP status was satisfactory.

At the heart of the PIMS is PipeView™ Integrity (PVi), a suiteof proven software tools designed specifically to manage,evaluate, and cohesively report on all the different data collectedfor pipelines. We had completed several magnetic in-lineinspections for this client through the years, so most of that data
was already formatted for PVi. But there was also a lot of datafrom other vendors and inspection techniques that had to beproperly formatted and loaded into the system.
Next was the critical task of data alignment—accuratelypositioning all the existing data sets based on the pipeline
centreline created in our GIS software. This was quite a complex
undertaking because of all the different vendors, technologies,
and reference points that the customer has used over time.
In fact, the alignment process is a big pain point for mostoperators, and they typically have difficulty getting it right without
specialized technical support. In this case, the customer has
used four vendors for major inspections, and many more smaller
vendors for localized inspections. Formatting and aligning all thisdata was a big job.
From there, pipeline segments were grouped into managed
segments by function (e.g., platform piping, riser, safety zone,
main line, shore approach, onshore, etc.). These were subdivided
as dynamic segments, or lengths of pipeline where the attributes
that feed the risk models are homogeneous (e.g. diameter, wall
thickness, pipe material grade, coating type, etc.). Risk values werecalculated at the dynamic segment level, and their risk results
were rolled up to managed segments for reporting purposes.
The result is a single, convenient dashboard that enables
visualization and analysis of everything recorded about thepipeline network. This brought the project up to the two-year
mark—so it’s no wonder that most pipeline operators find theidea daunting.
Creating a culture for change
In the beginning, we encountered some difficulties getting
complete and timely data from the many different gatekeepers
across the organization. Keep in mind that there were a dozen
distinct pipelines with a 20-year age spread among them. There
were various historical operating silos, different communication
and reporting norms across departments, etc. Some people
were worried about impacts for their departments or jobs. Others
thought it was ‘just a corporate program’ that couldn’t impact
work in the field. All in all, there was low employee commitment.
Truth be told, if implemented according to plan, this system
would indeed change the way everyone in the company thought
and acted regarding pipeline integrity. We’ve learned through ourown big organizational changes that communication is the key toemployee commitment. To that end, we organized stakeholderengagement meetings to clarify how each department’s data
would interact to enable the overall system. As soon as they saw
the analysis and reporting functions in action—and the errors
and limitations created by missing information—they were all on
board. We repeated these meetings at regular intervals to keep
everyone engaged throughout the process and ensure that thePIMS was addressing all their needs.

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06/2021

Risk estimates were also elevated because of a highconsequence of failure, driven primarily by the cost of longrepair times required to bring these lines back into service aftera loss of containment—even though there was an Emergency
Pipeline Repair System (EPRS) in place. We followed up with agap analysis of the EPRS, and identified several improvement
opportunities for ancillary equipment, vessel call-off contracts,
operational planning, etc. The customer assigned an EPRS expert
to close these gaps so they’ll be able to respond and resolve
offshore failure events much faster.
PVi’s Integrity Management Planning module greatly simplified
cost-benefit analysis, enabling the client's management team
to discuss pros and cons from safety, environment, and cost
perspectives, and select the mitigation measures to be included
as key performance indicators moving forward.
A second network-wide risk assessment was subsequently
performed with updated data, which significantly improved
risk values. Assessments are now repeated at regularly prescribedintervals, and we have a dedicated PIMS specialist on contract
with the customer’s team to continue honing integrity capabilities
throughout the organization.
The system has now been in place for several years, and it ispaying off. A loss-of-containment shutdown cost for one of thiscustomer’s 30" pipelines was estimated at $1.2 million USD per day
for 30 days—or $36 million USD in total. By contrast, the cost ofmaintaining our PIMS for an offshore pipeline for an entire year isonly 1% of that LOC estimate. To be conservative, even if two typicalpreventative repairs were included through the year (e.g. free span
rectification and clamp), the full annual cost would be only 5%of the LOC estimate. What’s more, thanks to the solid risk-basedplanning foundation established with PVi PIMS, the customer’s
actual annual inspection costs have been reduced by 31%.
Reduced cost: inspection optimization
Before PipeView™ Integrity PIMS

% of annual budget*

2 ROV inspections every 5 years

45%*

1 in-line inspection (ILI) every 3 years

13%
58%

After PipeView™ Integrity PIMS

% of annual budget*

1 ROV & 1 acoustic every 5 years

29%

1 ILI every 5 years

8%

PIMS activities (data analysis, risk assessment,etc.) and software maintenance3%

Savings from PVi PIMS-based
inspection program

40%
31% lower costs*Based on budget for a 60 km pipeline with 30 in. diameterbakerhughes.com