A Decision Making Methodology for Cost Effectively Managing Pipeline Risk
Authors: Blackwell Chris , Cote Edgar Ivan , Gagne Colin 
Published: July 2013

To aid with making risk-based pipeline management decisions, a methodology is required to evaluate the cost-benefit of various pipeline operation strategies as a function of time. This methodology should provide consideration to evaluating an existing asset with active damage mechanisms and imperfections in various states of severity. In this paper, the subject of the methodology is a typical transmission pipeline with the following properties:

• Transports refined liquid products;

• Mid-size diameter (NPS 8 to NPS 16);

• Telescoping wall thickness based on proximity to pump stations (4 to 6 mm);

• High pressure (9930 kPa);

• Approximately 50 years of operating history; and

• Approximately 500 km long.

The objective of this analysis is to determine the best operation strategy for the subject pipeline in terms of cost-effective risk management. The methodology considered four different risk management strategies:

• Operate and Maintain (O&M) at 100% of Maximum Operating Pressure (MOP):

○ A maintenance strategy involving in-line inspection and defect repair based on a function of probability and consequence of failure while operating at 100% of MOP.

• Operate and Maintain (O&M) at 50% of Maximum Operating Pressure (MOP):

○ Similar to the previous strategy except an additional form of mitigation is applied by reducing the operating pressure of the pipeline to 50% of MOP.

• Inspect, Repair and Re-coat (IRR):

○ A maintenance strategy involving complete excavation of the entire pipeline, inspection and repair of any defects, re-coat and burial.

• Pipeline Replacement:

○ A maintenance strategy where the existing asset is abandoned and replaced with a new pipeline.

To complete the analysis, two predictive models to determine probability of failure (POF) and consequence of failure (COF) were created using quantitative and semi-quantitative approaches. Consideration was given to both time dependent imperfections and time independent damage mechanisms. The effects of each risk management strategy were projected in both models over a timeline of 20 years. The results were aligned to a risk matrix with defined risk thresholds to aid in determining the acceptability of each risk management strategy.

To evaluate the effectiveness of each risk management strategy, a cost-benefit ratio was used. This ratio was defined as the predicted risk reduction through the implementation of each strategy over the costs required for execution. Maximizing this ratio would represent the optimal strategy at any given point in time. Completing the analysis showed that over the short term the O&M strategy was the most cost-effective methodology to mitigate risk. However, as a pipeline ages and repairs become more frequent, the replacement strategy becomes more favorable. The analysis predicted a time interval where if the subject pipeline is to be operated beyond this point in time then replacement as soon as possible is the best strategy to employ. This time interval is different between pipelines and heavily dependent on the rate and severity of damage. The results in this paper illustrate an example and utilizing the methodology discussed will produce different results on a case-by-case basis.