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A vast fraction of the world’s gas is brought to the market through pipelines. Several large pipeline projects are currently being evaluated. Pipelines can be over land or under water. Underwater pipelines have been used in the North Sea. However, water depth is a critical parameter that poses difficult challenges. When considering the pipeline option, factors such as:
- Throughput capacity
- Compressor-station requirements
- Pipeline size
- Water depth
- Topographical profiles have to be considered in the economic analysis
Pipelines typically operate at pressures ranging from 70 to 100 bar. As a general rule, the initial compressor stations for pipelines require two-stage compression for boosting pressure from 40 to 140 bar, while intermediate compressor stations require single-stage compression from 100 to 140 bar. Some pipelines operate at high pressures. High-pressure pipelines are defined as overland gas pipelines operating at pressure higher than 100 bar and in the range of 100 to 200 bar. At the receiving station of the pipeline, the gas may have to be scrubbed and metered for custody transfer purposes. The pressure of the gas may have to be adjusted to meet the requirements of the gas distribution pipeline network.
Several publications discuss the economics of pipelines relative to other gas utilization options.   Aside from economics, pipeline transit fees and political risk are key issues that should be considered when evaluating this option for monetizing gas. Additionally, pipeline routes are fixed and are exposed to acts of terrorism, high transit tariffs, or the potential for gas flow being shut off during a dispute involving one of the transit countries.
In the pipeline option, especially in remote locations, it should be considered that a pipeline is a single system and requires the entire pipeline to be serviceable for any gas to flow. Disruption of any part of the pipeline disrupts all service through that system. Pipeline maintenance is another area that requires attention. Pipeline sections, which are essentially out of sight, represent a risk over the long life of the gas project. The primary concern is corrosion, but mechanical damage also can be an issue.
Newer pipeline technology and growing energy consumption of nearby markets are the key drivers for transporting gas through pipeline. The development of high-pressure pipelines has brought down costs by the more efficient use of steel pipe. Traditionally, X-65 grade of carbon steel has been used for pipeline construction. Carbon steel grades of up to X-100 are currently available and will be field proved in the coming years. This will reduce the cost of pipeline installation by approximately 10%.28 Alternative new metallurgy, possibly including the use of composites, is expected to make pipelines a more competitive option by not only lowering the cost of the pipe itself, but also by resulting in lower logistics and installation costs, which are significant in difficult and inaccessible areas. Recent developments regarding deepwater pipelines are expected to open up new marine pipeline competition for LNG. Modern materials can face the new challenges of the deepwater pipelines crossing harsh environments.
- Asian Pipelines Top International Gas Development Projects. 2002. Remote Gas Strategies (August): 12.
- White, N. 1995. Economics of LNG and Pipeline Gas Exports from the GCC. Project Finance Intl. London, England: IFR Publishing.
- Gainey, B.W. 1999. Natural Gas Commercialization—Which Way Now? Inst. of Gas Technology Conference, Trinidad, June 1999.
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