Proceedings of the 2012 9th International Pipeline Conference IPC2012 September 24-28, 2012, Calgary, Alberta, Canada

IPC2012-90179

STUDY ON PIPELINE INTEGRITY MANAGEMENT PERFORMANCE EVALUATION TECHNIQUES AND ITS APPLICATION IN CHINA PIPELINE COMPANIES
Yulei Gu PetroChina Pipeline R&D Center Langfang, Hebei, China Honglong Zheng PetroChina Pipeline R&D Center Langfang, Hebei, China Yufeng Yang PetroChina Pipeline R&D Center Langfang, Hebei, China

Lijian Zhou PetroChina Pipeline R&D Center Langfang, Hebei, China

Huabing Zhang PetroChina Pipeline R&D Center Langfang, Hebei, China

Yi Li PetroChina Pipeline R&D Center Langfang, Hebei, China

ABSTRACT Nowadays, more and more pipeline operators vigorously promote the implementation of integrity management programs (IMPs for short) in order to improve the integrity of their pipeline systems. But how can the operators measure the performance of their pipeline IMPs? In other words, how can the operators evaluate the efficiency and effectiveness of their programs so as to make continuous improvement? The regulations and standards of pipeline integrity management just gave some requirements and recommendations on performance measurement, but no specific methods were presented. Normally, the pipeline operators measured the performance of IMPs on the base of their management objectives and local regulations requirements. The paper introduced the methodology and achievements of pipeline integrity management performance evaluation work conducted in PetroChina Pipeline Company. Considering the companys specific integrity management goals and objectives, the metrics were established and applied to evaluate whether those goals had been achieved or not, and found out the shortage of the IMP for giving suggestions for improvement. Considering the input and output parameters of IMP, the performance measures system was set up. The input parameters included the input of workforce, facilities and other investments. The output parameters indicated the output of IMP, such as the accomplishment of the objectives, the quality of the work and the safety improvement through IMP. In order to clearly define the input and output parameters of IMP, the IMP was divided into nine parts, such as data management, high consequences areas identification, risk assessment, integrity assessment, corrosion prevention, defect repair, geohazards control, pipeline patrol, pipeline security. For each part,

considering the management objectives, the input-output parameters metrics were set to measure the performance. In order to see the performance of IMP from a macroscopic perspective, a simplified index system was built which mainly focused on the safety improvement such as the number of leakage, failures, accidents and economic loss. The grading performance evaluation system could conveniently meet the different focus of different levels managers. In addition, in order to eliminate the influence of the different management difficulties to the performance of IMP, the paper built a set of adjustment factors to modify the investment parameters to make sure the evaluation results more objective and fair. At last, the paper showed the application results of the IMP performance evaluation conducted in PetroChina Pipeline Company and its branches. INTRODUCTION Today, integrity management has become more and more popular in oil & gas storage and transportation industry. The IMPs, which are usually comprehensive, systematic, integrated and customized to the enterprises own conditions, could provide the information for operators to effectively allocate resources for appropriate prevention, detection, and mitigation activities resulting in improved safety and a reduction in the number of incidents. With the increasing competition in the market, the enterprises took more and more attention to the efficiency and effectiveness of resources allocation. But how can the operators measure the performance of their pipeline IMPs? In other words, how can the operators evaluate the efficiency and effectiveness of their programs so as to make continuous improvement?

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At present, there is not yet a unified system or standard on the performance evaluation of pipeline IMPs. The ASME B31.8S and API 1160 give some suggestions on IMPs performance evaluation which mainly focus on the implementation of the laws and regulators requirements instead of the efficiency and optimization of resources allocation of the pipeline operators [1, 2]. Normally, the pipeline operators measure the performance of IMPs mainly based on legal compliance and their own management objectives, such as the implementation of the pipeline inspection, defects repairs, and pipeline accidents statistics, rather than a comprehensive evaluation of the whole inputs and outputs system or the specific technical effectiveness or the efficiency of resources utilization etc.. Consequently, the performance evaluation results could not directly give suggestions of improvements on how to more effectively optimize resource allocation and enhance the technical level of the pipeline integrity management, etc. DEFINATION Through a wide investigation and deep study of the requirements and needs of performance evaluation of IMPs, the author defined it as a comprehensive evaluation of the IMPs which needs to consider of their inputs and outputs to evaluate the efficiency and effectiveness of the IMPs, and put forward suggestions for continuous improvement of it [3]. Generally speaking, through the IMPs performance evaluation, three aspects of benefits could be achieved by pipeline operators such as follows: 1) Benchmark and Guidance By comparing with the different pipeline operators or different segments of the pipeline (refers to Decision Making Unit, DMU for short), the maximum effective DMU was selected as a benchmark unit and the inadequacies of other DMUs were identified, which could help guiding these units to the more effective and efficient status. 2) Improvement and Adjustment By analyzing the DMUs deviation from the objectives as well as the gap with the benchmark unit, recommendations were made for effectiveness improvement, and optical and efficiency resources allocation. 3) Exploration and Innovation The process of evaluation, data collection and analysis of the results, could help a good and deep understanding the IMPs of each pipeline operator. Subsequently, the various practical problems of the IMPs refers to both management and technology would be explored which help making continuous improvement or dramatically innovation. INDEX SYSTEM In this paper, the performance evaluation index system was established based on the China Petroleum Pipeline Companys specific realistic conditions and its objectives of pipeline IMPs. The system contains input and output indicators. In addition, in order to eliminate the influence of the different management difficulties, the paper built a set of adjustment

factors to modify the investment parameters of the IMP work to make sure the evaluation results more objective and fair. 1) Input indicators The input indicators mainly include the investment parameters for the implementation of IMPs such as labor, financial, and material resources. The labor inputs were measured by the man-days per annual year of both managers and operators. Financial inputs include all the investment of IMPs, such as the costs of test and repair of pipelines. And material resources, including equipment investment, mainly refer to fixed assets and construction costs. 2) Output indicators The output indicators mainly focus on the achievement of the management goals and effectiveness as well as the satisfactions with the requirements of the standards and management objectives. The output indicators were set from three aspects which respectively measure the completion rate of scheduled tasks, quality and effectiveness of the pipeline integrity management related work. In order to clearly show the performance efficiency of the pipeline IMPs, the pipeline integrity management program was divided into nine parts in accordance with the job contents, such as data management, high consequence area identification, risk assessment, integrity assessment, corrosion protection, defect repair, natural and geo hazards control, pipeline protection, pipeline security, etc. Considered separately for each of nine parts work contents, specific objectives and inputs outputs parameters, the performance evaluation index system was built. In order to see the performance of IMPs from a macroscopic perspective, a simplified indicator system was built. Without considering the details, the simplified macroscopic indicator system focused on the safety improvement such as the number of leakage, failures, accidents and pecuniary loss. The grading performance evaluation system could conveniently meet the different focus of different levels managers. The performance evaluation index system was shown in ANNEX A. 3) Adjustment factors based on management difficulty Due to the different natural and societal environment of the pipelines and the condition of the pipeline itself (including the running time, design, materials and other factors), the management difficulty, the same as the investment, varies dramatically from different pipelines. In order to eliminate the influence of these factors, the paper built a set of adjustment factors based on the different management difficulties to modify the investment parameters of the IMP work to make sure that the more investment for the more difficult managed pipelines could be also economically reasonable. The formulas for adjustment factors vs. management difficulty were as follows:

I im

(M r , s )

I (M r ,s ) i Fi(M r ,s )

Where,

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Mr

stands for module

;
i

I (Mr ,s ) stands for the modified input indicator im

module of Decision Making Unit (DMU) r = 0,1,2, L ,9 ;
r
s

of

The comprehensive efficiency of DMUj could be expressed as

where of DMU

hj =

u y
r =1 m r

rj

I (M r ,s ) stands for input indicator i of module i

s

v x
i =1

uT Y j vT X j

i ij

, where

r = 0,1,2, L ,9 ;
stands for the adjustment factor of input
i

Where, h j means the comprehensive efficiency value of of DMU j. u , v means the nonnegative input and output multipliers expressed in vector -matrix notation.
T T

Fi

(M r , s )

module r of DMU s , where r = 0,1,2, L ,9 . In this paper, the management difficulty adjustment factors were expressed as the average proportion of high consequence and high-risk segments mileage in total pipeline mileage. The higher the proportion of the pipeline section of the high consequence and high-risk, the more difficult to manage and control the risk of the pipeline, and result in correspondingly more inputs. METHODOLOGY The nature of the performance evaluation of pipeline integrity management is a cost-benefit assessment of a business system with multiple inputs and multiple outputs where the input and output indicators differ significantly both in the nature and value. Conventional statistical analysis and evaluation methods have limitations when dealing with those data to carry out scientific comprehensive evaluation. In this paper, the author applied Data Envelopment Analysis (referred to as DEA) to evaluate the performance of different pipeline operators called Decision Making Units (DMUs),which convert multiple inputs into multiple outputs. The DEA method, was first introduced by A. Charnes, W. W. Cooper, E. Rhodes in 1978 and recent years has been applied in a great variety of fields to evaluate the performance of entities, such as hospitals, US Air Force wings, universities, cities, courts, business firms, and others, including performance of countries, regions, etc.. The basic idea of the DEA method was as follows: 1) Based on the inputs and outputs of DMUs to get the production possibility set; 2) Using linear programming model to construct the production frontier; 3) Through identifying each DMU corresponding point whether locating in the production cutting-edge surface, to determine whether it is effective. CCR model, which was one of the classic models of DEA method, was used to solve the problem [4]. Assuming that there are n DMUs to be evaluated, each DMU consumes varying amounts of m different inputs to produce s different outputs. Specifically, DMUj consumes amount xij of input i and produces amount yrj of output of r. We assume that x ij 0, y rj 0 , and further assume that each DMU has at least one positive input and one positive output value.

X j and Y j

are respectively the input and output parameters of DMUj in vector notation. In mathematical programming parlance, this ratio, which is to be maximized, forms the objects function for the particular DMU being evaluated (refers to DMU0), when obviously the ratio of output to input of every DMU must be less than or equal to unity. The mathematical programming problem may thus be stated as uTY h0 = T 0 max v X0 uTYj 3 s.t. h j = T 1 v Xj u 0, v 0. j = 1,2, L , n After Charnes-Cooper transformation, and utilizing slack variables, and transforming to the LP dual problem, formula (3) could be stated as

min s.t. n X j j + s = X 0 j =1 n Y j j s + = Y0 j =1 2 j 0j = 1 Ln + s s 0 s M Y 0 Where,

is the relative efficiency value of the DMU0,

s , s

are the inputs and outputs slack variables of DMU0, is the nonnegative multipliers vector-matrix of the DMUs, is the upper boundary condition value of Y0 .

The solution of the above problem could gives the information of the performance efficiency of the DMU0 , which was defined as follows: 1) The performance of DMU0 is fully efficient if and only if both = 1 and s = s = 0 , which means that DMU0 is in the most appropriate scale of operation status.
+* *

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2) The performance of DMU0 is weakly efficient if and only if both = 1 and s 0 and s 0 , which means that in the given input case, compared with other decision-making units, the level of output of DMU0 has reached maximum level. 3) The performance of DMU0 is inefficient if < 1 and the slacks tells the potential improvement suggested to be made.
+* *

From table 2 and Picture 1, it could be concluded that, in the risk assessment module, the benchmarking DMU was DMU2 and DMU3, both with a relative efficiency value of 1.0000. DMU1, DMU4 and DMU5 were all inefficient, and the potential improvement should be made as shown in table 3.
Table3. Potential improvement of inefficient DMUs
inputs Cost of RA (10kRMB /km) 0.05000 0.00098 0.01000 accuracy of the RA results (score) -6.50000 outputs Guidance rate of projects base on RA results (100%) -0.03527 Adoption rate of projects base on RA results (100%) -

APPLICATION CASE In this section, the author gave a brief application example of the performance measurement carried out in China Petroleum pipeline companies to illustrate the feasibility and benefits of the technique. For the enterprise information security requirements, the real names of the DMUs were omitted. This project was carried out in 2011. Table 1 shows the original data of the risk assessment (RA) module investigated from each DMU. Table 1. Original data for risk assessment (RA) module
Inputs accuracy of the RA results (score) 93.5 95 93.5 93.5 93.5 Outputs Guidance rate of projects base on RA results (100%) 1 0.8 1 0.82 1 Adoption rate of projects base on RA results (100%) 1 0.91 1 1 1

DMU

DMU1 DMU4 DMU5

DMU

Cost of RA (10kRMB/km)

DMU1 DMU2 DMU3 DMU4 DMU5

0.06 0.0076 0.01 0.01 0.02

The relative efficiency values and rank of the DMUs were shown in table 2 and figure 1.
Table 2. Relative efficiency results of the DMUs
DMU DMU2 DMU3 DMU4 DMU5 DMU1
1.0000 0.8000 0.6000 0.4000 0.2000 0.0000 DMU2 DMU3 DMU4 DMU5 DMU1 0.5000 0.1667 1.0000

relative efficiency value (100%) 1.00000 1.00000 0.90166 0. 50000 0.16667

1.0000 0.9017

Rank of DMU 1 2 3 4 5

In Table 3, it suggested that DMU4 needs to improve accuracy of the RA results, control the cost of RA and enhance the guidance rate of projects base on RA results. DMU1 and DMU5 need to control the cost of RA. In order to make good understand the results and the suggestions, more detailed data mining should be done. For example, the results of the application case above showed DMU4 should improve the accuracy of risk assessment results by 6.5. Then we checked the original data, we can find that the problem was that the personnel working experience is insufficient for risk assessment of pipeline in DMU4, and no detailed implementation plan was set before the risk assessment project. After a comprehensive analysis of the data and results of each DMU, the conclusion and suggestions were made as follows: (1) Further improvement of the accuracy of risk assessment results should be made by assigning more experienced staff to do risk assessment, well prepared, and comprehensive and indepth analysis of all the risk factors to ensure the quality of RA work. (2) Further improve the project decision-making guidance rate according to the risk assessment results and ensure that the risk would be pre-controlled well. (3) Further improve the adoption rate of the suggestions of risk assessment results.
CONCLUSION The paper investigated the pipeline integrity management performance evaluation requirements of related laws, regulations and standards, and the recommendations on the evaluation methods. By combined with the China petroleum pipeline integrity management implementation details, the author established the performance efficiency evaluation index system. The pipeline integrity management was considered as a complex economic system with multiple inputs and multiple outputs. By using the method of DEA, the relative efficiency value was calculated, and suggestions on improvement, such as

Figure 1. Ranks of DMUs on relative efficiency

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optimizing resources allocation, improving the pipeline integrity management technology were given.
REFERENCES [1] American Society of Mechanical Engineers. ASME B31.BS-2001 Managing system integrity of gas pipeline[S]. New York: ASME B 31 Committee, 2001. [2] American Petroleum Institute. API Standard 1160-2001 Managing system integrity for hazardous liquid pipelines [S]. 1st ed. Washington D.C: API, 2001. [3] Zheng Honglong, Xu liwei, Gu Yulei etc.. Preliminary study on the index system of pipeline integrity management performance valuation (in Chinese) [J]. Oil & Gas Storage and Transportation, 2012, 31(1):10-11. [4] William W. Cooper, Lawrence M. Seiford and Joe Zhu. Handbook on Data Envelopment Analysis [M].

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ANNEX A
PIPELINE INTEGRITY MANAGEMENT PROGRAM PERFORMANCE EVALUATION INDEX SYSTEM Module Data Management High Consequences Areas (HCAs) Identification Risk Assessment (RA) Inputs cost for data collection and update. cost for HCAs identification. Outputs integrity of data; accuracy of data; application effect. HCAs identification coverage rate; accuracy of results of HCAs identification ; contribution and effect of HCAs identification. RA coverage rate; RA coverage rate in HCAs; accuracy of results of RA ; guidance rate for decision-making of risk control projects; adoption rate of the RA suggestions. IA coverage rate; IA coverage rate in HCAs; IA coverage rate with high risk of pipe defects; applicability of the testing method of IA; accuracy of testing results ; reliability of assessment results; guidance rate for decision-making of repair projects; contribution to the defects monitoring projects. catholic protection rate; interference rate of stray current; testing rate of corrosion defects; repair rate of corrosion defects; accomplishment of scheduled corrosion defects repair tasks; control of stray current; acceptance rate of cp projects; efficiency of catholic protection; leaks due to failure of CP. accomplishment of scheduled pipe defects repair tasks; in time rate of pipe defects repair tasks; acceptance rate of PR projects; engineering reliability of RP projects; the ratio of predictive repair to all the repair works; leaks due to failure of pipe defects. Natural and Geo Hazard risk identification coverage rate; accomplishment of scheduled risk investigation before blood season; accomplishment of scheduled risk investigation after blood season or earthquake disasters; accomplishment of risk control Module Inputs Outputs projects before blood season; accomplishment of risk control projects after blood season or earthquake disasters; monitoring rate of Natural and Geo Hazard high risk points; acceptance rate of Natural and Geo Hazard control projects; leaks due to Natural and Geo Hazard. accomplishment of scheduled patrolling; monitoring rate of Third Party' Construction activities; accomplishment of planed pipeline protection propaganda work; accomplishment of ground mark regulation work; ratio of intact identifications in pipeline access zone; incident rate of third party damage, stiletto pilfer oil and leakage of pipeline; accident rate discovered by patrolling; accident rate discovered by leakmonitoring system; accident rate discovered by security warning system. pipeline security risk identification coverage rate; accomplishment of planed pipeline security work; ratio of hazard factors indentified the pipeline security; leak due to deliberate destruction. annual leakage rate; annual incident rate; annual leakage per kilometer; annual loss per kilometer; cumulative average leakage rate; cumulative average incident rate; cumulative average leakage per kilometer; cumulative average loss per kilometer.

cost for RA.

Pipeline Protection

Integrity Assessment (IA)

cost for IA.

cost of pipeline protection ; labor assignment for patrolling.

Corrosion Protection (CP)

cost for CP.

Pipeline Security

cost of pipeline security.

Comprehensive

Pipe Repair (PR)

cost for PR.

cost of IMP; labor force.

Natural and Geo Hazard Control

cost for Natural and Geo Hazard control.

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