Introduction to the Pipeline Industry

Oil and natural gas pipeline industry

Transmission pipelines are used to transport the crude oil and natural gas produced in remote areas of
Canada to the urban centres and export markets where they are consumed. Pipelines are the vital links
that connect oil and natural gas producers with the consumers that rely on a steady supply of these
products.

Sometimes measuring more than a metre in diameter, liquid petroleum pipelines and high-pressure natural
gas pipelines carry their products over long distances from producers and processing plants to local
distribution companies or directly to large industrial consumers.

In 2002, the transmission pipeline industry consisted of almost 110,000 kilometres of pipeline and carried
about 136,662,600 cubic metres of crude oil and about 6.3 trillion cubic feet of natural gas.

Key potential environmental impacts

Impact
Air

Greenhouse gases

Land

Pipeline construction and land reclamation

Wildlife habitat

Spills
Air

Electric motors drive most of the pumps on liquid petroleum transmission pipelines in Canada. Diesel
powered generators are used in only a few locations not served with high-voltage electric power or as
emergency backup power supplies. As a result, liquids pipelines issue few direct emissions; those that
occur are mostly the result of evaporative losses from above-ground storage tanks at bulk terminals.

Natural gas transmission companies compress the gas up to 100 times atmospheric pressure for pipeline
transportation. Natural gas-fueled turbine engines, similar to the engines on large jet airplanes, drive most
of the compressors on natural gas transmission pipelines in Canada. Electric motors or natural gas-
powered conventional (reciprocating) engines are also used for compression.

Greenhouse gases

Direct emissions of carbon dioxide result mainly from the burning of natural gas, the main fuel source used
by natural gas transmission pipelines. Also, methane (the primary component of natural gas) can escape
as fugitive emissions from pipeline systems through small leaks in valves, fittings and other related
equipment. Methane is also vented when pipelines must be emptied prior to construction and maintenance
work or by system equipment that is designed to regulate pressure in order to maintain pipeline safety.

Indirect greenhouse gas emissions result from electricity consumed by pumps on pipelines carrying crude
oil and other liquid petroleum products. The method used to generate the electricity that is consumed by
these pumps has a significant impact upon the amount of indirect greenhouse gas emissions since coal
fired electrical generation has a much higher greenhouse gas intensity than that produced by hydroelectric
generation. The viscosity (resistance to flow) of the products transported also affects indirect emissions, as
products such as heavy oil and bitumen require more electric power to transport, resulting in greater
indirect emissions.

Pipelines are the safest and most efficient means of transporting crude oil and natural gas from
producing fields to refineries and processing plants and of distributing petroleum products and

natural gas to the consumer.

During the past few decades, people in communities affected by proposed or existing pipeline
industry activities have become increasingly involved in the decision-making process related to the
development or operation of pipelines.

With this increased involvement has come increased knowledge. However, despite improvements in
technologies and practices, there are still negative perceptions about potential health, social, safety,
security and environmental impacts of pipeline construction and operation.

We believe that when key stakeholders have convenient access to factual information about
industry operations, they can make informed choices about industry activities that affect their
communities, and ultimately influence policy decisions.

Introduction to The Canadian Energy Pipeline

The Canadian Energy Pipeline Association represents Canada's transmission pipeline companies. Our
members are world leaders in providing safe, reliable, long-distance energy transportation.

Transmission pipelines transport nearly all of Canada's daily crude oil and natural gas production
from producing regions to markets throughout Canada and the United States.
The Canadian Energy Pipeline Association is dedicated to ensuring a strong and viable transmission
pipeline industry in Canada in a manner that emphasizes public safety and pipeline integrity, social
and environmental stewardship and cost competitiveness.

What is a Pipeline?

Definition

A pipeline comprises all parts of the physical facility

through which liquids (crude oil, petroleum products)
or gases (natural gas, carbon dioxide) are transported
including pipe, valves and other equipment attached
to the pipe, compressor units, pump
stations, metering stations, regulator stations,
delivery stations, holders and fabricated assemblies.

Pipelines are the safest and most efficient means of

transporting crude oil and natural gas from producing
fields to refineries and processing plants and of
distributing petroleum products and natural gas to the
consumer.

History of Pipelines

Pipelines were developed to transport products to market, products – such as crude oil,
natural gas, gasoline, aviation fuel and the raw materials for plastics, fertilizers and
medicines – that are used by Canadians every day. Pipelines are important to Canadians
because they are the safest and most efficient means of transporting the products that
support our standard of living.

The earliest pipelines were probably built in China around 500 BC to transport natural gas
from brine/gas wells to heat brine in order to recover salt. Bamboo sections were split
lengthwise and the horizontal nodes removed. The halves were then glued back together
and bound with twine.

The first gathering systems in North America were constructed of hollow logs and were
used to transport natural gas short distances from well sites to nearby towns. Distribution
systems were also constructed to deliver the natural gas to buildings and street lights.

In the early 1900s, there were only a few transmission pipelines in Canada. One ran from
oil fields in Ohio to refineries in the Sarnia area. Another ran from Bow Island to Calgary,
and at 270 kilometres (168 miles), was the longest pipeline in Canada at its completion in
1912.
 During WWII, because of security concerns, oil
pipelines were built from Portland, Maine to Montreal,
and from Norman Wells, Northwest Territories to
Whitehorse, Yukon. The latter, known as the Canol
Pipeline, was only used for about a year, while the
former is still in use.

Major discoveries in Alberta during the 40s and 50s, such as Leduc, Pembina, and Swan
Hills, spurred construction of the Interprovincial Pipe Line (now Enbridge Pipelines Inc.)
crude oil pipeline from Edmonton to Superior, Wisconsin in 1950, and on to Sarnia in
1953.

The Trans Mountain Pipeline now owned and operated by Kinder Morgan Inc. was also
completed in 1953 to transport crude oil from Edmonton to Vancouver.

The Westcoast Pipeline (now owned and operated by

Spectra Energy Corp.) began transporting natural gas
from northeast British Columbia to the B.C. U.S.
border in 1957.

Construction of the TransCanada Pipeline began in

1957 to provide a secure source of natural gas for
Central Canada. It was completed the following
year. Also in 1957, TransCanada’s Alberta System,
referred to as NGTL or NOVA, began operation.

As demand grew, these pipelines were expanded and additional routes were opened to
carry Canadian crude oil and natural gas to markets in California, the Pacific Northwest,
the Rocky Mountain States and the Midwest United States.

The Maritimes and Northeast Pipeline was constructed in 1999 to connect the gas fields
off the Canadian east coast with markets in Nova Scotia, New Brunswick, Maine and
Massachusetts.

The Alliance Pipeline system began operation in 2000, transporting natural gas from
northeastern British Columbia and northwestern Alberta through Saskatchewan, North
Dakota, Minnesota, and Iowa to its terminus in Illinois.
Role and Necessity

According to the Canadian Association of Petroleum Producers, Canadians consumed 270,540 cubic
metres (1.70 million barrels) of crude oil and petroleum products and 188.6 million cubic metres
(6.7 billion cubic feet) of natural gas per day in 2006. Combined, crude oil and natural gas
accounted for 68 per cent of Canada’s primary energy consumption.

Similarly, according to the United States Department of Energy’s Energy Information

Administration, the United States consumed 3.3 million cubic metres (20.6 million barrels) of crude
oil and petroleum products and 1.7 billion cubic metres (60.0 billion cubic feet) of natural gas per
day in 2006. Combined, crude oil and natural gas accounted for 62.7 per cent of the United States’
primary energy consumption.

Because crude oil and natural gas fields are often far from refineries and processing plants, and
farther still from consumers, pipelines are necessary to transport raw materials from their source to
refineries and gas processing facilities and then to market.

While other forms of transportation are available, pipelines provide a safe, economical and constant
flow of crude oil, natural gas and petroleum products.

CEPA’s member companies transport 97 per cent of the crude oil and natural gas produced in
Canada. In 2006, this represented approximately 413,400 cubic metres (2.6 million barrels) of
crude oil and equivalent and 480 million cubic metres (16.6 billion cubic feet) of natural gas per
day. CEPA members operate more than 100,000 kilometres of pipeline in Canada and the United
States.

Types of Pipelines

There are three major types of pipelines use to transport hydrocarbons, defined by throughput:
crude oil pipelines, natural gas pipelines and product pipelines.

Crude Oil Pipelines

Approximately 421,300 cubic metres (2.65 million barrels of crude oil) of oil per day travel through
Canada’s crude oil pipeline network which includes everything from small-diameter plastic gathering
lines to steel conduits more than one metre in diameter.

Small-diameter (five centimetres to 15 centimetres; two inches to six inches) gathering system
pipelines in individual fields carry oil from wellheads to a central facility in the field called a battery.

Larger lines (up to 20 centimetres (eight inches) in diameter) connect groups of batteries with local
refineries or with still larger trunk lines (up to 120 centimetres (47 inches) in diameter) which feed
refineries across the country. Where gathering systems are not available, oil is transported by truck
to trunk lines. Crude oil and refined products are also transported by ship and by railway.

The oil is moved along the pipelines by powerful centrifugal pumps spaced along the line at intervals
depending upon pipeline size, capacity and topography.
Different types of oil, heavy oil, bitumen and natural gas liquids travel in batches at between four
and eight kilometres per hour. Because the different batches in a pipeline move as a continuum at
the same speed, there is no need to separate them. Mixing only occurs where two batches come in
contact with each other and these small volumes, known as transmix, are reprocessed.

Major Crude Oil Pipelines

Enbridge Pipelines’ crude oil pipeline system stretches from Norman Wells in the Northwest
Territories to northern Alberta and from Edmonton eastward to Sarnia, Toronto, Montreal and the
central United States. The leg between Sarnia and Montreal, originally built to carry Western
Canadian crude oil eastward, was reversed in 1999 so that it now brings imported and offshore
Canadian oil production westward to Ontario refineries.

The Trans Mountain system, owned by Kinder Morgan, carries crude oil and refined products
westward from Edmonton to Vancouver and into Washington State. Kinder Morgan also operates the
Express Pipeline, which carries crude oil from Hardisty, Alberta, to Wyoming where it joins another
Kinder Morgan pipeline, the Platte, to supply markets in the Midwestern United States.

Other pipelines that transport crude oil south from Alberta to Montana include the Rangeland, Milk
River and Bow River systems. The Wascana pipeline carries crude oil from Saskatchewan into
Montana.

Pipeline systems operated by Enbridge, Kinder Morgan and other companies also transport synthetic
crude oil, heavy oil and bitumen to refineries and marketing terminals in Alberta. The Cochin
Pipeline carries natural gas liquids, such as propane and petrochemicals, such as ethylene from
Alberta to Sarnia, and the Trans-Northern Pipeline supplies refined petroleum products in southern
Ontario and Quebec.

Canada’s crude oil imports arrive by tankers at East Coast ports or at Portland, Maine, for shipment
by pipeline to Montreal. There has also been some tanker transport of oil products on the Great
Lakes.

There are currently 16 refineries in Canada: two in British Columbia, three in Alberta, one in
Saskatchewan, four in Ontario, three in Quebec and three in the Atlantic Provinces, all of which are
connected to the pipelines system.

Natural Gas Pipelines

Approximately 484 million cubic metres (17.1 billion cubic feet) of natural gas per day travel
through Canada’s natural gas pipeline network which, like oil pipelines, comprises everything from
small-diameter plastic gathering lines to steel conduits more than a metre in diameter.

Unlike crude oil, natural gas is generally delivered directly to the consumer by pipeline. However, it
begins that journey in a manner similar to crude oil. Gas wells are connected to small-diameter (five
centimetres to 15 centimetres; two inches to six inches) gathering systems that take the gas to a
gas processing facility. Gas processing facilities, usually referred to as gas plants, vary in size from
small compression facilities that are mounted on moveable platforms and that remove impurities
and water from the gas, to large gas plants that also remove sulphur and carbon dioxide. Some gas
plants also extract ethane, propane, and butane, which are referred to as natural gas liquids or
NGLs. The generally dry gas may then be compressed prior to moving into the transmission system
which consists of steel pipe from 50 centimetres (20 inches) to more than a metre (39.4 inches) in
diameter.

Gas flows through the system from areas of high pressure to areas of low pressure through the use
of compressors, turbines similar to jet engines that increase the pressure of the gas up to 10,300
kilopascals (1,500 pounds per square inch). Compressor stations are placed at regular intervals
along the pipeline to increase line pressure which is reduced due to friction of the gas moving
through the pipe.

Transmission line compressors are most often driven by gas turbines with the necessary fuel being
taken from the pipeline. Where electricity is preferable, electric motors may be used to drive
compressors.

Transmission systems move the gas across great distances to local distribution companies or gas
utilities, where the pressure is reduced and the gas enters a distribution main for local delivery to
service lines connected to individual homes or businesses.

Major Natural Gas Pipelines

The Alberta system of TransCanada PipeLines Limited (TransCanada) carries the greatest volume of
natural gas in Canada. The Alberta system gathers gas from producing areas around the province
and transports it to distribution systems, industrial customers and other transmission systems
serving markets in Canada and the United States. Straddle plants, facilities which straddle the
pipeline and remove natural gas liquids, are located at the Alberta borders.

TransCanada also owns the largest interprovincial natural gas pipeline in Canada. It is one of the
world’s longest natural gas transmission lines, extending from the eastern Alberta border into
Quebec with numerous connections to the United States.

In British Columbia, Spectra Energy (formerly Westcoast Energy Inc.) operates gathering lines and
gas processing plants as well as the main natural gas transmission system. TransGas Limited
operates the collection, transmission and distribution system in Saskatchewan.

The Maritimes & Northeast Pipeline main pipeline was built in 1999 to bring natural gas to markets
in the Maritimes and Northeastern United States from six developed natural gas fields 160
kilometres (100 miles)offshore from Nova Scotia. The natural gas is delivered to shore by a pipeline
laid in a trench on the sea floor. The Canadian portion of the onshore line stretches 568 kilometres
(350 miles) from Goldboro, Nova Scotia to St. Stephen, New Brunswick, and connects to several
smaller lines that deliver gas to consumers in Nova Scotia and New Brunswick.

The Alliance Pipeline, which began operation in late 2000, stretches from northeastern British
Columbia to the Chicago area, and carries, at very high pressure, both natural gas and natural gas
liquids as a single dense phase fluid. Other significant transmission systems include Trans Quebec &
Maritimes Pipeline Inc. in Quebec and Terasen Gas, which operates a natural gas pipeline to
Vancouver Island.
In 1912, Canadian Western Natural Gas (now part of the ATCO Group) completed a natural gas
pipeline from Bow Island to Calgary. ATCO Pipelines operates more than 8,400 kilometres (5,220
miles) of natural gas pipeline. ATCO Gas owns and operates a 36,000-kilometre (22,370-mile)
natural gas distribution system in Alberta.The original pipelines have been replaced and new
pipelines continuously added. The ATCO system now totals 8,400 kilometres (5,220 miles), all
within Alberta.

To balance supply and demand, several natural gas companies operate storage facilities in depleted
oil and gas fields and underground salt caverns. The largest storage facilities are located in central
and eastern Alberta and southwestern Ontario.

Product Pipelines

Product pipelines carry refined products such as gasoline, diesel, jet fuel, heating oil and lubricants
from refineries to terminals or local distribution centres. Like oil pipelines, centrifugal pumps move
the products through the line. Pipe diameters range from 20 centimetres to as high as 106
centimetres (eight inches to 42 inches).

Where Pipelines are Located

Producing fields are generally thought of as being in remote areas some distance from
population centres; however, some producing fields are adjacent to or underlie cities such
as Calgary, Red Deer and Medicine Hat. Consequently, gathering systems can run
beneath wilderness areas, farmland and cities and towns.

Trunk lines, because they transport crude oil, natural

gas and petroleum products long distances, can also
run beneath wilderness areas, farmland and cities and
towns.

Natural gas distribution systems are found in urban

settings, delivering natural gas to houses, apartment
blocks and commercial and industrial buildings. In
most residential subdivisions, there is a service line
connecting to each house.

A pipeline’s location can be determined either by above-ground warning signs or the right-of-ways
in which the pipelines are buried.

Warning signs, as regulated by the National Energy Board and various provincial regulatory bodies,
are placed on each side of highway, road, railway or watercourse crossings and at suitable intervals
along the pipeline to clearly and continuously mark the pipeline’s location through urban areas and
along the right-of-ways of roads or highways.
Right-of-ways are recognized as corridors clear of trees, buildings and other structures and are
clearly marked by warning signs.

Provincial regulatory bodies determine minimum depth of earth over a pipeline, however, due to
human activity and/or erosion, the depth may be shallower, so extreme caution must be taken
when excavating near a pipeline.

Pipeline Design

Pipeline system design involves more than drawing a line between two points on a map. Several
items must be considered:

distance to be traveled,
volumes to be received,
receipt points,

volumes to be delivered,
delivery points,
type of throughput (oil, gas etc.),
range of throughput (heavy, light, composition, etc.), and
forecast volume growth.

These aspects dictate the diameter and composition of the pipe, compression requirements and
other surface facilities.

The pipeline route is influenced by such factors as:

safety,
environmental protection and preservation,
stakeholder input,
operating environment,
terrain,
location of existing corridors,

control points,
regulatory matters,
land acquisition, and
accessibility.
Pipeline Construction

Pipeline Construction is usually divided into three phases: pre-construction, construction and post-
construction.

Pre-construction Construction Activities Post-construction

Activities Activities

Surveying and Bending the pipe Testing

staking Joining the pipe Final cleanup
Preparing the right- Coating the pipe
of-way Positioning the pipe in Consultation to
Trenching the trench address
Stringing the pipe Installing valves and
Consultation to fittings post-construction
address Backfilling the trench issues
issues associated Consultation to address
with construction issues
route planning

Pre-construction
Surveying and staking

Once the route has been finalized, crews survey and stake the right-of-way. The right-of-way not
only contains the pipeline, but is also where all construction activities occur. It also provides access
to the site and storage for equipment and pipe. At this stage, other pipelines that will be crossed are
identified and marked.

Preparing the right-of-way

The right-of-way must first be cleared of trees and brush. Top soil is removed and stockpiled for
future reclamation. The right-of-way is leveled and graded to provide access for construction
equipment such as ditchers, backhoes, side boom bulldozers and trucks.

Trenching

Once the ROW is prepared, the trench is dug

and the centre line of the trench is surveyed
and re-staked. The equipment used to dig the
trench varies depending on the type of soil,

and may involve bucketwheel trenchers or

backhoes. Some small-diameter pipe is buried
using a large plough-like machine that creates
a deep slice in the earth and installs the pipe

at the same time.

Stringing the pipe

The individual lengths of pipe are brought in

from stock pile sites and laid end to end in
preparation for welding.

Construction
Bending the pipe

Due to the contours of the land, unsuitable

terrain and the type of substrate, it is often

necessary to bend the pipe. Special machines

are used to bend the pipe without destroying

its circular profile.

Joining the pipe

Individual lengths of pipe are usually welded

together using either welding machines or
manual arc welding. Several passes may be
required to complete the weld. Welding shacks
are placed over the joint to prevent wind from
affecting the weld. After welding, the integrity
of each joint is tested either by X-ray or
ultrasonically.

On some internally coated pipe, the coating

would be damaged by welding. This type of
pipe is joined by mechanical interference,
where the tapered end of one pipe is fitted into
the flared end of the next pipe. An epoxy resin
is used as a lubricant as the pipes are joined
and as a sealant afterward.
Coating the pipe

Coatings, both inside and outside the pipe, are

necessary to prevent corrosion, either from
ground water or throughput. Composition of
the internal coating varies with the nature of
the throughput. Pipeline pipe arrives at the
construction site pre-coated. Special care is
taken in loading and unloading and positioning
the pipe so as not to damage the coating.
However, the welded joints must be coated at
the construction site.

Positioning the pipe in the trench

The pipeline is lowered into the trench using

bulldozers with special cranes called
sidebooms.

Installing valves and fittings

Valves and other fittings are installed after the pipeline is in the trench. The valves are used once
the line is operational to shut off or isolate part of the pipeline.

Backfilling the trench

Once the pipeline is in place in the trench, the trench is carefully backfilled so as not to damage the
pipe coating.

Post-construction
Pressure testing

The pipeline is pressure-tested for a minimum of eight hours using air, water or a mixture of water
and methanol. A pressure-temperature recorder records and saves a continuous record of the test
to confirm the outcome.

Final cleanup

The right-of-way is restored to its original contour and the top soil which was previously removed
from the right-of-way is replaced and reseeded. Where necessary, erosion control barriers are
constructed. If the right-of-way passes through farmland, it can be seeded with crops.

Pipeline Economics

Pipeline construction costs depend on many factors such as:

type of pipe
type of coating
length of pipeline
diameter of pipe
environment, and
terrain.

Pipeline companies use calculations based on cost per pipe diameter per distance to estimate
pipeline project costs. For example, the calculation for a gathering system may be $1,000 per
millimetre diameter per kilometre. A 50-kilometre system consisting of 50 millimetre pipe may be
roughed out as:

50 millimetres x 50 kilometres x $1,000 per kilometre = $2.5 million

and
50 miles x 4.5 inches x $28,000 per mile = $6.3 million

If the proposed gathering system appears economical using this formula, a more detailed cost
estimate will be performed.
Pipeline Resources
Labour/Skills

Pipeline companies require a great number of skill

sets, from surveying, heavy equipment operation and
welding to line monitoring and line pack management.
While some of these skills are industry specific, others
are not. These more general trades, particularly
construction and maintenance, are in short supply
because of the current rapid expansion of the oil and
gas industry. Tight labour supply can lead to
escalating costs and delays in construction.

Pipeline construction and operation requires a wide range of skilled and unskilled
labourers and professionals working in a variety of disciplines.

accountants helicopter and charter air services

building tradesmen personnel
camp and site security personnel information systems specialists
catering and accommodation personnel instrumentation specialists
concrete weight manufacturers laborers
construction/project engineers manpower supply coordinators
consultation coordination managers mechanical tradesman
draftsmen modular assembly manufacturers
electrical/mechanical tradesmen operational maintenance workers
electricians pile-driving services
engineers pipeline integrity engineers
equipment operators process and field operators
expeditors project managers
facility site development workers public relations specialists
fencing / painting tradesmen right-of-way clearing, re-vegetation and
foremen restoration workers
general technicians (e.g. cathodic rough lumber suppliers
protection) traditional knowledge specialists
geotechnical specialists transportation tradesmen (road and rail)
heavy equipment supply and welders
maintenance tradesmen wildlife specialists
Pipeline companies are responsible for the safety of operations, which includes the proper training
and education of all employees and people associated with the pipeline project. In addition to
overseeing the safe operations of the pipeline, companies are also dedicated to making sure that
employees have a safe workplace and the appropriate training and tools to do their jobs. Pipeline
companies and inspectors evaluate whether employees are meeting regulatory requirements,
conducting proper inspections, and using necessary safety precautions. All pipeline employees are
properly trained at their task. Pipeline system operations are also subject to local, provincial and
federal environmental and safety standards and regulations.

Materials

A similar situation exists with respect to materials.

Because of the large number of energy construction
projects, particularly oilsands projects, basic
construction materials such as steel are periodically
scarce. Again, this leads to higher costs and project
delays.

Meeting future supply needs is driving significant new investment in non-traditional resource
development including oilsands and heavy oil, Arctic natural gas, coalbed methane, offshore oil and
natural gas and imported liquefied natural gas. Timely investment in and construction of pipeline
and storage infrastructure to connect these new supplies to markets will be critical to ensure North
America has adequate supplies of energy.

To understand the economic benefits to Canada and Canadians of these investments as well as the
costs to consumers from delays in the timely construction of critical pipeline infrastructure, CEPA
commissioned two economic studies. The two studies serve to quantify the economic benefits that
result from pipeline investment and to illustrate the potentially very significant costs to Canadian
residential, commercial and industrial consumers that would result from delays in the construction
of new pipeline infrastructure in North America.
Pipeline Operations

Business of Pipelines

Most pipeline operators do not own the throughput they are shipping. Shippers – oil and gas
producers, refineries, utilities and industrial customers – own the throughput and pay the pipeline
operator to ship it based on the type of the product shipped, amount of throughput and distance
transported.

Since oil and natural gas have to be transported to market, shippers generally reserve a fixed
volume per month on the pipeline in order to ensure reliable delivery to their customers. Pipeline
revenue is based on costs and throughput volumes.

How Do Oil, Natural Gas and Products Move Through a Pipeline?

No matter what the throughput, liquids in a pipeline

move in discrete batches. Because every batch in a
pipeline moves at the same speed – about four to
eight kilometres per hour for liquids – the batches
don’t mix except where they actually come in contact,
and these small volumes can be reprocessed. Rarely
are batches separated by physical means such as
metal or plastic pigs.

Natural gas volumes are not batched. They move through the pipeline at about 40 kilometres per
hour.

Strategically placed centrifugal pumps or compressors move liquids or natural gas respectively
through pipelines. These facilities are necessary because of energy loss due to friction.

How Are Pipelines Operated?

Pipeline operation involves more than loading and off loading batches at the right time and place.

Control centre personnel are responsible for:

monitoring the pipeline system 24 hours per day,

scheduling batch receipt and delivery,

controlling batch movement, and

responding to emergencies.

Field personnel are responsible for:

 inspecting the pipeline and pipeline safety measures such as cathodic protection,
maintaining and repairing the pipeline, pumps, compressors, valves, metering equipment,

safety measures and electronic equipment, and

calibrating instruments.

How Are Pipelines Monitored?

Control centre personnel monitor pressure,

temperature, flow rates and look for any
inconsistencies which may indicate a potential leak or
equipment failure. Information is fed to the control
centre through remote supervisory control and data
acquisition (SCADA) systems.

Sudden, large pressure drops will trigger automatic emergency systems that close valves to isolate
the section of the pipeline in question.
Pipeline Technology

Technology of Pipelines – Industry R&D

The evolution of pipeline technology parallels advancements in pipeline safety and involves
improvements to just about every aspect of pipelines.

o Standards – Standards are sets of accepted practices, technical requirements and

terminologies for products, services and systems. They are essential to ensuring
public safety and efficient methods and products.

They were designed as the ultimate reference tools for engineers, planners, regulators,
technicians, managers, suppliers, operators, contractors and consultants. Each standard
and its commentary provide up-to-date requirements on the design, construction,
operations and maintenance of oil and gas pipeline systems both onshore and offshore.

Materials –The earliest crude oil and natural gas pipelines in North America were made
either of wrought iron or cast iron. Wrought iron is almost pure iron and cast iron has a
high carbon content. Both of these materials are weaker and more brittle than steel pipe.
Steel pipe was introduced in the latter half of the 19th century and by 1900, was the
primary pipe material. It is still 98 to 99 percent iron, but also contains 0.001 to 0.30
percent by weight carbon and 0.3 to 1.5 per cent by weight manganese, and may contain
trace amounts of columbium, molybdenum, vanadium and titanium depending upon end

use. All of these alloying materials add strength, toughness, ductility and weldability.

Pipe Making – Pipe is made by forming hollow cylinders from flat sheets of steel and
welding the lateral edges together. Early processes, called furnace welding, involved
drawing red-hot steel through a tapered form which forced the lateral edges of the sheet
together creating the circular cross section and sealing the seam. Seams formed in this
manner had a burst strength on the order of only 70 per cent of that of the steel.

The first improvement on this method was to taper the lateral edges to increase the surface
area of the weld, which improved the burst strength to 90 per cent of that of the pipe
material.

Electric welding allowed the steel sheets to be formed into tubes at much lower
temperatures. As the lateral edges were forced together, an electric current was applied to
heat only the weld area and bond the edges together. Using this process, the strength of
such seams exceeded that of the pipe material.
Seamless pipe was made by rolling solid round “billets” into ovals. As the core of the oval
began to fail, a round mandrill was longitudinally forced through the billet, creating a round
tube.

In the mid 1940s, arc welding, where the edges are joined by an electric arc between the
pipe material and an electrode of filler metal, was introduced to pipe making. Initially, the
seams were welded only from the outside surface, but by the late 1940s, welds were made
on both the inside and outside surfaces of the pipe.

Since the 1950s, stronger grades of steel have been introduced, as well as improved
welding, inspection and quality control practices.

About The West Africa Pipeline Development Project: involves the construction
of a 680 kilometer transport system designed to carry natural gas from Nigeria to markets in
Benin, Togo and Ghana. The World Bank and its private sector insurance arm, the Multilateral
Investment Guarantee Agency, together provided risk insurance for the project, which is
financed by a consortium of private companies. Project sponsors have claimed that the pipeline
will improve the environment and promote regional development, but local civil society groups
are concerned that promised benefits will not be realized. Completion of pipeline construction is
expected soon, having been delayed by instability in the Niger Delta region where the gas is to
be extracted, a scenario predicted by local groups even while the project was under preparation.
The project has become the subject of a claim to the World Bank Inspection Panel by affected
communities in Nigeria, who have cited the inadequacy of the project’s environmental impact
assessment and public consultations, and the failure to demonstrate how the project will reduce
gas flaring in Nigeria or bring benefits to local communities.

The World Bank Group support for project, serving as a resource for environmental groups in
Nigeria and Ghana concerned about the continued exploitation of natural resources from the
fragile Niger Delta area and the impacts of trans-boundary infrastructure on local communities
and the environment. There is a resolve to bring peace to all concern and to continue to advocate
greater transparency and public influence on the project’s design and implementation, as well as
project sponsors’ accountability for the delivery of benefits and avoidance of harm to
communities and the environment.
CONCLUSION

Given the remote location of many Russian production fields, pipelines have always played a critical role in transporting oil and gas. The
construction of a vast system of pipelines was often cited as a crowning achievement of the Soviet oil and gas industry. They were
designed to move production primarily within the Soviet Union and Eastern Europe and secondarily for export to the West.

Today's Russia inherited from the U.S.S.R. 46,000 km of these crude oil pipelines, 15,000 km of petroleum product pipelines, and
152,000 km of natural gas pipelines, almost all of which are still owned and controlled by the state. By contrast, the United States, with
only 55 percent of Russia’s land mass, has over four times more oil pipelines and two times more natural gas pipelines, almost none of
which are owned or controlled by the government.

The Russian oil industry privatized and modernized throughout the mid-1990s. A more competitive cost structure after the ruble collapse
of 1998, improved property rights protection leading to greater reinvestment, and the introduction of Western technology and business
practice allowed Russian oil production to recover from a low of 6 million barrels per day to nearly 8 million barrels per day.

This is still far below the level achieved in the peak production year of 1988. Nevertheless, domestic oil consumption has dropped to only
about 2½ million barrels per day with lower economic activity and better energy efficiency. As a result, much more oil is being exported
today, and Russia has become the second largest oil exporter in the world after Saudi Arabia.

Russian oil production is forecast to maintain this rapid growth while domestic consumption is expected to be relatively flat in spite of
better economic per formance. The existing pipeline system was, however, designed to move oil to now diminished domestic markets
and less desirable markets in Eastern Europe.

Thus, Russia is desperately in need of new export facilities—large-diameter pipelines and deep-water marine terminals—to transport
increasing volumes of oil to higher-value world markets in the large ocean-going tankers favored in international trade. Otherwise, both
the performance of its petroleum industry, which has been the growth engine for the Russian economy in recent years, and its ambitions
of playing a larger role in world oil trade will suffer.

In order to harness the potential of its energy sector and capture new markets, three key projects on the drawing board are being
discussed widely. These include new pipelines to Murmansk, to Daqing in northeast China, and to Nakhodka on Russia's Pacific Coast.
The way in which Russia handles these pipelines and its petroleum resources will signal the likely direction in which its uncertain
economic future will unfold.

Russia's long term economic significance lies in the integration of its population into the world market and its potential as a progressive
force in the economic integration of its neighbors from the former Soviet Union into the global system.

With 5 to 6 percent of the world’s proven oil reserves and a production /reserve ratio of about 20 years, Russia is not a substitute for the
Persian Gulf when it comes to oil production, but enjoys better economic options than those countries thanks to its agricultural and
industrial potential.

Development of Russia's larger natural gas resources will require greater openness to foreign direct investment due to the high
investment costs and assured market access necessary for the remote gas projects around the world with which it will be competing.

Other countries, especially the United States, Germany, Britain, China, and Japan, will have to decide for themselves the meaning and
value of building an energy relationship with Russia. In doing so, there is no better touchstone than Russia's pipeline policy at home and
abroad. The path it takes, be it a statistic or market-oriented, will tell us much about the economic future Russia has chosen.

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