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Learning points for transnational pipelines

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Tobias Rosenbaum Tobias Rosenbaum
Regional Manager, Continental Europe & North Africa, DNV GL - Oil & Gas
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The TAP is set to climb to 1,800 metres (m) in Albania’s mountains (above) before running 820m below the Adriatic Sea
The TAP is set to climb to 1,800 metres (m) in Albania’s mountains (above) before running 820m below the Adriatic Sea. Photo: Shutterstock
Strategically important projects to pipe gas from the Caspian to Italy can benefit from experiences elsewhere

The Southern Gas Corridor (SGC) includes some of the most ambitious transnational natural gas pipeline projects undertaken. Its interconnected onshore and offshore pipelines – SCPX, TANAP and TAP – will transport gas 3,500 kilometres (km) to Europe from the BP-operated Shah Deniz field in the Caspian Sea.[1]

The three projects in the SGC could benefit from learnings on pipelines with similar characteristics, such as Los Ramones-Frontera (‘Los Ramones’) and Nord Stream. Each crosses or interconnects at important borders, and is regionally strategic.

The 856km Los Ramones system – three onshore pipelines – will supply Mexico’s growing industries with economic and abundant US shale gas. Its already operational Phase I uses 48-inch diameter pipes; the next phases will be 42-inch. Nord Stream’s offshore section of 1,224km, 48-inch diameter, twin lines beneath the Baltic Sea, exports Russian gas directly to Germany. This strengthens the European Union’s internal market in gas while renewable energy develops.

The SGC is also of great importance to BP. It is a high value project that will be key to underpinning the company’s growth “to 2020 and beyond”, according to Emily Olson, the company’s vice president (VP), communications and external affairs, Southern Corridor.

“Experience on Los Ramones, Nord Stream and other large projects may be useful in the Southern Gas Corridor’s development,” suggested Tobias Rosenbaum, regional manager for Continental Europe & North Africa, DNV GL - Oil & Gas.

“Such projects are challenging as the investors’ project teams are often assembled for the duration of the project and things need to be right from the start. Shared learnings between projects, coupled with use of joint industry projects, help to minimize risk. Smart application of this know-how can have a very positive effect on capital expenditure (capex), operational expenditure (opex) and schedule risk.”

He continued: “In-depth knowledge of codes and standards, coupled with the use of
DNV GL’s service specifications, can lead to capex savings and reduced technical uncertainty. Ensuring that the right pipeline materials are selected and that fabrication and installation is up to standard can also reduce the probability of delayed first gas and costly repairs during operation.”

The consequences of pipeline failure are unthinkable. “Typically, a major incident involving a gas pipeline can cost around USD20 million (m), and an offshore repair USD100m, while loss of a subsea pipeline could be substantially more,” said Rosenbaum. “For big strategic projects, the impact on business through loss of revenue and increased operational expenditure could be huge.”

TAP will run high in Albania’s mountains and deep in the Adriatic Sea. Its 36-inch diameter, a large dimension for deepwater, creates challenges during installation. Los Ramones’ Phase II North section also crosses steep mountains.

Geohazards such as landslides and earthquakes can damage or rupture pipelines. TANAP and TAP, for example, will cross areas of heightened earthquake risk. Repairs in remote areas may be lengthy and costly, particularly during winter when snow hinders access to the pipeline. Damage or a rupture could halt production for months. By monitoring pipelines continuously, operators can assess the need for immediate action to reduce the risk and consequences of failure.

Southern Gas Corridor (SGC)

Quality throughout the lifecycle

“The strategic importance of the SGC, Los Ramones and Nord Stream projects demands the highest quality assurance throughout their lifecycles,” said Rosenbaum. “Small improvements made at an early stage can have a significant, positive impact later in the project. The earlier the involvement of technical experts and risk management expertise, the greater the return on this investment.”

For instance, DNV GL was involved early in the Nord Stream project ensuring general compliance in the feasibility and conceptual phases. From 2007, DNV GL was appointed the independent certification organization for the full project. The technical basis for this project was the international pipeline standard DNV-OS-F101, and the basis for the
DNV GL certificate was DNV-OSS-301.

The requirements given in DNV-OS-F101 are formed by the knowledge gained and developed over 40 years by the oil and gas industry. The safety requirements in this standard are used by the most stringent authorities to protect people and the environment. “DNV-OSS-301 is the risk-based and proven method to organize quality assurance towards pipeline technical integrity,” Rosenbaum emphasized.

Nord Stream opted for DNV GL certification also in the operational phase. “Ongoing certification helps communicate risk-management goals and performance to multiple stakeholders,” Rosenbaum noted. Maintaining a certificate in the operational phase not only supports the maintenance of technical integrity and operational efficiency, but can also provide a reference document for the many stakeholders from several countries involved with interconnected projects.

DNV GL has been involved from early on with Los Ramones; Phase I (114km) from the US border to Los Ramones, Mexico – operational since 2014; and Phase II North (450km) and Phase II South (292km), which are under construction.

For Phase II North, DNV GL is verifying design, engineering, materials, compressors, main equipment, construction and start-up. It is certifying line pipes from Mexico for Phase II North, and providing inspection in China for Phase II South.

“Having experienced DNV GL surveyors worldwide, and working to global standards, allows us to mobilize excellent personnel at short notice so that verification work does not impact on the overall schedule of a project,” Rosenbaum said.

Early installation of pipeline integrity management (PIM) systems can also support substantial annual opex savings. DNV GL has been implementing its PIM software products during construction of Los Ramones Phase II South.

DNV GL's PIM software, now part of Synergi™ Pipeline, provides a clear overview of the integrity of onshore and offshore pipelines, and gas distribution networks. Implementation during construction means data from integrity monitoring, tests and inspections are logged from day one.

“Some operators wait years before installing integrity software. Early implementation helps to capture digital data to improve operational excellence, and may allow extended intervals between inspections. This can help reduce opex and prolong life,” Rosenbaum stressed.

Regulatory issues

Transnational pipeline projects are often prone to political challenges, particularly when traversing territories with little oil and gas experience. Regulatory authorities in these countries can often impose prescriptive design codes that add to cost; for example, those that lead to high wall thicknesses. Projects must also deal with local content requirements.

Detailed understanding of regulation, coupled with in-depth knowledge of codes, standards and service specifications, can provide opportunities to save on capex and opex because expectations can be satisfied at the first attempt. Such detailed insight is also needed to create room for smart solutions that can have significant effects on both types of expenditure.

DNV GL and the Southern Gas Corridor

The company has 40 years’ experience of major pipeline projects. Working with operators, suppliers, governments and industry associations, it supports progress across the entire pipeline industry.

DNV GL has had direct involvement spanning several years with participants in the Southern Gas Corridor (SGC), and with parts of their respective supply chains. This has included various studies and some quality assurance support, inspection services and third-party crossing assessments. This range of involvement has provided the company with insights into challenges and solutions for this strategically important gas corridor to the European market.

“There is further know-how to share with the SGC projects: experience gained from our pipeline projects worldwide in all topographies, environmental conditions and engineering challenges,” said DNV GL’s Tobias Rosenbaum. “SCPX, TANAP and TAP will similarly generate learnings for future pipeline projects.”

Reference:
[1] ‘Changing pipelines, shifting strategies: gas in south-eastern Europe, and the implications for Ukraine’, Pasquale de Micco, policy department, directorate-general for external policies, European Parliament, July 2015

Disclaimer: 

DNV GL prides itself on providing accurate information but makes no claims or guarantees about the accuracy, completeness or adequacy of contents in this publication, and disclaims liability for any errors or omissions. The authors’ views here do not necessarily reflect DNV GL’s views.