Pipeline Risk Analysis

Topics: Risk management, Project management, Risk Pages: 27 (7835 words) Published: March 25, 2013
Pak. J. Engg. & Appl. Sci. Vol. 2 Jan 2008

Risk Analysis for Construction and Operation of Gas Pipeline Projects in Pakistan S. Mubin1 and G. Mubin2
1 2

Civil Engineering Department University of Engineering & Technology, Lahore, Pakistan Instructor, VTI, PVTC, Govt. of Punjab, Lahore, Pakistan

In order to cater for its high energy demand, Pakistan is planning to import natural gas through pipelines from neighboring countries. For fully utilizing the imported gas, providing it to end customers, the infrastructure of gas pipeline needs to be developed. Therefore, huge investment has been done and proposed in this sector in coming future. Considering geological, topographical, geopolitical and climatic conditions of the country, there is added risk of earthquake, landslides and floods. Due to current geopolitical situation there is a persistent threat of unrest and terrorism in the country. Instable Government policies, high rate of inflation, rapid change in material prices are also important risk factors. All these factors make the situation very complex in quantifying the risk especially for a project in which the risk impact factor rises exponentially in case of risk occurrence. In this paper, most appropriate risk classification is made based on technological, organizational, political, natural climatic, security and environmental risk factors. Effort has been made to device a simpler risk management methodology to analyze and manage risks of gas pipeline project. In the proposed risk management model Monte Carlo simulation has been used to identify critical risks.

Keywords: Oil and Gas pipelines; Risk Analysis and Management; Monte Carlo simulation

1. Introduction
Oil and gas sector is considered as back bone of any country’s economy. In Pakistan industrialization, agriculture, transportation and even domestic utilization of the energy depends on oil and gas sector. Almost 80 % of power generation is oil and gas based (50% gas and 30% oil) [1]. For efficient energy production there is a need of efficient transportation system (main and distribution network of pipeline) in the country, which is not sufficient to fulfill the country’s requirement. As per World Bank Report only 21% of the total population of the country has access on natural gas. Due to the growing demands, pipeline network is expanding vigorously as during the last 10 years the network of main and distribution gas pipeline was expanded by 85% [2]. Currently Pakistan is meeting its gas demand by internal sources but by the year 2011 the difference between country’s gas demand and supply will be 1.2 Bcfd which will rise to 3.1 Bcfd by the year 2015 and ultimately to 11.1 Bcfd by the year 2025 [3]. To fill the gap between demands and supply Pakistan is planning to import natural gas through pipeline from neighboring countries. Options of Turkmenistan, Iran and Qatar are available for gas import. Figure 1

shows that route of future cross country pipeline. In Pakistan, expected investment in pipeline construction is within range of 7 to10 billion dollars during the next 5-10 years [4]. Structure and characteristics of risk are different in different mega project such as Iran-Pakistan-India pipeline due to multi-party involvement from different geographic locations and regulatory structure [5]. These mega projects may be termed as international projects defined as those where the owner and/or contractor may be from a country different to that of where the project is situated typically involve a wider range of issues than domestic projects and in effect, moving outside of one’s usual business jurisdiction interjects many unknowns. Factors impacting owner investment decisions with international capital facilities can be quite complex and may vary significantly from region to region and project to project [18]. Nature and impact of risk are different in different stages of project life cycle of pipeline projects. For most effective...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Risk Management Plan And Risk Analysis And Risk Management Revised Essay
  • Risk Management Plan Essay
  • Essay about Risk Assessment and Risk Communication in Civil Engineering
  • management risk guide Essay
  • Essay on Cement Plant Risk Management Approach
  • Risk and Customer Records Essay
  • Fault Tree Analysis Essay
  • House construction project Essay

Become a StudyMode Member

Sign Up - It's Free