Sidney P. Santos
Rio Oil & Gas Expo and Conference 2016
Technology development has been more and more available – everywhere and to everyone. Therefore, engineering companies, gas transmission companies and gas pipeline designers must take advantage of it to maintain a high level of competitiveness and to respond quickly to market demands and business opportunities. With mobile devices connected to the web, and running innovative applications, with a reliable data basis, it is now possible to design a gas pipeline and interact with different management levels of a company and project’s stakeholders at astonishing speed with high quality and low cost.
The innovative technology presented in this paper covers the following aspects of a gas pipeline design:
- Cost assessment
- Thermohydraulic simulation for a diameter range
- Loop lines design
- Compressor station quantity and spacing
- Multiple drivers selection
- Fuel gas or energy demand
- Economic evaluation with J-curves to determine the best alternative for the project
- Capacity ramp-up
- Availability analysis with Monte Carlo simulation
- Compressor performance analysis
- Compressor station optimization
- Executive and Technical Reports
- Project GIS visualization
With such technology, it is now possible to reduce dramatically the required time and engineering cost to design a gas pipeline. This paper presents two mobile applications and a case study of a nonexistent pipeline named KeystoneGas for the sole purpose to demonstrate the methodology of a gas pipeline design. This pipeline starts at Hardisty, Alberta, Canada and goes south through the Canadian-USA border down to Bayton, Texas, USA – using capacity and length as primary information and some typical information for the project as pressures, material, costs, etc. Hundreds or even thousands calculations are performed through the web at incredible speed including the reports and export files. The applications run in smart phones, tablets and notebooks.
The design process of a feasible gas pipeline (figure 1) is normally time consuming and involve professionals of different areas of expertise such as thermohydraulics, statistics, Monte Carlo simulation, risk analysis, environmental, cost assessment, economics, planning and project management. It includes:
- Modeling the pipeline and running thermohydraulic simulations for a quantity of alternatives of nominal diameters and compressor stations quantity;
- Cost assessment for the most significant cost components of a project such as capital expenditure – CAPEX, operation expenditure – OPEX and cost of fuel;
- Identification of the best feasible alternative between a range of technically accepted alternatives for the project;
- Failure analysis of compressor station units with Monte Carlo simulation and thermohydraulic simulations;
- Quantitative risk analysis for CAPEX, OPEX, construction and assembling schedule, environmental, and other important variables with their volatilities and statistical distributions.
- Project management
- Project decision-making, supported by the design process described above.
The innovative mobile technology with the methodology presented in this paper speed up the design process of a gas pipeline making it simple, reliable, practical and speedy. Multiple design alternatives are performed at astonishing speed. Another outstanding benefit is that it integrates different areas of a Company involved in the project at different management levels.
Figure 1 – The design process of a gas pipeline
The design process requires a high level of communication between professionals with different areas of expertise. With this scenario in mind and counting on computer science technology development, internet, the availability of mobile devices and more than 25 years of expertise in gas pipeline conceptual design, an innovative mobile technology for gas pipeline design has been developed and perfected as presented in this paper with a case study to help understanding its capability.
2. The Innovative Process
The design process presented in figure 1 starts with a potential project opportunity – a gas reserve or an interconnection with an existing gas pipeline and target market – and there is a need to identify the feasibility of this business opportunity with the best configuration of the gas pipeline project. Figure 2 presents the innovative mobile architecture that allows users anywhere they are and anytime required to model, modify, run, evaluate, share with others and speed up the decision making process for the best feasible configuration of a gas pipeline project.
Figure 2 – Innovative Mobile Architecture
The methodology consists of the following:
- It uses GasPipelineDesign application (figure 3) to model the potential project with just a few required technical and economic assumptions as can be seen at the Case Study paragraph. The results are optimized for five best alternatives for the project plotted on a Project PV (Present Value) Cost divided by capacity versus Capacity (J-Curve Graph – figure 4). Two reports are produced: (i) Executive and (ii) Technical Report. The simulation results for each alternative include:
- Detailed thermohydraulics
- Five best Nominal Diameters
- Compressor Station required quantities
- Compressor Station optimum location along the pipeline length
- Drivers type and sizes (electric motor, gas motor and gas turbine)
- Total fuel demand
- Cost breakdown
- With the selection of the best alternative from the best five obtained from GasPipelineDesign more details can be added to the selected alternative by using GasPipelineExpansion (figure 5):
- Pipeline route with GIS information (Lat., Lon. and Elevation)
- Update of Compressor Stations requirements
- Multiple gas deliveries
- Multiple gas supplies
- Loop lines
- Availability study (Monte Carlo simulation)
- Compressor performance analysis
- Compressor station optimization
- Capacity ramp up study
- Update of the Cost estimate
Figure 4 – J-Curve
Figure 3 – GasPipelineDesign Interface
Figure 5 – GasPipelineExpansion Interface
4. Driving principle
The innovative mobile applications rely on these key drivers:
- Must be simple
- Must be practical and speedy
- Must be reliable
Therefore, the applications have been designed so that managers, planners and engineers can start using them immediately and take advantage of them. They are simple since it allows different levels of professionals from different areas of expertise to play with then without requiring so much training or so much knowledge of the design technology. They are practical, since supports the design process of a gas pipeline while substantially reducing the working time normally required for a conceptual design. They are reliable since all internal process have been exhaustively tested and incorporate the state-of-the art of the available technology. Pipeline modeling is done for each configuration by GasPipelineDesign and GasPipelineExpansion and does not require any additional work, saving time and resources.
Both applications have been designed and optimized to run hundreds to thousands of simulations in a very efficient way to get accurate results, including reports and export files, within seconds, depending only on the quality of the internet connection.
5. Cost Estimate
The cost estimate module of the applications is based on the Oil&Gas Journal data basis but through a cockpit panel of GasPipelineDesign and GasPipelineExpansion user can incorporate his own expertise by changing cost multipliers for each type of cost associated with the project.
6. Challenging Scenario
Under a competitive and demanding scenario, we may envision a situation where a CEO or a high manager of a Transmission Company or Engineering Company found him/herself at a conference, a formal meeting, a restaurant or even playing golf and a fellow CEO asks him/her about a potential new gas pipeline or a branch expansion – but he only knows basic information such as capacity and length.
Then what? Do you have to quickly call your commercial, planning or engineering department for support or you just take your mobile device and run the case?
By using GasPipelineDesign and a mobile device you can get results by yourself at that very moment! Then you can provide your fellow CEO with reliable information that may start a promising business case. As simple as that!
7. Case Study
This case study considers a gas pipeline named KeystoneGas with the sole purpose to demonstrate the innovative mobile technology subject to this paper.
KeystoneGas starts at Hardisty in Alberta, Canada and goes south through the Canadian-USA border down to Bayton, Texas, USA with a straight route of 1,784 miles (2,870 km) and with a geographic route of 1,873 miles (3,014 km) (see figure 6)
Figure 6 – Case Study KeystoneGas Exported to Google Earth by GasPipelineExpansion
When starting the simulations pipeline nominal diameter is unknown but GasPipelineDesign will take care of that. The technical and Economic assumptions are as follows:
8. Technical Assumptions
- Capacity: 3,098 MMSCFD
- Nominal Diameter: Unknown
- Length: 1,784 miles of straight route (2,870 km)
1,873 miles of geographic route (3,014 km)
- MAOP: 1,420 psi
- Gas specific gravity: 0.6000
- Inlet pressure: 1,410 psig
- Inlet temperature: 131 F
- Delivery pressure: 1,000 psig
- Delivery at milepost 1,430 miles: 100 MMSCFD
- Delivery at milepost 1,595 miles: 150 MMSCFD
- Supply at milepost 915 miles: 150 MMSCFD
- Compression ratio: 1.4000
- Soil temperature: 68 F
- Ambient temperature: 104 F
- Aftercooler downstream temperature: 131 F
- Suction header pressure drop: 5 psi
- Discharge header pressure drop: 5 psi
- Aftercooler pressure drop: 5 psi
- Overall heat transfer (pipe-soil): 0.3886 BTU/h.ft2.F
9. Economic Assumptions
- Pipe material cost: 2,500 US$/ton
- Fuel gas cost: 5 US$/MMBTU
- Pipeline O&M: 1.5 % of Pipeline CAPEX per year
- Compressor Station O&M: 5% of Compressor Station CAPEX per year
- Project economic life: 30 years
- Discount rate: 12 % per year
- Construction time: 4 years
- Pipeline CAPEX schedule: 15% year 1, 30% year 2, 30% year 3, 25% year 4
- Compressor station CAPEX schedule: 0 % year 1, 10% year 2, 40% year 3, 50% year 4
- Other data accepted as suggested by the interface.
The innovative mobile technology – applying the methodology explained at the onset – and by using GasPipelineDesign (Figure 7) and GasPipelineExpansion have identified the 5 best feasible alternatives for this Case Study project named KeystoneGas and a nominal diameter of 56” was selected for this Case Study:
Figure 7 – GasPipelineDesign Executive Summary
- Nominal diameter : 56”
- Total length : 1,873 miles
- Transmission capacity : 3,066.36 MMSCFD
- Compr. station quantity : 11
- Compr. station operating units : 2
- Compressor station standby units : 1
- Total installed power : 1,016,480 hp
- Installed power per unit (ISO) : 30,802 hp
- Total required fuel gas per year : 108.8206 MMSCF
10.2 Economic, MMUS$
- Pipeline total cost : 12,087.73
- Pipeline total cost PV : 9,011.41
- Compressor station total cost : 2,047.62
- Compressor station total cost PV : 1,396.87
- Pipeline O&M present value : 928.20
- Compressor station O&M PV : 524.11
- Total fuel gas PV : 990.22
- Inventory (Line pack) gas PV : 44.22
- Total CAPEX : 10,408.28
- Total OPEX : 2,486.74
- Total Project PV : 12,895.02
11. Availability Study (Monte Carlo simulation)
Monte Carlo simulation method applied to the availability study consists of modeling each independent variable that is –the compressor station unit with its value (e.g. 0.971 for gas turbine + centrifugal compressor) and statistical distribution (e.g. uniform distribution) – and then run thousands random iterations to identify failure scenarios, their frequencies and their consequent impact on the dependent variable that is – the gas pipeline capacity. While running the model all the uncertain (independent) variables will change randomly very close to what happens in real life.
Availability study with Monte Carlo simulation is of key importance for a feasible gas pipeline project. Transmission Company must mitigate its operation risk to comply with the Transportation Agreements with Local Distribution Companies or End Users with regard to firm capacity clause and related penalties for non-compliance. On the event of compressor units’ failures impacting pipeline capacity Transmission Company is exposed to potential penalties and loss of revenues impacting dramatically its economic result (1,2,3,4).
GasPipelineExpansion incorporates a powerful and flexible module for availability study that performs Monte Carlo Simulation. Compressor units’ failure, their frequency and scenarios are identified and each scenario is thermohydraulically simulated and its capacity under failure is quantified. The frequency of failures versus capacity under failure will allow the evaluation of the compressor system availability and also support the definition of the adequate level of redundancy (standby units) for the gas pipeline. The simulation process can be as follows:
- Simulate the compression system without any standby units and get the compression system availability
- Select target compressor stations to have standby units and run again and get improved availability for the system
- Continue testing other arrangements of standby units until the availability satisfy the Project needs
- Or simulate with a standby unit for all the compressor stations.
Any kind of compressor and driver can be modeled for each compressor station and the availability figures for each combination of compressor (centrifugal or reciprocating) and driver (electric motor, gas turbine or gas motor) has been taken from the Electric Power Research Institute (5) as below:
Table 1 – Reliability and Availability for Compressor Station Units
Compressor Station Unit Reliability,% Availability,%
Electric motor + Centrifugal 99.4 98.9
Gas turbine + Centrifugal 98.2 97.1
Gas motor + Reciprocating 97.1 94.3
The simulated results (Figure 8) for Case Study KeystoneGas – with two (2) operating units for each compressor station – show that the compressor system availability without standby units is 0.9675. With one (1) standby unit for each compressor station the availability goes to 0.9993.
Figure 8 – Availability Analysis with Monte Carlo Simulation
12. Capacity Ramp Up Analysis
This analysis is of key importance when the gas pipeline project will not start operation at full capacity but gradually.
The Capacity Ramp-up module of GasPipelineExpansion will propose an optimum schedule of compressor station starting with one compressor station and increasing quantity until all stations will be operating. This will also support the definition of CAPEX schedule for the compressor stations and will also impact on the transportation tariff for the gas transmission service. For this case study figure 9 presents the capacity ramp-up results.
Figure 9 – Capacity Ramp-up
13. Compressor Station Performance and Optimization
Once defined the quantity of compressor stations and the arrangement of compressor units whether series or and the quantity of operating units and standby units parallel the next step is to evaluate the equipment from vendors and identify the ones who best fit the project.
The compressor station performance module of GasPipelineExpansion allows incorporate the performance maps for drivers and compressor units (series or parallel) and issue technical statement to support the decision-making process. Figure 10 shows the interface.
The Optimization module applies in cases the compressor station has different compressor units with different performance maps. The optimization module simulates and defines the configuration of units that will result in the least fuel consumption defining the individual capacity contribution of each one of them.
Figure 10 – Compressor Station Performance
In conclusion, the innovative mobile technology and methodology presented in this paper and demonstrated through the Case Study named KeystoneGas promotes an improvement on the design process of a gas pipeline. It is multiplatform and run on mobile devices through the web by just using the web browsers.
Harvard’s Michael Porter states that, “Companies achieve competitive advantage through acts of innovation” (6). These state-of-the-art, innovative mobile technology improves productivity on gas pipeline conceptual design and feasibility studies with simple, practical, accurate and speed solutions.
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- SANTOS, S. P., Availability and Risk Analysis Effects on Gas Pipeline Tariff Making. In: INTERNATIONAL PIPELINE CONFERENCE, 2008, Calgary, CA.
- SANTOS, S. P.; Bittencourt, M. A. S.; Vasconcellos, L. D., Compressor Station Availability – Managing its Effects on Gas Pipeline Operation. International Pipeline Conference, Calgary, Canada, 2006.
- SANTOS, S. P.; SALIBY, E., Compression Service Contracts – When Is It Worth It? Pipeline Simulation Interest Group – PSIG, Bern, Switzerland, 2003.
- ELECTRIC POWER RESEARCH INSTITUTE, EPRI. Report No. RP 4CH2983, 1999
- Michael E. Porter, “The Competitive Advantage of Nations,” Harvard Business Review, March 1990, https://hbr.org/1990/03/the-competitive-advantage-of-nations/ar/1