The most common method to transport oil and gas within the energy industry is through the pipeline transmission system. However, the pipeline system is very expensive, greatly on account of material and construction costs. One of the key decisive factors for a pipeline project is its capital expenditure (CAPEX). The material cost is primarily driven by "linepipe cost", which is a function of pipeline size and thickness. Several pipeline design standards are followed worldwide based on either the Working Stress Design (WSD) or the Load and Resistance Factor Design (LRFD) approach.

The aim of this paper is to present a comparative study and arrive at recommendations to optimize the material cost of linepipe, through a rational selection of the governing design code for pipelines, design philosophy and material grade. Hence, it is expected that the pipeline industry can benefit, particularly during the initial feasibility stage of evaluating the capital expenditure of a pipeline project.

As the pipeline diameter and operating parameters are fixed in line with process requirements, for purposes of mechanical design, wall thickness will be the governing cost parameter to be assessed. There are broadly two methods of design being followed in the industry to calculate the wall thickness based on pressure containment criteria i.e. WSD (stress criteria) or limit state. Traditionally, pipeline wall thickness is based on WSD, with the allowable design stress considered as a prescribed fraction of Specified Minimum Yield Strength (SMYS). However, there is inherent conservatism in the allowable stress method as only a certain fraction of material strength has been factored.

A recognition of this conservatism by the industry resulted in the limit state approach. A detailed comparison has been performed of available international design standards and the approach followed worldwide to develop the matrix and perform the parametric study. Literature review and parametric analysis indicates that linepipe material cost can be optimized upto 25%. To substantiate the findings, a case study for a typical pipeline project in the Middle East has been performed. FEM tool (e.g. ABAQUS) has been used to ascertain the stress and strain level.

The paper deliberates on the design code, design method and linepipe material and provides recommendations on the judicious selection of these parameters which can ultimately lead to optimum CAPEX. Results of the case study indicate that opportunities exist to optimize the material cost up to 15%.

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