ABSTRACT: Internal pipe coating technology is available for natural gas pipelines, and can be primarily used to reduce surface roughness, and thus internal friction. This will reduce the pressure drop between compressor stations, and thus allows installing less power and consume less fuel. The potential to lower CAPEX (due to lower compression power requirement) and OPEX (due to lower fuel consumption) are counteracted by the extra cost of the internal coating. In this paper, a large diameter pipeline case study is used to evaluate the alternatives of (a) coating versus (b) not coating the pipeline, and the results are presented. The impact of coatings on friction factor is based on actual test data. Based on actual cost data from pipeline coating, derived from a large transnational pipeline project, the impact on overall economics is assessed. The case study will cover a pipeline capacity ramp up curve and the best technical and economical solution with regard to Capital expenditure - CAPEX and Operation expenditure - OPEX and consequently inpact on the transportation cost of service. INTRODUCTION With the worldwide demand for gas rising, new pipelines are required to bring gas over longer distances to the market. For long distance pipelines, the transport cost of the gas will make up an increasing portion of the delivery cost to the customer, and can reach 30 to 50% of the total cost at the receiving terminal. This transport cost can be influenced by optimizing the fuel consumption, equipment first cost, equipment operating cost, as well as equipment reliability and availability. The pressure and flow characteristics of pipelines and other factors influence the arrangement of compressors in a station. The question is often about number of units, the spacing of stations, standby requirements or the use of series or parallel arrangements in a station arises, together with type of driver, and type of compressor. When planning a compressor station or, for a new pipeline, a number of stations, considerations include: steady-state and transient capabilities and requirements of the system, growth requirements and capability, availability and total cost of ownership, and delivered cost to shippers and customers. The pipeline hydraulics relate pressure losses to the flow through the pipeline, determine the compressor operating conditions in terms of head and actual flow, and subsequently determine the required power from the driver. Contractual requirements and obligations, such as pressures and volumes at transfer points, have to be met. A key factor in these considerations is the pressure loss in the pipeline for a given flow rate, which, in turn is very much affected by the roughness of pipe. For a situation where a compressor operates in a system with pipe of the length Lu upstream and a pipe of the length Ld downstream, and further where the pressure at the beginning of the upstream pipe pu and the end of the downstream pipe pe are known and constant, we have a simple model of a compressor station operating in a pipeline system.