Racing The Rust | |||
Consisting of 38,000 individual segments, today TNK-BP’s sprawling web of pipelines spans 25,000 kilometers – the distance from Sydney to New York. If stretched in a straight line, it would span two thirds of the way around the globe and it would take more than 25 hours to fly from one end to the other in a modern passenger jet.
When TNK-BP was established in 2003, in addition to billions of barrels of reserves deep underground, the company took ownership over a vast above-ground infrastructure: a sprawl of surface facilities in the producing regions of West Siberia and the Volga Urals, all tied together by an extensive network of pipelines.
Infield gathering lines transport liquids and gas from wellhead to gathering stations, separation and processing facilities, and feed oil into Russia’s main oil arteries – the large-diameter Transneft trunk lines, much like the small capillaries and blood vessels supply blood to the main human arteries.
Consisting of 38,000 individual segments, today TNK-BP’s sprawling web of pipelines spans 25,000 kilometers – the distance from Sydney to New York. If stretched in a straight line, it would span two thirds of the way around the globe. It would take more than 25 hours to fly from one end to the other in a modern passenger jet.
In 2003, prior to subsequent portfolio divestments, this network was even more extensive: it reached 32,000 kilometers in length. And it was leaking at an increasing rate.
Key facts about TNK-BP pipelines
- 25,000 kilometers TNK-BP pipeline length
Between 2003 and 2007:
- 280% increase in pipeline replacement
- 300% increase in inhibition coverage
- $625 mln invested in pipeline integrity program
“Based on the reporting system in place when the company was formed, there were multiple breaches to pipeline integrity”, says Sam Porter, Director of Integrity Management. Many pipelines were in poor condition and required replacement. More than 40% were older that 15 years of age, and most of the network had seen almost no modern external and internal anti—corrosion treatment.
| Pipeline distribution by age |
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| Total length of pipelines |
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“After our initial analysis, we concluded, that if the same low level of intervention was maintained, the number of leaks would rise rapidly over the next five years”, says Porter. “In other words, by 2008 the company could have had 18,000 leaks on its hands. It was clear that something had to be done”.
Acting on principle
When TNK-BP was established, it committed to the HSE principle: “No accidents, no harm to people, no damage to the environment”. The decision to tackle the pipeline leak issue was a direct outcome of this approach.
“It is much cheaper to prevent a leak, rather than to pay for the consequences of a leak that actually takes place – bearing in mind the cost of land reclamation, fines, as well as the reputational damage rightly associated with those who pollute the environment”, says Porter. “Being environmentally conscious makes good business sense”.
Given the vast scope of the challenge, TNK-BP created a dedicated pipeline integrity team which brought together Russian and international experts. As the first step, the team had to develop a new approach to the problem and plot a path forward. Since replacing all the pipelines at once was not an option, the first task was to understand the existing infrastructure and identify its critical points.
Matrix, reloaded
After several months of work, the group developed an analytical tool – a risk prioritization matrix that included data on all pipeline segments and rated them on the basis of two metrics: probability of failure, and the consequences of such failure. “This is an important tool that drives our pipeline maintenance and replacement program”, says Alan Crossland, Pipeline Integrity Specialist. “We are able to focus our effort on the lines with highest risk and highest impact – for instance, high pressure lines in environmentally sensitive areas”.
| Prioritization matrix |
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The system rests on a comprehensive electronic database which contains detailed information on the current status of more than 38,000 individual pipeline segments in operation. The 500,000 data points in this database provide the company’s integrity team with a complete and up-to-date picture of TNK-BP’s network, and enable the team, jointly with the business units to make informed investment decisions.
Development of this framework was a joint effort by specialists from Upstream and Technology, both from the corporate center and the business units. “Initially, the system was developed by a joint BP and TNK-BP team. By now, we have perfected the system to such a level that BP has recently asked us for input in developing their own pipeline prioritization system”.
Integrity program
An all-encompassing set of data enabled the company to put in place a comprehensive pipeline integrity program. In 2004, TNK-BP’s then-COO Larry McVay made a commitment to reduce pipeline leaks by 50% by 2009. This was to be achieved by replacing the pipelines in poor condition and by the introduction of new technologies to improve the protection of existing lines.
The commitment was backed up by a tangible increase in spending. In 2003, the combined heritage companies of TNK-BP replaced 300 kilometers of pipeline; less than 10% of existing lines were inhibited.
Starting from 2004, the spending began to increase annually, reaching $165 million CAPEX in 2007. In 2004, the company replaced 434 kilometers of pipelines. By 2007, annual replacement reached 857 kilometers, and the company plans further significant replacement in 2008.
| Pipeline integrity spend, $ mln |
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“Between 2003 and 2007, we replaced 2,700 kilometers of pipelines, roughly the distance between London and Rome at a cost of $400 million”, says Sam Porter.
In addition, the company is focused on removing decommissioned lines from the ground. In previous years, many decommissioned pipelines were left in the ground. In 2008 alone, TNK-BÐ plans to spend $20 million on removing decommissioned lines. “From 2008 and on, the length of dismantled pipelines will be equal to or greater than the length of pipeline replaced”, says Porter.
| Scope of reconstruction done, km |
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Leveraging technology to reduce corrosion and extend the life of existing pipelines became another important aspect of the program. This included applying corrosion inhibition, as well as technologies that are relatively new to Russia, such as pull through liner.
| Scope of inhibition done, km |
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Extensive use of inhibition was first piloted in Nyagan, a West Siberian group of oil fields with mature infrastructure. After initial studies, inhibition was first applied in 2004. Within one year, the increase in the leak rate had been halted and reversed. Within two years, the leak rate was reduced by 50%.
| Corrosion inhibition results in Nyagan |
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Between 2003 and 2007, inhibition coverage has increased by 300%. Today TNK-BP is a leader in corrosion inhibition technology in Russia. The company now spends more than $50 million per year on corrosion inhibition and monitoring. “Inhibited lines have shown corrosion and leak rate reduction of close to 90% compared to untreated lines”, says Porter. “By 2009, our inhibition coverage will be 500% up on 2003”.
TNK-BP was also the first Russian oil company to begin applying polyethylene liner to extend the life of existing pipelines. A pilot project, completed in Nyagan in 2007, showed positive results and the integrity team has now committed to developing an upscaled plan for application across the company.
Another area where TNK-BP’s integrity team achieved rapid and material improvement was in Orenburg, a core production area in the Volga-Urals. “In 2004, pipeline failures were increasing at over 10% per year in the Orenburg business unit and the need for intervention was becoming critical”, says Ilya Sivokon, manager for integrity management in TNK-BP’s Upstream. “The pipeline integrity team developed a solution that allowed us to apply a comprehensive inhibition system to the region’s pipeline network and to optimize the pipeline replacement program in the business unit”.
“The pipeline integrity team involved experts from Technology and Upstream and relied on direct support from the business unit Leader Alexander Berman and Chief Engineer, Aleksei Kan”, says Sivokon. Execution of the program has allowed the company to replace more than 580 kilometers of pipelines since 2004. The Orenburg business unit has been a leader in expansion of inhibition to over 4,300 kilometers, with spending on preventative inhibition more than doubling in three years. Further leading initiatives from the business unit have seen Orenburg successfully implement the first chemicals managed services program (CMS) in TNK-BP.
As a result, Orenburg was recognized as a finalist in the
“Today, Orenburg continues to lead the development of technology programs by piloting external corrosion control and cathodic protection of pipelines”, says Sivokon.
Rising to the challenge Maintaining pipeline integrity for a company the size of TNK-BP represents a major challenge. Despite the general success in reducing the overall leak rate, the integrity team faces a daily set of daunting challenges.
“We have 26,000 operating wells and some of these pump almost 10 bbl of water for each 1 bbl of oil. We also operate a pipeline system that is longer than BP’s global network,” says John Johnson, Integrity Team Leader Pipeline. “An ineffective technological solution applied at this scale will magnify the losses. Equally, a successful technological solution, applied at scale, can generate a lot of value for the company. So, the margin of error is very thin and the motivation to get it right is high”.
Just like any other engineering process, seeking the right technological solution for TNK-BP’s pipelines has sometimes been a matter of trial and error. Some new technology brought to Russia has not worked. For instance, using fiberglass for pipelines replacement, a technology that proved effective in oil fields in the West, did not yield successful results in Russia due to the different ground conditions widely found in TNK-BP fields. “The marshy ground conditions we experience in many of our fields in West Siberia are very challenging for fiber glass materials”, observes Alan Crossland. “After initial pilots, we had to give up this idea”.
Reaping the harvest
Five years after the company’s formation, TNK-BP is a leader in pipeline corrosion management, protection and replacement in Russia.
It has also emerged as a leader in applying innovative technological solutions to maintain the life of its sprawling network of pipelines. Having invested about $625 million in this ambitious program, the company has increased pipeline replacement by 280% compared to 2003 and increased inhibition by more than 300%. Total investment in pipelines and facilities integrity is set to reach $1.6 billion over the period of 2007–2011.
This investment will enable TNK-BP to deliver on its commitment to cut pipeline leaks in half by 2009. The team is rightfully proud of its achievements but it also looks at this progress in perspective. “We have improved our performance in this area to the point where we are significantly better than the Russian industry average,” says Porter. “Yet we are also aware that there is still some way to go before we can get to the best international level. And that is our long-term aspiration”.
To continue moving towards this long-term goal, the company will have to continue increasing performance in this area. To that end, the integrity team is actively looking at new solutions that can deliver further gains – such as use of solid inhibitor, lined pipes / pull through linings, or optimizing procurement of chemicals. Meanwhile, each day more than 1.4 million barrels of oil keep flowing through TNK-BP’s pipelines, safely bringing the much-needed crude oil to the world market.
Corrosion inhibition
Historically most pipeline failures in TNK-BP occurred due to internal corrosion of the pipeline. Corrosion inhibition is a complementary approach to pipeline replacement. It can extend the life of pipelines for many years at a fraction of the cost of replacing pipe by reducing degradation of steel across a large area.
Corrosion inhibitors have been used in the oil and gas industry since the 1940’s. They consist of organic molecules which attach to the steel surface and suppress the corrosion reaction by creating an effective barrier between corrosive fluids and the pipeline’s surface. As a result, they reduce the corrosion rate of steel by an order of magnitude. Inhibitors are typically dosed in “part per million” levels, typically at 15 to 25 grams per ton of fluids. TNK-BP annually uses over 8,000 tons/year of corrosion inhibitor, at a cost of over $30 million (2008 plan).
Oilfield pipeline networks are like branches of a tree, they radiate outward from a single point. Because of this, adding the inhibitor at the pipeline inlet protects the pipeline along its full length, up to hundreds of kilometers.
Corrosion Inhibition
Pull through liner
This technology involves pulling a polyethylene liner through the pipeline. Existing steel provides pressure retention. The liner prevents leakage of fluids and acts as a barrier to future corrosion. This method is up to 30% cheaper than completely reconstructing a pipeline, enabling 30% more replacement for a given spend.
Although pull through liner has not been used extensively in Russia, it has seen wide and successful application in other parts of the world. TNK-BP is pioneering the use of this technology at scale in Russia.
Pull through liner
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