Oil and gas pipeline concessions

Abstract

Primary oil and gas pipelines are a critical supply chain link between the production areas and the refineries or fractioning plants, respectively. They require huge capital investments and expertise in design, construction, maintenance, and operation that are beyond the capabilities of many countries and are generally built and operated under concession by multi-national consortiums with huge financial resources and technical expertise on a Cost of Service (CoS) basis. They are the most economical means of land (and near coastal) transport. However, they also pose the threat of oil or gas spillage. Although the frequency of spills is extremely low, the severity of the consequences can be extremely high if not controlled. There are several causes for oil and gas pipeline spills including geotechnical events, internal and/or external corrosion of the pipeline, failure of equipment, sabotage, internal expansion forces, materials defects, mechanical impact from excavation equipment due to lack of proper pipeline marking, etc.