Oil and Gas Transportation

22.1 INTRODUCTION

This chapter is devoted to highlight the application and the use of different methods of transferring crude oil and natural gas. Oil is normally transported by one of four options:

• • Tankers
• • Pipelines
• • Railroad
• • Tank cars and tank trucks

Oil and gas pipelines act as veritable arteries inside the Earth. Using extensive steel and plastic pipes, they transport gas and oil throughout the planet. Pipeline—the most commonly used form of oil transportation is through oil pipelines. Pipelines are typically used to move crude oil from the wellhead to gathering and processing facilities and from there to refineries and tanker loading facilities.

Supply-end pipelines and railroads carry crude oil from production areas to a loading terminal at a port. Tankers then carry the crude oil directly to demand-side pipelines that connect to the refineries that convert the raw material into useful products. Most crude oil is transported by pipelines on land and by tankers across the seas. Moving natural gas, on the other hand, requires a network of pipelines from the production wells to the processing plants and to the final consumers.

Price, cost, and investment issues in transportation garner intense interest boosting prosperity. Oil and gas they transported contributed $81 billion to our GDP through exports. A recent study by Angevine Economic Consulting Ltd. estimates the total GDP contribution of the pipeline industry over the next 30 years is $175 billion. Pipelines power prosperity.

22.2 OVERVIEW

Tankers, railroads, and pipelines are proven, efficient and economical means of connecting petroleum supply and demand. Supply-end pipelines and railroads carry crude oil from production areas to a loading terminal at a port. Tankers then carry the crude oil directly to demand-side pipelines that connect to the refineries that convert the raw material into useful products.

With the advances in exploration and production, great stripes are achieved to locate and recover a supply of oil and natural gas from major reserves across the globe. At the same time, demand for petroleum-based products has grown in every corner of the world. Transportation therefore is indispensible and vital to ensure a reliable and affordable flow of petroleum we all count on to fuel our cars, heat our homes, and improve the quality of our lives.

22.3 PIPING SYSTEM AND PUMPS

Pipelines along with pumps are needed as an efficient means of transporting crude oil. hydrocarbon products, natural gas, and other important fossil fuels, quickly, safely, and smoothly. Pipelines are pipes, usually underground, that transport and distribute fluids. When discussing pipelines in an energy context, the fluids are usually either oil, oil products, or natural gas. Petroleum pipelines transport crude oil or natural gas liquids, and there are three main types of petroleum pipelines involved in this process. Pipelines need to be constantly and reliably operated and monitored in order to ensure maximum operating efficiency, safe transportation, and minimal downtimes, and to maintain environmental and quality standards. Powerful pumps, on the other hand, are needed for oil transport of crude oil within the oil field and for the delivery of oil to terminal points.

The role of pipelines and pumps in oil field operations is demonstrated as follows:

• • Gathering systems in the oil field
• • Crude oil delivery network
• • Sizing of pipeline and selection of wall thickness
• • Other aspects of piping
• • Classification and types of pumps

Cross-country pipelines are globally recognized as the safest, cost-effective, energy- efficient, and environment-friendly mode for transportation of crude oil and petroleum products. ... The pipeline was jointly dedicated to nation by Hon’ble Prime Ministers of India and Nepal.

Pipelines are the second most important form of oil and gas transportation. Their uses are more complex than uses of tankers, which by their nature only move crude oil or products and gas from or to a rather limited number of points on the oceans or navigable rivers. Pipelines, however, are used for gathering systems in oil fields, for moving the crude oil to refineries, marine terminals, and often for moving refined products from refineries to local distribution points.

Market demand growth can, of course, outstrip a pipeline’s basic ability to handle the demanded volumes. The first way to solve this problem is to increase the speed with which the oil passes along the line by adding pumping stations. But since pipeline friction increases geometrically with the speed of flow, at some point it becomes economical to add more pipes. This process is called “looping”, and it consists of laying another pipeline alongside the existing one. In summary, pipelines serve a vital function in the transportation of both oil and natural gas.

There are two main categories of pipelines used to transport energy products: ^[1]

Petroleum pipelines transport crude oil or natural gas liquids, and there are three main types of petroleum pipelines involved in this process: gathering systems, crude oil pipeline systems, and refined products pipelines systems. The gathering pipeline systems gather the crude oil or natural gas liquid from the production wells. It is then transported with the crude oil pipeline system to a refinery. Once the petroleum is refined into products such as gasoline or kerosene, it is transported via the refined products pipeline systems to storage or distribution stations.

Natural gas pipelines transport natural gas from stationary facilities such as gas wells or import/export facilities, and deliver to a variety of locations, such as homes or directly to other export facilities. This process also involves three different types of pipelines: gathering systems, transmission systems, and distribution systems. Similar to the petroleum gathering systems, the natural gas gathering pipeline system gathers the raw material from production wells. It is then transported with large lines of transmission pipelines that move natural gas from facilities to ports, refiners, and cities across the country. Lastly, the distribution systems consist of a network that distributes the product to homes and businesses. The two types of distribution systems are the main distribution line, which are larger lines that move products close to cities, and the service distribution lines, which are smaller lines that connect main lines into homes and businesses.

22.3.1 Gathering Systems in Oil Fields

The value of a pipeline is in its economy of operation and in its consistency of operation. Today, there is great diversity in size of pipe used to carry crude oil refined oil products and natural gas ranging from 6 in. to as much as 36 in., and in some cases in the Middle East, even 48 in. piping. Lines are single or multiple, laid on top of the surface or buried in the ground, with booster pumps spaced anywhere from approximately every 25 miles to as much as 200 miles apart.

Pipeline costs vary, of course, with capacity, the character of the terrain which the lines will traverse and the type of product which the line is intended to carry, that is, its function. In general, there are three types of pipeline: ^[2]

TABLE 22.1

Assumed Values for Velocity for Different Fluids

To determine the fluid velocity in a pipe, the rule of thumb, the economic velocity for turblant flow, is used, as reported by Peters and Timmerhaus (4th ed) and shown in Table 22.1

22.3.2 Pumps

A fluid moves through a pipe or a conduit by increasing the pressure of the fluid using a pump that supplies the driving force for flow. In doing so, power must be provided to the pump. There are six basic means that cause the transfer of fluid flow: gravity, displacement, centrifugal force, electromagnetic force, transfer of momentum, and mechanical impulse.

Excluding gravity, centrifugal force is the means most commonly used today in pumping fluids. Centrifugal force is applied by using a centrifugal pump or compressor, of which the basic function of each is the same: To produce kinetic energy (K.E.) by the action of centrifugal force, and then converting this K.E. into pressure energy (P.E.) by efficient reduction of the velocity of the flowing fluid.

Fluid flow in pipes applying centrifugal devices have in general the following basic advantages and features:

• • Fluid discharge is relatively free from pulsations.
• • No limitation on throughput capacity of the operating pump.
• • Discharge pressure is a function of the fluid density, i.e., P =/(£/).

To provide efficient performance in a simple way with low first cost.

Pumps can be classified into three major groups according to the method they use to move the fluid: direct lift, displacement, and gravity pumps. Pumps can also be classified by their method of displacement as positive displacement pumps, impulse pumps, velocity pumps, and gravity pumps. Pumps operate by a reciprocating or rotary mechanism. Mechanical pumps may be submerged in the fluid they are pumping or placed external to the fluid. A concise summary for the comparison between different types of pumps is in Table 22.2.

Pumps are used for many different applications. Understanding which pump type one needs for his application is very important. For the oil and gas industry, some basic features are listed next:

TABLE 22.2

Comparison between Different Types of Pumups

• • Pumps should handle the fluids with low shear and least damage to droplet sizes causing no emulsions for the effective separation of water from oil.
• • Pumps should be self-priming and experience no gas locking.
• • The requirement of having low' net positive suction head (NPSH) is an advantage. This is advantageous for vessel-emptying applications such as closed drain drums or flare knockout drums or any applications encountering high-vapor pressure liquids.
• • Pumps should handle multiphase fluids, construction site, pond, mine shaft, or any other area.

Fire pumps—A type of centrifugal pump used for firefighting. They are generally horizontal split case, end suction, or vertical turbine.

22.3.3 Global Overview for Pipelines

Globally, North America has the highest oil and gas pipelines length of 834,152.5 km (with start years up to 2023), of which, crude oil pipelines constitute 154,200.9 km, petroleum products pipelines constitute 103,106.3 km, natural gas pipelines constitute 495,555.3 km, and NGL pipelines constitute 81,290.0 km. The region’s share in the global transmission pipeline length is 41.0%.

World’s longest pipelines: Natural gas

• • West-East Gas Pipeline: 8,707 km. ...
• • GASUN, Brazil: 4,989 km. ...
• • Yamal-Europe Pipeline: 4,196 km. ...
• • Trans-Saharan Pipeline: 4,127 km. ...
• • Eastern Siberia-Pacific Ocean Oil Pipeline: 4,857 km. ...
• • Druzhba Pipeline: 4,000 km. ...
• • Keystone Pipeline: 3,456 km. ...
• • Kazakhstan-China Pipeline: 2,798 km.

Source: From Wikipedia, the free encyclopedia

Africa

• • Chad-Cameroon pipeline - Chad-Cameroon
• • Sudeth Pipeline - South Sudan-Ethiopia (under construction)
• • Transnet Pipelines - South Africa
• • Sumed Pipeline - Egypt
• • Tazama Pipeline - Tanzania-Zambia
• • Nembe Creek Trunk Line - Nigeria
• • CPMZ-Mozambique-Zimbabwe Pipeline company-Mozambique
• • [KMPP] Khartoum-Madani Petroleum Products Pipeline-[inside SUDAN]
• • Kenya pipeline-Kenya

Europe

• 1. Balkan area - Southeast Europe Pipelines (includes Albania, Bosnia and Herzegovina, Bulgaria, Greece, Hungary, Romania, Serbia, Slovakia, Slovenia, FYR Macedonia, and Turkey)
• 2. France and Belgium Pipelines
• 3. Germay, Netherlands, and Czech Republic Pipelines
• 4. Italy Switzerland, and Austria Pipelines
• 5. Norway, Sweden, and Denmark Pipelines
• 6. Russia and former Soviet states Pipelines (includes Russia, Kazahstan, Lithuania, Turkmenistan, Ukraine, Uzbekistan, Azerbaijan. Georgia, Belarus, Latvia, Estonia, and Tajikistan)
• 7. Spain and Portugal Pipelines
• 8. United Kingdom and Ireland Pipelines

Source: Europe Pipelines map - Crude Oil (petroleum) pipelines ... theodora.com > pipelines > europe_oil_gas_and_produ.

As shown in Figure 22.1

Adria Oil Pipeline

• • AMBO Pipeline
• • Baltic Pipeline System
• • Brent System

FIGURE 22.1 Existing and planned oil and natural gas pipelines to Europe.

• • Burgas-Alexandroupoli Pipeline
• • CLH Pipelines - Spain
• • Druzhba Pipeline
• • Forties Pipeline System
• • Groznv-Tuapse Pipeline
• • Ninian Pipeline
• • Odessa-Brodv Pipeline
• • Pan-European Pipeline
• • Transalpine Pipeline

South European Pipeline

• TRAPIL - France

Oil and Gas Pipelines Industry, Global, Trunk/Transmission Pipeline Length by Region are indicated in Figure 22.2, Sept 2019.

FIGURE 22.2 Oil and Gas Pipelines Industry. Global. Trunk/Transmission Pipeline Length by Region, Sept 2019.

Source: Midstream Analytics, GlobalData Oil and Gas © GlobalData

• 22.3.4 Pipeline Economics
• 22.3.4.1 Economics of Scale

Economic of scale exists because the larger scale of production leads to lower average costs. The cost of the materials for producing a pipe is related to the circumference of the pipe and its length. However, the volume of chemicals that can flow through a pipe is determined by the cross-section area of the pipe. Economies of scale refer to a long run average cost curve, which slopes down as the size of the transport firm increases. The presence of economies of scale means that as the size of the transport firm gets larger, the average or unit cost gets smaller. Economics of scale is calculated by dividing the percentage change in cost with percentage change in output. A cost elasticity value of less than 1 means that economies of scale exists. Economies of scale exist when increase in output is expected to result in a decrease in unit cost while keeping the input costs constant.

Once a firm has determined the least costly production technology, it can consider the optimal scale of production, or quantity of output to produce. Many industries experience economies of scale. Economics of scale refers to the situation where, as the quantity of output goes up, the cost per unit goes down. Figure 22.3 illustrates the idea of economies of scale, showing the average cost of producing an item falling as the quantity of output rises.

A doubling of the cost of producing the pipe allows the chemical firm to process four times as much material. This pattern is a major reason for economies of scale in chemical production, which uses a large quantity of pipes. Of course, economies of scale in a chemical plant are more complex than this simple calculation suggests. But the chemical engineers who design these plants have long used what they call the “six-tenths rule”, a rule of thumb which holds that increasing the quantity produced in a chemical plant by a certain percentage will increase total cost by only six-tenths as much (Table 22.3).

TABLE 22.3

Comparing Pipes: Economies of Scale in the Chemical Industry

Source Economies of Scale: Economies of Scale | Microeconomics - Reading courses.lumenlearning.com > chapter > economies-of-scale.

22.3.5 Economic Balance in Piping and Optimum Pipe Diameter

When pumping of a specified quantity of oil over a given distance is to be undertaken a decision has to be made as to

• 1. whether to use a large-diameter pipe with a small pressure drop, or
• 2. Whether to use a smaller-diameter pipe with a greater pressure drop. The first alternative involves a higher capital cost with lower running costs; the second, a lower capital cost with higher running costs specifically because of the need for more pumps.

So, it is necessary to arrive at an economic balance between the two alternatives. Unfortunately, there are no hard and fast rules or formulas to use; every case is different. Costs of actual pumping equipment undoubtedly must be considered, but the area in which the pipes will “run” is also important. For instance, to obtain the same pumping effort in the desert as opposed to a populated area could involve much higher costs in the form of providing outside services and even creating a small, self-contained township.

In the flow of oil in pipes, the fixed charges are the cost of the pipe, all fittings and installation. All these fixed costs can be related to pipe size to give an approximate mathematical expression for the sum of the fixed charges.

In the same way, direct costs, or variable costs, comprising mostly the costs of power for pressure drop plus costs of minor items such as repairs and maintenance, can be related to pipe size. For a given flow, the power cost decreases as the pipe size increases. Thus direct costs decrease with pipe size. And total costs, which include fixed charges, reach a minimum at some optimum pipe size. This factor can be expressed roughly in a series of simplified equations which express relations in terms of weight rate of flow and fluid density, then weight (or mass) rate of flow and annual cost per foot for most cases of turbulent flow.

To summarize, in choosing the inside diameter of pipe to be used, either in the oil field or in a refinery, selection should generally be based on costs of piping versus costs of pumping. Small-diameter pipe, which usually involves quicker drops in pressure than large-diameter pipe and therefore must be supplemented with more pumping equipment when laid for long distances, costs less than large-diameter pipe, but cost of pumping can add considerably to total cost of transferring a given amount of oil. Conversely, large-diameter pipe will have a fixed capital charge, even though pumping costs are minimized since natural pressure drops are less than with small-diameter pipe. Thus, an economic balance is desirable.

Example 22.1

This is an example of the principle of economic balance as applied to piping involving two alternatives. One alternative is the use of a large-diameter pipe with a small pressure drop; the other alternative is a small-diameter pipe with a greater pressure drop and more pumps. Pumps and pump room installation are considered part of the investment in pipelines.

Assume that the requirement is to transfer 100,000 bbl/day of crude oil for a distance of 200 miles by pipe. In order to arrive at the optimum conditions where total annual costs will be minimized; the fixed costs, or installation costs, and corresponding operating costs for the pipeline for different diameters must be determined and the optimization technique then applied. This is illustrated as follows:

1st: Calculate the fixed charges (installation costs) of piping and pumps and their installation. For a distance of 200 miles and for such a quantity of oil 100,000 bbl/day, the number of pump stations varies between two and three.

In order to convert the total fixed costs to an annual basis, a payout time has to be assumed. This is taken to be 5 years, plus 5% annual maintenance. Therefore, the annual "fixed charges" are 0.20 + 0.05 = 0.25% of the total fixed costs.

• 2nd: Operating expenses should include the following:
• 1. Labor, supervision, and salaries
• 2. Electrical power consumed

Using the above data and taking into consideration the pressure drop (P.D.) for each diameter of pump, one can estimate the number of stations needed and the brake horsepower used in pumping the oil. The ultimate solution leading to the optimum diameter is found from the graph shown in Figure 22.4.

Mathematically speaking, one can obtain the economic pipe/diameter for a pipeline using the optimization techniques.

Figure 22.5 illustrates the transport of oil by pipelines which run into millions of pipe feet and tonnage per oil field, as well as per refinery. From each individual wellhead in an oil field, the crude oil is collected in small-diameter gathering pipelines, which then converge on a collecting center. At the collecting center, the crude oil passes through gas separators, where gas is “linerated” from the crude oil. Usually, there are a number of collecting centers in different parts of the oil field. Figure 22.6 indicates this function; while it is pictorially shown in Figure 22.7.

From the collecting center, pipes of extremely large diameter lead the crude oil to a tank farm, a center or group of large circular enclosed storage tanks. From here, the crude is conveyed either to a refinery or to storage tanks at terminals for overseas delivery by sea tankers or long-distant pipeline. Large-diameter pipe

FIGURE 22.4 Optimum pipe diameter.

FIGURE 22.5 Transport of oil by pipes.

FIGURE 22.6 Net work for the delivery of oil from an oil Field.

FIGURE 22.7 Network from wellheads to terminal points, from Canadian energy pipeline association, http//:www.cepa.com/about-pipelines/types-of-pipelines/liquids-pipelines.).

FIGURE 22.8 East-West pipeline of Saudi Arabia.

is used where volume is large, where it is practical and where long distances are involved, for the greater the diameter of the pipe, the less is the fall in pressure and thus the fewer pumping stations required. For example, the East-West pipeline of Saudi Aramco, which is known as the (Petroline), is presented in Figure 22.8. The 1,200 km, and 48 in. pipeline transports nearly 50% of Aramco’s total crude oil output to Saudi refineries on the Red sea and more than 2.3 mbd crude export via Yanbu terminal.

Producing oil fields commonly have a number of small diameter gathering lines that gather crude oil from the wells and move it to central gathering facilities called oil batteries. In general, there are four types of pipelines that are in common usage:

• • Oil field gathering pipelines; their function in the oil field is of great impact on production operations.
• • Larger diameter feeder pipelines transport the crude oil from the oil field to loading ports and nearby refineries.
• • Long-distance pipelines, which naturally shorten the alternative sea route.
• • Pipelines that transport oil from ports of discharge to inland refineries, located in industrial areas remote from a seaport. These are called transmission pipelines.

Pipelines used to carry crude oil and petroleum products differ a great deal in size, ranging from 2 in. to as much as 36 in. diameter. In some cases, even 48 in. piping is used. As far as the design of an oil gathering system, flowlines and trunklines make a combination of different schemes.

22.3.6 Sizing Pipelines

In the design of a pipe, one should be aware of two fundamental concepts:

• • The diameter of a pipe is a function of the flow rate of the fluid: D =f(Q);
• • The thickness of a pipe is a function of the working pressure inside the pipe: '=/(/»■

By sizing, we mean to determine the pipe diameter first. An engineer in charge must specify the diameter of pipe that will be used in a given piping system. Normally, the economic factor must be considered in determining the optimum pipe diameter.

To calculate pipe diameter for noncompressible fluids, one can apply the well- known equation:

Pipe diameter, d, is readily calculated from this equation for a specified flow rate, Q (bbl/hr) and for an assumed fluid velocity, и (ft/sec).

SOLVED EXAMPLES Example 22.2

This example illustrates determination of the optimum pipe (D_opI) through optimization of the total annual cost. Assume the following formulas:

where f, and F₂ are some defined functions of the diameter D of the pipe.

The total annual costs for transferring oil will be = T, + F₂ = Total costs Optimum economic diameter of the pipeline is reached when the total annual costs are at the minimum, that is, taking the derivative of the total annual cost w.r.t. the pipe diameter, D.

Therefore,

and letting this product equal zero, solving for the value of D = D_opl.

To illustrate the principle of D = D_opI in a simplified manner, take f, and F₂ as linear functions of some constants:

where a, b, c are constants to be defined, and

This gives Hence,

The exact equation for predicting D_opt for turbulent flow for incompressible fluids inside steel pipes of constant diameter is given by the equation:

where:

D> 1"

W = thousands of pounds mass flowing per hour £ = density, or lb-mass/ft³

Then, to calculate D_opt, if we are considering the transfer of 500,000 bbl/day of oil of an average API of 33° (with t = 53.70 lb/ft³) across a distance of 1,000 miles, we have:

1st: Calculation for D._T.:

Therefore, 31 in. is the optimum economic pipe diameter in this particular case.

22.3.7 Construction Costs of Pipelines

There are four categories of pipeline construction costs; material, labor, miscellaneous, and right-of-way (ROW). The cost per category, expressed as a percentage of total construction costs, tends to vary by both location and year. Materials may include line pipe, pipe coating, and cathodic protection.

The average cost-per-mile for the projects rarely shows consistent trends related to either length or geographic area. In general, however, the cost-per-mile w'ithin a given diameter decreases as the number of miles rises, suggesting that fewer and longer pipelines are more cost efficient. Lines built nearer populated areas tend to have higher unit costs.

The Table 22.4 shows the results of some pipelines in a survey of projects documented by the Global Fossil Infrastructure Tracker. The survey is based on a diverse collection of projects worldwide. It show's the w'ide range in costs per km, u'hich can likely be attributed primarily to differences between offshore and onshore projects, the inclusion or exclusion of additional infrastructure such as drilling platforms or pressurization stations, and regional costs differences. For that reason, these results should be view-ed as non-conclusive.

Estimated average pipeline investment for any amount of piping involves millions of dollars. Size of pipe in diameter, length of the line in distances of miles and feet traveled and type of pipe used all contribute to total investment in pipelines.

The following example illustrates how the immense costs of a pipeline could be recovered quickly by pumping crude oil.

TABLE 22.4

Investment Per Km, US $, for a Number of Pipeline Contructors

For proposed onshore US gas pipeline projects in 2015-16, the average cost was $7.65 million/mile, up from both the 2014-15 average cost of $5.2 million/mile and the 2013-14 average cost of $6.6 million/mile.

Source Oil and Gas Pipeline Construction Costs - Global Energy Monitor www.gem.wiki > Oil_and_Gas_PipeHne_Construction_...

Example 22.3

If the investment cost of pipeline in flat terrain is taken to be $900,000/mile and the pipeline is 1,000 miles, while the rate of pumping crude oil is assumed to be 500,000 bbl/day, calculate the total capital investment of the pipeline and compare this figure with the gross revenue per year received by selling the oil at $80/bbl.

As far as the crude oil pipeline capacities are concerned, each pipeline must be considered an individual problem. Generally speaking, the economic capacity of each of the various diameters of pipelines as well as the usual spacing between pump stations (booster pumps) lies between the limits given in Table 20.12.

When moving oil and oil products, such operating costs as the following, based on a per-ton mile basis, will be important:

• 1. Construction costs of pipeline and equipment
• 2. Amortization of investment
• 3. Interest on invested capital
• 4. Energy costs for operating pumping stations, etc.
• 5. Personnel and maintenance costs
• 6. Royalties to governments of countries crossed by the pipeline

Finally, it has to be noted that these large sizes of pipe are costly to ship, because the space they occupy, relative to their weight, is high, and therefore freight costs are up. To reduce freight costs, it has become the practice today to design these large pipelines for equal quantities of two slightly different sizes of pipe, so that they can be "nested" for shipment; for example, one length of 20 in. pipe is placed inside each length of 22 in. pipe.

22.4 OIL TANKERS

Primarily the transportation of bulk liquids began in the year of the late 19th century when the discovery and expedition of oils began. At that time, tankers emerged as the main mode of transportation to carry bulk liquids from the refineries to the global market. On the way, as different energy products emerged, the need for a different type of tankers came into the real picture.

There are two basic types of oil tankers: crude tankers and product tankers. Crude tankers move large quantities of unrefined crude oil from its point of extraction to refineries. For example, moving crude oil from oil wells in a producing country to refineries in another country.

Today’s cutting-edge tankers are the product of a commitment to safety combined with the power of computer-assisted design. As a result, the new ships traveling the seas are stronger, more maneuverable, and more durable than their predecessors. Oil tankers are the one of the best ways to transport extremely large quantities of oil. These tankers traverse the oceans and vast waterways of the world with millions of gallons of oil and liquefied natural gas.

Examples of commercial tankers:

The commercial oil tanker AbQaiq, in ballast

An oil tanker, also known as a petroleum tanker, is a ship designed for the bulk transport of oil or its products.

There are two basic types of oil tankers:

• Crude tankers and

Product tankers

Crude tankers move large quantities of unrefined crude oil from its point of extraction to refineries. For example, moving crude oil from oil wells in a producing country to refineries in another country.

Product tankers, generally much smaller, are designed to move refined products from refineries to points near consuming markets. For example, moving gasoline from refineries in Europe to consumer markets in Nigeria and other West African nations.

Oil tankers are often classified by their size as well as their occupation. The size classes range from inland or coastal tankers of a few thousand metric tons of deadweight (DWT) to the mammoth ultra large crude carriers (ULCCs) of 550,000 DWT. Tankers move approximately 2.0 billion metric tons (2.2 billion short tons) of oil every year. Second only to pipelines in terms of efficiency, the average cost of transport of crude oil by tanker amounts to only US$5 to $8 per cubic metre ($0.02 to $0.03 per US gallon).

Some specialized types of oil tankers have evolved. One of these is the naval replenishment oiler, a tanker which can fuel a moving vessel. Combination ore-bulk- oil carriers and permanently moored floating storage units are two other variations on the standard oil tanker design. Oil tankers have been involved in a number of damaging and high-profile oil spills. As a result, they are subject to stringent design and operational regulations.

Source: From Wikipedia, the free encyclopedia

22.5 RAILROAD TANK CARS

Before the development of pipeline systems, transportation of oil by railroad tank cars was by a wide margin the most important method of moving oil from its point of production through refining and to its point of final consumption. This dominance was initially a function of the fact that railroads w'ere extensively developed in most areas at least a half century before the economic use of motor trucks and the road networks that were established to serve more local markets than could be reached by rail transport. The other factor that contributes to the importance of railroad tank cars in today’s markets is that on a ton/kilometer basis, rail transport is generally between tw'o and three times as efficient as oil and oil product movement by truck. This is partly because railroad tank cars are significantly larger than even the biggest tank trucks and thus enjoy greater economies of scale, and partly because each tank truck needs a driver w'hile an entire trainload of perhaps a hundred cars requires only two or three employees. Roadbed costs also tend to be less, and required maintenance is not as expensive as the tank truck alternative requirements.

The relative economies of the three land-based transportation systems—pipelines, railroad tank cars, and tank trucks—can be illustrated by the way Iraq moved its crude oil to world markets during the Iraq/Iran War. Being essentially barred from using tankers in the Gulf by Iran’s control of the Shatt El-Arab waterway, and with its pipelines to the Mediterranean Sea blocked by political action by Syria, Iraq turned principally to a pipeline across Saudi Arabia to Yanbu on the Red Sea, secondarily to a rail link with Turkey and finally to the most expensive mode of all, tank trucks by road to Turkey and to the Gulf of Aqaba through Jordan. With the war over, Iraq established limited tanker access through the Gulf, implemented an expansion of its pipelines across Saudi Arabia to Yanbu, discontinued its long-haul truck movements across Jordan and phased out its truck movements to Turkey, in that order.

Railroad tank cars remain in many parts of the world, in both the industrialized and developing countries, an important mode of transportation. Many small markets do not economically justify building pipelines to serve them, but are still large enough and close enough to rail connections to make rail the main method of basic oil product transportation. This means that tank trucks only have to do short hauls to get the oil to its final consumers.

22.6 TANK TRUCKS

Tank trucks tend to be very much oriented to specific local consumer markets. All gasoline and diesel service stations, for example, are supplied by tank trucks, as are all home heating oil customers. Rail transportation systems are not flexible enough to reach many small or medium-sized consumers of even commercial and industrial oil products. Large fuel users, such as electric utilities or steel plants, are likely to be supplied by individual pipelines from local refineries, barges if they are on the waterfront and railroad tank cars if they are both not available to water and too far away to justify a product pipeline. Heavy fuel oil is also sometimes too viscous to pump at ambient temperatures and thus requires heated delivery systems, whether pipelines, railroad tank cars, or tank trucks; this involves added capital and operating costs and is a significant factor in heavy fuel oil’s competitive position with coal.

Tank trucks, because of their flexibility, are also involved fairly extensively on the crude oil supply side, particularly in North America but also in other countries where field size and flow rates do not justify pipeline gathering systems. Oil from small wells is pumped into small tanks at the well sites; these are regularly emptied and the oil trucked to the nearest refinery, rail connection, or pipeline access point. In the United States, for example, about 3% of total oil production, from well over half of the country’s wells, is handled in this fashion.

The inefficiencies of this system, relative to the gathering costs of major oil fields, are such as to make such production barely inframarginal. This was why in the 1985-1986 decline in world oil prices about 500 barrels per day of U.S. producing capacity was shut down. Had the transport costs of bringing the output of many wells to market not been so high, it is likely that these cutbacks would have been substantially lower.

A significant exception to the generalization that most final consumers are served by tank trucks is the airline sector. Because of the volumes involved and the need to maintain product purity as well as consistent availability, most airports are served by pipelines from local refineries or distribution points. Again, relative economics are the dominant factor. But in these cases, the importance of assured supply and tight product specifications as to quality are enough to justify a market premium of perhaps U.S. two cents per gallon, or 85 cents per barrel. (Final delivery for the last few hundred meters, however, is by tank truck into the aircraft fuel tanks.)

22.7 RISKS AND HAZARDS ASSOCIATED WITH PIPELINES

The pipeline will be 24-30 inches in diameter. It will carry over 300,000 barrels of oil a day with a volatility of 32. For natural gas pipelines, the greatest risk is associated with fires or explosions caused by ignition of the natural gas. This can cause significant property damage and injuries or death. Additionally, the release of natural gas, primarily methane which is a very potent greenhouse gas, contributes to climate changeeleases of products carried through pipelines can impact the environment and may result in injuries or fatalities as well as property damage. The risk associated with pipelines varies depending on a number of factors such as the product being transported in the pipeline, size and operating pressure of the pipeline, as well as the population and natural resources near the pipeline.

• [1] Petroleum pipelines and • Natural gas pipelines.
• [2] Those which run from the oil field to loading ports and are complementaryto ocean transport. Without these, there would be no transport by tankers atall. so they are not competitive with transport by tankers. 2. Those long-distance pipelines which naturally shorten the alternative searoute. They can be competitive with ocean transport tankers if tanker ratesare high. But in times of low tanker rates, such pipelines are not competitive with transport by tankers. A good example of this type of pipeline isTapline, the 1.100-mile pipeline from Ras Tanura in Saudi Arabia throughfour countries to Sidon, Lebanon. Transport by Tapline saves approximately3,300 miles each way of ocean transport, and also saved Suez tolls whenthe Suez Canal was open. At this writing the Suez Canal has just reopened. 3. Those pipelines which transport oil from ports of discharge to inland refineries located in industrial areas, remote from a seaport. They can be competitivewith domestic railroad and motor carriers. Examples of this type of pipelineare the pipelines of Rotterdam on the Rhine and Wilhemshaven on the Ruhr.