Feasibility Analysis of Cross-Country Petroleum Pipeline Projects: A Quantitative Approach

Route selection for cross-country petroleum pipelines plays an important role in the entire feasibility analysis of pipeline projects, as all technical parameters of pipelines depend on the length and hydraulic gradient of the terrain through which they traverse. The present practice of feasibility analysis identifies the shortest route through reconnaissance survey on the basis of factors, such as constructability and approachability and minimal effects on the environment. It then identifies a few alternative projects for further study on the basis of technical parameters, such as throughputs, diameter of pipelines, and number of intermediate stations. The selection of the best project from these alternatives, through financial analysis, often results in a suboptimal project, as the shortest route may not be the optimal route. This paper proposes project feasibility analysis with the selection of an optimal pipeline route by considering strict government stipulations, expansion capability, and the chances of pipeline failure throughout its life, along with other factors. All these factors are analyzed quantitatively with respect to a few alternative routes (determined through a geographical information system) through an analytic hierarchy process (AHP). AHP takes into account of all the factors interactively. This system is demonstrated through a case study of a cross-country petroleum pipeline project from an Indian perspective. A cost-benefit comparison of the shortest route (conventionally selected) and the optimal route establishes the effectiveness of the model.