RISK ANALYSIS IMPROVES PIPELINE DECISIONS

Risk analysis improves pipeline decisions by allowing an assessment of the impact of design uncertainties on profitability. Risk (profitability) profiles are constructed for different combinations of values of independent varialbles such as throughput, operating costs, tax rates, and the properties of the materials to be transported. Either every possibility is evaluated and assigned a probability value (practical only with few factors of limited variability), or a random choice of combinations is evaluated (the Monte Carlo Method). An example of the latter method is given involving four line-size alternatives for a hypothetical 400 mi long crude oil line, assuming an initial investment ranging from $35 million for a 16 in. dia line to $42 million for a 22 in. a 22 in. dia line. The Bonner & Moore Associates Inc. PAUS program, which requires about 10 min on a medium-sized computer, is used. The results do not automatically produce decisions, but they provide a measure of the consequences of a particular decision.

  • Availability:
  • Corporate Authors:

    Petroleum Publishing Company

    211 South Cheyenne, P.O. Box 1260
    Tulsa, OK  USA  75221
  • Authors:
    • Jefferson, J T
  • Publication Date: 1970-8-31

Media Info

  • Pagination: p. 80-84
  • Serial:
    • Oil and Gas Journal
    • Volume: 68
    • Issue Number: 35
    • Publisher: PennWell Publishing Company
    • ISSN: 0030-1388

Subject/Index Terms

Filing Info

  • Accession Number: 00056248
  • Record Type: Publication
  • Source Agency: American Petroleum Institute
  • Files: TRIS
  • Created Date: Jul 15 1974 12:00AM