NORWEGIAN UNIVERSITY OF SCIENCE AND TECHNOLOGY

DEPARTMENT OF PETROLEUM ENGINEERING AND APPLIED

GEOPHYSICS

TPG 4140 NATURAL GAS

SEMESTER PROJECT REPORT

PRODUCTION AND LAYING OF NATURAL GAS

PIPELINES

Morice Richard
Oras Joseph Mkinga
Julieth Anthony Tibiika
Faustine Joseph Kasanda
Revocatus Fabian Kasheshi

Trondheim, November 2013

ACKNOWLEDGEMENT
First we would like to give our special thanks to our course lecturer Prof. Jon Steinar
Gudmundsson for his ideas of generating the title of this project.

We also would like to acknowledge our ANTHEI Program sponsor, Norwegian Agency for
Development (NORAD) for their financial support.

We cannot wind up without acknowledging the efforts of each group member towards the
completion of this report.

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 ABSTRACT
This report focuses on explaining the production of 1.07 m (42 inches) pipes which include
epoxy and concrete coating, laying process by barge which includes the welding of 12 m long
sections and evaluation of costs of laying pipeline onshore and offshore. The 1.07m diameter
is the largest pipeline used in Norway. The purpose of doing this project based on the
importance of transmission pipelines in relation to economic aspect in the natural gas as the
source of energy in the world.

Research on literature was conducted on production of natural gas pipeline, laying and cost
estimation. Chapter two covers production of natural gas pipelines that narrow down on
production of transmission pipes and application of coating layers of both epoxy and
concrete. Chapter three discusses the laying process of natural gas pipeline and its procedural
activities before laying process begin. It also covers the techniques of laying natural gas
pipeline by reel barge, laying towing and lay barge of which lay barge was the main focus.
Chapter four explains the evaluation of costs that relates during construction process of
natural gas pipelines of both onshore and offshore.

From this study it has been shown that in production of natural gas pipeline, it is important to
consider materials that withstand chemical and mechanical damages within the environment
where the pipeline is intended to pass. The produced offshore pipelines are laid down using
various techniques of which lay barge is widely used as it comprises both S-lay and J-lay
methods. The cost of constructing and laying pipeline in United States of America, USA
offshore is 1600 USD per meter which is double that of onshore 800 USD per meter. This
study shows that cost for constructing and laying pipeline onshore in developing country is
higher than in developed countries, for example in Tanzania is 1200 USD per meter
compared to USA onshore which is 800 USD per meter.

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TABLE OF CONTENTS

ACKNOWLEDGEMENT ...................................................................................................... i

ABSTRACT ......................................................................................................................... ii

TABLE OF CONTENTS ..................................................................................................... iii

LIST OF TABLES ............................................................................................................... iv

LIST OF FIGURES ............................................................................................................. iv

1. INTRODUCTION............................................................................................................. 1

2. PRODUCTION OF NATURAL GAS PIPELINES ........................................................... 2

2.1 Production of transmission pipes .................................................................................. 2

2.2 Epoxy coating .............................................................................................................. 3

2.3 Concrete coating .......................................................................................................... 4

3. LAYING OF NATURAL GAS PIPELINES ..................................................................... 7

3.1 Land survey ................................................................................................................. 7

3.2 Hazards analysis .......................................................................................................... 7

Hazards Identification .................................................................................................... 7

Hazards protection methods ........................................................................................... 7

3.3 Techniques of laying natural gas pipeline ..................................................................... 9

Pipe laying by reel barge ................................................................................................ 9

Pipe laying by towing..................................................................................................... 9

Pipe laying by lay barge ................................................................................................. 9

3.4 Commissioning of Offshore Natural Gas Transmission Pipeline ................................ 12

Figure 7: Methanol Swabbing (Russell 2005) ............................................................... 15

4. PIPELINE CONSTRUCTION COSTS ON LAND AND OFFSHORE ........................... 17

5. CONCLUSION ............................................................................................................... 20

6. REFERENCES ............................................................................................................... 21

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LIST OF TABLES
Table 1: Onshore pipe cost estimation (USAID 2013) ......................................................... 18
Table 2: Offshore pipe cost estimation (USAID 2013) ........................................................ 18
Table 3: Estimated construction cost in other countries ....................................................... 19

LIST OF FIGURES

Figure 1: Thin reddish layer of epoxy coating (Bayou 2013) ................................................. 3

Figure 2: Concrete coating of pipeline (Bayou 2013) ............................................................. 5
Figure 3: Pipe trenching(Mousselli 1981) .............................................................................. 8
Figure 4: Spoil removal principles(Mousselli 1981) .............................................................. 8
Figure 5: S-laying method (Jensen 2010)............................................................................. 10
Figure 6: Dewatering a natural gas pipeline (Russell 2005) ................................................. 14
Figure 7: Methanol Swabbing (Russell 2005) ...................................................................... 15
Figure 8: Membrane nitrogen unit with a cross-section of membrane module ...................... 16

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1. INTRODUCTION
Natural gas is a valuable resource and fastest growing energy source in the energy industry in
the world. The market of this precious resource is all over the world. This has led to have a
necessary means of transporting the natural gas from the producing field to market in a safe
manner. Pipeline is one among the means that has been commonly used in transportation of
natural gas.

Natural gas pipeline construction comprises of different aspects that are to be taken into
consideration. These include supply volume, markets and distance. The distance from field to
the market typically 3500 kilometers is economic feasible to construct pipeline (Dale 2013).
All factors mentioned determine the economic viability of the process and whence decision
of laying down gas pipeline is established.

This work focuses on giving an understanding of the whole process of pipelines production
and mechanisms of laying as well as estimation of cost on land and offshore. To attain the
goal of this project, the following are the objectives to be achieved:

 Understanding on how natural gas pipelines are produced including concrete

and epoxy coating.
 Elaborating the lying process of pipelines and welding of the 12 m long
sections on a barge.
 Evaluating costs of laying pipeline on land and offshore.

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2. PRODUCTION OF NATURAL GAS PIPELINES
There are three major types of pipelines along the transportation route of natural gas from
well head to the consumer. The three categories are gathering system, transmission system
and distribution system. The gathering systems are low pressure typically less than 1.38
MPa, small diameter 0.05 to 0.5 m that collects raw natural gas from the wellheads to
processing plant. Transmission pipeline system transport natural gas thousands of miles for
example transportation of natural gas through Norwegian continental shelf, from North Sea
down the way to German. Transmission pipelines are larger in diameter typically between
0.41 and 1.22 m and natural gas travels at high pressure ranging from 1.38 to 10.34 Pa
(NaturalGas.org 2011). They can be constructed either onshore or offshore depending on the
locations of producing regions and markets. Distribution systems are low pressure and small
in diameter that delivers natural gas to most retail customers and residential natural gas users.

Natural gas offshore transmission pipelines consist of transmission pipes and valves. Valves
are installed at the beginning and at the end of pipeline. These valves work like gateways to
open and stop gas flow along a pipeline. This report covers the production and coating of
1.07 m internal diameter offshore Norway transmission pipeline.

2.1 Production of transmission pipes

The 1.07m internal diameter pipes are produced in steel mills by folding sheets of strong
carbon steel material into a tube and welding the joint to form a pipe section. After making
sections of pipes, they are tested to ensure that pressure and strength standards are met. Then,
pipes are coated with a layer of epoxy on both internal and external parts to protect them
from corrosion and rusting. Also a layer of concrete is applied on transmission pipes to make
them heavy so that they do not float under the laying process as well as to protect them
against mechanical damages as explained in the 2.3 Concrete coating section (NaturalGas.org
2011).

Other pipelines; natural gas gathering and distribution pipes have been produced from
materials like plastic, cast iron, copper and steel. Highly advanced plastic pipes are most
commonly installed nowadays for natural gas distribution systems due to the need of
flexibility, versatility and the ease of replacement (NaturalGas.org 2011).

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2.2 Epoxy coating
Internal pipelines coating
Epoxy coating is the main internal gas pipeline coating material which is mainly used to;
reduces roughness and hence minimize frictional pressure drop, corrosion protection to the
pipeline, reducing fluid pumping costs, sealed surface and maintain product purity. It is a
very thin layer which almost doesn’t affect the internal diameter of the pipeline, usually less
than 100 micrometers (Robinson 2009) as shown in Figure 1 below.

Figure 1: Thin reddish layer of epoxy coating (Bayou 2013)

Epoxy coating material is made up by solid epoxy resins with an average molecular weight of
1000 together with either polyamine adduct or polyamide curing agents, which is then mixed
with organic solvent to form liquid coating composition. Commercial epoxy coating contains
40 – 45 % by weight organic solvent which is equivalent to 400 – 450 kg/m3 of epoxy
solution (Robinson 2009).

Epoxy coating has got performance requirements after it is made. These performance were
specified by American Petroleum Institution (API), TRANSCO CM2 (British Gas) and more
recently ISO 15741. Some of those performance requirements are; adhesive, hardness,
flexibility, corrosion resistance, water resistance, chemical resistance and resistance to gas
pressure variation (Robinson 2009).

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Internal epoxy coating is mostly done separate from the steel mill through various steps. First
the pipeline is preheated to at least 258.15 K above dew point. Then, internal blasting is done
using steel abrasive to a commercial finish. Afterward, spray coating is applied into the pipe
and finally, post heating of the pipe to ensure a tack free finish (Bayou 2013)

External pipeline coating

Pipelines are also coated outside in order to prevent corrosion. Apart from that, it also assists
protection of the environment in case the pipeline gets corrosion for example spillage of the
gas into the ocean when it corrodes. Fusion – bounded epoxy is one of the external coating
materials used. Fusion – bounded epoxy coating provide corrosion protection of the external
metal surfaces. Its main function is to provide excellent impact resistance, improved abrasion
resistance, flexibility and slip resistance (3MTM ScotchkoteTM Custom 2013).

2.3 Concrete coating

Concrete is the mixture of cement, fine aggregates, coarse aggregates, water and
reinforcement in a specified ratio. The main reasons for coating natural gas pipelines with
concrete is to provide weight stability of the pipeline while submerged in an ocean and
protect the external coating (Fusion –bounded epoxy coating) from being damaged as shown
in Figure 2. The following is the most common mixing ratio of the concrete mixture to
obtain the required strength of the concrete to coat the pipeline (Design_Mumbai 2013)

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 Figure 2: Concrete coating of pipeline (Bayou 2013)

Cement: The common cement used is Portland cement in accordance with ASTM C – 150
Type – iii. The main requirement for this cement in order to be satisfied for coating the gas
pipeline is that the content of tricalcium alluminate should be in the range of 5% - 8 %
(Zacarias 2013). Tricalcium alluminate should be in this range in order to prevent sulphate
attacks in the sea to the concrete weight coating. Also it is supposed to be hard, partially set
or Lumpy should not be used.

Fine aggregates: these can be natural or artificial. It supposed to be clean, free from injurious
amounts of salt, alkali, deleterious substances or organic impurities. The recommended
particle size for these fine aggregates is that, the minimum particle size should be 0.15 mm
and the maximum should be 4.75 mm.

Coarse aggregates: consist of gravels and broken stones. They should also be free from clay
and injurious amounts of alkali, deleterious substances and organic impurities because these
components affect strength of the concrete. The recommended particle size is that, the
minimum particle size should be 0.15 mm and the maximum particle size should be 9.5 mm.

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Water: Water used for concrete mixing should be clear and clean and it should not contain
chlorides and sulphates. Sea water and contaminated water is not allowed to make concrete
for coating natural gas pipeline.

Reinforcement: Reinforcements is applied around the pipeline in such a manner that it

covers the whole section of the pipeline or some parts of the pipeline where concrete has to
be applied. Reinforcements consist of welded steel wire fabric, manufactured in rolls (ribbon
mesh) which must conform to the standards of ASTM-185. Reinforcement mesh should be
0.025 m x 0.0675 m size.

Reinforcement’s layers are applied in the concrete mixture according to the thickness of the
concrete. When the thickness of the concrete is 0.061 m, only one layer of reinforcement is
satisfactory and it is applied at the middle of the concrete thickness. For the thickness of the
concrete range from 0.061 m to 0.12 m, two layers of reinforcements are required which are
applied at first third and second third of the concrete thickness. Above that range, three layers
of the concrete reinforcements are needed and they are usually applied at first quarter, second
quarter and third quarter of the concrete thickness. The ratio of water/cement in the concrete
mixture is usually 0.45 and the minimum compressive strength of the concrete is 37 MPa
(Zacarias 2013).

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3. LAYING OF NATURAL GAS PIPELINES
Laying of natural gas pipelines process is the procedural activity. It comprises of numerous
stages that have to be analyzed before launching it. Obligatory stages before laying process of
a pipeline involves surveying of land and perform analysis on potential hazards.

3.1 Land survey

Subsea gas pipelines take high chances in transportation of natural gas worldwide. Seabed
contains numerous features like valleys and mountains. Therefore seabed should be keenly
surveyed along the whole route to identify these obstacles before pipeline is layed out. After
identification of these various features and hazards that associates with laying process, the
pipeline path is analyzed that may involve bypassing or removing of obstacles. It may also to
some location need to be buried or backfilled.

3.2 Hazards analysis

Hazards Identification
Different hazards may exist along the pipeline route which can cause damage to the pipeline.
These hazards may be due to man-made activities or natural causes. Man-made activities
include dragging anchors, dropped anchors, fishing activities and discarded objects left on the
seabed such as sunken vessels or debris left by construction vessels. Natural causes are
environmental which include wave, current forces,soil movement, and earthquakesresulting
into instability of the pipeline at the seabed. Before protecting the pipeline from hazards there
are various data which are gathered to identify presence of hazards. Waves, surface and
subsurface currents, bottom currents, soil conditions on the seabed and soil movements
tendencies are some of them (Mousselli 1981).

Hazards protection methods

In order to protect the pipeline from getting damage, different methods are applied. These
methods include:
 Trenching the pipeline below seabed.
 Anchoring of the pipeline using gravity anchors, screw anchors or other types of
anchoring.
 Increased concrete coating
 Strengthening the pipeline

The most common method that used to protect pipeline from hazards is trenching.

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Trenching
Trenching is a process of cutting a ditch and settling a pipe inside. Different trenching
parameters are illustrated in Figure 3. Trenching process applies different methods such as
jetting, sand fluidization, mechanical cutting and plowing whereby jetting is often used.

Figure 3: Pipe trenching(Mousselli 1981)

The use of jetting is supported by its effectiveness in soil disposal operations which includes
ejector-principle, air-lift principle and mechanical pump as shown in
Figure 4. The process can apply one operation at a time or a combination of them. In injector-
suction operation, water is driven from the surface into the tube and due to pressure
difference, soil get lifted and move out of the trench. For the air-lift principle, air is forced
into the tube due to difference in densities inside the tube, soil get lifted and disposed at the
sides of the trench.

Figure 4: Spoil removal principles(Mousselli 1981)

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3.3 Techniques of laying natural gas pipeline
Pipe laying by reel barge
Barge reel method is used for flexible and smaller diameter pipe of less than 20 inches
(NaturalGas.org 2011). It involves the use of horizontal and vertical roll which is used to
wrap the pipe around. Horizontal reel barges perform S-lay installation while vertical reel
barges can perform both S-lay and J-lay pipeline installation (Rigzone 2013).

Pipe laying by towing

Towing is a process that works by suspension of the pipe in the water by the use of buoyancy
modules. Once the pipe is in proper location, the buoyancy modules are removed and the pipe
is allowed to sink to the seabed. Towing process comprises four ways as described below:

 Surface tow: This involves towing the pipeline on top of the water and buoyancy
modules help to keep it on the water's surface.
 Mid-depth tow: This uses less buoyancy modules than the surface tow. It uses forward
speed of the boat to keep the pipeline at a submerged level. Once the forward motion
has stopped, the pipeline settles to the seabed.
 Off-bottom tow: This uses buoyancy modules and chains for added weight, working
against each other to keep the pipe just above the sea bed. At the required location, the
buoyancy modules are removed, and the pipe settles to the seabed.
 Bottom tow: This is the last way that drags the pipe along the sea bed, without using
any buoyancy module. It is performed in shallow-water installations at the soft and flat
seabed(Rigzone 2013).

Pipe laying by lay barge

In lay barge method, individual pipes that have already been coated with epoxy and or
concrete from onshore are loaded and transported on the lay barge to the installation point.
Basically there are three barge laying methods J-lay method, S-lay method and reel method.
Speaking of J –lay and S-lay methods pipes are usually checked for damage, cleaned and
lined up end-to-end during transporting them to the installation point. With these two
methods, welding of two 12 m lengths into a 24 m ‘double joint’ is done.

The welded pipe joint is then subjected to ultrasonic testing so that even the smallest defect
can be detected and rectified before reaching the double joint. Finally, the entire area of the
unprotected joint linking the two pipe sections will be wrapped in a heated, corrosion-proof

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shrink sleeve. On cooling of the sleeve, it will form a waterproof seal by shrinking and
wrapping around the welded joint. Around that, a steel collar will be applied and secured with
steel belts. Then, polyurethane foam is poured into a mould which serves to protect the shrink
sleeve especially during pipe laying (Medgaz 2013).

S-laying mechanism
S-lay method is common and suitable for use in both shallow and deep water. In S-lay barge,
pipelines are well arranged and lined up end to end. Joints on the pipeline are horizontally
welded in the production unity named firing line that also assist and provides proper working
environment to enable multiple operation working stations for welding, non-destructive test
of the welds as well as coating on the welded section (Jensen 2010).

Next to firing line are tensioners. These are large rolling caterpillar tracks with rubber which
hold in place and press on the pipeline to assist further construction of pipelines. After the
new pipe joint has been made, the line is extended from the barge heading down to seabed
with the aid of tensioners while controlling its speed as shown in Figure 5 below.

Figure 5: S-laying method (Jensen 2010)

Stinger is slopping units made up of several hinged sections that make it easy to articulate in
a curvature shape. It is a long structure typically of 100 m of length which is fitted together
with rollers for proper pipeline controls.

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The main advantage with this method is that, up to four 12 m and long pipe joints can be
added at a time (Jensen 2010). This is due to the long line from the vessel to the seabed that
allows parallel works stations for assembly of pipe joints. Considering large water depths, the
pipe should be supported close to vertical departure angle that demand a large stinger to
avoid damaging the pipe. Moreover, as water depth increases the power needed to give
required lay tension also increase which results to high fuel expenses.

J-laying mechanisms
J-laying method is suitable in deep water pipelaying installation. After the pipe sections have
been placed in the middle of the barge platform, grippers and rollers use to rise up pipes to
the welding tower, where they are to be welded together at each joint by using welding
equipment. The angle of J lay tower may typically range between 0 to 15 degrees from
vertical (Jensen 2010). The pipeline is constructed on a nearly vertical position using J lay
tower that is fitted together with tensioners. Based on this arrangement, the overbend region
from s-lay method is eliminated and the suspended pipe resembles to letter J

In J-lay method the pipe leaves the barge steeply such that the total length of the free pipe is
shortened and less applied tension is needed for bend control. The method assists in getting
rid of complexity that involved with the stinger. Furthermore, the pipe can be installed more
accurately as the seabed point is not as far behind the vessel as in case of S-lay method due to
having lower applied tension. The key drawback with the method is that the tower only
facilitates one workstation which results in making the J-lay method slower than the S-lay
method.

Reeling method
Reeling method is the other principal conventional method in pipelaying technique. It is
suitable for cables, umbilicals and flexible pipes that generally have small diameters up to
0.41 m (Jensen 2010). In this method, the pipe is constructed onshore in a controlled factory
environment and spooled onto a large diameter reel that is fitted on the reeling vessel at the
spooling base. Depending on the pipe diameter, the reel capacity is typically several miles of
pipe. After loading the lay vessel, it then travels to the installation point where the pipe is
installed by unspooling as the vessel moves. These barges usually have a horizontal reel and
the pipe is sent into the ocean through a stinger similar to S-lay method, while ship shaped
reeling vessels has a vertical reel and a tower to accommodate a J-lay method installation.
Usually during spooling into the reel, the pipe experience very large strains.

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Advantages to this method is that has a reasonable speed and lower operating costs because it
has few welding crews and less welding equipment on the lay barge. Also, the method is less
weather dependency compared to S- and J-lay methods.

3.4 Commissioning of Offshore Natural Gas Transmission Pipeline

Basic activities are conducted for verification and inspection in preparing a natural gas
pipeline for operation, once it has been laid down. These activities are filling the line with
water, cleaning the line, hydro-testing the pipeline, dewatering and drying as clarified in
dewatering and drying of offshore pipeline section. The pipeline is inspected to verify that
the pipeline has been laid without significant defects and is in conditions suitable to transport
natural gas. The inspection is done by sophisticated equipment known as smart pigs and the
process of doing it is called pigging. Smart pigs are intelligent robotic devices that are
propelled through the pipeline to evaluate the interior of the pipe. The pigging for each
activity is described in the following paragraphs.

Water cleaning and filling of offshore pipeline

During pre-commissioning the pipeline is filled with water and cleaned. This is done to
prepare the line for hydro-testing and to make sure that no debris left over. It is usually
performed as a single operation. Pig discs and water flow are used to remove debris in
pipelines with internal coating. Pig discs are preferable to avoid potentially damaging the
coating. One or more trains of these pigs may be used depending on the quantity of debris
being produced and this may be repeated until the client is satisfied with the cleanliness of the
pipeline. However, coated pipeline tends to have less debris to clean out. In this activity,
pigging speed is best controlled between 0.5 and 1.0 ms -1 to achieve the required cleaning
specification (Russell 2005).

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Hydro-testing of offshore pipeline
The pipeline is filled with water at least 99.8% of total volume with the rest being air to a
minimum of 24 hour pressure test. This is done to avoid invalid results on the hydrotesting
operation due to fact that air is more compressible than water. During the test, water pressure
should be higher than the operating pressure and it is conducted to confirm the integrity of the
pipeline. Treated flesh water is used in this operation even though it is expensive in offshore
and in many location around the world. Treated sea water may be used although it has an
environmental issue even in those situations where treated sea water is acceptable.

The pipeline is brought up to test pressure after successful flooding for four main reasons.
First, verification of pipeline strength and its ability to withstand the operating pressure.
Second, to verify there are no significant leaks. Third, to find defects in equipment and fourth
to relieve some of the stresses potentially induced during construction (Russell 2005).

Dewatering and drying of offshore pipeline

After hydro-testing of offshore natural gas pipeline, it is important to dewater test water and
dry the pipeline. This is done to prevent corrosion to occur and formation of hydrates when
the offshore natural gas pipeline is brought up to pressure in the presence of residual water. In
order to achieve effective dewatering, the pig train used consists of a number of pigs, each
with a specific function as shown in Figure 6 below. First pig designed to sweep as much
water as possible out of the pipeline. A slug of fresh water may be introduced into the
pipeline between the first and second pig so as to remove salt water if sea water was used to
fill the pipeline. Then, air with other pigs is used to provide significant compression in order
to propel the pig train. Dewatering is likely to leave a film of 0.1 to 1 mm thick of water on
the internal surface of a pipeline. This significant amount of water over the length of pipeline
is removed through various techniques which include air drying and vacuum drying.

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 Figure 6: Dewatering a natural gas pipeline (Russell 2005)
Pigs have a role to play in air-drying as very often; a series of foam swabs will be run in the
pipeline during air-drying operations. The first pigs pushed through may be bi-directional but
most of the operation will be performed using bare foam pigs. These have a dual action: they
swab water off the pipe wall by absorbing it and they also push the water out in front of the
pig. Bare foam pigs become saturated quite soon, so that many such swabs will usually be
run. This will continue until it appears that the swabs are not effectively removing any
remaining water, when a final stage of drying by purging the line with dry air or nitrogen will
proceed without pigs. An alternative to this in the final phase of drying is in running pig
trains to batch hydrophilic chemicals through the pipeline. The aim is to bring any moisture
not removed from the pipeline by pigs in contact with chemicals that will absorb water.
Chemicals that are used for this purpose include methanol and glycol. Typically, slugs
of methanol are placed in perhaps two batches in a train of four or five pigs, driven by
nitrogen and with nitrogen between them as shown in Figure 7 below. Standard calculations
can be used to determine just how much methanol will be required to dry a given size and
length of pipeline (Russell 2005).

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 Figure 7: Methanol Swabbing (Russell 2005)

The pig train is pushed through the line using the nitrogen, either cryogenic nitrogen
obtained from tanks or generated on-site using membrane nitrogen units. Membrane
nitrogen unit is equipment consists of membrane modules (Figure 8) which separate nitrogen
from air (Weatherford 2012). As the pigs are received the methanol is diverted into
temporary storage tanks for analysis purposes. This analysis gives data on how much water is
contained within the methanol, allowing an estimate of how much water has been removed.
Moreover, although this pig train will still have left a liquid film on the inside of the pipe,
this film will have a very similar ratio of water to methanol as the recovered
methanol, allowing estimates to be made of the remaining water content in the line (Russell
2005).

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Figure 8: Membrane nitrogen unit with a cross-section of membrane module

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4. PIPELINE CONSTRUCTION COSTS ON LAND AND OFFSHORE
The pipeline construction activity either onshore or offshore involves utilization of various
types of resources which are material and human. These resources are further categorized into
different components that contribute to total cost of the pipeline. These components include
materials, labor, right-of-way (R.O.W) and damages and miscellaneous.

Material
Material is one is of the most important components in determining the costs of natural gas
pipeline construction. The costs related to materials in the pipeline construction including the
costs for the total 12 m pieces of pipes used, materials from which the pipes are constructed,
thickness of the pipes, concrete materials, coating, welding resources and other material
resources that may be used in the construction process. The costs for the material used in
offshore pipeline construction is higher compared to that onshore; this is because of many
factors including the thickness of the pipes offshore being bigger up to 0.035 m (PPSA 2013).
For both offshore and onshore the material costs depends on diameter and length.

Labor
Labor is the most costing component that contributes the largest percentage to the total costs
in the pipeline construction, it covers about 40 – 50 % of the total costs (Parker 2003). The
labor costs vary linearly with length. Both labor and material cost about 70 to 80% of the
total costs in pipeline construction both onshore and offshore (USAID 2013).

Right – of – Way (R.O.W) and damages

Right – of – way (R.O.W) costs are the one incurred to get the right to make use of land or
work on the piece of land. Prior to the laying process, the previous users of the land through
which the pipeline has to pass across are supposed to be paid for compensation. Sometimes,
during laying process, workspace may be needed; the costs related to workspace and damages
are included in the R.O.W
Miscellaneous
Miscellaneous is the composite of many parameters that are not included in other cost
components. These parameters include surveying, engineering, supervision,
telecommunication, freight, administration, overhead, taxes and interests. The Miscellaneous
costs contributes at an average of 20 – 30 % of the total costs (Parker 2003), it also linearly
depend on the length.

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Total cost
The four cost components can then be added up together to get the total cost for the whole
process of constructing the pipeline. This means the sum of the costs of material, labor,
R.O.W and miscellaneous. The total costs for pipeline both offshore and onshore vary
linearly with length as explained in previous sections. The natural gas pipelines offshore are
generally more expensive to construct and maintain than onshore. This can be justified by
looking at the costs in United States of America as shown in Table 1 and 2.

Table 1: Onshore pipe cost estimation (USAID 2013)

Estimated Pipeline construction costs (USD) per meter and percentage of Total
1995 – 1996 2000 - 2001
Component
(USD) (%) (USD) (%)
Material 170 31 174 21
Labour 263 47 355 44
Miscellaneous 96 17 214 26

R. O. W and damages 30 5 75 9
Total 559 100 818 100

Table 2: Offshore pipe cost estimation (USAID 2013)

Estimated Pipeline construction costs per meter and percentage of Total
1995 – 1996 2000 - 2001
Component
(USD) (%) (USD) (%)
Material 425 42 257 16
Labour 328 33 955 60

Miscellaneous 246 25 317 20

R. O. W and damages 2 0 73 4
Total 1002 100 1602 100

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The justification of higher costs of offshore than onshore is due to the fact that, the high
carbon steel sheet material used to produce offshore pipeline are thicker compared to onshore
pipeline. This is because they operate at higher pressure (30 MPa) than onshore (10 MPa)
especially in deep water, for instance the pipelines in Angola, Mexico and Brazil (PPSA
2013). Also, offshore pipelines need to be protected by the concrete coating due to reasons
explained in 2.3 Concrete coating section.

The costs of constructing pipeline also differ from country to country (USAID 2013, Thomas
2013, Hanssens 2013 and Cornot-Gandolphe et al. 2003) as shown in Table 3. This variation
depended on rules like location, terrain, population density and labor and tax laws in different
countries. The costs in the developed countries are lower compared to developing countries.
For example, the costs in United States of America (developed country) onshore is 800 USD
per meter as shown in the Table 1, while in Tanzania (developing country) is about 1200
USD per meter as shown in Table 3 for the Mtwara to Dar Es Salaam natural gas pipeline.
Also the cost of constructing pipeline offshore Norway is comparable to the cost of
constructing pipeline onshore Tanzania (Table 3).

Table 3: Estimated construction cost in other countries

Pipeline Length Diameter Cost

(m) (m) (USD/m)
Europipe II (Norway to Germany), offshore 658000 1.07 2660 (in 2010)
Franpipe (Norway to France), offshore 840000 1.07 2163 (in 2010)
Trans-Caribbean (Venezuela – Colombia), 232000 0.66 1424 (in 2006)
onshore
Mozambique (Mozambique to South Africa), 905000 0.66 939 (in 2003)
onshore
Mtwara-Dar es Salaam (Tanzania), onshore 532000 0.90 1200 (in 2012)

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5. CONCLUSION
In production of 1.07 m offshore natural gas pipeline, it is important to consider materials
that withstand chemical and mechanical damages within the environment where the pipeline
is intended to pass. It is necessary to coat the pipeline internally with a layer of epoxy to
reduce roughness and hence minimize frictional pressure drop and protect it from corrosion.
Layers of epoxy and concrete have to be applied on the outside part of the pipeline to prevent
it from corrosion and making it heavy in order to sink respectively.

The produced offshore pipelines are laid down using various techniques of which Lay barge
is widely used as it comprises both S-lay and J-lay methods. The S-lay method is suitable on
deep and shallow water and also allows up to four sections of 12 m long each to be added
together at a time. The J-lay method is applicable in deep water and avoid complexities that
associates with S-lay method. In order to choose the appropriate barge laying method, land
survey and hazard analysis have to be performed.

The cost of constructing and laying pipeline in USA offshore (1600 USD per meter) is as
twice as much as that of onshore (800 USD per meter). These results from the complexity of
installing offshore pipeline as labor are subjected to hazardous environment. Moreover,
offshore pipeline needs thicker pipes and concrete coating which contribute to increase in
cost of constructing offshore pipes. Costs in developing countries like Tanzania (onshore
pipeline cost 1200 USD per meter for 0.9 m diameter pipeline) are greater than developed
countries like USA (onshore pipeline cost 818 USD per meter).

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