Pipeline Industry Overview

Pipeline Transmission & Gathering Worldwide Directory

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Pipeline Industry Overview

Oil and Gas Transmission Pipeline & Gathering Systems

Oil & Gas Transmission Pipelines

Transmission pipelines consist of liquid pipelines (crude oil or product) and natural gas pipelines. Product pipelines carry refined products (gasoline, jet fuel, fuel oil, etc.).

Transmission pipelines are large diameter (16" to 42"), high pressure, large volume, and more often than not span long distances and quite commonly cross state borders. With minor exceptions, all pipe is welded steel joints of at least 40 foot in length and the outside is coated to impede corrosion.

Pump & compressor stations

Until after World War II, pump stations for liquid pipelines were powered by diesel engines, and were usually spaced every 30 miles. Each of these pump stations had to be manned around the clock to keep the system operating properly.

Today, technology allows the manufacture of large diameter and much more efficient pipeline systems, and pump stations equipped with centrifugal pumps driven by electric motors or, in some cases, by diesel engines or gas turbines. Between 20 and 100 miles separate pumping stations, depending on the pressure at which the pipeline is operated and upon the terrain over or through which it runs.

Compressor stations, as the name implies, compresses the natural gas, (pumping up its pressure) providing energy to move the gas through the pipeline. Compressor stations are installed along the pipeline route, typically every 40 to 100 miles. The size of the station and the number of compressors vary, based on the diameter of the pipe and the volume of gas to be moved.

Oil & Gas Gathering Systems

Gathering systems are a series of pipe that collect crude or natural gas and transport it to the transmission pipeline. This begins at the wellhead and may be through a series of piping systems that consolidate oil and gas from different wells on the same lease to wells from other leases.

Generally, the gathering system for crude oil from individual wells is owned and operated by the producers up to the point that crude from different leases is consolidated. The crude is often gathered from the wellhead (individual well) to a tank battery and subsequently trucked away to a central collection point.

The crude is then transported generally by pipeline, sometimes by railcar or barge, to its final destination. Each time custody of the crude changes, it is measured for volume and tested for content.

Custody Transfer & Measurement

Each time that custody of crude, natural gas and refined products changes, it is measured for volume and tested for content. New and improved technology in multi-tasking liquid and gas flow computers, controllers, analyzers and related equipment have significantly increased the reliability and integrity of custody transfer measurement systems.

The Business of Oil and Gas Pipelines

Government Influence

Regulatory changes culminated with the Federal Energy Regulatory Commission’s (FERC) Order 636 effective November 1, 1993. Order 636 required interstate natural gas pipeline companies to unbundle their sales and transportation services and revise how rates were determined for transportation services.

Historically, interstate pipelines had served as gas merchants: buying gas at the wellhead and selling it at the city gate to local distribution companies. In regulating the transportation of natural gas in interstate commerce, the commission sets rates, terms and conditions for operation of interstate gas pipeline systems.

Today virtually all natural gas, crude oil & refined products are owned by shippers who arrange with pipeline companies for transportation. Generally, pipeline companies are separate from the producing companies, and the pipeline companies provide only transportation services.

Future Growth Prospects - North America

North America presently consumes a little more than 30% of the oil, 30% of the natural gas & 30% of total energy consumed by the world. By 2020 it is estimated that those percentages will be 24% of the oil, 22% of the natural gas and 25.5% of total energy consumed.

Although as a percentage of the total a modest decline is expected, North America natural gas consumption will nearly double by 2020 and oil consumption will increase approximately 80% during this period.

Demand increases and the continuing decline in producible reserves will require a larger percentage of North America oil and gas to be imported. All of these factors will increase demand for transportation of all types to move supplies to consuming markets.

In order to meet US growth in demand for petroleum products and natural gas through 2007, the pipeline industry will increase capital spending from $6.4 billion in 2002 to $7.2 billion in 2007.

The Association of Oil Pipe Lines indicates that the infrastructure of liquid transmission pipelines represents a $31 billion investment in a 200,000-mile long network.

The investment in infrastructure of the 180,000 miles of interstate natural gas pipelines is expected to grow by as much as $8 billion in a two-year period. This would seem to ensure a promising future for the well positioned and prudently operated Pipeline Company, Engineering, Construction, Manufacturing or Supply firm serving the pipeline industry.

Future Growth Prospects - International

Most low cost oil and gas producing areas of the world are long distances from consuming markets.

Internal increases in demand and increased demand for exports will require additional transport facilities of all types. International pipeline construction is expected to be 8 to 10 times that of the U.S. This places annual capital expenditures for the pipeline industry exclusive of North America at $50 to $64 billion U.S.

Midwest Publishing Company (MWP)

Midwest’s role is obvious, "provide the most timely, comprehensive and accurate information possible at a reasonable price" and thereby serve all parts of the industry. The PC Directory provides MWP the tools to accomplish this task and the opportunity for our subscribers to benefit from the inherent added value of the product.