Cost of Corrosion – Gas & Liquid Transmission Pipelines

Gas & Liquid Transmission Pipelines

There are over 528,000 km (328,000 mi) of natural gas transmission and gathering pipelines, 119,000 km (74,000 mi) of crude oil transmission and gathering pipelines, and 132,000 km (82,000 mi) of hazardous liquid transmission pipelines. For all natural gas pipeline companies, the total investment in 1998 was $63.1 billion, from which total revenue of $13.6 billion was generated. For liquid pipeline companies, the investment was $30.2 billion, from which revenue of $6.9 billion was generated. At an estimated replacement cost of $643,800 per km ($1,117,000 per mi), the asset replacement value of the transmission pipeline system in the United States is $541 billion; therefore a significant investment is at risk with corrosion being the primary factor in controlling the life of the asset. The average annual corrosion-related cost is estimated at $7.0 billion, which can be divided into the cost of capital (38 percent), operation and maintenance (52 percent), and failures (10 percent).

Significant maintenance costs for pipeline operation is associated with corrosion control and integrity management. The driving force for maintenance expenditures is to preserve the asset of the pipeline and to ensure safe operation without failures that may jeopardize public safety, result in product loss, or cause property and environmental damage. A recent survey of major pipeline companies indicated that the primary loss of cathodic protection was due to the following two reasons: (1) coating deterioration (30 percent) and (2) inadequate cathodic protection current (20 percent). The majority of general maintenance is associated with monitoring and repairing problems, whereas integrity management focuses on condition assessment, corrosion mitigation, life assessment, and risk modeling. With a range of corrosion operation and maintenance cost of $3,100 to $6,200 per km ($5,000 to $10,000 per mi), the total corrosion operation and maintenance cost ranges from $2.42 billion to $4.84 billion.