Pipeline Transport free essay sample

Pipeline transport is the transportation of goods through a pipe. Most commonly, used to send liquid and gases, and the pneumatic tube that transport solid capsules using compressed air are also used it. In other words, any chemical stable substance can be sent through a pipeline. Besides that, pipeline is a unique method of transport. The `way’ in transportation by the pipeline is important as an artificial way, and it usually constructed by a private user for his own particular purpose. For examples, today the crude oil and natural gas pipelines was owned and operated by oil and gas companies like Petronas. In general, pipelines can be classified in three categories depending on it purpose. First is gathering pipelines which is a group of smaller interconnected pipelines that forming a complex network with the purpose of bringing crude oil or natural gas from several nearby wells to a treatment plant or processing facility. In this type, the pipelines are usually short which is about a couple of hundred meters and with a small diameters. A sub- sea pipelines for collecting product from deep water production platforms are also considered as a gathering systems. Second is a transportation pipelines. Mainly, long pipes with a large diameters can moving the products likes oil, gas and refined products between the cities, countries and even the continents. These transportation networks is include a several compressor stations in lines and pump stations for crude and multiproducts pipelines. And last but not least, is distribution pipelines which is a composed of several interconnected pipelines with a small diameters, which is used to take the products and to the final consumer. The pipelines at the terminals for distributing the products to tank and storage facilities are included in this types.   In Malaysia, Petronas was not the first company to extract oil or gas. It was the Royal Dutch Shell who had began the oil exploration in Sarawak, then a British colony at the end of the 19th century. In 1910, the first oil well was drilled in Miri, Sarawak. This became the first oil producing well known as the Grand Old Lady. Shell was still the only oil company in the area in 1963, when the Federation of Malaya, having achieved independence from Britain six years before, united with Sarawak and Sabah, both on the island of Borneo, and became Malaysia. The authorities in the two new states retained their links with Royal Dutch Shell, which brought Malaysias first offshore oil field on stream in 1968. Meanwhile, the federal government turned to Esso, Continental Oil, and Mobil, licensing exploration off the state of Terengganu, in the Malay Peninsula, the most populous region and the focus of federal power. By 1974, only Esso was still in the area. It made its first discoveries of natural gas in that year and then rapidly made Terengganu as a bigger producer of oil than either Sarawak or Sabah. By 1974, Malaysias output of crude oil stood is at about 81,000  barrels per day (12,900 m3/d). After negotiations lasting from 1977 to 1982, Petronas had concluded the contracts with Tokyo Electric Power and Tokyo Gas for the sale and delivery of LNG through to the year 2003. Malaysia LNG was to send almost the entire output of its Bintulu gas fields to Japan, under these contracts and another one, signed in 1990, to supply Saibu Gas of Fukuoka, in southwestern Japan, for 20 years from 1993. However, the depletion policy was being undermined by external circumstances. Through the year in early 1980s, a worldwide of oil glut, which OPEC proved unable to control. It forced the Malaysian government to increase production to offset deterioration in its balance of increased payments to a deficit of $1 billion. It became clear that this could only be sustained by relaxing the conditions for joint ventures between Petronas and the major oil companies. In 1982, the Petronas and government share was happened, which had risen to 80%, was cut to 70%, and taxes on company income were also cut. After that which ih 1983, Petronas went into refining and distribution. It initiated the construction of refineries at Malacca and at Kerteh in order to reduce its dependence on Royal Dutch/Shells as a two refineries at Port Dickson while Essos is refinery in Sarawak. These two major and other foreign companies, is already covered much of the domestic retail market but the new subsidiary, Petronas Dagangan was given the initial advantage of preference in the location of its stations. By 1990, 252 service stations carried the Petronas brand, which is all but 20 on a franchise basis, and another 50 were planned. Some were set up on grounds of social benefit rather than of strict commercial calculation. As production from Royal Dutch/Shell and Essos existing fields moved nearer depletion, the companies sought new fields and new contracts. In 1985, the government and Petronas revised the standard production about the contract sharing, increasing the rate of recovery of capital costs from 30% to 50% of gross production in the case of oil and from 35% to 60% in the case of natural gas, abolishing signature, discovery, and production bonus payments and increasing the foreign partners share of the profits The government and Petronas aimed to encourage the replacement of fast-depleting oil within Malaysia itself and simultaneously to foster a heavy industries which could help reduce the countrys overwhelming dependence on exporting its natural resources. In 1980, petroleum products accounted for 88% of the countrys commercial consumption of energy, the rest being provided from hydroelectric plants in Sarawak, too far away from the main population centers to become a major alternative. Five years later, gas accounted for 17%, hydroelectricity for 19%, coal for 2%, and petroleum products for 62% of such consumption, and about half of each years gas output was being consumed in Malaysia. The Petronas enture responsible for this shift is in fuel use, and along with Malaysia LNG for Malaysias to becoming the third largest producer of LNG in the world, was the Peninsular Gas Utilization Project (Projek Penggunaan Gas Semenanjung), the aim of which was to supply gas to every part of the Peninsula. In 1985, the first stage was completed, following the success of smaller gasification projects in the states of Sarawak and Sabah and involved the extraction of gas from three fields in the Natuna Sea, between the Peninsula and the island of Borneo. It is processing in a plant at Kerteh on the Peninsulas east coast and its distribution to the state of Terengganu by pipeline and abroad via an export terminal. Petronass least happy venture was is the ownership of the Bank Bumiputra, the second-largest with a least profitable of the commercial banks incorporated in Malaysia. Petronas spent more than MYR3. 5 billion over five years trying to rescue the bank from the impact of the bad loans it had made, starting with its support of the Carrian property group of Hong Kong, which collapsed in 1985, taking the banks share capital down with it. In 1991, Petronas sold the bank back to another state company, Minister of Finance Inc. , and announced it intention to concentrate on oil, gas, and associated activities in future. Petronas with its policies of promoting self-reliance, helping to develop associated industries, and varying the sources and uses of oil and gas, played an important role in the Malaysian economy as a whole. Under governments which is by current, if not historical, Western standards were strongly interventionist, the contribution of oil taxes to the federal governments revenue hovered at around 12% to 16% until 1980, when it showed a marked increase to 23%, followed by another leap to 32% in 1981. From then until 1988 the proportion fluctuated between 29% and 36%. Petronas was not just another big oil company. It controlled a crucial sector of the economy and remained for better or worse, an indispensable instrument of the state. Pipeline networks are composed of several pieces of equipment that operate together to move products from location to location. The main elements of a pipeline system are divided into six aspects which are: †¢ Initial injection station. Known also as supply or inlet station. It is the beginning of the system, where the product is injected into the line. Storage facilities, pumps or compressors are usually located at these locations. †¢ Compressor or pump stations. Pumps for liquid pipelines and Compressors for gas pipelines, are located along the line to move the product through the pipeline. The location of these stations is defined by the topography of the terrain, the type of product being transported, or operational conditions of the network. †¢ Partial delivery station. Known also as an intermediate stations. These facilities allow the pipeline operator to deliver part of the product to being transported. †¢ Block valve station. These are the first line of protection for pipelines. With these valves the operator can isolate any segment of the line for maintenance work or isolate a rupture or leak. Block valve stations are usually located in every 20 to 30  miles (48 km), depending on the type of pipeline. Even though it is not a design rule, it is a very usual practice in liquid pipelines. The location of these stations depends exclusively on the nature of the product being transported, the trajectory of the pipeline and the operational conditions of the line. †¢ Regulator station. This is a special type of valve station, where the operator can release some of the pressure from the line. Regulators are usually located at the downhill side of a peak. †¢ Final delivery station. Known also as outlet stations or terminals, this is where the product will be distributed to the consumer. It could be a tank terminal for liquid pipelines or a connection to a distribution network for gas pipelines. OWNERSHIP Petronas is short for Petroliam Nasional Berhad, is a Malaysian-owned oil and gas company that was founded on August 17, 1974. Wholly owned by the Government, the corporation is vested with the entire oil and gas resources in Malaysia and it is entrusted with the responsibility of developing and adding value to these resources. Petronas is ranked among Fortune Global 5oo’s largest corporations in the world. Fortune ranks Petronas as the 95th largest company in the world in 2008 and 80th largest in 2009. It also ranks Petronas as the 13th most profitable company in the world and the most profitable in Asia. Since its incorporation, Petronas has grown to be an integrated international oil and gas company with business interests in 35 countries. As of the end of March 2005, the Petronas Group comprised 103 wholly owned subsidiaries, 19 partly owned outfits and 57 associated companies. Together, these companies make the Petronas Group, which is involved in various oil and gas based activities. The Financial Times has identified Petronas as one of the new seven sisters. The most influential and mainly state is it was owned national oil and gas companies from countries outside the OECD. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining, marketing and distribution of petroleum products and trading, gas processing and liquefaction, gas transmission pipeline network operations, marketing of liquefied natural gas, petrochemical manufacturing and marketing, shipping, automotive engineering and property investment. Several factors converged in the early 1970s to prompt the Malaysian government into setting up a state oil and gas company, as first proposed in its Five Year Plan published in 1971. Former Chief Minister of Sarawak, Tun Abdul Rahman Yakub was one of the people who proposed the idea of Malaysia setting up their own oil company. These were years in which power in the world oil industry began to shift away from the majors, which then controlled more than 90% of the oil trade, toward the Organization of Petroleum Exporting Countries (OPEC), as well as a proliferation of new private and state companies joining in the search for reserves. By 1985, the majors, reduced in number from seven to five, were producing less than 20% of the world total. It seemed that Malaysia would either have to join the trend or continue to leave its oil and gas entirely to Royal Dutch/Shell and Esso, multinational corporations necessarily attuned to the requirements of their directors and shareholders, rather than to the priorities the government of a developing country might seek to realize. Further, an agreement between Malaysia and Indonesia, signed in 1969, had settled doubts and disputes about each countrys claims over territorial waters and offshore resources at a time when both were heavily indebted to Organization for Economic Co-operation and Development (OECD) governments and banks as well as to the International Monetary Fund (IMF) and the World Bank. Setting up a state oil and gas company, through which the government could get international capital but avoid tangling with foreign oil companies or governments, had worked for Indonesia: why not for Malaysia as well? The oil crisis of 1973–74 made the government even more aware of Malaysias dependence on foreign oil and foreign capital in general. Another factor in the decision was that the technology had recently been developed for extensive exploration and drilling offshore. The local geography included a combination of broad basins of sedimentary rock with calm and shallow waters around the Sunda Shelf, making exploration for gas and oil relatively easier and more successful than in most areas of the world. Malaysian crude turned out to be mostly high quality with low sulfur content. A final and crucial factor in the creation of Petronas, and its continuation in much the same form since, has been the political stability of Malaysia. Since the restoration of parliament in 1971, the country has been ruled by the National Front (Barisan Nasional), the heirs to the Alliance Party which had been dominant from 1957 to 1969 and the originators in 1971 of the New Economic Policy, which was designed to improve the economic position of Bumiputras, native Malays and other natives in Sabah and Sarawak—relative to Chinese and Indian Malaysians and to foreign corporations. The difficulties this policy has caused for foreign companies and investors are outweighed by the benefits they believe they gain from Malaysias political stability. Having created Petronas, the government had to choose what forms its dealings with private oil companies would take. Starting with its legal monopoly on oil and gas activities and resources, it had several options which it could simply award concessions without taking part in production, management, or profits. It also could try offering services at the supply end or could make contracts to cover profit-sharing, production-sharing, joint ventures sharing both profits and costs or all stages of the process, under carried-interest contracts. Petronass first move was to negotiate the replacement of the leases granted to Royal Dutch/Shell on Borneo and to Esso in the Peninsula with production-sharing contracts, which have been the favored instrument, alongside joint ventures, ever since. These first contracts came into effect in 1976. Allowing for royalties to both federal and state governments, and for cost recovery arrangements, they laid down that the remainder would go 70% to Petronas and 30% to the foreign company. Esso began oil production in two offshore fields in 1978, exporting its share of the supply, unlike Petronas, whose share was consumed within the country. Petronas went downstream for the first time in 1976, when it was chosen by the Association of South East Asian Nations (ASEAN) to begin construction on the second ASEAN joint industrial project, a urea plant. The subsidiary, Asean Bintulu Fertilizer (ABF), is based in Sarawak and now exports ammonia and urea all over the world. Also in 1976, Malaysia became a net exporter of oil, but exports were at such a low level as to make the country ineligible to join OPEC. This situation benefited Malaysia, and Petronas, by allowing the company a degree of commercial and political flexibility and reinforcing Petronass chief purpose, Malaysian self-reliance. Petronas supervised its foreign partners oil activities, taking no direct role in production until 1978, when the government saw to the creation of a subsidiary for oil exploration and production, Petronas Carigali. It began its work in an oil field off the Peninsula. Petronas retained its supervisory powers over all oil and gas ventures, particularly on issues of health and safety and environmental control. Malaysia has one of the most extensive natural gas pipeline networks in Asia. The Peninsular Gas Utilization (PGU) project, completed in 1998, expanded the natural gas transmission infrastructure on Peninsular Malaysia. The PGU system spans more than 880 miles and it also has the capacity to transport which is about 2 billion cubic feet per day of natural gas. A number of pipelines link Sarawaks offshore gas fields to the Bintulu facility. Petronas is building the 310-mile Sabah-Sarawak Gas Pipeline between Kimanis, Sabah and Bintulu, Sarawak to transport gas from Sabahs offshore fields, such as Kota Kinabalu, to Bintulu for liquefaction and export. Some of the gas will be used for downstream projects in Sabah. This pipeline is expected to be completed by March 2011. The Association of South East Asian Nations (ASEAN) is promoting the development of a trans-ASEAN gas pipeline system (TACP) aimed at linking 80 percent of ASEANs major gas production and consumption centers. Because of Malaysias extensive natural gas infrastructure and its location, the country is a natural candidate to serve as a hub in the ongoing TACP project. The first pipeline connected Malaysia with Singapore and was commissioned in 1991. This has been followed by gas pipeline links between West Natuna, Indonesia and Duyong, Malaysia, commissioned in 2002, and the Trans-Thailand-Malaysia gas pipeline, commissioned in 2005, which allows Malaysia to pipe natural gas from the Malaysia-Thailand JDA to its domestic pipeline system.