Session 9 Principles of Pipeline Gas Transportation.pptx

Key Principles of Pipeline transportation covering technical, commercial and Regulatory Aspects. The materials also cover
Title, custody and risk on variant of the models of delivery points

1. Principles of Pipeline Gas Transportation [For Non Engineer] Sampe L. Purba

2. Key Principles of Pipeline Gas Transportation Covering Technical Commercial Regulatory Aspect Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 2

3. Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 3 Courtesy of ChatGPT

4. Flow dynamics Pressure and Compression -- Compressor to increase gas pressure to maintain flow Flow rate [  pipeline diameter, pressure, length of pipeline] and capacity [managed to avoid bottlenecks] Pipeline integrity [monitor leaks, corrosion and maintain the integrity of pipeline to prevent accidents] Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 4

5. Ownership and Access Open Access vs Dedicated pipelines [third party access vs exclusivity] Tariff Structure [volume, distance, quality or priority of access] Capacity Reservation [Firm or interruptible capacity] Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 5

6. Commercial Arrangements Gas Transportation Agreements [GTA] [pipeline operator and gas shippers: right obligation and tariff] Take-or-pay clauses [certain level or percentage, to boost regular use and pipeline operator to recover its costs] Balancing and Nominations [declaration or plan of gas to take. Any deviation may involve penalties or balancing charges Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 6

7. Regulatory and Legal Framework Regulatory Pipelines [ tariff , safety standards, access conditions]  fair market practices Environmental and Safety standards [ensuring no pose risks to the environment or public safety] Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 7

8. Operational Considerations Line Pack [ volume of gas stored in the pipeline to allow operational flexibility and acts as a buffer for demand fluctuations] SCADA system [supervisory control and Data Acquisition System], to monitor and control pipeline operations, to ensure real-time data on flow rates, pressures, and safety conditions Interconnection with Storage and Distribution Systems [ in well established infrastructure system, connection to network to facilitate gas to end-user] Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 8

9. Risk Management Supply and Demand Risk Force Majeure Clauses Health, Safety, and Environmental (HSE) Compliance Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 9

10. Title, Custody and Risk Title : Flow of title (Ownership) Custody (physical possession) Risk (liability for loss or damage) Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 10

11. Gas Production/ Upstream Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 11 Title : The gas producer or seller (upstream company) retains the title until delivery. Custody : The producer has custody until the gas enters the transportation system (e.g., pipeline). Risk : The producer bears the risk of loss or damage while the gas is still in its custody.

12. Transportation (midstream) Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 12 Title : Ownership usually transfers to the buyer when the gas enters the pipeline (e.g., wellhead or plant exit). Custody : The pipeline company (transporter) holds custody but does not own the gas. They are responsible for safe transport. Risk : The buyer typically assumes risk once the gas enters the pipeline, though the transporter may have limited liability for any issues during transportation.

13. Delivery Point Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 13 Title : The title to the gas formally passes to the buyer at the agreed delivery point (often at the entry into the transportation system or city gate). Custody : Custody may transfer to the buyer at this point if the buyer assumes operational control, or it may remain with the transporter until further downstream. Risk : Once the title transfers, the buyer typically bears all risks, including transportation risks if they do not contractually assign them to another party .

14. Variant of the models of delivery Points Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 14

15. Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 15

16. Downstream Distribution Okt-24 Sampe Purba - Principles of Pipeline Gas Transportation 16 Title : The buyer retains ownership of the gas after the delivery point. Custody : If the buyer uses third-party distribution networks, they may transfer custody to another transporter while maintaining ownership. Risk : The buyer continues to bear the risk unless they contractually assign risk to a third-party distributor.

17. References Peter Roberts https://www.amazon.com/Gas-LNG-Sales-Transportation-Agreements/dp/041411129X Chatbot. AI generated sources https://DONDE-LEVY-in-FREEMAN-LEVY-Eds-Gas-LNG-Price-Arbitrations-2020-The-Arbitrators-Role-pp.-131-141.pdf Sampe Purba – https://www.slideshare.net/sampepurba Okt-24 17 Sampe Purba - PRICE REVIEW Provision

18. Okt-24 18 Sampe Purba - Principles of Pipeline Gas Transportation