4.4 Pipeline design and optimization

The objective of hydraulic design and economic simulation is to define a technically and economically optimum pipeline facilities system. The optimization process is thus an attempt to determine the best and most favorable option for all stake holders. Considerations are:

• engineering (including balancing technical alternatives, e.g., route 1 versus route 2, pipe (diameter/loop/material/addition) versus compression

• design

• construction

• timing facilities put in operation

• operational flexibility

The optimization process is diagrammatically depicted in Fig. 4-7.

Figure 4-7. Optimization process chart

4.4.1 Optimization Parameters

Optimization is undertaken to determine the following:

• optimum pipe size and compression requirements

• optimum operating pressure

• appropriate compression ratio

• optimum pipeline route

• optimum system load factor

• necessary storage facilities

The above involves the following:

• pipeline routing

• supply and demand locations

• volume and volume build up, design years(s)

• load factor

• maximum and minimum operating pressures and temperatures

• pipe size and material

• compressor units and compressor station spacing/location intervals

• compression unit drivers (gas diesel, electric)

• cooling requirement (types and size)

• protection

• others

All reasonable optimization parameters must be considered in technical and economic assessment of alternatives.

2. Optimization Process Overview

When all reasonable combinations of the optimization parameters are considered, and if the system is such that there are several pipeline segments each with significantly different flow requirements (and, hence, requiring separate optimization), then it is possible to assess al­ternatives for the most economically optimum and technical feasible solution. Alternatives are generally assessed through a screening process to reduce the number of options. Of importance are the flow, design year, and load factor.

Firstly, for each flow (/design) year, usually, a separate analysis of alternatives is un­dertaken prior to comparing alternative flow/design years. For each alternative, flow simu­lations is performed for the maximum flow condition in the selected/given design year. This can be used to locate all compressor stations and to determine the size of the stations and number/type of units required. Further flow simulations can then be performed for the buildup years to determine when each station need be installed and to establish the power buildup for each station.

Knowing the availability of stations in each year, seasonal average flow simulations can be undertaken for each year up to the design year to determine if the available stations are required under seasonal average flow conditions and, if so, to establish fuel require­ments for these stations.

For each alternative, it is then possible to estimate the capital costs to acquire and con­struct/install the facilities. These estimates are usually costed to the year of installation, i.e., in as-spent costs. Fuel costs in as-spent terms along with other operating and maintenance costs are also estimated.

In reviewing the capital, fuel, and operating and maintenance costs, it is possible that some of the alternatives will have higher costs in all categories than other alternatives. These higher cost alternatives are eliminated, thus giving preference to most economically viable solutions.

In reviewing the capital, fuel and operating and maintenance costs, it is also possible that some of the alternatives will have higher costs in all categories than other alternatives. These higher cost alternatives are the eliminated as applicable.

For the remaining alternatives, it is necessary to estimate project all annual costs (i.e., to the limit of the facilities life), present-value these, and cumulate the present-valued costs in order to establish the lowest cost alternative. Thus, in addition to the capital, fuel, and operation and maintenance costs, other cost factors that will need to be allowed include depreciation expenses, financing costs, return on equity, and any taxes, if applicable. The discount rate applied in the present-valuing of the annual costs is usually the owners/pro­ponents cost of money (i.e., a mix of debt financing at the rates available based on credit rating plus equity financing at the minimum acceptable rate of return).

In comparing design flow years, the best of the alternatives for each design/flown year are selected, but a direct comparison is not immediately possible since each of these cases has a different throughput capacity. Therefore, the alternatives with a lower capacity need to be expanded (e.g., adding compression to the pipeline) to the highest capacity. This again requires some effort to ensure the expansion is done in a close-to-optimum manner. The additional capital, fuel, and operation and maintenance costs are estimated, and then the total annual costs are extended to the highest design year. The alternatives can then be compared on the basis of cumulative present-valued costs.

With the best two or three alternatives, we can go back and test the sensitivity! I some of the other parameters are varied.