Ormen Lange pipeline leads to fall in UK gas prices

OilOnline reports that the Ormen LangeLangeled pipeline has been completed well ahead of schedule. The pipeline is due to officially open on 16 October.

The pipeline, the world’s longest offshore pipeline at some 1,200km, could meet up to 20% of the UK’s gas demand.

This has various media outlets speculating onwhat this may mean for gas customers in the UK.

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why pipelines?

Pipelines are the backbone in the transportation of oil, gas and water, as well as other fluids for use in industrial processes (e.g. ethylene).

This makes the design, operation and maintenance of pipelines important. However, the route of a pipeline has immediate geopolitical impact, because pipelines form part of the “tap” through which consumers access oil and gas. This means pipeline routes and failure in pipeline integrity can make headline news. The World Energy Council explains this in detail:

In WEC’s study on Drivers of the Energy Scene we made various observations about the rate at which oil and gas are likely to enter the market. This can be looked at as issues concerning the size of “the tap”. WEC’s Survey of Resources constitutes the longest time series on the size of “the tank”.

Clearly the size of the tap is the immediate issue which dominates headlines and energy decision-maker thinking. It is capacity in producing wells, pipelines, conversion and refining and tankers that will determine, along with other more commercial and political factors, how supply will respond to demand in the short-term. The size of the tank is of longer-term relevance, but what are the linkages and relationships between the tap and the tank? The tank is essentially a function of past exploration expenditure together with the build-up of geological and extraction understanding, which permits extrapolation from exploration data. The tap is a function of investment decisions in the capacities mentioned above.

pipeline primer

Pipelines have received some bad press lately. Not that they ever had much good press in the first place! But what is a pipeline and why use one? And why do they fail and what causes them to fail with such lethal consequences?

As a primer to pipelines, I’ve collected some links which will hopefully educate the reader on pipelines.

Pipeline101, an introduction to pipelines by API and APOL.

Wikipedia entry on pipelines as a means of transportation.

HSE portal on pipeline health and safety in the United Kingdom, and the key document The Pipeline Safety Regulations 1996.

OPS website (part of PHMSA), dedicated to safe operation of pipelines in the United States. DOT also has an introduction to pipelines.

Pipeline Safety Trust.