Financial Risk Analysis for Crude Oil Buried Pipeline System

Abstract

Buried pipelines are the most lucrative deal in today's transportation for transmission of vital fluids and liquids. However, with the advent of disasters, the continuous flow through these indispensable systems gets hampered. The purpose of this chapter is twofold: one is to develop a simulation approach to capturing the effect of risk/disaster due to unforeseen events on buried pipeline, and the second is to gauge financial losses due to such uncertain events. A simulation model considering hoop, longitudinal, and radial stresses on continuous flow carrying buried pipeline subjected to uncertain and risky events is developed in CAESAR II engineering software. The authors performed statistical analysis to carry node-based analysis to describe the repair cost associated with the individual node or throughout the whole pipeline system under study. Although with a limitation in terms of model accuracy and reliability as the actual scenario could differ from the simulated model, the study outlines financial gain over total repair cost using simulation modeling approach in face of disruptions.