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

13 Okt 2024 Sampe Purba - Principles of Pipeline Gas Transportation 2
Key Principles of Pipeline Gas Transportation
Covering
•Technical
•Commercial
•Regulatory Aspect

Courtesy of ChatGPT

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]

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]

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

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]

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]

Risk Management
•Supply and Demand Risk
•Force Majeure Clauses
•Health, Safety, and Environmental
(HSE) Compliance

Title, Custody and Risk
•Title : Flow of title (Ownership)
•Custody (physical possession)
•Risk (liability for loss or damage)

Gas Production/ Upstream
•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.

Transportation (midstream)
•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.

Delivery Point
•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.

Variant of the models of delivery Points

Downstream Distribution
•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.

13 Okt 2024 Sampe Purba - PRICE REVIEW Provision 17
References
•Peter Roberts https://www.amazon.com/Gas-LNG
-Sales-Transportation-Agreements/dp/041411129
X
•Chatbot. AI generated sources
•https://DONDE-LEVY-in-FREEMAN-LEVY-Eds-G
as-LNG-Price-Arbitrations-2020-The-Arbitrators-R
ole-pp.-131-141.pdf
•Sampe Purba –
/sampepurba

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