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Report: Corroded Iraqi Pipelines Near Failure

Thursday, October 21, 2010

Oil pipelines in Southern Iraq are severely corroded and at risk of failing any time, according to U.S. technical assessments reported by two news agencies that cover the global energy and oil markets.

More than 32 miles of pipelines in Southern Iraq are 15 years past their shelf life, and more than 75% of the original metal walls are corroded away, reports Platts, an energy news and analysis service.

‘Excessive Corrosion’

The pipelines were last inspected in 1991, when corrosion forced a reduction of more than 75% in production capacity, said Platts, which obtained a 2007 study of the pipelines commissioned by the U.S. Army Corps of Engineers and conducted by engineering conglomerate Foster Wheeler.

The 2007 report relies heavily on the 1991 assessment, which used pigging to assess the damage. The earlier survey found “excessive corrosion” and estimated that the pipeline wall had deteriorated by 76%, said Iraq Oil Report, which also reviewed the reports.

“We are afraid of anything happening to [the piplines],” Deputy Oil Minister Ahmad Shamma told Iraq Oil Report. “We are not putting any more pressure on them, touch wood.”

‘A Well-Known Secret’

“The frailty of the pipelines is a well-known secret,” said Iraq Oil Report. “But the extent was made clear” in the two reports made public only this month.

It added: “In October 2007, the U.S. Army Corps of Engineers commissioned Foster Wheeler to assess the integrity of export pipelines for Iraq’s Ministry of Oil. In December 2007, Foster Wheeler produced a feasibility study on building redundancy for the exports.

“In October 2008, the Financial Times reported that the U.S. State Department had sent a notification to the U.S. Congress that the pipelines were at risk, in a justification for more funds, but the reports underlying that warning have never before been disclosed.”

$100+M Daily

The pipelines were built in 1975 with a life expectancy of 20 years. Three-quarters of Iraq’s oil is exported through the fragile system, which begins on the Fao peninsula, drops nearly 100 feet below the northern Arabian Gulf, and extends to the al-Basra Oil Terminal, the report said. More than $100 million of oil flows through the pipelines every day.

“The 48-inch export pipelines have long passed their design life and are due for replacement,” concluded the 2007 reports, according to IOR. “A full integrity evaluation of the existing pipelines is required if these pipelines were to continue in service. Without this assessment, it is considered that the condition of the pipelines should be considered critical.”

No such assessment has been made, IOR added, quoting “officials close to the southern export activities.”

Bottom-of-Pipe Corrosion

Because the pipelines do not employ hydrogen sulfide or carbon dioxide to stabilize the petroleum, "it is a reasonable assumption that the corrosion in the pipeline is mainly due to water collection at the bottom of the pipeline and that all of the corrosion will be 'bottom-of-pipe,'" the assessment said.

“If this average corrosion rate has continued linearly, the pipeline should have lost containment by now,” the Foster Wheeler assessment said.

The feasibility study said the pipelines could not be inspected, much less fixed, until alternative export routes were built, due to the risk of rupturing the pipelines.

Risking Catastrophe

Platts called a rupture of the pipeline system “an economic and environmental catastrophe that would reverberate from Baghdad to its neighbors and the entire oil market.”

A rupture could dwarf the oil spill unleashed by the April explosion of BP’s Deepwater Horizon in the Gulf of Mexico, officials say. “In the more likely—and ruinous—scenario,” IOR reported, “the pipeline would break far from shore, and weather would push the oil throughout the Gulf toward Iraq’s neighbors.”

Shamma said the first priority would be “intelligent pigging” that determines “the remaining thickness” of the pipeline wall. After that, a decision will be made to repair, downgrade or shut down.

Meanwhile, Iraq has signed contracts with Foster Wheeler and Leighton Offshore to build new pipelines and single-point mooring (SPM) systems for new capacity, Platts reported.