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Three points to consider when assessing natural gas pipeline hot tapping economics


The figures in this article are purely illustrative as this article is a summary based on figures provided in the 2006 EPA whitepaper 'Using Hot Taps for In Service Pipelines'

Relying solely on traditional methods has seen natural gas transmission and distribution companies being forced to shut off part of a pipeline in order to expand or modify their system.

Hot tapping is an alternative procedure which enables the connection to be made while the pipeline remains in service, limiting the disruption involved.

Recent improvements and innovations relating to hot tapping have reduced complications and uncertainty experienced by operators.

Meanwhile, shutdown interconnect procedures result in methane emissions, customer inconvenience and the loss of both product and service for the period of the shutdown.

Considering all potential factors

This means there are both economic and environmental impacts to be considered when attempting to use these methods.

Hot tapping involves the attachment of a branch connection and valve to the outside of a pipeline before the pipeline wall is cut out from within before being removed through the valve.

This enables natural gas companies to reduce their methane emissions while increasing their revenues, with the gas savings relating to this type of work usually sufficient enough to justify it.

Vented gas when carrying out a shutdown interconnect procedure represents a loss of product which could otherwise be sold.

Tallying up the savings

Using hot tap methods, a company that carries out an average of 320 per year can expect to save a volume of natural gas in the region of 24,400Mcf per year.

In terms of value this depends on pricing points, but at $3 per Mcf would see a saving of $73,200 per year, while pricing of $5 per Mcf would see a saving of $122,000 per year.

Those companies charging $7 per Mcf would see savings in the region of $170,800, suggesting the use of hot tap technology is economically beneficial.

A further $13,680 a year can be saved for inert gas with the use of hop tapping.

In terms of cost, implementing the procedure can cost around $47,500, while additional costs in the format of operations and maintenance and contract services can cost an additional $62,000 a year.

These calculations are made on several assumptions but attempt to take in as many factors as possible.

Depending on the price per Mcf, the payback periods on the procedures can vary between around seven and 15 months.

Hot tapping is therefore more cost-effective than the other methods of modifying pipeline systems, while the positive environmental aspects are making it a move of choice.

Download the Mirage Machines Hot Tapping and Line Stopping Buyers Guide

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