Pipelines
What is the importance of pipelines in energy transition?
Pipelines have historically transported oil, gas, water and refined products from a produced source to an end user or to a point where a further transportation system is used. Once built they can last for many years with minimal intervention and maintenance and offer a safe reliable method high volume continuous transportation. In the energy transition, pipelines are now seeing increasing demand for CO2 (for CCS), hydrogen and hydrogen derivatives. Whether purpose-built or repurposing of existing lines, both present unique commercial, regulatory and technical challenges.
How can etasca help?
The etasca team have commercial and technical experience on some of the largest infrastructure projects worldwide. Whether you need techno-economic advisory services, due diligence support on projects, or an understanding of the carbon intensity impact of these projects.
Interested? contactus@etasca.com
thousand kilometres
of gas pipelines globally
%
Average technical blend
of hydrogen in a typical
gas pipeline without
major modifications
kilometres
of hydrogen
gas pipelines already
installed in the U.S.
Commercial considerations:
The energy transition necessitates significant investments in pipeline infrastructure to transport molecules like hydrogen and CO2.
- With 1.3 million kilometers of gas pipelines globally, the current infrastructure is largely tailored for natural gas. However, as the energy transition accelerates, there is a pressing need to adapt or construct pipelines for new energy forms, despite the high initial costs involved.
- Near-term pipeline investments are forecasted to reach $720 billion, predominantly for natural gas projects . Yet, there’s an emerging focus on energy transition projects, like hydrogen and CO2 transportation, signalling a shift in investment priorities towards more sustainable energy solutions. Notably, pipeline infrastructure, though capital-intensive, represents a small fraction of overall costs in projects such as CCUS, which can exceed $500 million in capex, with pipelines accounting for less than 5% of the LCOE for CCS projects.
Critical for supply chain continuity.
- As the energy landscape shifts towards renewable sources, the reliability of pipelines becomes even more critical. Failures can severely impact the nascent renewable energy supply chains. The transition introduces new considerations for ensuring redundancy and reliability, given the unique properties and safety considerations of carriers like hydrogen.
Influence of geo-political stability.
- The geopolitics of energy transportation becomes increasingly complex with the energy transition. Pipelines for renewable energy carriers may cross international borders, necessitating cooperation on new levels and presenting both diplomatic challenges and opportunities for global energy policy alignment.
Comparison with alternative transportation methods.
- The shift to renewable energy carriers amplifies the need for efficient, low-emission transportation methods. Pipelines, with their inherent efficiency for bulk transport, stand out. However, the transition also demands a re-evaluation of alternatives, considering the full environmental impact and the need for a diversified energy transportation infrastructure to enhance resilience.
Technical considerations:
Pipeline complexity
- There are numerous complexities to retrofitting or building new pipelines. This includes: gasket choice, expansion joint consideration, metallurgy, hydraulic considerations, pressure and temperature, friction losses, lining requirements, pigging requirements and cathodic protection,
- In new pipelines civil aspects are important such as routing, trenching and excavation, major crossings consideration and horizontal directional drilling (HDD).
Extended use beyond design life.
- The practice of extending the use of pipelines beyond their design life poses specific retrofitting challenges in the context of the energy transition. Adapting existing pipelines for new energy carriers requires careful assessment of material compatibility and safety, alongside investments in upgrading and retrofitting to ensure operational integrity.
Through-life costs versus alternatives.
- The economic analysis of pipelines in the energy transition involves considering the costs associated with retrofitting existing infrastructure for new energy carriers versus building new pipelines. This comparison must factor in not only the financial aspects but also environmental impacts, regulatory compliance, and the need for technological innovation to address the unique requirements of renewable energy transportation.
Adaptability to new energy carriers.
- The transition to renewable energy sources brings to the forefront the adaptability of pipeline infrastructure. Retrofitting existing pipelines for CO2 or hydrogen transport involves addressing technical challenges such as material compatibility, pressure management, and leak detection. These retrofitting efforts are crucial for aligning existing infrastructure with the goals of the energy transition, enabling the efficient distribution of new energy carriers, and overcoming the barriers to achieving a sustainable and resilient energy system.
Low through-life maintenance costs.
- The favourable CAPEX-OPEX ratio of pipelines remains advantageous during the energy transition. However, the introduction of new energy carriers may necessitate specialised maintenance protocols to address the unique challenges they present, such as hydrogen embrittlement in steel pipelines, thereby affecting through-life costs.