A stochastic approach to evaluating the economic impact of disruptions in feedstock pipelines on downstream production

Abstract

Reliability of feedstock supply is an important consideration for enhancing the safety and continuous operation of chemical plants. A critical component of the chemical and refining sectors is the extensive pipeline network which transports natural gas and hydrocarbon liquids from producing areas to refineries and chemical plants. Incidents involving spills or releases and shutdowns of those pipeline can occur due to a number of causes including corrosion, equipment malfunction, and excavation damage. These incidents involve economic, environmental, and safety consequences such as the cost of asset damage, lost commodities, cleanup requirement, and operational disruption. In this work, an appropriately developed stochastic framework is presented to determine the disruption impact of pipeline incidents on downstream chemical production. Incident data are statistically analyzed to determine meaningful distributions for incident rates, spill/release quantities, and pipeline shutdown durations. A case study on the production of propylene via three different pathways (crude oil, propane, and natural gas) is presented to illustrate the methodology and underline the variability of the process production impact due to variations in risk occurrence characteristics. Using specific process chemistry and mass balances, more precise risk profiles for the product shortfall and cost of lost sales can be generated.