A methodology using the subset simulation and the modified Metropolis-Hastings algorithm with delayed rejection (SS-MMHDR) is developed to evaluate the time-dependent reliability of corroded pipelines under multiple failure modes. This methodology considers the competition between the small leak and burst failures and the correlated non-normal distribution of the defect variables, and characterizes the defect geometric probability distribution from extensive inspection data. Results demonstrate that SS-MMHDR has high accuracy and low variability in evaluating the pipeline failures, outperforming the SS-MMH and Monte Carlo simulation algorithms, especially under low probability levels, but with slightly increased computation time. The Generalized Extreme Value Type II (GEVII) distribution is the optimal distribution for internal corrosion defect lengths from the Kolmogorov-Smirnov test. Lognormal, Weibull and Normal distributions provide more conservative estimates on burst and composite failure probabilities and limiting maintenance times than GEVII. Effects of operating pressure and its variability, corrosion rate on failure probability, and pipeline limiting maintenance time are also revealed through numerical cases.