Underground steel pipelines are one of the most important mediums for transport of water, oil, natural gas and other hazardous or highly toxic gases. Its assessment against blast has become very crucial due to intentional and accidental explosions in the route of buried pipelines. In present study, evaluation of X70 grade steel pipelines against subsurface blasts is carried out numerically. A computational model with finite element technique is developed by implementing Coupled Eulerian-Lagrangian method in ABAQUS. A protective covering of Carbon Fiber Reinforced Polymer has been introduced to alleviate the impact of blast waves. The Jones-Wilkins-Lee, ideal gas Equation of State (EoS), Mohr-Coulomb plasticity criteria, are used to model the behaviour of explosive substances, air, and soil respectively. Hashin damage criteria and Johnson-Cook model are employed to assess the response of CFRP blanket and steel pipe, respectively. The Finite Element (FE) results were validated with available experiments and empirical formulae. The influence of different factors namely thicknesses of pipe, internal pressure, explosive charges, type of soil, and thickness of CFRP on performance of pipes against blast load are analysed and mitigation provided by protective covering is determined. The maximum decrease in strain was found to be 69.2% and 67.4% in the 14.6 mm and 26.2 mm thick steel pipe covered with 10 mm thick CFRP sheet, respectively. The maximum reduction in peak displacement values was found to be 36% and 55% for 14.6- and 26.2-mm thick pipes respectively. Also, safety criteria/zone for underground pipeline against subsurface blast loading is proposed. The present work could be helpful for blast resistant design of underground steel pipelines.