Optimization of pipeline lifecycle cost using alternatives with different life spans

Abstract

Abstract This paper suggests a pipeline project optimization approach that compares alternatives with different life spans. The average inflation rate is used to project the future maintenance, operation and replacement costs. The average interest rate is used to express all the costs in Equivalent Real Annual Cost (ERAC), which is the correct cost form to compare alternatives with different life spans. The pipe diameter, material, pressure rating, surge tank size, and inlet/outlet resistances are the decision variables. A software was compiled with a commercial pipeline software to generate all the possible design alternatives based on the decision variables. Pipe initial cost as well as operation and maintenance costs are computed for each design alternative. The alternative with the least ERAC value is the optimum one. It was found that the approach can lead to substantial savings in pipeline projects cost. For pipes 800 mm in diameter or larger, and when selecting the optimum diameter, savings are between 23 and 27% in the total project cost. When imposing certain pipe material savings in overall cost will be 8.5, 16.3 and 31.3% for ductile iron, GRP and mild steel pipe material, respectively.