Page 505 - Pipelines and Risers

472 Chapter 25

0 Verifying the pipeline against design and code requirements for installation,
commissioning and operation.

The level of engineering is sometimes specified as being sufficient to detail the design for
inclusion into an ‘Engineering, Procurement and Construction’ (EPC) tender. The EPC
contractor should then be able to perform the detailed design with the minimum number of
variations as detailed in their design.

25.2.4 Materials and Fabrication
This category of quality aspects is probably the one in which most experience has been gained
in terms of financial analysis of the options available. This category coven the quality of all
materials that are used in the pipeline development and the quality of fabrication of these
materials.

25.2.5 Marine Operations
This category of quality aspects covers all marine operations that are required prior to the
operation of the pipeline and also the extraordinary marine operations that are required to
maintain operation of the pipeline (Le. repair). An example of the application of LCC would
be when deciding on the type of Lay barge to use, a balance between day rates and days down
would be analyzed.
25.2.6 Operation

The operation of a pipeline includes all activities that are performed after the installation of
the pipeline. This primarily involves the inspection of the pipeline, but not, as stated above,
the repair of the pipeline.

25.3 Financial Risk

25.3.1 General
Through the use of risk analysis it is possible to anive at financial values which represent the
financial losses that are likely to occur in a pipeline. This method relies on the Quantitative
Risk Analysis approach.

Risk analysis can be determined by the following generic expression:
Risk = Probability of Failure x Consequence of Failure (25.3)

The two elements that are used to calculate risk can be separated into the Probability of
Failure, which is equivalent to the Frequency of Failure, and the Consequence of Failure. In
using risk for financial analysis it is necessary to determine the consequence of failure in
monetary terms.