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Pipelines

Pipelines. Significance of the Industry. Only unidirectional mode of transportation – no backhaul Transport roughly 57.5% of total intercity ton-miles 26.5% of total domestic ton-miles Employ roughly 150,000 people. Carriers. Oil Carriers Natural Gas Carriers.

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Pipelines

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  1. Pipelines

  2. Significance of the Industry • Only unidirectional mode of transportation – no backhaul • Transport roughly 57.5% of total intercity ton-miles • 26.5% of total domestic ton-miles • Employ roughly 150,000 people

  3. Carriers • Oil Carriers • Natural Gas Carriers

  4. General Service Characteristics • Commodities Hauled • Oil & Oil Products • 57% of all pipeline use • Average haul of 800 miles • Natural Gas • Coal • Slurry Lines • Chemicals

  5. General Service Characteristics • Relative Advantages • Low rates • Excellent loss & damage record • Dependability • Relative Disadvantages • Slow speed • Highly inflexible • Limited type of freight • Small shipment sizes unavailable • Tenders – minimum shipment sizes ranging from 500 barrels to 10,000

  6. Equipment • Gathering Lines • 8” diameter • Frequently laid on the surface • Temporary in nature • Trunk Lines • 30-50” diameter • Typically underground • Permanent in nature • Tank Farms • Finished product storage prior to shipment • Batching Pig • Rubber ball used to separate different grades of oil

  7. Cost Structure • Approximately 30% of costs are variable • Remainder are fixed • Must provide own rights-of-way • Must construct pipeline & pumping stations • High preventative maintenance • Highly automated

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