Managing Risk: Ensuring a Safe Pipeline System for Australia

Risk management strategies are an integral part of designing, constructing, operating and maintaining pipelines. Here The Australian Pipeliner talks to pipeline construction companies, steel and pipe makers, operators and consultants about what they see as being the most important aspects of managing risk in regard to pipeline safety.There are many factors that can create risk during the design, construction, operation and the eventual abandonment of pipeline projects. These include the environment, cultural heritage, landowners, society at large, the contract between principal and service provider or user, and financial issues.Pipeline consultant Stephen Dykes of Gemseekers International says “Any of these can impinge on the pipeline at any time in its life and risk management is an important element in whether the pipeline is a success – commercially or otherwise.”As such, it is important that risk management practices are implemented at every stage of pipeline development and operation, including during design, construction, before commissioning and throughout the pipeline’s operating life to abandonment.Peter Tuft from Peter Tuft & Associates says “Its lifecycle risk management, which means the entire life of the pipeline, you don’t just think about it once.”Mr Dykes explains that this is because “There are substantial changes in the overall risk profile as the pipeline transitions through each of these phases and there are sub-stages in each stage. For example during construction, you move from clear and grade to trenching, pipe stringing, welding and so on, each with a unique set of threats.“As these changes manifest themselves with time you need to envisage the changes, analyse the new threats and ensure that the entire team knows the controls that are in place to manage them and who is responsible. At the end of the day, the entire workforce is responsible for ensuring that controls put in place are effective.”In order to establish a clear process of risk management through a pipeline’s life, the Australian Standard AS2885 has been developed.AS2885 – Pipelines and liquid petroleum – Part 1: Design and construction outlines the risk management process that should be adhered to when starting a pipeline project, including a focus on safety and design aspects such as wall thickness and external interference protection.AS 2885.1 Appendix B: Safety management process explains the risk management process during the operation of a pipeline until its abandonment, focusing on areas such as threat identification, threat control and residual risk management.This article will outline some risk management procedures that are deemed important by representatives of sections of the pipeline industry.A detailed designMr Tuft says that there is a strong focus on identifying causes of failure and designing against them using a control model of management, and as such risk considerations need to be brought in at the very earliest conceptual and design phases. From here safety management studies should be completed at more than one point through the pipeline design cycle.A detailed assessment of the pipeline routing and a vigorous risk assessment should occur as more detailed design studies start to develop. This should then be reviewed again before the design is complete and the pipeline is constructed.Mr Tuft explains that AS2885 is a risk-based standard. This means that while it contains design rules, many design elements of pipeline design are dependent on the outcomes of the safety management studies.Safety management studies refer to review processes that aim to identify threats that may impact upon the pipeline. These studies attempt to ensure that these threats are managed in the best possible way.Group Manager of Operations at APA Group Stephen Ohl says that APA fosters a strong pipeline engineering and construction management capability to identify, monitor, manage and control pipeline construction risks from the start of the design phase.During the pipeline design phase the company’s risk management activities include risk assessments and hazard and operability tests (HAZOPs) and the development of environmental management plans, construction safety plans and other plans required for the management of significant risks, for example traffic management plans.Mr Tuft says that he was involved with a pipeline a long time ago where the risk issues were not sufficiently considered during the design phase of the pipeline, which resulted in more work for the proponent at a greater cost.When selecting the route of the pipeline, the proponent chose to avoid rough country through hills, instead of fixing the route of the pipeline along the edge of a town. “The problem was that if the company put the pipeline in this area it had the potential to kill lots of people.“So when we later did the risk assessment we told them that they would have to bury that pipe deep and put concrete slabs over it for a couple of kilometres. At the end of the day, the cost of running the pipeline next to the town was the same as it would have been through the hills. If risk issues had been considered earler, the design could hae been optimised at lower cost.”Mr Tuft is quick to note that this was a one off occurrence and happened as AS2885 was being developed.Considering constructionMr Dykes says that the most successful pipeline construction projects continue to assess all possible risks progressively throughout the project.Mr Ohl agrees, saying that APA Group completes personnel inductions, regular tool box talks, hazard/near miss/incident reporting, project steering committee and team meeting reviews, and audits of the management plans applicable to the project.“These activities are further enhanced as a project moves into the commissioning phase with the use of job hazard analyses, commissioning plans and the development of operation and maintenance plans.”Mr Dykes says “In construction, with experience you arguably become more aware of the threats to the project and each project has a unique set of threats. The trick is to understand the combination of threats and their interdependence.“The emphasis is on understanding the risk profile of the project and assessing which party – principal or contractor – is best equipped to deal with the threat should it arise and then, as a team, understanding what the mitigation measures will be.”“You do this by analysing the risk and working on mitigation methods to obtain the least risk profile, and this inevitably involves partnerships with others who have the ability to manage those risks better than you do, for example construction contractors.”A risk profile is developed during the feasibility stage of a project, and is intended to identify any risks the project might face and determine who would be best able to manage the risk. A risk profile is often identified in the request for tenders. It is generally accepted that a particular risk should reside with the organisation best able to manage it.“Contractors are in the business of taking risks to make money, therefore you need to understand how they operate and work with them to take advantage of this skill set but target it to minimising the risk and the costs,” says Mr Dykes.Construction contractor McConnell Dowell’s Commercial and Risk Manager – Pipelines Andrew Rattray says that risk is best dealt with on a shared basis whereby both the proponent and construction contractor have an interest in correct assumptions about the project being made.These assumptions refer to those that must be made about the execution of a project. “These assumptions may include the effects of weather, sub surface ground conditions and calculated rates of construction progress,” he says.Mr Dykes disagrees however. He says that the proponent shouldn’t be expected to share the costs of any inefficiencies that arise in a contractors work in an alliance contracting strategy.“The better way is to define the risks and agree which party is going to be responsible for managing and bearing the costs of the risk. Weather risk is usually allocated to the proponent but risks concerned with the management of machinery to achieve construction progress rates can only be managed by the contractor and to share these is simply sharing in the contractor’s inefficiencies.”Mr Dykes says that he has been a contractor and can appreciate the commercial drivers for the contractor to want to share risks.A safe operationIn order to mitigate risk for employees working on APA’s operating pipelines, Mr Ohl says that the company has a system of Permit to Work, Tagging, Lock Out and Remote Travel management procedures.“These procedures have been developed in-house and represent industry best practice as well as complying with national standards for equipment isolation and tagging. With these national procedures in place, any APA employee or contractor can work on any APA pipeline asset across Australia, and be immediately proficient in the safe use of, and compliance with, the various procedures.”In addition to the risk posed to employees working in pipeline operations, Mr Ohl says that a significant risk in the pipeline industry is the loss of pressure containment. This can be due to a number of causes including:

• Third party interference;

• Corrosion (including stress corrosion cracking); and,

• Natural phenomena such as landslides, floods, earthquakes, lightning and erosion.

Mr Tuft says that third party interference accounts for at least 80 per cent of all pipeline incidents in Australia. Because of this AS2885 requires that all practicable measures are taken to protect pipelines, both physical and procedural.Mr Ohl says that APA mitigates third party risk through participation in ‘Dial Before You Dig’; the supervision of all third party activity in the pipeline easement; visiting and educating landowners on a regular basis; education of local contractors and councils; and, working with designers and developers at the earliest possible stage before any work commences around the pipeline.Mr Dykes says that managing risk during the operation phase is all about relationship management with stakeholders.“Understanding the source of the threats and being able to eliminate these and then being very adept at managing the outcomes if something does go wrong are clear prime competencies of a good operating entity,” he says.“Any change in operating regimes – for example, the resignation of an engineer – is an event which needs to trigger a risk assessment to assess the threats imposed on the pipeline by the change in circumstances. The risk assessment will provide control measures which then need to be put into action by a disciplined operating entity.”Mr Ohl says that APA mitigates the corrosion risk by using cathodic protection and pipe coating; monitored by tracking electrical potentials and currents, coating surveys and intelligent pigging; and remediated by replacing pipe, sleeving, re-coating or reducing pressure in the pipe.“Risk associated with natural phenomena such as landslides is difficult to mitigate other than ensuring there is regular patrolling along pipelines so that any changes around the pipeline are detected and managed before they can damage the pipe,” says Mr Ohl.APA’s overall risk management strategy for its operating pipelines is to have a well developed and practised emergency response and pipeline repair capability. The company holds regular emergency response training exercises and ensures that repair and replacement equipment is ready for use and can be mobilised quickly to wherever it is needed.AS2885 stipulates that pipeline operators must undertake a risk assessment every five years. Mr Tuft says that this is usually done through a workshop format.“You really need to have people who are intimately familiar with the pipeline right-of-way, so they’re surveyors or land agents or pipeline patrol people, the guys who are out there regularly and know the terrain and the route. These people are central to the risk management process because they have the firsthand knowledge of the activities and the threats that go on around the pipeline.”In addition, Mr Tuft says that someone is needed in the workshop that represents operations management, an environmental consultant and specialists such as corrosion specialists.“The workshop process works very well, it’s a consensus process. The purpose is to identify problems and then go away and fix them.“Once you have a qualitative understanding of the likelihood of something happening and the severity of it happening, people usually don’t have that much trouble on reaching an agreement on what needs to be done,” says Mr Tuft.Team work is the keyWhen those interviewed were asked who in an organisation should practise risk management techniques, the answer was unanimously ‘everyone’.Mr Rattray says “Everyone on a pipeline project has a role to play in managing risks. Risk manifests itself in so many ways that everyone working in the field is exposed to occupational health and safety risk every day, whilst corporate management is exposed to different commercial and other risks. No one can afford to ignore risk.”Mr Dykes says that risk management is important to everyone involved because it is “all about going home at the end of the day in the same or better state of health than when you came to work. It is also about maintaining a workplace that is safe for the future.”Training in risk management is seen as being very important for the design, construction and operation of pipelines.Mr Ohl says that it provides systems, processes and training to ensure successful risk management is practised across the organisation. Site induction training and regular tool box talks are used to reinforce the message and the qualifications of individuals are reviewed to make sure their qualifications and on the job training are current and appropriate.“It is everyone’s responsibility to be aware of the risks around them and to manage them accordingly to ensure that APA continues to operate all of its assets safely and reliably,” Mr Ohl says.Mr Dykes says “Training in risk management principles gives good background in terms of the mechanics of the process. Being involved with the workshops gives hands on experience, especially when the grey hairs talk about their experience as to whether controls are relevant and effective.”However, he also notes that risk management should be a habit – derived from a commitment to the process of identifying the threats, deciding what controls will mitigate the threat, then applying those controls and providing the learnings back into the process.Mr Rattray agrees “There are many risk management training courses offered, however risk management is best understood by realising that it is a matrix of events or issues that give rise to project risk. You simply cannot isolate individual elements when assessing the risks that a project may entail.”Mr Tuft says that while this is the case, it is important to have training in identifying the risk and making judgements on what to do to mitigate it. “A lot of people aren’t very comfortable with that.“A risk-based approach to design or engineering means that discretion must be used in accordance with the Standard. Some people are more comfortable with a standard that tells you what to do – believing, ‘If I do what the standard says, no one can criticise me.’”Assessing risk for a successful pipelineMr Dykes says “Risk analysis is an ongoing process which starts at the conceptual and development stage and ends with successful abandonment.“Successful pipelines have very robust risk management practices including integrity management processes.”Mr Tuft says that AS2885 ensures optimal safe management of Australia’s pipelines. He says that the beauty of the standard is in its risk-based approach, “So if you come up with a new situation you don’t look at the standard to see what it says about that situation, you look at the standard so that you know what the process is, to make your own assessment and evaluation for the situation so you come up with the right conclusion.”Completing risk management practices during the phases of a pipeline’s life, from design, to construction, operation and abandonment, is the best way to achieve a safe and efficient asset.Mr Tuft says “Once a pipeline is in operation, to have an employee focusing on risk, doing calculations on ‘if you spill this much oil, how big is the fire?’ That’s the wrong end of the risk management process. Something’s gone seriously wrong when you get to that point. It’s really about nipping things in the bud and stopping them going wrong in the first place.”Mr Dykes agrees, “Even the tea lady should practise risk management techniques.Reference: http://pipeliner.com.au/news/managing_risk_ensuring_a_safe_pipeline_system_for_australia/008157/