Logistics aspects of pipeline transport in the supply of petroleum products
Date
2008-06
Authors
Pienaar, W. J.
Journal Title
Journal ISSN
Volume Title
Publisher
AOSIS OpenJournals
Abstract
The commercial transportation of crude oil and petroleum products by pipeline is receiving
increased attention in South Africa. Transnet Pipeline Transport has recently obtained permission
from the National Energy Regulator of South Africa (Nersa) to construct and operate a new
petroleum products pipeline of 60 cm diameter from Durban to Gauteng. At an operating speed
of 10 km/h the proposed 60 cm Transnet pipeline would be able to deliver 3,54 million litres of
petroleum product per hour. This is equivalent to 89 deliveries per hour using road tank vehicles
with an average carrying capacity of 40 000 litres of fuel per vehicle. This pipeline throughput is also equivalent to two trains departing per hour, each consisting of 42 petroleum tank wagons
with an average carrying capacity of 42 500 litres of fuel per wagon. Considering that such road
trucks and rail wagons return empty to the upstream refineries in Durban, it is clear that there
is no tenable long-term alternative to pipeline transport:
• pipeline transport is substantially cheaper than road and rail transport;
• pipeline transport is much safer than rail and especially road transport; and
• pipeline transport frees up alternative road and rail transport capacity.
Pipeline transport is a non-containerised bulk mode of transport for the carriage of suitable
liquids (for example, petroleum commodities, which include crude oil, refined fuel products and
liquid petro-chemicals), gas, slurrified coal and certain water-suspended ores and minerals. In
South Africa, petroleum products account for the majority of commercial pipeline traffic, followed
by crude oil and natural gas.
There are three basic types of petroleum pipeline transport systems:
1. Gathering pipeline systems
2. Crude oil trunk pipeline systems
3. Refined products pipeline systems
Collectively, these systems provide a continuous link between extraction, processing, distribution,
and wholesalers’ depots in areas of consumption.
The following activities are involved in the flow of goods between place of origin and place of
consumption or application: (1) Demand forecasting, (2) Facility site selection, (3) Procurement,
(4) Materials handling, (5) Packaging, (6) Warehouse management, (7) Inventory management,
(8) Order processing, (9) Logistics communications, (10) Transport, (11) Reverse logistics.
Because cost is incurred without adding value each time goods are handled (activity 4) at
a terminal or storage facility, a primary logistics objective is to eliminate handling wherever
possible. With the carriage of crude oil and petroleum products by pipeline this objective is fully
met. Commodity intake, haulage, and discharge are combined in one process, usually a remotecontrolled
operation. Pipeline transport is a non-containerised bulk mode of transport thereby
obviating the need for packaging (activity 5) and returning empty containers. Pipelines provide
a direct and long-term link between these origins and destinations. If necessary a continuous
service can be provided with no need for a return trip or a reverse pumping process (activity 11).
The elimination of handling, packaging and reverse logistics activities contribute substantially
to the high measure of economies of scale that pipeline transport enjoys. The article provides a
description of each of the eleven logistics activities in the context of pipeline transport.
Effective logistics service is a prerequisite to help ensure that customers receive the required
products at the desired quality and quantity, where and when needed. The most pertinent
determinants of logistics service performance are (1) suitability, (2) accessibility, (3) goods
security, (4) transit time, (5) reliability and (6) flexibility. The article offers a discussion of the
extent to which pipeline transport conforms to each of these measures of effectiveness.
Description
The original publication is available at http://www.satnt.ac.za/
Keywords
Crude oil, Crude oil trunk pipeline, Gathering pipeline, Logistics activity, Petroleum products, Pipeline transport, Products pipeline, Service effectiveness, Supply chain
Citation
Pienaar, W.J. 2008. Logistics aspects of pipeline transport in the supply of petroleum products. Suid-Afrikaanse Tydskrif vir Natuurwetenskap en Tegnologie, 27(2), 102-122.