Rules and Regulation for Cross country pipeline Design, Laying and O&M in India

A blog by Anirudha

LEGISLATION & REGULATIONS _ The Petroleum Act, 1934 _ The Petroleum Rules, 2002 _ Petroleum and Mineral Pipelines (Acquisition of Right of User in Land) Act, 1962 & Amendment Act, 1977 _ Indian Forest Act, 1927 And Indian Forest (Conservation) Act, 1980 _ Guidelines for laying Petroleum Product Pipelines (Gazette Notification no. P20012/5/99-PP dated 20.11.02) _ Supplementary guidelines for laying Petroleum Product Pipelines (Gazette Notification no. P-20012/5/99-PP/OR-II dated 26.10.04)

1) THE PETROLEUM ACT, 1934 The Petroleum Act, 1934 consolidates and amends the law relating to import, transport, storage, production, refining and blending of Petroleum products.

2) THE PETROLEUM RULES, 2002 The Petroleum Rules, 1976 were replaced by Petroleum Rules, 2002 with effect from 13th march, 2002. Part V of Petroleum Rules, 2002 deals in Transportation of Petroleum Products by Pipelines. The salient details of Part V of Petroleum rules are given below: Right of Way to be acquired - No pipeline and installation connected with a pipeline, shall be constructed without acquiring the necessary land, leasements and right for the construction. Approval of the design and route of the pipeline - No pipeline shall be laid without the prior written approval of the Chief Controller of the route of the pipeline, and of the design, construction and working thereof. Design of pipeline and attachments - The pipeline shall be constructed of suitable steel which is safe for the conditions under which it is to be used. The pipeline and its components shall be designed and constructed in accordance with a code

recognized by the Chief Controller or OISD Standard 141 and shall be capable of withstanding a pressure which shall not be less than the maximum working pressure thereof plus an allowance for surge pressure, as anticipated. Provision shall be made for thermal expansion or contraction of the pipeline. The pipeline shall be protected by a casing of steel pipe or by increasing the thickness of its wall to prevent damage to the pipeline from usual external conditions which may be encountered in railway crossings, road crossings, river or water course crossings, bridges, long self supported spans, unstable ground, vibrations, weight of special attachments or thermal forces. By-pass relief valves, pressure limiting stations or automatic shut down equipment of approved design shall be provided in the pipe line. Isolation valves shall be installed at each of the following locations _ On the suction end and the discharge end of the pump station. _ On each line entering or leaving the installation. _ On each main line at locations along the pipeline system that will minimize damage from accidental product discharge, as appropriate for the terrain in open country or for the location near cities or other populated areas. _ On each lateral take off from a trunk line. _ On each side of a water crossing that is more than 30m wide from high water mark to high-water mark. _ On each side of a reservoir holding water for human consumption. Laying of Pipe Line - Pipeline shall be laid in the most favorable route, avoiding known obstructions and areas in which unusual external conditions prevail. Pipeline shall be laid below the ground level except where laying above the ground level is desirable for topographical, economic or other special reasons. Where an underground Pipeline has to cross any existing underground water or gas line, cable, drain or other services, the pipeline shall be laid at least thirty centimeters below such services. The number of bends in the pipeline shall be kept to the minimum. The route of underground sections of a pipeline shall be indicated by markers and not less than two such markers shall be visible from any point along the route.

Protection against corrosion - The pipeline shall be protected against corrosion by suitable coating strapping and where necessary by cathodic protection. Hydrostatic testing of pipeline Before transporting petroleum for the first time, each pipeline or completed sections thereof shall be filled with water and the pressure in the line or section, as the case may be raised to 1.1 times the design

internal pressure and maintained for a period of atleast 24 hours or as per procedure laid down in the relevant pipelines design code recognized by Chief Controller. A pipeline or a section thereof showing any significant drop of pressure during the period of testing shall not be used for transporting petroleum until necessary repairs have been carried out and satisfactory retest done.

The test specified above shall be carried out atleast once in every 12 months in each completed pipeline section which crosses an area where there is danger of water pollution by any leakage. However, the provision shall not apply to crosscountry pipelines, for which new technologies are available. Shut down of pipeline - Except when shut down for maintenance work, a pipeline when not in operation shall be shut down under pressure and a careful record made of the pressure during the shut down period. Any significant drop in pressure shall be deemed to render the pipeline unfit for transport of petroleum until it is repaired and tested. Patrolling of pipeline _ The whole of every pipeline shall be efficiently patrolled by the company owning the pipeline. _ Telegraph or telephone or radio communication facilities shall be provided at frequent intervals along the pipeline. Checking of gauges - Tank gauges or gauges at intermediate or booster pump stations shall be checked atleast once a year.

Additions and alterations in the pipeline No addition or alteration to a pipeline shall be carried out without the previous approval of Chief Controller in writing. Every person desirous of carrying out any additions or alterations in any pipeline shall submit an application to the Chief Controller. The Chief Controller shall, if he is satisfied, approve the proposed additions or alterations subject to such conditions as he may deem fit.

Repair and maintenance of pipeline - No maintenance or repair involving cutting or rewelding of any pipeline shall be carried out except under following conditions, namely:

(i) An experienced engineer shall inspect the section requiring maintenance or repair before the work is undertaken and issue a written permit specifying therein the precautions to be observed and the procedure to be followed for carrying out the work. The permit so issued shall be preserved by the owner of the pipeline for a period of six months. (ii) All work involving cutting or welding shall be carried out by an experienced person. (iii) The section of the pipeline shall be isolated and drained before starting repairs or maintenance. (iv) Only mechanical cutters shall be used for cutting the pipeline or any connection thereof unless the section of the pipeline and its connections have been purged with an inert gas. (v) No hot work shall be carried out on any pipeline until the section thereof requiring repair has been isolated drained and purged with inert gas or steam or kept filled with water or until such section has been prepared in a manner approved in writing by the experienced engineer. (vi) The section of the pipeline in which repairs or maintenance work has been carried out shall not be used for transporting petroleum until such sections are replaced with hydrostatically pre tested sections and the repaired weld joints pass the radiography test. (vii) No section of any pipeline, and no valve fitted to it shall be separated until an efficient electrical bond has been established between the parts to be so separated which shall not be broken until the separated parts have been rejoined.

Relaying or repairs to a pipeline in public interest - Where the Chief Controller is of the opinion that it is in the interest of public safety to do so, he may, by a notice in writing given to the owner of the pipeline, require such owner, to relay, renew repair such pipeline in accordance with such requirements as may be specified in such notice. Power of inspection and examination - The Chief Controller or Controller may at any time inspect and examine any pipeline. Reports of fire or major leakage - The occurrence of any fire or major leakage in a pipeline and connected facilities shall be reported immediately by the person for the time being incharge of the pipeline to the nearest Magistrate or officer-in charge of the nearest police station and to the Chief Controller by telephone/fax

and also by telegram at his telegraphic address, namely Explosives Nagpur.

3) PETROLEUM AND MINERAL PIPELINES (ACQUISITION OF RIGHT OF USER IN LAND) ACT, 1962 & AMENDMENT ACT, 1977 The Petroleum and Mineral Pipelines (Acquisition of Right of User in Land) Act (P&MP Act), 1962 provides for the acquisition of Right of User in land for laying petroleum pipelines. Given below are the salient details of this Act: Competent Authority: Competent Authority is defined as any person or authority authorized by the Central Government, by notification in the Official Gazette, to perform the functions of the Competent Authority under the P&MP Act. Publication of notifications for acquisition - Section 3(1): Whenever it appears to the Central Government that it is necessary in the public interest that for the transport of petroleum or any mineral from one locality to another locality pipelines may be laid by that Government or by any State Government or a corporation and that for the purpose of laying such pipelines it is necessary to acquire the right of user in any land under which such pipelines may be laid, it may, by notification in the Official Gazette, declare its intention to acquire the right of user therein. Power to enter, survey etc.(Section 4): On the issue of 3(1) notification, it shall be lawful for any person authorized by the Central Government or by the State Government or the corporation which proposes to lay pipelines for transporting petroleum or any mineral, and his servants and workmen a) To enter upon and survey and take levels of any land specified in the notification. To dig or bore into the subsoil. c) To setout the intended line of work. d) To mark such levels, boundaries & line by placing marks and cutting trenches. e) Where otherwise survey cannot be completed and levels taken and the boundaries and lines marked, to cut down and clear away any part of standing crop, fence or jungle; and f) To do all other acts necessary to ascertain whether pipelines can be laid under the land.

Hearing of Objections - Section 5(1): Any person interested in land may, within 21 days from the date of notification under sub-section (1) of section 3, object to the lying of the pipelines under the land. Objections shall be made to CA and order by CA shall be final. Declaration of Acquisition of Right of User - Section 6 (1): Where no objections under subsection of section 5 have been made to the CA within the period specified therein or where the CA has disallowed the objections, CA shall submit a report containing his recommendations and record of the proceedings to Central Government and upon receipt of such report, the Central Government shall declare, by notification in the Official Gazette, that the right of user in the land for laying the pipeline should be acquired. On publication of 6(1) notification, the right of user shall vest in the Central Government free from all encumbrances. Central Government may direct by order in writing that the right of user instead of vesting in Central Government, vest in the State Government or the corporation proposing to lay the pipelines, free from all encumbrances. Central Government or State Government or corporation to lay pipelines Section 7: It is lawful for the Central Government or State Government or corporation to lay pipelines provided that no pipeline shall be laid under a) any land which was used for residential purposes immediately before the date of 3(1) notification. any land on which a permanent structure is there. c) any land which is appurtenant to a dwelling house. d) any land at a depth which is less than one metre from the surface.

Power to enter land for maintaining, examining, repairing, alerting inspection etc. Section 8 Compensation Section 10: For any damage, loss or injury sustained by any person interested in the land under which the pipeline is proposed to be, or is being, or has been laid, by reason of i) the removal of trees or standing crops ii) the temporary severance of land under which the pipeline has been laid from other lands belonging to or in occupation of such person

iii) any injury to any other property or the earnings of such person the Central Government, State Government or the Corporation, as the case may be, shall be liable to pay compensation to such person for such damage, loss or injury, the amount of which shall be determined by the CA. In case the amount of compensation is not acceptable to either of the parties, the amount of compensation shall be determined by the District Judge. No account shall be taken of any structure or other improvement made in the land after the date of the notification under section 3(1) in determining the compensation. A compensation calculated by the CA at 10% of the market value of that land on the date of 3(1) notification shall also be paid to the affected land owner. Penalty Section 15 (1): Whoever willfully obstructs any person in doing any of the act authorized by P&MP act or willfully fills up, destroys, damages or displaces any trench or mark shall be punishable with imprisonment which may extend to six months or fine or with both. (2) Whoever willfully removes, displaces, damages or destroys any pipeline laid under section 7, shall be punishable with rigorous imprisonment for a term which shall not be less than one year, but which may extend to 3 years and shall also be liable to fine.

4) INDIAN FOREST ACT, 1927 AND INDIAN FOREST (CONSERVATION) ACT, 1980 This act is applicable to the Pipeline ROU passing through reserved forest, protected forest or any area recorded as forest in the government records.

5) GUIDELINES FOR LAYING PETROLEUM PRODUCT PIPELINES (GAZETTE NOTIFICATION NO. P-20012/5/99-PP DATED 20.11.02) Categorization of Pipelines 1. The petroleum product pipelines would be categorized as follows: (i) Pipelines originating from refineries, whether coastal or inland unto a distance of around 300 kilometers from the refinery.

(ii) Pipelines dedicated for supplying product to particular consumer,

originating either from a refinery or from oil company's terminal and, (iii) Pipelines originating from refineries exceeding 300 Km in length and pipelines originating from ports, other than those specified in (i) and (ii) above. Ownership and access 2. Right of User (RoU) in land for laying pipelines under the Petroleum Pipelines (Acquisition of right of User in Land) Act, 1962 for the pipelines falling under category specified in sub-clauses (i) and (ii) of Clause 1, will be granted in favor of applicant company treating such pipelines as captive pipelines for exclusive use by the proposer company. 3. For grant of ROU in land for laying pipelines under the Petroleum Pipelines (Acquisition of right of User in Land) Act 1962 for the pipelines falling under the category specified in sub-clause (iii) of clause 1, the following procedure will be followed: 3.1 A proposal for laying common usage product pipeline could originate from any single interested party or a joint-venture (herein after referred to as proposer). 3.2 The Ministry of Petroleum and Natural Gas shall publicize in such manner as the Ministry may decide, the proposal inviting expression of interest, within a period of three months from anyone interested in the proposal. In case any company is interested in taking any capacity in the pipeline, it could express its interest and enter into take of pay or any other mutually agreeable contract with the proposer. The pipeline size and design would be finalized by the proposer after taking into consideration all such requests. 3.3 In case, no expression of interest is received from any industry player within a period of three months of publicizing the proposal, the proposer would be at liberty to go ahead with the project. 3.4 The designed pipeline capacity would be atleast 25% more than the capacity requirement of the proposer and of those who take capacity under clause 3.2 as may be decided by the Ministry of Petroleum and Natural Gas. 3.5 The ownership of the pipeline would be that of the proposer or as may be decided by the proposer, irrespective of whether the other industry player(s) take pipeline capacity or not. 3.6 The excess capacity, as mentioned in clause 3.4, would be available for use by anyone other than the owner and those taking capacity under clause 3.2 at the approved tariff as per the provisions under clause 4, on common carrier

basis i.e. capacity would be made available to anyone interested and offering to pay the tariff. In case, such demand exceeds this excess capacity, the allocation of the excess capacity would be prorated amongst the interested users other than the owner and those taking capacity under clause 3.2. Tariff 4. Tariff for the pipelines commissioned after the date of publication of this notification in the Official Gazette and falling in the category specified in subclause (iii) of clause 1, will be subject to the control orders or the regulations that may be issued by the Government or the statutory authority in this behalf under any law for the time being in force. Conditions under ROU acquisition 5. The ROU acquisition under the Petroleum Pipelines (Acquisition of Right of User in Land) Act, 1962 will be subject to such conditions as may be deemed fit by the Government in public interest. Such conditions may inter alia include the following: 5.1 Sharing of portions of acquired ROU falling in forest areas, wild life/marine sanctuaries/parks, prohibited/restricted areas etc with the other interested parties. 5.2 In case the route alignment of the Pipeline crosses another pipeline route/alignment, the points of crossing would be decided by mutual agreement between the parties failing which the matter will be referred to the Ministry of Petroleum and Natural Gas whose decision will be final.

6) SUPPLEMENTARY GUIDELINES FOR LAYING PETROLEUM PRODUCT PIPELINES (GAZETTE NOTIFICATION NO. P-20012/5/99PP/OR-II DATED 26.10.04) The Supplementary guidelines are applicable for pipelines falling under category 1(iii) of Guidelines for laying Petroleum Product Pipelines. Common Carrier Capacity 1. The Common carrier capacity to be built under para 3.4 of the Guidelines for Laying Petroleum Product Pipelines notification F.No.P-20012/5/99-PP dated 20.11.2002 provides the right of first use to any party other than the owner / proposer, throughout the life of the pipeline. 2. In the event that capacity is available out of the common carrier capacity, the owner / proposer may utilize the same with the stipulation that should any

other party seek transportation through common carrier capacity, the owner / proposer would vacate and make available common carrier capacity up to the designated level immediately. Time Frame for Completion of Pipeline 3. Pipeline project will be required to be commissioned with in the time period provided in the sanction / approval letter, which shall have an outer limit of 36 months from the date of sanction / approval. Bank Guarantee 4. The owner / proposer will be required to furnish an irrevocable bank guarantee of an amount equivalent to 2% of the project outlay or Rs. 2 lakhs per kilometer of pipeline proposed, whichever is higher, as a guarantee for commissioning the pipeline project as per the approved time schedule. The irrevocable bank guarantee shall be encashable any time after 36 months from the date of the sanction / approval and will be dischargeable only on advice of the Government. If the completion of the project is delayed beyond 36 months from the date of sanction / approval of the project, then the bank guarantee may be invoked. 5. The ROU acquisition would be commenced after execution of Bank Guarantee and its deposit with the Government. 6. The Bank Guarantee may be deposited within 30 days of issue of sanction letter failing which sanction letter would stand withdrawn. 7. The Bank Guarantee will be discharged on commissioning of the pipeline within the time period specified and satisfactory compliance of conditions imposed through the sanction / approval letter. Competent Authority for Acquiring ROU 8. Only serving Government Officers will be considered for working as Competent Authority under the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962. Transfer of Ownership 9. Where a pipeline implementing company is a subsidiary company and has been granted sanction / approval letter on the basis of its holding / parent companys balance sheet, permission of Ministry of Petroleum and Natural Gas will be required to be obtained prior to any change in management majority holding in such pipeline implementing subsidiary.

Eligibility of Players Seeking Capacity in a Pipeline Project 10. Any party may approach the proposer to seek capacity in a pipeline project for which an EOI has been issued under Guidelines for Laying Petroleum Product Pipelines Notification F.No.P-20012/5/99-PP dated 20.11.2002. Eligibility of parties seeking capacity will not be limited on the grounds that the party, seeking capacity is neither a refinery nor possessing any marketing rights.

LIST OF STATUTORY APPROVALS REQUIRED FOR A PIPELINE PROJECT a) Environmental Clearance i) State Pollution Control Boards (SPCB) Consent for Establishment ii) Ministry Of Environment and Forest clearance (including CRZ & non CRZ areas) iii) State Forest Clearance for Reserve / Protected / State forest crossing ROUs (upto 5 hectares in a state). Clearance from State Forest Department in case of Social forest crossings specifically in case of such notified areas along High way/ Local road networks iv) Clearance from Regional Conservator of Forests for Reserve / Protected / State forest crossing ROUs (From 5 to 20 hectares of forest areas in a state). For more than 20 hectares, approval of Central Forest department is required under MOEF v) SPCB consent for operation before commissioning of the project ROU approvals i) State Governments deputation of in service Government officer (preferably revenue officers) for notification as Competent Authority under Petroleum & Mineral Pipeline (Right of Use Acquisition) Act., 1962 ii) MOP&NGs notification of Competent Authority under PMP Act 1962 iii) MOP&NGs notification of ROU under 3(1), 6(1) sections of PMP Act,1962, CAs conduction of Objection hearing under 5(1) section after 3(1) notification iv) Approval of Zonal railways for railway crossings v) Approval of State Panchayat, State R&Bs (PWD), NH authorities for

various road crossings

vi) Approval of Rivers/canals/Streams/Nalahs/Drains/ water body crossings from respective State Irrigation Authorities vii) Approval / Consent from other Utility owners like Telecom, Water/ Petroleum pipelines etc. viii) Approval of District Magistrate for crossing of ROU in Government, lands ix) Approval from Port Trust and other Govt. bodies where ever applicable for restricted ROUs in their lands c) Approvals from Central Departments i) CCOE Construction approvals for Pipeline alignment, Station / Terminal layouts & approval for commissioning after project completion ii) Approval for Fire Advisor, Ministry of Home iii) Approval of Ministry of Finance for concessional Custom Duty iv) Notification of entry ports for concessional duty imports v) Approval from Ministry of Communication for HF/ VHF wireless frequency vi) Approval of Central Electricity Authority for energizing HV/EHV electrical installations

d) Approvals from State Departments i) Certificate of Registration from Regional Labor commissioner ii) Construction approval from Director of Factories iii) NOC from respective District Magistrates for all Stations/ Terminals iv) Approval of plans from respective Municipal authorities v) Approval of HT/LT Electrical Loads, DG set installation vi) State Fire Service Dept.s approval of plans and Fire officers approval before commissioning

PIPELINE DESIGN CODES OISD (Oil Industry Safety Directorate) Standards 1) OISD 138 Inspection of Onshore Pipelines 2) OISD 140 Inspection of Jetty Pipelines 3) OISD 141 Design & Construction of Hydrocarbon Pipelines International Codes, Standards & Practice 1) DNV Rules for Submarine Pipeline Systems 2) ASME B 31.8 Gas Transportation and Distribution Piping Systems 3) ASME B 31.4 Pipeline transportation Systems for Liquid Hydrocarbons and other liquids 4) API RP 1102 Recommended Practice for Rail And Highway Crossings 5) API 1104 Standard for Welding Pipeline and Related Facilities 6) API RP 1110 Recommended Practice for Pressure Testing of Liquid Petroleum Pipelines 7) API RP 1111 Recommended Practice for Design, Construction, Operation and Maintenance of Offshore Hydrocarbon Pipelines 8) NACE MR 0175 Material Requirements- Sulphide Stress Cracking Resistant Materials for Oil Field Equipment 9) IP 6 Pipeline Safety Code 10) OTHER

REFERENCES Applicable Standards / Specifications Of ANSI / ASME, API, NACE, MSS, BS and DIN

OISD : Oil Industry Safety Directorate API : American Petroleum Institute ASME : The American Society of Mechanical Engineers ANSI : American National Standards Institute NACE : The National Association of Corrosion Engineers BS : British Standard DNV : Det Norske Veritas MSS : Manufacturers Standardization Society of Valve and Fittings Industry AWS : American Welding Society DIN : Deutsches Institute fur Normung [/font]