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by
J. Malcolm Gray
An Independent View of Linepipe and Linepipe Steel for High Strength Pipelines:
How to get Pipe that's Right for the Job at the Right Price
by
J. Malcolm Gray
Summary
This paper describes the state of development of high strength linepipe up to X-100 and
beyond. API Grade X-80 pipe steel, the subject of this conference, is available in the market
place in ERW, DSAW and SMLS product forms and has been for several years, however, only
large diameter DSAW systems and seamless risers have been installed to date.
This paper describes a reliable, proven methodology to be applied in sequential steps for
procuring large or small quantities of high quality linepipe from mills worldwide. It is
expected to be especially useful for sourcing a new grade such as X-80 from an unproven
manufacturer. The approach was developed and refined during the past two decades and was
successfully used for purchase of 1,766 miles of sour service X-70 linepipe for the All
American Pipeline System, a summary of the project outcome is included in the paper.
1.0
Introduction
Linepipe strengths have increased steadily during the past 40 years as metallurgical
practices and manufacturing techniques have evolved in response to the demands of the
marketplace. Technical requirements and expectations have escalated continuously as both
the oil and gas industry and pipe production have become fully internationalized and very
competitive. It can be argued that linepipe installability and reliability have simultaneously
improved due to impressive improvements in steelmaking, rolling, pipe manufacturing and
inspection technologies. Despite this, adoption of new grades representing increments in
strength have been impeded by tangible and intangible factors, many of which are being
discussed in this workshop. The present paper reviews the state of the art concerning
pipeline steels having yield strengths of 80 ksi (551 MPa) and above and presents a
methodology for procuring the correct steel at a sensible price.
2.0
Available yield strength levels have doubled in the past 50 years from the X-42 to X-52
(289 - 358 MPa) range in 1950 to 100 ksi (689 MPa) and above. The overlapping
development periods for each grade are presented in Figure 1. The early higher strength
steels were based on heat treatment of vanadium microalloyed steel whereas more recent
steels, up to the present day, are based on thermomechanical processing of low carbon
complex steel compositions which universally depend on the beneficial effects of niobium
during hot rolling.
The adoption dates for new or even improved steels have lagged the initial
developments by between 10 and 15 years. This is true even as the pace of metallurgical
development has accelerated due to the emergence of Exxon-Mobil, an end user in the steel
development business. This can be traced to conservatism in the pipeline industry as well as
the time it takes to develop the data necessary to support the end user design and safety
concerns.
The inertia concerning the adoption rate has held despite seemingly impatient or
irresistible demands of the marketplace, some of which are chronicled in Table I. For
example, one of the first initiatives to transport natural gas from Alaska to Canadian and
USA market circa 1970 was based on X-80 strength levels (48 inch [1202 mm] O.D., 0.60"
[15.24 mm] w.t. and 90 ft-lbs [120 J] CVN energy at -90F [-69C]). The steels were mostly
developed by 1972[1] but the first Alaskan gas project has yet to be built! However, X-80
linepipe was indeed adopted some eleven years later in the Megal and Ruhr Gas Projects,[2-5]
a delay of 10-12 years. By this yardstick significant usage of small diameter X-80 HFERW
linepipe, which has been available since 1993[6], may be imminent.
Table I
Stimuli for Technological Development
Date
Event
Industry Reaction
1943
1954
1960
1970
1972
1974
1978
1978
1988/89
1990
1997
The literature abounds with technical data concerning the metallurgy, welding and
fracture resistance of X-80 linepipe in all diameters and pipe types (ERW, SMLS and
DSAW). The required technology is undoubtedly available, in many quarters, for
manufacturing high quality pipe in large quantities. All obstacles appear to be surmountable.
For example higher strength grades such as X-80 or ultra high strength X-100/120 require
very high Charpy V-notch or DWTT energies for ductile fracture control which can only be
achieved in clean low sulfur steels. Fortunately, steelmaking and desulfurization
technologies have advanced to the point where sulfur content <10 ppm are available on a
large scale and even amongst the emerging steel producers in Korea, Ukraine, India and
China. The effect of the reduced sulfur contents on Charpy V-notch energy is shown in
Figure 2. This paper describes effective methodologies for efficient procurement of these
new steels.
3.0
Steel Purchase
3.1
The profile of the project helps to determine options for steel sourcing. Apart from
obvious factors such as diameter, grade, wall thickness and intended use one must consider
challenges related to installation and options. Onshore, even very high strength pipelines in
advanced countries such as Australia, may only represent the moderate end of the risk
spectrum whereas offshore, deepwater sour hydrocarbon lines to be installed by J-Lay or reel
barging in hostile waters may present additional challenges. The "personality" of the
engineering company and installation contractor also plays a part in the selection of the pipe
mill(s). Cavalier contractors with fixed price contracts and limited knowledge of the pipe
market and a "poor boy" mentality can purchase the wrong steel at the right price and then
they and their clients will pay dues later.
Some additional comments on the above methodical steps are presented below:
(a)
Design Premise
This is the fundamental basis for the project which immediately defines the
project risk and the potential to qualify marginal manufacturers.
(b)
Specifications
(c)
Bidders List
Product
Diameter Range
Number of Manufacturers
Seamless
4 to 28 inch
11
ERW
4 to 24* inch
40
DSAW (UOE)
12 to 72** inch
22
*Except for Kawasaki Chita Works which produces 26".
**UOE up to 60" O.D. with three roll bending up to 72" O.D.
It is useful and desirable to maximize the different linepipe manufacturing options
in the bidders list. HFERW linepipe production economics put pressure on both
SMLS and DSAW when the size ranges overlap. Likewise, small diameter
DSAW is encroaching on SMLS markets in deep offshore development including
linepipe and production risers.
The quality of linepipe from each mill can be assessed using a variety of
assessment or scoring systems and field audits. Each mill's equipment and track
record are important components in the assessment process. A formalized system
for assessing ERW mills is presented in Figure 3. Critical components of the pipe
mill assessment are as follows:
(i)
Proven ability to produce the size and grade of linepipe and a documented
supply record.
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(ii)
Reliable skelp source with proven track record, especially when considering
sour gas service.
(iii) When a new grade such as X-80 is involved, availability of trial data and
existence of an enlightened technical organization reduces the risk of
disappointment or project delays.
(iv) Enlightened management organization and strong QC/QA functions
demonstrating proper awareness of the opportunity and the risk
11
Whatever the scoring system, criteria must be developed for establishing the cut
off point below which mills are not to be seriously considered. Nevertheless, wild
cards in the form of new producers, geographically advantaged or indigenous
mills, or simply commercially aggressive entities may be usefully added to the list
if there is a fair chance that they can be qualified and technically supported during
execution of the project. However, to reduce risk the technical team must control
the final selection of producer to avoid awarding of the order to the low cost but
otherwise unproven and possible naive or overzealous vendor.
(d)
Commercial Strategy
In Australia, there is one major linepipe producer with another possibility in the
works within its limited size range. One Steel is a competent and maybe
preferred, domestic producer which nevertheless has its eye on competition from
Korea, Indonesia, Japan, Greece and other low cost sources. In connection with
the X-80 theme of this conference, One Steel may have a tactical advantage due
to its pioneering research and development of X-80 linepipe and past trial
production data. However, the experience is unlikely to justify a sizeable
premium for this type of product.
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(e)
The full bid package should be sent out direct to the selected bidders.
Distribution to trading companies is not always useful since they often duplicate
contacts, confuse the market environment and may try to manage competition
particularly in Japan. We have found that the presence of trading companies in
technical meetings also hinders open dialog.
(f)
The commercial evaluation should be completed before the MPS and Inspection
Test Plan (ITP) are submitted for formal review. In this way, the three or four
lowest bidders can be properly evaluated and technical exceptions assessed and
scrupulously compared in formal spreadsheets.
(g)
This meeting involves a thorough review of the MPS and ITP as well as
outstanding commercial issues. This is a critical step in procuring the "right steel
at the right price". The meeting affords a last opportunity to extract final
concessions related to quality issues. Once the order is let, or letter of intent
signed, it becomes increasingly difficult to challenge exceptions or deviations
raised in Item (f) above. Participation of experienced metallurgists in this critical
meeting, to represent the buyer is advised and is usually very beneficial.
(h)
Inspection
Third party inspection of pipe production and coating is traditionally used in the
USA. It is less intense in Australia and often non-existent when engineering
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(i)
Technical Assistance
If the linepipe purchaser is willing to fund technical assistance during all states of
the manufacturing process it is possible to buy technically sophisticated product
from low cost emerging or even marginal producers.
3.3
Conventional bidding is considered in Item (e) above. Direct negotiation with available
producers also works well especially when qualified mills are limited in number. This option
has been used in Australia, especially by EPC contractors. It is also useful to "piggy back"
on an existing MPS or ongoing production run. Third party inspection is rarely used in
typical "partnering" schemes or negotiated agreements which is a risky proposition in the
author's opinion.
Online or reverse auctions have become popular as the proponents have sought to
commoditize linepipe technology. While the technique undoubtedly puts pressure on prices,
it has serious drawbacks, for example old loyalties are destroyed and the low bidder is rarely
qualified to perform as required. The several online auctions known to the author have all
failed miserably due to naivity in assembling the list of participants, allowing inclusion of
rogue traders, not prequalifying mills, poor definition of required steel, poor or non-existent
14
supplementary specification and not mandating an appropriate and preapproved MPS. In the
absence of a level playing field, the competent mills are mistreated and the less competent
cause damaging static in the marketplace.
4.0
A Case History
The All American (Sour Crude) Pipeline Project (AAPL) was completed in 1984 and
consisted of 1,766 miles (476,000 tons) of 30 inch O.D. x 0.281 inch X-70 linepipe. At the
start of the project, the pipe order was placed with four pipe producers as illustrated in
Figure 4. Due to trade issues and import restrictions resulting from the actions of domestic
steelmakers and pipe producers, it was not possible to source the steel as originally planned.
However, the principals of AAPL refused to buckle under the pressure of the domestic steel
mills and elected to source from interested and motivated pipe mills worldwide, taking
advantage of all available quotas and favored trade agreements.
Figure 4. Original supply plan (letters of intent) for AAPL linepipe supply.
The methodology described in Section 3.2 of this paper was fully applied, detailed MPS
and ITP documents were prepared and technical assistance was provided to several pipe
mills. The end result was that the pipe was purchased from 18 pipe mills utilizing skelp from
20 different sources, Figure 5. All steel was covered by detailed MPS documents and was
fully inspected at source. High quality steel tested according to NACE TM0284, Solution B
15
arrived on schedule and under budget. The project was completed without technical
problems and is operating today as a gas pipeline, in the reverse direction, transporting
natural gas to California.
5.0
Risk Factors
5.1
Project Experience
The author and his associates have participated in several projects in recent years and
routinely utilizes the methodologies presented herein. Despite this exposure, problems may
still occur due to insufficient oversight or overestimation of producer capability and integrity.
Breakdown in mill quality systems and loss of corporate memory are becoming increasingly
16
frequent. A listing of certain problems is presented in Table III which covers both
Microalloying International assisted and other projects.
17
TABLE III
Linepipe Non-Conformances
Technical Problem
Corrective Action
Improve radiographic film contrast, improve film viewers and audit or duplicate
mill inspection.
Introduced proper macro etch procedure (no sulfur prints), increase surveillance at
the slab stage. Improve concast parameters such as speed and superheat.
Use PSL-2 maximum yield strength limits and check dimensions (shape or
peaking) before expansion. Improve final weld seam U.T.
Automatic recording of final hydrotest pressure and computerized accept/reject
procedure. Audit of hydrotest charts introduced.
Intensified or focused pipe mill inspection and updated (improved) pipe mill
housekeeping and inspection.
Prohibit flux crushing and refurbishment, audit plate mills to identify potential
problems.
Bar code system updated and working instructions mandate reliance on computer
database.
18
5.2
The methodology and project experience presented in this paper may be used to
identify and address the predominant and relevant risk issues related to procurement of X-80
linepipe. These are presented in Table IV below.
Table IV
Risk Issues Specific to X-80 Linepipe
I.
Risk Factor
Low Yield Strength
Mitigation
Residual Technical Risk
Integrate efforts of skelp and pipe
Poor pipe dimensions caused by 100%
SMYS hydrotest.
manufacturer. Require demonstrated
competence. Utilize 100% SMYS mill
hydrotest. Avoid thin slab cast skelp.
III. Non-Complying
Hydrotest
Use milled edge skelp. Prevent use of Occasional low toughness values may
center-slit skelp. Assess track record
slightly increase the probability of
of potential vendors. Encourage use of fracture initiation.
Q&T weld seam heat treatments. Use
reverse bend testing.
V. Transit Fatigue
6.0
Conclusions
19
and pipe producers. Supervision by experienced metallurgists during the preaward and
subsequent phases has proven invaluable in the past and should be incorporated into the
master execution plan.
References:
1.
2.
H. Engelmann, A. Engel, P.A. Peters, C. Duren and H. Musch. First Use of LargeDiameter Pipes of the Steel GRS 550 TM (X-80) in a High Pressure Gas Pipelines.
3R International, Issue 5, 1986.
3.
4.
5.
6.