Decision Support System for Design and Evaluation of Pipeline Projects

Petronet India Limited (PIL) was created to give impetus to investments in pipeline projects for transportation of petroleum products in the country. Since these projects have a long life and require large investments, correct assessment of location, capacity and financial viability are of critical importance. This paper is based on the study undertaken for PIL to evaluate a few of their pipeline projects. The study resulted in creation of a comprehensive software package that is capable of operational and financial evaluation of pipeline projects based on countrywide view on production and distribution of petroleum products. The core of the package is an LP based optimization model. The package is capable of performing sensitivity analysis to investigate the impact of uncertainty on the proposed project due to from changes in the values of key factors including distribution network and capacities, refining capacities and pattern of demand. •A model is developed for identification of viable pipeline projects, taking into account the demand and capacity additions to production and distribution network for petroleum products in the future. •The model can be used for financial evaluation of such projects based on appropriate assumptions to forecast the investments required as well as the net cash flows from the project. •The solution procedure is implemented for the models developed in the form of a software package that would allow the decision maker to experiment with assumption and generate solutions with ease and with little manual intervention. •The software package developed above is further embellished so that it also provides additional information to the decision maker in the form of reports that contain details of movement of products and the mode combinations used for the movements.