Pre-feasibility study of the northern refined products pipeline project

Abstract

Pre-feasibility study of the Northern Petroleum products pipeline project is conducted on marketing, technical, and economic issues. Technical analysis is focused on the study to find suitable provinces for construction pipeline and oil depots, and the calculation of the size of the depots. The pipeline will be installed from the Pipeline System of Thappline in Saraburi province along the High-voltage transmission lines of the Electricity Generating Authority of Thailand (EGAT). Net present valve (NPV), internal rate of return (IRR), benefits/costs ratio (B/C ratio), and payback period are used as the criteria for the economic analysis. The result shows that the suitable location for construction of oil depots are Nakhon Sawan, Pittsanulok and Lampang with the storage capacity of 18, 15 and 23 million-litres, respectively. The Northern pipeline has an overall length of 510 km from Saraburi to Lampang. After the installation is completed, the annual petroleum products transferred are 2,962 million-litres. This pipeline is divided into three sections. The first section, from Saraburi to Nakhon Sawan, will be 170 km having pipe diameter of 14 inch. The second section, from Nakhon Sawan to Pittsanulok, 12 inch-diameter pipeline will be installed with the length of 130 km. And the 10 inch-diameter pipeline will be installed along the last 210-kilometer-long route between Pittsanulok and Lampang terminal oil depot. Economic study shows that initial cost of this project is 5,429 million-Baht. Operating cost is estimated to be 21.88 satang/litre. Economic analysis shows that the pipeline project will yield IRR of 12.94%, NPV of 2,088 million baht, payback period of 9.83 years, and B/C ratio of 1.26. The initial cost of tjis project is found to be the most critical factors on economic analysis. In summary, pipeline project is viable and can efficiently compete with the existing oil transportation modes.