Availability and Risk Analysis Effects on Gas Pipeline Tariff Making

On a competitive market gas transportation rates must be as low as possible while recovering capital expenses — Capex and operating and maintenance expenses — Opex at a return rate expected by the project sponsors to recover their investment. To guarantee project feasibility, designers must be concerned not only with technical and direct economic aspects but should also incorporate availability and economic risk analysis to make sure that under operating conditions along the economic life of a project the cash flow will be kept inside predicted values and therefore will not expose project sponsors to undesirable negative Net Present Values — NPV. This paper will present a methodology to address these important aspects with focus on pipeline economics. Pipeline availability study associated with compressor stations failure analysis will be evaluated under Monte Carlo simulation and consequently their impacts on gas pipeline capacity will be economically evaluated. Quantitative economic risk analysis using Monte Carlo simulation is part of the methodology. The adoption of this methodology allows committing more pipeline transmission capacity to a level close to maximum without exposing the Transporter to losses of revenue and contractual penalties. Also prevents designing an oversized and less competitive system with unused spare capacity and consequently higher transportation rates.