Corrosion in pipes is usually found in the form of closely spaced defects, which eventually reduce the pipe pressure carrying capacity and piping planned useful life. Codes and standards have been developed to evaluate the effect of such form of metal loss on the piping pressure carrying capacities. However, predictions of such codes are usually conservative, and hence, there is a need to assess their degree of conservatism. The present paper utilizes nonlinear finite element analysis (FEA) in estimating pressure carrying capacities of defective pipes, and hence provides an evaluation of codes degree of conservatism. Shell elements with reduced thickness at the corrosion defect are adopted and their accuracy is assessed by comparison with those of solid elements as well as experimental test results. The influence of defects interaction is investigated by considering two neighboring defects in an inclined direction to each other. The influence of inclination angle, inclined proximity distance between the two defects, and the defect depth to wall thickness ratio are investigated. Comparisons were made with predictions of codes of practice in all cases. Code predictions were found to be conservative compared to FEA results. Furthermore, the interaction rule embedded in the codes for checking for interaction leads to inaccurate predictions for closely spaced defects as it does not include the effect of defect depth.