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Pipeline Risk Analysis

string(220) ‘ risk between your client and contractor tends to overshadow successful management tactics and research show that contactors and owners offer minimal thought to dangers outside the realm of their own concerns. ‘

Pak. T. Engg.

, Appl. Sci. Vol. two Jan 08 Risk Examination for Structure and Operation of Gas Pipeline Assignments in Pakistan S. Mubin1 and G. Mubin2 1 2 City Engineering Division University of Engineering , Technology, Lahore, Pakistan Instructor, VTI, PVTC, Govt. of Punjab, Lahore, Pakistan Subjective In order to look after its high energy demand, Pakistan is about to import natural gas through sewerlines from nearby countries. Pertaining to fully utilizing the brought in gas, offering it to finish customers, the infrastructure of gas pipeline needs to be developed.

Therefore , big investment continues to be done and proposed from this sector in coming future. Considering geological, topographical, geopolitical and climatic conditions of the nation, there is added risk of earthquake, landslides and floods. Due to current geopolitical situation there is also a persistent risk of unrest and terrorism in the country. Labile Government guidelines, high charge of pumpiing, rapid enhancements made on material prices are also essential risk factors.

All these elements make the scenario very intricate in quantifying the risk especially for a project where the risk effect factor goes up exponentially in the case of risk happening. In this daily news, most appropriate risk classification is manufactured based on technical, organizational, personal, natural climatic, security and environmental risk factors. Hard work has been designed to device a simpler risk management technique to analyze and manage hazards of gas pipeline project. In the proposed risk management unit Monte Carlo simulation has become used to determine critical dangers.

Keywords: Oil and Gas pipelines, Risk Analysis and Management, Mazo Carlo simulation 1 . Launch Oil and gas sector is considered because back bone fragments of any kind of country’s economic system. In Pakistan industrialization, farming, transportation and domestic usage of the energy depends upon oil and gas sector. Almost eighty % of power generation is coal and oil based (50% gas and 30% oil) [1]. For efficient energy creation there is a need of successful transportation program (main and distribution network of pipeline) in the country, that is not sufficient to fulfill the country’s requirement.

According to World Lender Report just 21% with the total population of the region has access on natural gas. Due to the growing demands, pipe network is usually expanding strenuously as over the last 10 years the network of main and distribution gas pipeline was expanded by 85% [2]. Presently Pakistan can be meeting its gas demand by internal sources nevertheless by the season 2011 the difference between country’s gas demand and supply will be 1 . two Bcfd that may rise to three. 1 Bcfd by the season 2015 and ultimately to 11. one particular Bcfd by the year 2025 [3].

To fill the difference between demands and supply Pakistan is going to import gas through pipeline from nearby countries. Options of Turkmenistan, Iran and Qatar are available for gas import. Determine 1 implies that route of future cross-country pipeline. In Pakistan, predicted investment in pipeline development is within selection of 7 to10 billion dollars during the next 5-10 years [4]. Structure and characteristics of risk are very different in different ultra project including Iran-Pakistan-India pipeline due to multi-party involvement by different geographic locations and regulatory structure [5].

These ultra projects may be termed as worldwide projects thought as those where the owner and contractor can be from a country different to regarding where the project is situated commonly involve a wider selection of issues than domestic assignments and in impact, moving outside of one’s normal business legislation interjects a large number of unknowns. Factors impacting owner investment decisions with worldwide capital features can be quite complex and may fluctuate significantly by region to region and project to project [18].

Mother nature and effects of risk are different in various stages of project your life cycle of pipeline assignments. For most effective risk management experts recommend to prepare, analyze and manage risk in all phases of task life cycle i. elizabeth. initializing, strategy clearance and feasibility, design, construction and operation. Understanding the relationship between risk Corresponding Author: T. Mubin ([email, protected] edu. pk) Risk Analysis pertaining to Construction and Operation of Gas pipe Projects in Pakistan management and task phases for capital jobs can be a trial.

For instance, a lot of risks are negligible in construction phase but are of vital importance in style phase including earthquake. Although dealing with risk management of worldwide projects, which are often first or one-time efforts and task progress and phasing decisions can be isolated from risk management. For most worldwide projects, diverse participants are in charge of for control over the various phases of a project’s life circuit. In many cases, the project owner is largely in charge of program research, a thirdparty is often hired to design (engineering), construct, manage and control to meet the initial onstraints set by the owner [6]. Contractor is definitely hired to set up the job, which turns the effects over to the owner for businesses or creation. Structuring assignments with distinct phases and responsibilities may increase risk by separating the job participants in such a manner that minimal attention is given to overarching task concerns. Specific project individuals become interested in only their own project dangers and both willingly or unwillingly try to transfer these types of risks to other task participants.

To limit the scope with this paper the discussion is limited to the risks developing during construction and procedure phase. Physique 1: The routes of future gas pipeline task in the region. The uncertainty in undertaking structure of a canal project originates from many sources and often entails many participants in the project. Since every participant tries to minimize its own risk, the conflicts amongst various participants can be detrimental to the project. Systematic risk management of job activities is usually not completely recognized as valuable by practitioners in the development industry.

Not any common view of risk exists since the owner, trader, designer, and constructor have differing job goals and objectives, and historically adverse relationships are typical. In recent years, the concept of “risk sharing/risk assignment” deals has received acceptance in pipeline style and structure. The division of risk between the client and company tends to dominate effective supervision strategies and investigations present that providers and owners give minimal consideration to risks outside of the realm that belongs to them concerns.

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The Federation Internationale kklk Ingenieurs Recommandations (the International Federation of Consulting Technicians, FIDIC) plus the International Euro Construction Federation (FIEC) distribute two famous and widely-accepted forms of circumstances of get international structure projects (the Red and Yellow Books) that include conditions on the reasonable and fair risk posting between the owner and the company as well as risk responsibilities, liabilities, indemnity, and insurance [7].

Taking into consideration technological viewpoint geographical conditions of Pakistan are very sophisticated for the development of pipeline projects. Almost 50 % of the total area of Pakistan is tremendous mountain or semi-mountainous and in remaining portion of the 23 Pak. J. Engg. , Appl. Sci. Volume. 2 January 2008 location there is wide network of rivers and canals (Figure 2). Consequently , for linear structure just like pipelines there are extensive crossings and sometimes extreme site circumstances are fulfilled, where degree of risk is usually increased while compare to regular conditions of construction.

However, risks during operation of pipelines will vary characteristics depending upon the strength and weakness of operating firm, topographical, geopolitical and weather conditions of the country where project is executed. While working with natural hazards, the geology and geographical characteristics of the regions has to be thoroughly researched. For instance, both continental dishes i. elizabeth. Indian and Eurasian meet up with in Pakistan which highly impact on the eodynamics from the region which are the major method to obtain earthquake [8]. In monsoon period there is substantial probability of floods. Normal topography, high slopes, large rainfall in a specific period (JuneAugust) and high temperature (melting glaciers) will be the dominating factors for accelerating the consistency of floods in a particular year. Looking at geopolitics from the regions we have a persistent menace of unrest and terrorism.

The economical instability added the problem because of that there is frequent change in financial parameters. These are in fact the potential risks for any building project specifically oil and gas pipelines in which risk are multiplied many flip and there is rapid rise in harm in case of occurrence of one or even more risks resulting huge man and environmental losses. Figure 2: Map of Pakistan showing important geological and geographical popular features of the country. Classification of Dangers For powerful Risk Management, risk classification features prime importance. There are many varieties of classifications have been made so far [10]. In general, risks associated with pipeline projects may be classified since broadly: ¢ ¢ Risk during Structure Risk during Operation Nevertheless , in operation, risk are different, in which emphasis is given to prevent those element with hurdle safe and smooth operation/functioning of canal.

Usually, in mega projects such as cross-country trunk sewerlines investment risk are considered most import then the security risk. More exactly, risk during construction and operation of oil and gas pipelines can be divided into following types (Table 1): The type to result in of risk in every single class are different. Risks during construction will be time vulnerable and the likelihood of happening of different risk are period dependent, more is the life long project bigger are the probabilities.

These are generally related to execution of processes, materials availability, time, finances (budget), time frame, unintentional, legal and environmental. twenty-four i. ii. iii. iv. v. ni. vii. viii. Political risk Socio-economical risk Technical risk Organizational risk Natural huge risk Financial risk (investment risk) Safety and security risk Environment risk Risk Analysis pertaining to Construction and Operation of Gas canal Projects in Pakistan Table1: Risk Classifications No 1 ) Category Risk Political hazards Unstable Govt. olicies Difference in economic parameters Breach in contractual romance Unrealistic cost baseline and financial postpone Inefficient conversation Accident during construction or perhaps operation Earthquake Risk Elements Change in time policy Rise in inflation and material rates Loss of enterprise or collaboration Exchange charge risk and rise in interest Inefficient and conventional technology Not make use of HSE guidelines and normal floods Harm to surrounding environment Delay in approvals via regulatory physiques Seasonal unavailability of work Unrealistic SWOT analysis Happens, lockout, lawlessness Change in economic policies and tax system Fine or perhaps compensation installment payments on your Socio-economical risks Organizational risks 3. four. Investment risk Disinvestment from market Insufficient resources and equipment Terrorism or conflict Strong credit rating policy Top quality risk and rework Human being error (Damage or decrease of machine or human resource) Weather conditions elizabeth. g. dampness, precipitation Injury to ecology and wildlife your five. Technological risk 6. Protection risk six. Natural and climatic risk Landslide, hurricanes Depletion of hydrocarbon resources 8. Harm to Environmental risk natural assets 2 . 1 Political Risk The effect of country’s guidelines on the task directly influence on project success or failure.

During the insurance plan making process, technological factors are generally ignored and policies may be set in the best way that procedure of a project may not be cost-effective or operate offing. This factor is additionally important in unstable governments, where there is somewhat more risk of transform of monetary, petroleum or perhaps labor policies, which are immediately related to the pipeline tasks. Delays can happen due to time consuming and thorough procedure for acceptance from public safety regulation department, environmental regulation agencies and oil and gas regulatory physiques. Public health, safety and environmental concern will be more important inside the western countries as beat developing countries like Pakistan. Policy and political hazards are more concerned in worldwide project risks, such as mix border pipe projects.

In international jobs these dangers 25 are occasionally overlooked or perhaps assessed randomly. Such hazards include warfare, civil conflict, terrorism, expropriation, inability to transfer foreign currency across region, and operate credit defaults by international or domestic customers [6]. Even though risks just like civil unrest and economical stability are typically outside the range, understanding and dealing with these kinds of risks will be critical for businesses working internationally. A 2001 study by AON Operate Credit discovered that, in the Fortune 1000, no more than 26 percent of businesses had in place systematic and consistent methodologies to assess political risks [6]. installment payments on your 2 Socio-economical risk

Socio-economical conditions even more reinforced the climate of uncertainty with high pumpiing and interest levels. The deregulation of financial establishments has also generated unanticipated concerns related to the financing of construction. These kinds of risks can be forecasted and linked with the economic indicators of the nation. For instance, In Pak. J. Engg. , Appl. Sci. Vol. a couple of Jan 08 Pakistan, the economic symptoms are maintaining grow regardless of political lack of stability in the country. The GDP in the country was 8. 4% prior to june 2006 earthquake, which in turn declined to GDP your five. 6 or less currently. Earthquake and floods over the last two year costed government approximately $5. 4 M and likely to spend even more $3. 6bn till 2010.

Overall there is growth on the market and prospect of foreign investment in structure sector [1]. installment payments on your 3 Technological risk The hazards related to technical problems are familiar to the design/construct professions that have some degree of control over this category. However , as a result of rapid advancements in fresh technologies which usually present new problems to designers and constructors, scientific risk has become greater in many instances. Certain style assumptions that have served the professions well at the past could become obsolete in present period. Site circumstances, particularly subsurface conditions which usually present some degree of uncertainty, can produce an even greater amount of uncertainty during construction.

Since construction methods may not have been fully awaited, the design might have to be modified after development has begun. A good example of facilities which may have encountered this sort of uncertainty may be the nuclear engine power, and many owners, designers and contractors have suffered for undertaking these kinds of projects. There is also a need of technological improvement to overcome this risk. statistics, geological surveys, sub surface exploration through various method offers given rise to the development of such techniques which can not simply quantify regularity of occurring of this sort of phenomenon in a particular place but also their impact and devastation. Northern areas of Pakistan are thought in large seismic area [8] especially after chance of 9th Oct. 005 earthquake, by which more than 86000 people passed away and one million got harmed and a few million started to be homeless, this factor is extremely considered in planning, feasibility, design and construction of the any structure project in the area [9]. The major reason is the platter tectonic motion in Himalaya, northern part of Pakistan. This kind of plate tectonic motion is a result of the uplift of European Asian dish by American indian plate (two plates happen to be meeting in Pakistan) 2 . 6 Expenditure risk Sewerlines are huge project. A whole lot of funding is required pertaining to the completion and safe procedure of sewerlines. Investment has been always a chief risk in construction task due to variable party involvement.

But particularly for the international pipeline task, this is usually risk of payback and control offing, as a result of bilateral and diplomatic associations. 2 . six Safety and security risk In a wider sense, security and safety risks consist of factors as a result of that loss or destruction of assets (manpower, machinery and economical resources) or facilities (pipeline, pipeline bridging, gas air compressor station) can happen during development or procedure phase of a pipeline. It is very often that loss of function time, machinery and manpower occur because of accident in side because of the negligence of some member of staff. These risks involve most actions (accident, malfunctioning, terrorism, war etc) due to that loss of assets nd development of canal can occur. These risks are more likely to occur during operation period however , place be occurring in building stage as well. To accommodate these risk to occur Wellness safety coverage is enhance so that to reduce on-site and offsite accidents during building. It is generally accepted which the pipeline will be the target in terrorists’ problems and wars. For, illustration, history prevails that in last five years the total terrorist episodes made for the pipelines in Pakistan had been 103. It can be the result of internal political situation of the nation but around the globe this factor of risk is considered to be extremely important.

For secure operations, state-of-the-art methodology and technology has become developed which usually ensure safe exploitation of pipeline, including remote realizing, Geographical Details System (GIS) and mapping techniques, Mild detection and ranging (LIDAR), Global positioning program (GPS), info acquisition (SCADA) and In-line inspection (ILI) etc . 26 2 . some Organizational risk The risks relevant to organization and organizational human relationships may is very much unnecessary tend to be quite real. Strained relationships may develop between several organizations mixed up in design/construct process. When concerns occur, discussions often focus on responsibilities instead of project requirements at a time if the focus must be on fixing the problems.

Co-operation and interaction between the get-togethers are frustrated for anxiety about the effects of impending litigation. This kind of barrier to communication comes from the illconceived notion that uncertainties as a result of technological complications can be eradicated by appropriate contract conditions. The net consequence has been a rise in the costs of constructed features. 2 . five Natural devastating risk All-natural catastrophic risks are all those on which there is no control. They are generally the ‘act of God’ and can happen at anytime and anywhere. Earthquake, floods, hurricanes are the common examples of these types of risks. Nevertheless , due to the advancement the science and technology in neuro-scientific simulation and modeling

Risk Analysis for Construction and Operation of Gas pipeline Projects in Pakistan 2 . 8 Environmental risk Environmental concerns and awareness can be increasing all over the place. The throughout the world environmental safeguard movement has contributed to the uncertainty for construction because of the inability to learn what will be required and how lengthy it will take to acquire approval in the regulatory firms. This delay in approval practically influence on total costs in the project. General public safety polices have comparable effects. The case constantly change guidelines pertaining to engineers, constructors and owners, as tasks move through the stages of planning to structure due to the enhancements made on govt. guidelines.

These moving targets include a significant new dimension of uncertainty which make it nearly impossible to schedule and work at budgeted cost. Risk management reduces the impact of unfavorable risks and enhances confident risk for making opportunities. However , limiting the scope from this section to negative hazards, risk management could possibly be defined as a strategy to reduce the implications of unfavorable events (risk) tend to arise during building and operation of pipe by producing mechanisms and strategies (risk transfer, risk reduction, risk distribution, avoidance, risk enhancement) compatible for the system environment in which project is accomplished. The approach of risk management is based on risk analysis outcomes for a particular task.

According to Project Supervision Institute (PMI) approach of risk management [11] the process comes with: 1 . 2 . 3. four. 5. Risk management planning Risk identification Qualitative risk evaluation Quantitative risk analysis Risk reduction tactics 3. Risikomanagement Process Generally risk evaluation and managing had not been utilized in building industry and particularly in pipe projects. It truly is comparatively fresh area for pipeline jobs, which is rapidly advancing due to the involvement of non indigenous client or perhaps contractor. However , the concept of risk analysis and management is getting fame in pipeline project due to involvement of multinational contractor/organizations.

Fundamentally risk management handles management of positive and negative occasions which arises during conclusion of projects. 3. 1 Risk management preparing Risk management method (PMI approach) starts with the look of risikomanagement, which includes a in depth risk management organizing. In Risikomanagement planning the proposed alternative for risk analysis is set. The type, output and process are shown in the table installment payments on your Table a couple of: Process exhibiting Risk Management Planning [19] Type Organizational environmental factor Organizational process of resources Project opportunity management Task management plan Planning conference and research Risk Management Program Planning intervention Process Out put 3. 2 Risk Identification process

For effective risk research and management the identification of risk is very important carefully such that zero important factor is left which could negatively impact on the job. The risk indemnification process output and input are displayed in stand 3, such as the following: Details Gathering Approaches: Examples of data gathering tactics used in determining risk range from brainstorming, Delphi techniques, interviewing, root cause identification and SWOT (Strengths, weaknesses, opportunities, and threats) 27 analysis. Brainstorming is important data gathering technique for risk recognition in which a group of team members or subject-matter authorities (design, structure, purchase, fund etc) collectively identify anticipated risks.

Delphi is another technique of information gathering used so as to reach a consensus of experts on a subject. Experts on the subject engage in this technique anonymously. A facilitator uses a customer survey to solicit ideas Task Documentation Opinions: For risk identification project documentation will be reviewed, including plans, presumptions, prior job files, and also other information. The standard of the ideas, as well as Pak. J. Engg. , Appl. Sci. Volume. 2 January 2008 regularity between all those plans device project requirements and assumptions, can be indications of risk in the task. Assumptions Analysis: Every pipe project can be conceived and developed based upon a set of hypotheses, scenarios, or perhaps assumptions.

Assumptions analysis can be described as tool that explores the validity of assumptions because they apply to the project. That identifies dangers to the project from inaccuracy, inconsistency, or incompleteness of assumptions. Desk 3: Process of Risk Recognition Input Organizational environmental component Organizational procedure for assets Task scope supervision Project administration plan Risk Management plan Checklist Analysis: Risk identification check-lists can be produced based on traditional information and knowledge that continues to be accumulated from previous related projects and from other sources of information. The lowest level of the RBS could also be used as a risk checklist.

Diagramming techniques: A lot of Risk diagramming techniques could also be used for risk identification including cause-and-effect blueprints, system or process movement charts and influence blueprints. Process Details collection Paperwork review Presumption analysis Directory analysis Diagramming techniques Out put Risk Register several. 3 Qualitative risk research There are several ideas to evaluate risks [12, 17]. Numerous distinct risk formulae exist, although perhaps the most widely accepted formula for risk quantification can be: Rate of Occurrence my spouse and i. e., likelihood multiplied by the Impact of event comparable to Risk Amount, mathematically indicated in formula 7. The inputs and output of qualitative risk analysis process is shown in table-4.

PMI described values of probability and impact element can be used in risk analysis given in Desk 5. Yet , the selection of one of many value of P to get a particle risk from table 5, is based on expert judgment which may create controversial effects. The objective is to prioritize risk based on their probability and impact assessment. Probability and Impact matrix is used to visualize the impact of risk by least to maximum likelihood. Another approach called Risk Data Top quality Assessment is employed which requires accurate and unbiased info Analysis with the quality of risk data is a way to evaluate the level to which the info about hazards is useful pertaining to risk management.

This involves examining the degree that the risk is definitely understood. Hazards to the job can be categorized by types of risk (e. g., making use of the RBS), the location of the job affected (e. g., making use of the Work Malfunction Structure), or other useful category (e. g., project phase) to determine areas of the project the majority of exposed to the effects of uncertainty. Desk , some Process displaying Qualitative risk analysis [19] Input Organizational process of assets Project scope management Project management program Risk Management program Risk Signup Process Risk probability and impact analysis Probability and Impact matrix Risk info quality assessment Risk categorization Risk Signup (updates) Out put twenty eight

Risk Research for Structure and Operation of Gas pipeline Assignments in Pakistan Table five: Standard principles of rate of recurrence of occurrence and Effects factors [11] Possibility of incident very high chance High chance Greater chance Possible Likely Unlikely Probability (P) 90 % 75% 60% 45% 30% 15% Type and level of risk Impact The moment maximum effect on scope, some cost High-impact on range, medium impact on time and reduced impact on expense High impact punctually, medium impact on scope and lesser impact on cost Once high impact in cost of the project, moderate impact on some lesser impact on scope Impact Factor (I) 0. on the lookout for 0. 6 0. 3 0. one particular 3. some Quantitative risk analysis

Pertaining to quantitative risk analysis one of the following technique may be used while illustrated in Table six. incorporates possibilities and the costs or rewards of each reasonable path of events and future decisions, and uses expected value analysis to assist the organization discover the comparable values of alternate actions. See also expected value analysis. Tenderness analysis: Sensitivity analysis helps you to determine which usually risks have most potential impact on the project. That examines the extent where the uncertainty of each task element impacts the objective getting examined when all other unclear elements are held for their primary value.

One particular typical display of tenderness analysis is definitely tornado plan, which is useful for comparing comparable importance of parameters that have a top degree of uncertainness to those that are definitely more stable. Predicted Monetary Value (EMV) Analysis: This can be a statistical technique that computes the anticipated outcome of future scenarios in financial form that may or may not happen. Modeling and simulation: Building and ruse is recommended pertaining to cost and schedule risk analysis since it is more powerful and less subject to misapplication than anticipated monetary value research. Simulation utilizes a model that translates the uncertainties particular at reveal level of the project within their potential effect on project objectives. 3. a few Risk eduction strategies Risk register can be obtained from risk management procedure identified by Project Management Company (PMI) [11], which is a document that contains the benefits of the qualitative risk examination and quantitative risk examination. On the basis of risk analysis risk reducing technique is set and this is given in risk register. The chance register by doing so, presents every related data of identified risks which includes description, category, cause, probability of taking place, impact(s), risk number plus the possible approach set for every risk. Decision Tree: The decision tree is known as a diagram that describes a decision under consideration plus the implications of choosing one or another of the available alternatives. It truly is used when some long term scenarios or perhaps outcomes of actions happen to be uncertain.

That Table 6th: Process demonstrating Quantitative risk analysis [19] Input Company process of property Project range management Task management program Risk Management strategy Risk Signup Process Out put Quantitative risk evaluation ( Awareness analysis, Decision Tree, Building and Simulation, Expected Value, EMV) 30 Risk Sign-up (updates) Pak. J. Engg. , Appl. Sci. Volume. 2 Jan 2008 The common course of action with the any business or participator (consultant, company, client or perhaps owner) engaged in the construction means of oil and gas pipeline can undertake one or combination of course of action provided below, depending upon the kind of project, site and instances.

Distribution of risk among participants in the project can be made by: 1 . Risk Copy (insurance, contracts) 2 . A contingency Budget a few. Risk mitigation (problem fixing and cause analysis) 5. Risk elimination 4. Advancement Risk Management Model for Pipe Construction Projects Project Managing Institute (PMI) approach of risk evaluation and administration may be challenging and laborious for structure project like pipeline. Consequently a model of risk evaluation and managing is produced which makes simple the process and produce even more probable results with the rendering of Monte Carlo ruse (Figure 3). Project record review Industry Analysis Client/Contractor review

Geopolitical analysis and review installment payments on your Risk Classification Risk Malfunction Structure (RBS) 3. Risk probability and impact factor Data collection (Authentic source) Data control (Normal, Beta, Gamma, Log, etc distribution) Calculation of Frequency (P) and Effects factor (I) 4. Risk analysis a few. Monte Carlo Simulation Identity of essential risk 6th. Risk management strategy Risk Copy (Contract, insurance) Risk Syndication (Between parties) Risk Mitigation (Eliminating risk causes) Risk Avoidance six. Risk monitoring process Paperwork Monitoring procedure and results Check and make improvements Data Traditional bank Figure3: Risikomanagement Model to get pipelines construction project. 40

Risk Analysis for Construction and Operation of Gas pipeline Jobs in Pakistan STEP-1: Model starts with identity and classification of hazards considering the form of construction project. Degree and frequency of risk varies from trunk canal to division line. Likewise it gives suited approach for the major celebrations i. electronic. Owner (client) and the Service provider. Before identifying the risk the industry review, client/contractor capability and geopolitical conditions of the area are examined where job is likely to be performed. The types of risk are also depending upon the type of contractual relationship involving the owner and constructing firm. In different ypes of contract (Build-Operate and Transfer, Engineering-Purchase and Structure, Figure, Turnkey contracts, Work contract, etc) between the owner and making body the level and power of risk differs [13]. STEP-2: On the basis of risk identification risk are classified and Risk Breakdown Composition (RBS) is made as shown in Determine 4. Risk identification is the central thing accompanied by the likelihood and influence calculations in whole risk research process. Number 4: Risk Breakdown Structure of gas pipeline project STEP-3: Risk probability examination investigates the chance that each specific risk will certainly occur. Risk impact analysis investigates the potential effect on a project objective such as time, price, scope, or perhaps quality.

The selection of PMI defined the beliefs of likelihood and effect factor given in Table five is based on qualified judgment which might produce debatable results. For instance, it may be hard some time to tell apart the possibility by “Higher Chance to “Greater Chance for that an expert can use 60% possibility value yet , another work with 45%. In that way some negligible risk could possibly be superseded to other important risk. Risk impact factor defined by simply Project Management Institute (PMI) are used through this study which range from 0, one particular to 0. 9 dependant on the type and impact of event to the project. To get risk Bosque Carlo Simulation the precise benefit of possibilities are required.

Consequently , probability and impact of each risk may be calculated depending on historic info. In this 31 case all of us the values of possibility of different risks are determined by using several probability circulation curves, however , when the historic data is not available, the probability is judged by experts thoughts and opinions (from SNGPL) or the direct value of probability for this particular risk published by the related govt agency. It is vital to determine the possibility distribution of the risk on the basis of that the rate of recurrence of occurrence is worked out. It is seen that the likelihood distribution of various risk appearing in different stages of job life cycle is different.

Therefore , during computation of likelihood of each risk the feature of risk must be thought to find the appropriate circulation to get the even more precise results. For example , figure 5 reveals the ten-year data of flood [21] depicts that the a normal curve is best suited to find the probability of any given volume/time called since the flood flow may be calculated employing Equation 1, 2 and 3 [14]. Pak. J. Engg. , Appl. Sci. Vol. 2 By 2008 Physique 5: Visual representation of flood data 1990-2001 where P ” probability of occurrence Z ” area under typical curves for any given benefit X (the probability of these area can be found out via charts)? ” mean worth of the 10 year data of river moves.? ” standard deviation from the mean info.

On the basis of famous data, extracted from IRSA, the probability of river stream more than 500 (MAF) (which is referred to as flood flow) through lake system of Pakistan (sum of river stream at a time in Mangla and Terbela) is definitely calculated through the use of measured. Likewise other risks are also quantified based on the characteristic of data distribution curve. For instance, pertaining to earthquakes our company is interested to find the probability of occurrence earthquake more than 5. 5 More potent Scale. Relating to structure codes, the earthquake between 3. 5-5. 4 More potent Scale is often felt, although rarely triggers damage. A worth of five. 5 Wealthier Scale is usually selected to calculate possibility of thirty-two occurrence underneath assumption that almost minor damage to well designed buildings can easily caused main damage to poorly constructed structures over small regions.

Sewerlines can go underneath slight damage of residual. For a arbitrary variable By (x &gt, 0 and elsewhere my spouse and i. e. by &lt, 0 the value of probability is zero) have an exponential distribution with parameter? after that probability circulation is defined as in equation (4), (5) and (6) [14]. As a result either rapid or molteplicit? distribution (with m =1) may be used for probability calculations of earthquake at specific value (in Richer Scale) using the traditional data [9], as shown in the Figure 6. where P ” probability of happening? ” imply value of historic info? ” common deviation from the historic info e ” 2 . 718282 VAR is definitely the variance any kind of time value X. For your five. Richer Scale earthquake? = 1? G (X &gt, 5. 5) =? 1 . e ” 1*5. 5 = 0. 000408 a few. 5 Risk Analysis intended for Construction and Operation of Gas canal Projects in Pakistan Consistency of happening 70, 500 60, 1000 50, 000 40, 1000 30, 000 20, 500 10, 000 0, 500 0 you 2 three or more 4 your five 6 Earthquake Intensity (Richer scale) Number 6: Graphical representation forty five year earthquake data STEP-4: On the basis of likelihood values for each and every risk a risk signup (table 7) may be produced which gives quantitative risk analysis for every single risk. PROJECT MANAGEMENT INSTITUTE defined impact factor can be used which obvious cut describes the type and condition of risk impact. On such basis as this method below qualitative risk examination is made.

This relationship is utilized for risk analysis [11]: RN = G x We RN ” Risk Number P ” Probability of occurrence I actually ” Impact factor of risk For guidelines the data is definitely not available professional judgment can be used for likelihood assessment. Risk Number (RN) can be found for a lot of risk discovered in Risk Breakdown Composition (RBS). By hand it can be determined critical risk having larger risk quantity, RN based upon the one point calculation. Nevertheless , the more traditional way to distinguish the critical risks linked to pipe project is Monte Carlo Simulation strategy which is talked about in next thing. STEP 5: Bosque Carlo ruse is a trusted computational means for generating likelihood distributions of variables that depend on additional variables or parameters showed as probability distributions.

Although Monte Carlo simulation has been used considering that the 1940s, development of computer technology made it attainable and attractive for many new applications [15]. That availability features coincided with increasing discontentment with the deterministic or point estimate measurements typically utilized in quantitative risk assessment, as a result, Monte Carlo simulation is definitely rapidly gaining interest. Monte Carlo simulation, the industry mathematical method used in risk analysis to approximate the distribution of potential benefits based on probabilistic 33 (7) inputs would involve a large number of calculations in the intake price rather than a one calculation, for each and every calculation, the computation could use a value for each suggestions parameter at random selected in the probability denseness function for your variable [16].

Every simulation is usually generated by randomly pulling a sample worth for each type variable from its defined probability distribution, elizabeth. g. consistent, normal, lognormal, triangular, beta, etc . These types of input sample values happen to be then utilized to calculate the results, i actually. e. total project period, total job cost, project finish period. The inputs can be task duration, price, start and handle time, etc . This procedure is then repeated before the probability droit are sufficiently well symbolized to achieve the desired level of reliability. They are utilized to calculate the critical way, slack values, etc . Bosque Carlo ruse have been verified an effective methodology for the analysis of project plan with questions.

In Monte Carlo ruse any ideal level of statistical accuracy may be achieved by raising the number of iterations. Risks happen to be probable agencies, it is possible that most the risk accrued at the same time during project performance and may become no identified risk shows up. Therefore , it can be desired to make use of Monte Carlo simulation strategy to find one of the most critical and probable risk which can are available in the pipe project. Risk analysis has become made by employing program Riskyproject 1 . three or more. 3 [20] which is an advanced project software with integrated risk analysis. RiskyProject is utilized for preparing, scheduling, quantitative risk evaluation, and performance way of measuring of tasks with multiple risks and uncertainties.

RiskyProject determines which will parameters may have the most effect on the job: duration, cost, and finish time with minus risks, essential tasks, critical risks, and success rate. RiskyProject helps to improve the span of the job: track task performance and risk together and examine the affect of mitigation efforts [22]. On the basis of Monte Carlo simulation crucial risks happen to be Pak. T. Engg. , Appl. Sci. Vol. a couple of Jan 08 Table six: Risk input in risk register and their quantitative research for pre-defined risks Risk Identification and Categorization Cat. Risk 1 1 one particular 1 1 1 you 2 a couple of 2 a few 3 3 3 several 3 3 4 5 4 4 5 five 5 6 6 6th 6 7 7 several 7 8 8 1 . 2 . Risk Register Risk Analysis Freq. Risk reducing Strategy

Rank 27 a few 23 twenty-five 8 13 29 1 12 21 16 almost eight 9 doze 4 5 3 2 24 18 19 14 10 5 20 14 12 five 15 a few 12 a couple of 6 almost 8 Risk Elimination Risk Risk Transfer Mitigation Remarks Risk Delay in approvals from regulatory systems Unstable Govt policies Change in regulations Difference in labor plan Change in petroleum policy Political instability Lawlessness, strikes, lockouts Change in economical parameters Walk in materials prices Unavailability of experienced laborers Change in project range Insufficient technology Completion of building not promptly Not practical planning of resources and volume of operate Request for embrace project price range In satisfactory specialist and engineers Pressures in contractual relationships Economic delays Disinvestment from the industry Loss of

Partnership Change in credit policy (increase interest rate) Design not completed in period Unexpected barrier on web page (dewatering, rock excavation) Gradual communication among team members War Terrorism Car accident on site during structure Loss of human life Earthquake Flood Landslides Unexpended the weather, precipitation wind storms Problems for environment Degradation of natural resources (P) 5, 15% 8% 2, 10% two, 90% 5% 4% four, 50% eight, 10% 8, 03% 6th, 80% a few, 9 % 10% on the lookout for, 50% eight, 10% 13, 13 % 6, 50% 5, 30% 6. 1 % 4, 40% 3, 01% a few, 10% several, 80% several, 80% your five, 90% zero, 10% two, 20% 2% 3, 90% 0, 04% 3, 07% 2, 1 % four, 72% 3, 75% you, 10% Effects (I) 0, 32 0, 6 some 0, on the lookout for 0, 6 0, 6th 0, 6th 0, 3 0, 9 0, 3 0, a few 0, six 0, a few 0, several 0, a few 0, three or more 0, six 0, being unfaithful 0, being unfaithful 0, one particular 1

Risk Number 1, 54% 4, many of these 1, 89% 1, 74% 3, 00% 2, forty percent 1, 35% 7, 29% 2, 41% 2, 04% 2, 34% 3, 00% 2, 88% 2, 43% 3, 94% 3, 90% 4, 77% 5, 49% 0, 44% 1, 81% 1, 53% 2, 34% 2, 34% 3, 54% 0, 09% 1, 98% 1, many of these 2, 34% 0, 12% 2, 76% 0, 63% 2, 82% 2, 25% 0, 66% E? your five E? Electronic? GO At the? E? E? 6 several GO, EO SA 7 GO At the? EO EO EO SOCIAL FEAR GO SOCIAL FEAR EO EO SA EO SA EO EO EO SA SA SA SOCIAL FEAR SA SA SA PROCEED GO 0, 6 zero, 3 0, 3 0, 3 zero, 6 zero, 9 0, 9 0, 9 0, 6 0, 9 0, 9 zero, 3 zero, 6 zero, 6 0, 6 zero. 1- When high impact upon cost of the project, channel impact on time and lesser effect on scope. zero. 3- High-impact on time, moderate impact on scope and reduced impact on cost. 3. 0. 6- High impact on range, medium effect on time and reduced impact on price. 4. 0. 9- When ever maximum effect on scope, some cost. five.

EO- Rate of recurrence of risk is based on expert’s opinion. six. GO- Rate of recurrence of risk is based on statistic available by relevant Govt organization. six. SA- Regularity of risk is based on statistical analysis. 34 Risk Analysis for Construction and Procedure of Gas pipeline Projects in Pakistan Figure-7(a): Mucchio Carlo Simulation conducted for risk examination of Muree Rawat gas pipeline task presents most probable cost and length to finish project. It also presents the majority of probable day of completing the project considering every identified risks. Figure-7(b): Effect obtained from ruse identifying most significant risk affecting scope, period and expense Muree Rawat gas canal project dentified impacting in scope, expense and life long project [Figure six (a) and (b)]. Method for risk management is placed accordingly. This analysis and results was produced by the programme: 35 Sensitivity analysis Success rate of completion Critical risks impacting cost Important risks influencing duration of project Pak. J. Engg. , Appl. Sci. Vol. a couple of Jan 08 Critical activities. Most likely duration Most probable cost of the task Most probable date of completion of task. STEP 6: Based on critical risk identification by Monte Carlo simulation, risk reduction strategy is set, which may be risk copy, mitigation, elimination, distribution and the like.

During development process the impact of risk can be decreased by changing the routine of construction for example 95% of likelihood of avalanche occurrence is at period from June to August. In flood, the location comes under water and might not become possible to carry on the construction procedure. Therefore , routine may be set in a way that ground related activities should be set accordingly to avoid the occurrence. STEP 7: The effects or set methodology to get risk management has to be periodically monitored and inspected for improvement. Lesson discovered and recommendation should be send to “Data Bank which might be useful for risk analysis and management of another pipeline project of similar character. organizational capacity pertaining to design, development and procedure. Organizational or technological risk like too little resource planning or project management, difference in scope etc can be removed by improving the process or application of fresh technologies accessible in this discipline. New state of the art technologies are helpful in handling change at any stage from the project. Famous data of river moves shows that the flood provides probability of 95% of occurrence among June and August. This risk could be minimized during construction phase by rearranging the construction timetable. Other risks like landslides are connected with floods, rain fall or earthquakes. Earthquake risk during structure phase depends upon what length of setup of task and only influence on the construction cost of the project. As the duration of the execution increases probability of occurrence of risk can also increase.

However , in operation phase this risk has to be eliminated by simply practicing design and style based on earthquake/horizontal forces. ¢ ¢ five. Conclusion and Recommendations ¢ Probability of risk event “P comes out to be the function of job duration “T both during construction and operation period. However Power of break down or Effects is a function of enterprise internal and external environment. Three most significant tasks worked out by Dangerous Project will be Excavation, Transport of Material and Stringing of pipelines. One of the most critical risks come out being change in economical parameters, Change in design and scope, earthquake and terrorism during structure and operation of gas pipelines.

Taking into consideration all hazards the likely values to project conclusion calculated by simply Risky project is 460 days even so the base project duration is 390 days and nights. Similarly the project expense without hazards is three hundred and fifty, 00, 500 however , with risks it can be 391, 00, 000. Based on that a contingency budget of project can be formulated to cater raise the risk. The supplementary risks just like change in material prices, construction not done in time or budget and design not really in time could be reduced or perhaps transferred to the other party or organization simply by contract. Even so SNGPL is designing, building and functioning gas sewerlines so risk can be eradicated by building up the internal Acceptance Mr. Pervair, Senior Standard Manager and Engr.

Waqar Ashraf, Deputy General Manager (Projects), SNGPL are known for their contribution and help in providing data and relevant material. ¢ REFERENCE [1] Economic Study of Pakistan, Ministry of Finance, Section 15, Energy Sector of Pakistan, Islamabad, Pakistan. (2006), 219-225. [2] Annual Record, Sui Upper Gas Sewerlines Limited (SNGPL), Lahore, Pakistan (2006), 511. [3] Iran-Pakistan-India (IPI) Pipeline Pre-feasibility report by Hagler Bailly Pakistan. Islamabad, Pakistan, (2006), 111-119. [4] Syed Hassan Nawab, Proc. third Pakistan essential oil , gas conference, Islamabad, Pakistan, (2007), 136-145 [5] Amberish T. D., A pipeline through Pakistan, Dehli, India (2004), 131-137. [6] John T., Edward G., International Job Risk Analysis: Methods, Types of procedures, and Important ¢ ¢ 36

Risk Analysis for Construction and Operation of Gas pipeline Projects in Pakistan Factors (Center Structure Industry Studies, Report No . 31, The University of Texas at Austin) Austin tx, Texas. (2003), 41-49. [7] FIDIC Conditions of contract for building. (Multilateral Development Bank Harmonized Edition). Geneva, Switzerland. (2005), 217-229. [8] Armbruster T., Research Record, 83(1978) 8891. [9] Pemimpin S., Muhammad S., Proc. 1st Intercontinental Conference upon Earthquake Engineering (ICCE), Lahore, Pakistan, (2006), 177-182. [10] D’Appolonia Electronic., Proc. of 9th Worldwide Conference about Soil Mechanics and Foundation Engineering, Tokyo, Japan, 4(1979), 410-414. 11] PMBOK Guide, Strategies for the Task Management Physique of Knowledge, third Edition, PA, USA, (2004), 237-264. [12] Peter C., Robert S., Proc. next International Deepwater Pipeline Technology Conference. London, UK, (1999), 291-297. [13] Conditions of Contract for EPC/Turnkey Projects, Guidance for the prep of the particular Conditions Forms of Tender, Deal Agreement and Dispute Adjudication Agreement, USA, (1999), 4-12. [14] Sher Muhammad Ch., Introduction to record theory, Ilmi Kitab Khana, Urdu Transaction, Lahore, Pakistan, 6th Impotence, (1996), 361-370. [15] Susan R. G., Proc. Int. Conference on Risk Assessment and Policy Association appointment in Alexandria, Virginia, (1997), 245-255. [16] Brenda McCabe, Proc. Int.

Conference upon Simulation, Barcelone, Canada, (2003), 15611565. [17] Jack Ur., Meredith, Samuel J., Mantel Jr., Project Management, fifth Ed, NJ, USA, (2002), 191105. [18] Wells John, Gleason Eric, Harvard Organization Review Journal, 73(5)(1995) 44-54. [19] CPM 128: Task Management Bootcamp, (2006), eleven. 1-11. 30. [20] www. intaver. com/accessed on tenth March, 3 years ago [21] Gross annual Flood Survey, Ministry of Water and Power, Islamabad, Pakistan, (2006), 1-5 available too online upon http://www. pakistan. gov. pk/ministries/index. jsp? MinID=24=291. [22] Customer’s Guide to RiskyProject Professional 1 . 3, Intavar Institute Incorporation., USA, (2006), 31-38. 37

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