Home » O&G Pipeline Security: Shouldn't the new Bill herald a new approach?

O&G Pipeline Security: Shouldn't the new Bill herald a new approach?

O&G Pipeline Security: Shouldn't the new Bill herald a new approach?

As pipelines face threats of protests, sabotage and even potential terror attacks, a new Bill seeks to make punitive clauses more stringent in pilferage and tampering of O&G pipelines. But solutions cost money, and the proportion along a pipeline is not significant. Is it time to invest in technology, surveillance systems and regulatory mechanisms for our pipelines from a security and social, not only economic, viewpoint? Investing in new technology like trenchless, which will save on land and depreciation, will have many such ramifications, writes Janaki Krishnamoorthi.

Between 2006 and 2009, there were 311 cases of pilferages or attempted pilferages on oil and gas (O&G) pipelines in India and the consequent loss incurred during this period as reported by O&G Public Sector Undertakings was Rs 14.32 crore. This inf­o­r­­mation was provided in the Lok Sabha on 9 July 2009 by the then Petroleum Minister. Apart from this piece of data, there appear to be no ready compiled statistics avai­lable on such incidents that have occurred before this period or after. Many industry professionals and the gov­ernment believe that pilferage and tampering episodes have been increasing over the years and have become a cause for concern.

Pipelines play a vital role in carrying crude oil from import terminals to refineries and refined petroleum pro­ducts from refineries to the market across the country. Around 40 per cent of petroleum products are moved through pipelines in India. Pipeline transportation is environment-friendly with negligible loss of product in transit, low maintenance costs and minimal impact on land use pattern. However, since they carry highly infla­mmable material, any tampering can cause large spills, fires and explosions resulting in injuries, loss of lives and environmental pollution, apart from disruption of pro­duct supply, property damage and loss to the oil com­panies and to the nation. Accidents can happen due to corrosion, inadequate maintenance, technical break­down, third-party digging for some other work, etc. However, prevention mechanisms are in place through effective quality control and monitoring. Accidents cau­sed by sabotage, pilferage and tampering, on the other hand, are generally less predicted and controllable. Pipelines are not immune even to terror attacks.

A collaborative concerted effort is the need of the hour with all the associated organisations, bodies and the government coming together under a stronger legal structure. Perhaps the following three-pronged approach may prove to be beneficial: i) using technologies at the construction stage that would make pipeline tampering next to impossible, ii) deployment of modern surveillance system to prevent such incidents, and iii) revised regu­lations with severe punishment that would be a deterrent for anyone indulging in such illegal activities.

Network security

As security of pipeline networks is increasingly under focus, expansion in the network is itself a major cause of the mounting incidents of pipeline pilfering, says L Mansingh, Chairperson, Petroleum and Natural Gas Regulatory Board (PNGRB). “The Board has been proac­tively trying to facilitate the dev­elop­ment and expansion of the tran­smission and distribution networks for petroleum products and natural gas. As a result, it would be prudent to assume that incidents of tampering and pilferage of petroleum products would increase along with this expansion,” he adds.

Loss of petroleum products is no doubt substantial, although, in the whole picture, the percentage of loss to the industry is not significant at present. A highly placed source in the Union Ministry of Petroleum and Natural Gas concedes that such pilferages and tampering are of grave concern. But the eventualities of such acts like oil spills, fires, explosions and consequent loss of life and property is the more serious matter. Sometimes, even after the offenders leave the site, if the oil continues to leak undetected, it can erode an entire cultivable soil and then it becomes the liability of the pipeline operator to get it rectified or pay compensation.

The reasons behind pipeline pilfering, tampering and sabotage incidents are apparent. The culprits gene­rally do so to either sell the siphoned off products in the black market or to file claims for pollution compensation. To create panic and disruption is another motive behind a sabotage, largely carried out by separatists and terrorist groups. The United Liberation Front of Asom (ULFA) has allegedly attacked several pipelines in Assam.

“As natural gas pipelines are at a very high pressure, there are no cases of tampering and pilferage in these lines, although there are some accidental exposures due to third-party construction or digging activity,” says a spokesperson of GAIL India, which owns and operates more than 8,700-km network of cross-country high- pre­ssure natural gas pipeline in the country.

PNGRB's Mansingh reiterates that because natural gas transmission pipelines carry gas at high pressure, it is unlikely that any pilferage can occur there. “However, any deliberate or accidental damage to such pipelines would create a potentially dangerous situation.”

Apparently, any tampering of oil and gas pipelines would almost automatically indicate that sabotage was the obje­ctive behind, which of course, can be more dangerous and devastating.

“The problem is not only limited to India but also prevalent in countries such as China and Brazil,” says Basab Acharya, General Manager, Pipeline, Punj Lloyd Group, the leading O&G pipeline EPC company with global operations. The problem is also rampant in Iran, Nigeria and Columbia. Nigeria is the world's eighth biggest exporter of crude oil and a size­able proportion of it is allegedly pilfe­red, either by drilling into pipelines or hijacking barges loaded with oil. Likewise, a large num­ber of China's oil pipeline leaks are reportedly caused by pilferage. As else­where, the incidents of pilferage are more with oil pipelines than gas pipelines and those located onshore than offshore.

Who's in charge here?

The responsibility of protecting these pipelines, rest with the oil companies and pipeline operators. PNGRB has laid down norms for maintaining the technical and safety standards through the PNGRB (Technical Standards and Specifications including Safety Standards for Natural Gas Pipelines) Regulations, 2009, and the PNGRB (Technical Standards and Specifications inclu­ding Safety Standards for City or Local Natural Gas Distribution Networks) Regulations, 2008. Compl­iance is also monitored by the Board.

“The primary responsibility of ensuring the security and safety is that of the authorised entity operating the pipeline as per the norms laid down by PNGRB,” reveals Mansingh. “The state governments also have a respon­sibility to ensure the safety and security of infrastructure. So the Board has written to all the state Chief Secretaries advising them to take necessary steps.”

The pipeline owners and operators while accepting the responsibility, however, contend that to tackle the menace effectively, they require the adequate support of the state governments and police in many areas. Neither is the legal framework supportive. When any such pilfe­rage occurs the tricky burden of proving it rests on the oil companies. Even when proved, the punishment is not severe enough to deter a repeat. “In fact, we are oft­en left to fend for ourselves despite the fact that we are building a major infrastructure that contributes to nation's progress,” laments an oil company representative who wished to remain anonymous.

Punj Lloyd has laid more than 10,000 km of onshore and offshore pipelines for many major O&G companies, and as an EPC contractor, their responsibility for the pipeline safety is limited to the defect liability period – an year post-pipeline construction on average.

Keeping a close watch

Currently, most of the oil companies and pipeline ope­­r­­ators are concentrating more on effective monitoring and surveillance system – right from round-the-clock vigil on the operational parameters like flow and pressure in the pipelines to monitoring leakages, electronic surv­eillance and physical patrolling of Right of Way.

Measures in the direction include aerial surveillance, ground patrolling, installation of pipeline warning boa­rds / pipeline markers, deployment of security perso­nnel and conducting awareness campaign to educate villagers and habitats along the pipeline route. Advanced teleco­mmunication systems and leak detection systems are also widely used to improve the monitoring and remote controlling of the pipelines.

More pipeline project owners are making it man­datory to install Leak Detection System (LDS) during the construction stage. LDS comes with an alarm and displays related data like location, distance and severity of any leak in the pipeline which helps the owners to control the situation. Bharat Petroleum Corporation (BPCL), which operates the Mumbai-Man­mad-Bijwasan multi-product white oil pipeline, has walkers and super­visors patrolling the entire pipeline length. It has also installed Optical Fibre Cable based system which enco­mpasses Supervisory Control & Data Acquisition System (SCADA) and LDS, voice connectivity to all major and Sectionalising Valve (SV) stations, CCTV / VCS, etc.

Anurag Deepak, Executive Director, BPCL, elabo­rates, “The pipeline operating parameters like flow rate, pressure, density and temperature are transmitted from field instruments to Remote Telemetry Units at SV sta­tions, to Master Control Room in Mumbai and then to all major locations. If there is any abnormal variation in flow / pre­ssure figures, it is passed on to the con­trol room officer who uses the LDS to con­firm the leak location, size and the time of event. He can then close the rel­evant valves instantly, if necessary.”

Likewise, oil companies like Indian Oil Corporation (IOC) have their own systems in place, including round-the-clock monitoring of pipeline flow and pressure through SCADA, LDS, intensified patrolling through line patrolmen, night patrolling of vulnerable pipeline stretches of Right-of-Way, surprise checks by officers, continuous monitoring of repeaters and mainline valve locations through CCTV-based surveillance system, mo­nitoring the movement of line patrolmen / night guards through Global Positioning System (GPS) etc.

In addition, IOC has also formed Oil Security Coordination Committees in Gujarat and Rajasthan, and liaises with police and civic administration officials in many states in sensitising villagers along the Right-of-Way through community development programmes.

“The incidents of oil pilferages from IOC's pipelines have been on the decline over the years though the menace is still prevalent to some extent in some parts of the coun­try, such as in Gujarat and Haryana,” informs KK Jha, Director (Pipelines), IOC. “In a few cases, pilferage attempts have been thwarted too. In some cases, pilferers' gangs along with oil tankers were nab­bed from sites in Gujarat, Haryana, Uttar Pradesh and Bihar.”

“Generally, people drill into oil pipelines to sell it to small refineries, which rely on stolen oil to maintain crude supply,” says Punj Lloyd's Acharya. “Instances have been repo­rted where owners of land through which the pipeline passes deliberately tamper with the pipeline, cause oil leakage and then ask for pollution compensation.”

Sophisticated surveillance systems can play a vital role in pipeline safety. There are even technologies ava­ilable for seismic sensing of underground vibrations that provide early warning when saboteurs approach the pipelines location. It is also possible to deploy small unmanned aerial vehi­cles which can stay in the air for about 30 hours at medium-to-low altitudes, and send images of the site to a central control station. All these tech­nologies and equipment, no doubt, come with a price tag. But such surveillance costs can be red­uced to a large extent if new technologies are adopted at the construction stage.

Deeper is better

Developments in technology continue to make pipe­line construction more effective, secure and less intrusive to communities. Using fibre-optics that can detect even minor leaks, fortifying the pipes with external carbon fibre wrap that can mitigate the effects of explosive dev­ices, burying pipelines deeper with trenchless tech­no­logy, laying them in a common corridors etc, are a few examples.

“Laying the pipeline in a common fenced corridor, (as it is done by some pipeline owners in the Middle East) and providing CCTV surveillance for the entire corridor along with an automatic alarm will help report action on any kind of intrusion in the corridor,” suggests Acharya.

Trenchless technology, where the pipelines are laid several metres below the ground, will not only mitigate the chances of sabotage, but also help land use to revert to normal and eliminate cost depreciation. Also, referred to as 'No Dig' technology and considered eco-friendly, it also speeds up the construction process.

Some companies like IOC are utilising the tren­chless technology but to a limited extent. Explains Jha, “IOC is using trenchless technology wherever there is a requirement and where accessibility is difficult like across railway crossings, highways, across rivers or in urban areas to minimise public inconvenience. Pipes here are laid 10 to 15 m below the ground. But it is an expensive process and hence cannot be used for lay­ing an entire pipeline. Just laying a kilometre of the pipe­line will cost around Rs 3 crore.” This is a view shared by many public and private oil companies.

But is the cost factor too myopic? While the usage of such technologies may substantially increase the cost, the investment will quickly pay for itself as it will reduce the spend now being made in surveillance systems and also loss suffered due to pilferage and subsequent spillage. For a safer environment, the application and adoption of such advance technology may become imperative in the future. But it has to be voluntary as it cannot be enforced legally. Land depreciation, a major cause for protests by landowners, could be substantially eliminated.

The government has no intentions to make this tec­hnology mandatory as of now and is focused on ame­n­ding the penal provisions in the Petroleum and Minerals Pipelines (Acquisition of Rights of Users in Land) Act, 1962 (PMP Act) to provide for more strin­gent pun­i­shment to those found guilty of pilfering/dam­aging the pipelines, which many in the industry have been dem­anding for some time now.

“The method and technology to be used in cons­truction and surveillance of pipelines are left to the company. It is not possible to introduce such issues in the present Bill as the provisions have to be relevant to the context of the Bill,” says the source from Petroleum Ministry.

Stringent legal provisions

The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 was enacted to provide for the acquisition of right of user in land for laying pipelines for the transport of petroleum and min­erals and related issues. The Act has also laid down pro­visions for dealing with the pilferage issue and the pun­ishment to be meted out to the offenders.

In order to make the provisions more stringent, the Petroleum Ministry proposed amendments to the rele­vant provisions and introduced the new Bill, the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Amendment Bill 2010, in the Lok Sabha in March 2010. The Bill was referred to the Standing Committee on Petroleum and Natural Gas and the committee presented its report to Lok Sabha in August 2010.

According to the Petroleum Ministry source, the amendments proposed by the Ministry revolved around the penal provisions. “The amendments proposed have been made the punishment for such offences more severe including capital punishment, bail to be granted only after a hearing and more importantly, the burden of proof has been wrested on the accused. Earlier, the en­tire onus of proving that the accused had committed the crime rested on pipeline owner or operator which proved difficult.”

The Parliament, though supportive, felt that certain provisions may be misused by enforcing agencies and recommended some changes in those provisions. The Standing Committee after studying the Ministry's pro­posals and Parliament's recommendations and subm­itted its report. The Bill, however, is yet to be passed. (See box for details on the proposed amendments.) 

With inputs from Shashidhar Nanjundaiah.

Original Act Vs New Amendment Bill

Act: Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962.
Bill: Proposed Petroleum and Minerals Pipelines (Acquisition of Right of User in Land)
Amendment Bill, 2010
Penalty (Sections 15 and 16 of Act 1962)

Original provision

Sub-section (2) of Section 15 provides that whoever wilfully removes, displaces, damages or destroys any pipe­line, shall be punishable with rigorous imprisonment for a term which shall not be less than one year, but which may extend to three years and shall also be liable to fine. Section 16 provides that offence under sub-section (2) of Section 15 shall be deemed to be cognisable under the Code of Criminal Procedure, 1973. 

Proposed amendments

Substitute sub-section (2) of Section 15 and insert sub-sections (3) and (4) in that section, to provide:
(a) whoever makes or causes to make any unauthorised connection with, or removes, destroys, damages or dis­places any pipeline or inserts any device to extract pet­roleum or its products or minerals from such pipeline or disrupts supplies being made through the pipeline, shall be punishable with rigorous imprisonment for a term which may extend to ten years and shall also be liable to fine;
(b) a person, who is convicted of an offence under sub-section (2), commits the offence again under that sub-section shall be punishable with rigorous imprisonment for a term which shall not be less than three years and may extend to ten years for the second or subsequent offence;
(c) whoever, with the intent to cause or knowing that he is likely to cause damage to or destruction of any pipeline, causes by fire, explosive substance or otherwise dam­age to, or destruction of, any pipeline being used for transportation of crude oil/petroleum product/gas with the intent to commit sabotage or with the knowledge that such act is so imminently dangerous that it may in all probability cause death of a person or such bodily injury likely to cause death of any person, shall be punishable with rigorous imprisonment which shall not be less than ten years and may extend to imprisonment for life or death.

Amend Section 16 further to make offences under sub-sections (2), (3) and (4) of Section 15 to be cognisable and nonbailable and insert new sections 16A, 16B, 16C 16D and 16E to provide:

(a) Central Government may, notwithstanding anything contained in the Code of Criminal Procedure, 1973, confer on any of its officers the powers of arrest, investigation and prosecution exercisable by a police officer and all the officers of police and the Government shall assist the officers of the Central Government in execution of the provisions of the said Act;
(b) when any petroleum product together with all tools, vehicles and all items used in committing any offence under sub-section (2) or sub-section (4) of the aforesaid Section 15 are seized in the reasonable belief that the petroleum products have been stolen from the pipeline, the burden is on the person from whose possession the petroleum products (crude oil/petroleum product/gas) together with the tools, vehicles, etc, used in committing the crime are seized or who claims to be owner thereof, to prove that he is not guilty; 
(c) if any question arises, in any proceedings taken under this Act, or in consequence of anything done under this Act, as to whether any petroleum product is the property of the corporation, such property shall be presumed to be the property of the corporation until the contrary is proved; 
(d) no person accused or convicted of an offence punishable under the said Act, shall be released on bail or on his own bond unless the prosecution has been given an opportunity to oppose the application for such release;
(e) Section 438 of the Code of Criminal Procedure, 1973, relating to the grant of bail to person apprehending arrest, shall not apply in relation to any case involving the arrest of any person on an accusation of having committed an offence punishable under sub-section (2) or sub-section (4) of Section 15 of the said Act. 

Statutory Committee Recommendations

The Committee was apprehensive that some of the stringent provisions regarding penalty, bail etc with unfettered powers to officers may be misused, leading to harassment and punishment of innocent villagers and landowners for any acts done accidentally or unintentionally attracting the provisions of Section 15. Hence, the Committee felt that there would be no impediment to achieve the objectives of the Bill if stringency of bail provisions proposed in section 16 D and 16E are made applicable only to offences defined under section 15 (4).

Before conferring powers to Central Government offi­cers, lay down clear provisions for exercise of the powers of arrest, investigation and prosecution by Central Government officers in the Act itself to avoid ambiguity, misuse of such powers and to safeguard the interest of the villagers and land owners.

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