1943-G-G-001_rC

Process Infrastructure

1943-G-G-001 Revision Number C

ArcelorMittal Mt Reed to Port Cartier Iron Concentrate Pipeline Conceptual Study Study Report April 2011 06-Apr-11

Revision Status Revision

Date

Description

Author

Checked By

Approved By

C

06-Apr-11

Issued to Incorporate Client Comments

RT

APS

APS

B

29-Mar-11

Issued for Client Review

RT

PMW

APS

A

29-Mar-11

Issued for Internal Review

RT

APS

---

Rev: C Date: Error: Reference source not found Error: Reference source not found - C

Revision Status Revision

Date

Description

Author

Checked By

Approved By

C

06-Apr-11

Issued to Incorporate Client Comments

RT

APS

APS

B

29-Mar-11

Issued for Client Review

RT

PMW

APS

A

29-Mar-11

Issued for Internal Review

RT

APS

---


Contents 1

Introduction

1

1.1 1.2

Scope of Work Purpose of This Document

1 1

2

Executive Summary

3

2.1 2.2

Study Conclusions Recommendations for Future Work

4 4

3

Route Description

5

4

System Design Criteria

7

4.1 4.2 4.3 4.4 4.5

Battery Limits Slurry System Design Criteria Process Design Criteria Pipeline Mechanical Design Criteria General Study Assumptions

7 7 8 9 9

5

Hydraulic Design

10

5.1 5.2 5.3 5.4 5.5

Pipeline Design Philosophy Pipe Diameter Selection Operating Velocity Agitated Storage Tanks Hydraulic Design

10 10 10 10 11

6

Pipeline Systems Description

14

6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13

Selected System Slurry Pipeline Pump Selection Pump Station 1 – Mine Site Intermediate Pump Station – PS 2 Monitoring Stations Terminal Station Pipeline Slope Restrictions Pipeline Crossings Cathodic Protection Leak Detection SCADA System Telecommunications

14 14 15 15 16 17 17 18 18 18 18 19 19

7

Operating and Control Philosophy

20

7.1 7.2

St Start-up Normal Operating and Control Philosophy

20 20

8

Capital Cost Estimate

21

8.1 8.2 8.3

Summary Material Costs Pipeline Construction

21 21 21


8.4

Recommendation for Next Project Phase

22

9

Operating Cost Estimate

26

9.1

Operating Cost Basis

26

10

Comparison with Commercial Pipeline Operations

28

11

Project Execution Plan

29

11.1 11.2

Project Implementation Schedule

29 30

Schedule Appendix 1 – Process Flow Diagrams Appendix 2 – Pipeline Facilities Photographs Appendix 3 – Concept Layouts Appendix 4 – Vendor Quotations Appendix 5 – Railway Route Profile – Port Cartier to Mont Wright


1

Introduction ArcelorMittal has iron ore mines in Mont Wright, Mt Reed and Fire Lake in Northern Quebec, and operates a pellet plant in Port-Cartier. The renewed interest toward pipeline expansion projects is driven by the ambitious objective of ArcelorMittal for a higher degree of self-sufficiency in iron ore. As a result of the high cost of railroad expansion, operating costs, and other related expenses, ArcelorMittal would like to compare the cost and feasibility of pipeline transport of iron concentrate from Mt Reed to the port at Port-Cartier versus rail transport. In March 2011 ArcelorMittal awarded Ausenco PSI a conceptual study for an iron concentrate pipeline system from the concentrator at Mt Reed to Port-Cartier at a throughput of 24 Mt/y. The length of the pipeline from Mt Reed to Port-Cartier, Quebec is about 330 km. Ausenco PSI has also been asked to provide a conceptual level estimate of the capital and operating costs for the pipeline.

1.1

Scope of Work

The scope of work includes the development of a conceptual design and associated capital and operating costs including the following: •

Preliminary hydraulic analysis

•

Overview of project showing selected route using Google Earth.

•

Preliminary PFDs

•

Overview of project execution plan including overall schedule

•

Preliminary pump specification (type, head, flow, power)

•

•

•

1.1

Preliminary pipe specification (size, material, pressure rating, tonnage, coating, liner (if required) and construction / installation method) Order of magnitude capital cost based upon similar systems and broken down in a form to allow ArcelorMittal to further develop supply and installation costs Operating cost estimate

Purpose of This Document

This study includes all system components related to the pipeline transportation system including: •

Agitated storage tanks at mine site and terminal station

•

Iron concentrate slurry pipeline transport system

•

Pressure monitoring stations

•

Ancillary facilities including control and telecommunication systems

1 Rev: C Date: Error: Reference source not found Error: Reference source not found - C

1

Executive Summary The following tables summarize the pipeline system. Table 2-1: System Summary Design Parameters Average Annual Throughput, Mt/y

24

Slurry Pipeline Design Throughput, t/h, @ 95% Availability

2884

Design Slurry Concentration, wt % solids

65

Pipeline Design Flow Rate, m3/h

2257

Pipe Diameter, inches

28

Pipe Material

Steel, API 5L X70

Pipeline Length, km (miles)

330 (205)

Pipe Steel Weight, t

66,920

Total Number of Pump Stations

2

Table 2-2: Station Summary Station

Mine Site / PS 1

PS2

Terminal

Distance from Mine site, KP

0

130

330

Distance from Terminal, MP

205

124

0

Slurry Tanks (20 m diameter X 20 m high)

4

1

4

Water Tanks (12 m diameter X 12 m high)

1

1

0

Pump Type Mainline Pump Quantity Pump Station Discharge Pressure, MPa (psi) Pump Operating Power, kW (HP) Water Receiving Pond

Positive Displacement 3 operating + 1 stand-by

3 operating + 1 stand-by

N/A

8.0 (1160)

8.4 (1220)

N/A

5585 (7490)

5865 (7860)

N/A

No

Yes

Yes


Table 2-3: Capital and Operating Cost Summary Cost

1.1

Capital Cost (Million USD)

811.3

Operating Cost (Million USD/y)

11.6

Study Conclusions

The proposedpipeline system for the Arcelor Mittal iron concentrate pipeline is technically feasible. Existing mineral slurry pipelines have operated successfully and have demonstrated that, with qualified personnel and adherence to operating procedures and maintenance programs, high reliabilities can be achieved in comparison with other transportation methods such as railroad or trucking. In addition, pipeline operation is minimally affected by weather, and traffic accidents can be eliminated. The selected system is adequately conservative such that it should be able to withstand normal design changes as the project advances. Opportunities for optimization have been identified which can be pursued in future phases of the project. 1.2

Recommendations for Future Work

The following issues should be addressed further in future phases: •

•

•

•

•

Validate slurry characteristics by testing a sample from the site under study Investigate a revised PSD of 70% passing 325 mesh compared to the PSD of 83% used in this study to eliminate the need for regrinding Field visit by Ausenco PSI route specialist to identify best possible routes and analyse constructability access issues for the selected route. The railway right of way width, track location, fibre optic cable location, and any other buried utilities should be determined. A geotechnical report is recommended in future phases to determine amount and type of rock along the route. Optimize pipe diameter, and pumping requirements once the slurry characterization has been completed and the pipeline throughput range and route has been finalized. Perform transient analysis to optimize steel requirements and provide necessary equipment for pressure containment for normal operation and emergency conditions

•

Review storage tank requirements in conjunction with likely production variability

•

Evaluate station and pipeline construction costs: ○

Working conditions and local costs

○

Capabilities of local contractors


1

Route Description The pipeline route from the concentrator at Mt Reed is shown in Figure 3-1. The pipeline heads East from Mt Reed for approximately 22 km (14 miles) where it intersects with the existing Mt Wright-Port Cartier Railway at rail MP 191. It then follows the railway south to Port Cartier. Total pipeline length is about 330 km (205 miles). Refer to the Port Cartier to Mont-Wright railway route profile in Appendix 5. The initial 22km(14 miles) sectionis cross-country through hilly terrain with many lakes and streams. The balance of the route parallels the railway from rail MP 191 to MP 0. There are several areas along the railway where the right-of-way is quite narrow.


Figure 3-1: Slurry Pipeline Route

The pipeline starts at an elevation of 577m,has intermediate high points of 677m at KP 78.6 (rail MP 156) and 570 m at KP 215 (rail MP 71), and then descends toan elevation of 18 m at the terminal, as shown in Table 3-1. Table 3-1–Pipeline Elevations KP

Rail MP

0

Elevation (m) 577

22

191

530

78.6

156

677

215

71

570

330

0

18

Pipeline route optimizations should be performed in the next phase of the project to better define the pipeline corridor. Early identification of rocky areas, steeply sloping areas, and water crossings will allow reduction of construction costs. The objective of optimizing the pipeline route is to minimize length, eliminate potential environmental impacts and assure engineering criteria are met. Pipeline route investigations, including field surveys and GIS engineering analysis, should be performed with this purpose.


2

System Design Criteria The design basis for the pipeline was prepared using data provided by ArcelorMittal and complemented with Ausenco PSI’s in-house information from similar commercial operations. Key elements of the Design Basis for this project have been summarized in the sections below.

2.1

Battery Limits

Ausenco PSI’s scope starts at the inlet of the slurry agitated storage tanks at the mine site pump station and ends at the discharge of the agitated storage tanks at the terminal station. Refer to the Process Flow Diagrams in Appendix 1. 2.2

Slurry System Design Criteria

2.2.1

Slurry Characteristics

Ausenco PSI used in house data for this phase of the project. Table 4-1 summarizes the slurry characteristics. Table 4-1 - Slurry Characteristics Parameter

Value

Solids SG

5.0

Slurry pH

10

Slurry Temperature, o C

25

Viscosity, cP

9

Particle Size Distribution (mesh – Cum. % Passing)

100 mesh –99% - 100% 150 mesh – 99% - 100% 200 mesh – 97% - 100% 270 mesh – 90% - 94% 325 mesh – 80% - 85%

Concentration by Weight (wt %)

2.2.2

65

Slurry System Throughput

Table 4-2 presents throughput and flow rate at design transport concentration for the slurry pipeline design. The hourly design throughput for the pipeline assumes 95% availability based on a typical multiple pump station system.


Table 4-2 - Slurry System Throughput Parameter

2.2.3

Pipeline System

Throughput, Mt/y

24

Throughput, tph

2884

Flow Rate at 65 wt%, m3/h

2257

Pipeline Life

The slurry pipeline is designed for a 20 year life. Experience shows that pipeline life can be extended with proper ongoing maintenance – this merely represents the economic life for evaluation and design of system components. 2.2.4

Pump Selection:

Pumps used for slurry transportation generally fall into two categories: •

Centrifugal type

•

Positive displacement type

Centrifugal pumps are ideally suited for low discharge pressure design conditions (up to 50-60 bar). Many long distance slurry pipelines utilize positive displacement pumps due to the higher discharge pressure requirements (up to 250 bar). 1.1

Process Design Criteria

The following design criteria were used to develop the hydraulic model for the concentrate slurry pipeline. These criteria are the same for the design of all pipelines at the conceptual study level and will be refined in future phases of work. For slurry flows, pressure loss calculations will be determined from Ausenco PSI’s proprietary slurry hydraulic computer model, Ausenco PSI-WASP 1.1. A design factor of 6% for flow is used for the hydraulic design to account for variations in slurry characteristics and general operations variability. This is equivalent to a design factor of approximately 12% for pressure loss. A 5% design factor on pipeline length is included to account for deviations/optimizations in the final pipeline route. The minimum clearance between the hydraulic gradient line and the pipeline profile is 50 m. The minimum clearance between the hydraulic gradient line and the maximum allowable operating pressure (MAOP) line is 50 m.


1.2

Pipeline Mechanical Design Criteria

The pipeline will be designed in accordance with the mechanical design criteria specified below: Code for Slurry

ASME B31.11, Slurry Transportation Piping Systems

Pipe

Carbon Steel, API-5L, Grade X70 for slurry (no lining will be used)

Pipe Design Factor

0.80 of Specified Minimum Yield Stress (SMYS)

Transient Pressure Factor 1.10 times maximum allowable operating pressure 1.3

General Study Assumptions

It is assumed that electric power and fresh water suitable for gland seal water is available at allstation locations.


2

Hydraulic Design

2.1

Pipeline Design Philosophy

The hydraulic design of the ArcelorMittal pipeline is based on a conservative sizing of equipment and facilities because of the safety factors required to design a system without specific slurry data. It is possible that future engineering optimization will improve the facility design. 2.2

Pipe Diameter Selection

Selection of a pipeline diameter is based on commercial operations for slurries with similar solids specific gravity and particle size distribution. Various pipe diameters were reviewed to avoid particle deposition and optimize friction losses (pump duty). For the desired throughput, 26, 28 and 30 inch diameter pipes were considered. The velocity of flow in the 30-inch pipe was less than the minimum safe velocity and hence cannot be used except with slurry - water batching. A 26-inch diameter requires higher pumping pressures. A 28-inch diameter pipe was selected as the operating velocity was above the minimum safe operating velocity and the pressures were lower than in the 26” pipeline. For the 28” pipeline option two scenarios were evaluated:

1.1

•

One pump station system

•

Two pump station system

Operating Velocity

The minimum safe operating velocity for a concentrate pipeline is intended to maintain pseudohomogeneous flow behaviour in order to avoid unstable pipeline operation resulting from deposition of particles. The pipeline should operate in turbulent flow regime. The transition velocity is the point of transition from laminar to turbulent flow in the pipeline.The minimum safe operating velocity is based on deposition velocity as well as on transition velocity evaluations. Ausenco PSI uses an inhouse model to calculate both the transition and deposition velocities. The greater of these two values, with adequate margin, was selected as the minimum safe operating velocity for each pipe size. The minimum safe operating velocity calculated at 65%Cw is about 1.5 meters per second (m/s). The design velocity in the 28” pipe is about 1.7 to 1.8 m/s depending on wall thickness of the pipeline section which is slightly above the minimum safe velocity and significantly less than the maximum allowable velocity of 3 m/s to allow some flexibility in operation. At velocities above 3 m/s erosion of the pipeline can occur. 1.2

Agitated Storage Tanks

The agitated storage tanks at the start of the slurry pipeline receive slurry from the beneficiation plant thickeners. Slurry from these tanks is transported via the slurry pipeline to the next pump station or to the terminal. If slurry flow from the thickeners is interrupted, slurry in the tanks provides feed for the slurry pipeline. If problems occur with the slurry pipeline, the storage tanks continue to receive slurry from the thickeners for a limited time. Storage volume is established based on the


amount of time required to react to operating problems. The objective is to avoid facility shutdowns for short-term upsets (e.g., 6 to 8 hours).\ Based on an 8 hour storage requirement, four 20m high x 20 m diameter tanks each were selected at the head station and terminal. One 20m high x 20m diameter tank was selected at the intermediate pump station. This tank will be used during pipeline re-start after a shutdownto agitatethe slurry and re-suspendthe solids. 1.3

Hydraulic Design

The hydraulic gradient is a graphical illustration of the head in meters at any point in the pipeline. The hydraulic gradient must stay above the pipeline profile with at least 50 m clearance in order to avoid slack flow. If the gradient line is too close to the profile, slack flow can occur (the pipeline runs partially full creating high operating velocity at the bottom of the pipe), which can result in premature pipeline failure due to erosion. The pipeline system will transport 24 Mt/y iron concentrate from mine to terminal. The hydraulic design developed for this system is a DN700 (28” OD) API 5L X70 pipeline with either one or two pump stations. Option 1 has a single pump station with6positive displacement pumps operating in parallel with1 standby unit. Option 2 has two pump stations, each with 3 operating and 1 standby unit. The ground profile, hydraulic gradient and maximum allowable operating pressure at24 Mt/yfor Option 1 is presented in Figure 5-1. Option 2 is presented in Figure 5-2.


Figure 5-1 –Hydraulic Profile: Option 1, 28”, 24 Mt/y IronConcentrate Pipeline – 1 Pump Station

1943 - MT Reed To Po

1800 1600 2 Rev: C Date: Error: Reference source not found Error: Reference source not found - C

Figure 5-2 –Hydraulic Profile: Option 2, 28”, 24 Mt/y Ir onConcentrate Pipeline – 2 Pump Stations

Figure 5-2 –Hydraulic Profile: Option 2, 28”, 24 Mt/y Ir onConcentrate Pipeline – 2 Pump Stations



1200


1200


2


2.1

Selected System

Capital costs were estimated for Options 1 and 2 and are presented in Section 8. Operating costs are very similar for each option. Option 2 was selected because its capital cost is about USD 49.5 million lower than Option 1. The sections below describe the selected Option 2 2.2

Slurry Pipeline

Pipeline materials and construction are selected to optimize initial cost, operating cost, operating life

2


2.1

Selected System

Capital costs were estimated for Options 1 and 2 and are presented in Section 8. Operating costs are very similar for each option. Option 2 was selected because its capital cost is about USD 49.5 million lower than Option 1. The sections below describe the selected Option 2 2.2

Slurry Pipeline

Pipeline materials and construction are selected to optimize initial cost, operating cost, operating life and hydraulic performance of the pipeline. The pipeline is designed to have adequate steel wall thickness to withstand the steady state slurry hydraulic gradient, and static head when the line is shutdown on slurry. The recommended pipe for the slurry pipeline is DN700 (28” OD) API 5L GrX70, high strength carbon steel. The wall thickness varies from 7.9 mm (0.312”) to 15.9 mm (0.625”).The pipeline wall thickness was chosen to provide a safe pressure envelope to operate the pipeline within the intended operating range. Allowances for corrosion/erosion based on operating conditions and pipeline life have also been taken into account in selecting the pipeline wall thickness. The pipe wall thickness used in this study is preliminary and will be finalised in the basic design phase. The recommended external pipeline corrosion coating is factory applied three layer polyethylene. The pipeline will be buried for security with a minimum 2.0 m depth of cover over top of pipe. The final depth of cover for this project can only be decided in the next phase when frost depth is known. A design factor of 80% of specified minimum yield stress (SMYS) has been used for allowable stress values of the buried pipeline design in accordance with ASME B31.11, Slurry Transportation Piping Systems. Thicker pipe (lower design factor) will be used in sensitive areas such as river crossings. Station locations are as follows. Table 6-1: Station Locations Location (Rail Mile Post)

Distance between Stations (km)

Distance between Stations (miles)

Facility

Location (km)

Mine Site/PS1

0

PS 2

130

124

130

81

Terminal

330

0

200

124


2.3

Pump Selection

Positive displacement pumps were selected for this system. Pump data is listed below. Table 6-2: PumpData Station

Mine Site/ PS 1

Mainline Pump Type

PS 2

Positive Displacement

Mainline Pump Quantity

3 operating +1 stand-by

Flow Rate, m3/h

2257

Pump Station Discharge Pressure, MPa (psi)

8.0 (1160)

8.4 (1220)

Pump Operating Power, kW (HP)

5585 (7490)

5865 (7860)

Although calculated pump discharge pressure is slightly different, all the pumps are identical. 2.4

Pump Station 1 – Mine Site

Refer to Appendix 3 for a conceptual layout of PS 1. Major components of PS 1 are agitated storage tanks, charge pumps, gland seal pumps, main line PD pumps and test loop. 2.4.1

Agitated Storage Tanks

Studies completed by Ausenco PSI for other projects indicate that agitated storage tanks of equal diameter and height are the most economic when considering capital and operating costs. For this study, four tanks 20 m diameter and 20 m high were selected at the mine site to provide about 8 hours of storage. Each tank will be designed to contain slurry at a maximum specific gravity of 2.25, which corresponds to 70% solids by weight, in addition to supporting the agitator structure and other loads such as wind and earthquake. Refer to Table 6-3 for recommended tank dimensions. Table 6-3: Agitated Slurry Storage Tanks

Pump Station 1

2.4.2

Number of Tanks

Diameter (m)

Height (m)

Working Volume (m3)

4

20

20

5,500 each

Slurry Charge Pumps & Gland Seal Pumps

Slurry is pumped from storage tanks to the mainline pumps with two centrifugal, slurry charge pumps (one operating and one standby). The charge pumps are provided with high-pressure gland


seal water pumps (one operating and one standby) to prevent ingress of solids into the pump shaft seal. Both charge pumps will be provided with variable frequency drives (VFD). 2.4.3

Mainline Slurry Pumps

The main line pumps are triplex piston-diaphragm type positive displacement pumps operating in parallel (three operating and one standby). Each pump is equipped with variable speed drive controller, gear reduction, pressure pulsation dampeners, and pressure relief devices. Pump duty conditions are listed in Table 6-2. 2.4.4

Test Loop

Long distance slurry pipelines are generally provided with a test loop to confirm the hydraulic characteristics of the slurry prior to committing it to the pipeline. The test loop has the same diameter as the slurry pipeline, and is of sufficient length to obtain reliable pressure drop readings. In the case of the ArcelorMittal iron pipeline, the test loop will be 28” diameter, and will have a length of about 190 m. The loop will be installed at the mine site pump station between the charge pumps and main line positive displacement pumps. It will be equipped with block valves so that flow from the tanks to the pipeline can be diverted through the loop, or can bypass the loop. Downstream of the loop, flow can be sent to the pipeline or diverted back to the storage tanks. During commissioning, slurry will be re-circulated back to the storage tanks. During normal operation the test loop can be used in series with the main line (no recirculation to tanks). The instrumentation will give advance warning of increasing pressure drop which could indicate a grind that is too coarse or an increase in slurry concentration. 2.4.5

Flush and Gland Seal Water

It is assumed that the flush water required for the pipeline will be provided by the client from the beneficiation plant. The gland seal water required for the charge pumps will be stored in a 12m x 12m water storage tank. A volume of 55,000 m3 of flush water is needed at the Head Station in order to displace slurry from PS 1 to PS 2. 2.5

Intermediate Pump Station – PS 2

Refer to Appendix 3 for a concept layout of the intermediate pump station. Major components of PS 2 will be choke station, agitated storage tank, gland seal water storage tank, charge pump, gland seal pump, main line pumps and water recovery pond. A choking system is incorporated to ensure the hydraulic gradient line adequately clears the ground profile and to create additional head dissipation when required. About 20 m choking is required at PS2. Main line pumps will be similar to the pumps at PS 1


PS 2 will haveone20 m D x 20 m H agitated storage tank which can be u sed in case of shutdown or emergencies; however the pipeline will be directly connected to the mainline pumps and therefore will by-pass the tank and charge pump during normal operation. A 12m x 12m water storage tank will supply gland seal water required for the charge pumps. On the upstream side of the tank a rupture disc is installed to protect the pipeline and piping from over-pressure. The discharge of the rupture disc is directed to the slurry storage tank. During start up, the pipeline is filled with water. When slurry is introduced at PS 1, the water will be displaced by slurry to the water recovery pond at PS 2. The pond will accommodate the pipeline volume -approximately 55,000 m3 of water. Water stored in this pond can be used to flush the next pipe section during pipeline shutdown. 2.6

Monitoring Stations

Pressure monitoring stations (PMS) are usually required every 50 km and/or near the points where slack flow is expected. Pressure monitoring stations also facilitate leak detection. PMSs have been located in between each pump station. A total of five are required: two upstream of PS 2 and three downstream. 2.7

Terminal Station

Refer to Appendix 3 for a concept layout of the terminal station. Major components of the terminal station will be choke station, agitated storage tanks and water recovery pond About 200m of chocking is requiredat the terminal for steady state slurry pumping, but during water batching additional choking may be required.This needs to be optimized during a future phase of the project. On the upstream side of the terminal a rupture disc is installed to protect the pipeline and piping from over-pressure. The discharge of the rupture disc is directed to the terminal slurry storage tanks. Tank sizing is listed in the table below. Table 6-4: Agitated Slurry Storage Tanks

Terminal Station

Number of Tanks

Diameter (m)

Height (m)

Working Volume (m3)

4

20

20

5,500 each

The terminal station will also have a water recovery pond to accommodate the pipeline volume between PS 2 and the terminal station - approximately 85,000 m3 of water. 2.8

Pipeline Slope Restrictions

The maximum pipeline slope will be restricted to 12% to minimize risk of a blockage.


2.9

Pipeline Crossings

Road and stream crossings will be trenched. Certain river, larger highways and all railway crossings will be bored. Existing rail bridges will be used if there is enough space to support the pipeline. 2.10

Cathodic Protection

A cathodic protection system is provided to protect any areas of the pipe that may have gaps in the external coating which were not detected during installation. Insulating joints will be provided to electrically isolate the pipeline from pump stationand terminal facilities. Bonding bridges will be installed across the station for cathodic protection continuity. Cathodic protection test leads will be spaced at a maximum distance of 1 km along the pipeline. Consideration will be given to the influence of any high tension power lines in the pipeline corridor. A temporary system using sacrificial anodes may be required to protect the pipeline at all water crossings. 2.11

Leak Detection

Two methods normally are used in pipelines to detect leaks:

1.1.1

•

Pressure wave detection

•

Mass balance

Detection by Pressure Valves

Pressure wave detection uses two or more pressure signals to both detect and locate leaks. This works on the principle that any leak in a pipeline will generate a pressure wave that travels upstream and downstream from the leak source. Such waves are detectable using standard instrumentation. Using the time difference between the wave detections, it is possible to detect leak location. Leaks in the range of 3-5 percent of design flow have been detected, and leak locations can be estimated within 1 km. With this method a leak can be detected within minutes. 1.1.2

Detection by Mass Balance

Mass balance uses flow meters and is based on the principle of conservation of mass. Running averages are used to account for short-term flow fluctuations. The Ausenco PSI software product Pipeline Advisor™ is applicable for leak detection on slurry pipelines. 1.2

SCADA System

The pipeline will be operated from the mine pump station. A supervisory control and data acquisition (SCADA) system provides input to the pipeline programmable logic controller (PLC) and provides the operator the information and functions needed to operate the pipeline. Facilities will allow remote (i.e., from the control room) and manual (by a local operator) control of all pipeline equipment. A leak detection system will be included in the SCADA system.


During future phases of work, operating procedures will be developed and converted to program sequences, permitting automated operation of the pipeline system, as well as all other operating functions. 1.3

Telecommunications

A fiber optic telecommunications system using Ethernet technology is provided to support the pipeline control requirements at the pump stations, pressure monitoring stations, and the terminal. While the fiber optic system is primarily installed as the most economic and reliable method to control intermediate and remote stations, it will also be capable of transporting voice, data, video, or other information if required by the project. Based on experience on other projects a 12-fiber cable is recommended. Four fibers would be dedicated for the pipeline control system and eight would be for other possible communication needs including: •

Linking mine site processing plant and terminal site DCS systems

•

Linking mine site processing plant and terminal site PABX systems

•

Providing communication link to commercial/public system and

•

Providing internal networks for email, data exchange, file servers, etc.

The above system has adequate capacity to support the SCADA systems for future pipelines. Based on Ausenco PSI’s experience, an Ethernet technology is recommended as the most cost effective approach for telecommunications. Under this approach Ethernet switches would be located at each of the stations. A radio system with coverage along the pipeline is also recommended. A radio system provides a communication link between the control room operator and operations/maintenance personnel working between the intermediate stations and can be used as partial voice back-up to the primary fiber optic communications system to support manual operation of the pipeline.


1

Operating and Control Philosophy

1.1

Start-up

The pipeline is filled with water during commissioning. The pumps and pipeline system are initially operated and checked out on water. After the system operation is confirmed on water, a slurry batch will be introduced at PS1 and pumped through the system. Water will be displaced from each section of the pipeline into the water pond. 1.2

Normal Operating and Control Philosophy

Mainline pump speed control will be used to adjust flow rate and suction and discharge pressures. 1.2.1

Mine Site Pump Station (PS1)

At the mine site pump station, the slurry from the thickener underflowenters the tanks at about 65% Cw. The tank agitator maintains the solids in suspension. The slurry tank has low and high level alarms to warn of abnormal tank level conditions. The slurry charge pumpprovides suction head from the slurry tank to the mainline slurry pumps. The main line slurry pump raises the slurry pressure to enable flow through the pipeline. Pump speed is controlled to achieve desired pipeline flow rate. Low suction pressure and high discharge pressure over-rides protect the pump and pipeline, respectively. 1.2.2

Intermediate Station (PS2)

Slurry from the pipeline will feed directly to the main line PD pumps. During tight-line operation the intermediate pump stations will have suction pressure control with maximum discharge pressure over-ride. 1.2.3

Terminal Station

The pipeline delivers slurry into the slurry tanks at the terminal. The slurry tank has low and high level alarms to warn of abnormal tank level conditions.


2

Capital Cost Estimate

2.1

Summary

The capital cost estimate has been developed to an accuracy of +/-30% for the defined scope of work. The capital cost is reported in first quarter (‘1Q’) 2011 United States dollars (‘USD’). The capital cost estimate assumes that the project will be executed as an engineering, procurement and construction management (EPCM) contract through to the completion of commissioning. Pipeline and station construction contracts will be competitively bid. The capital cost estimate is summarized by area in Table 8-1. 2.2

Material Costs

The following material cost basis was used:

1.1

•

Positive displacement slurry pumps:

Vendor quotation

•

Line pipe:

Vendor quotation

•

Slurry storage tanks:

Based on recent estimate for tank plus agitator

•

Water storage pond:

Not included

•

Other costs are from recent projects.

Pipeline Construction

Construction costs were developed using the Ausenco PSI pipeline cost database and using our best judgment to adjust for local conditions. No site visit to Quebec has been made to verify local conditions or costs. It was assumed that the route is hilly terrain with many lakes and streamsfollowing an existing railroad right of way. 10% rock ditch has been included in this estimate. There are 13 rivers ranging from 40m to 220m in width to be crossed, as well as approximately 25 streams 10m in width. It is anticipated that rivers will be crossed via directional drilling and the small streams by open cut below scour depth and with anti-flotation weights added. Pipe is assumed to be imported through the port of Port-Cartier, Quebec Canada. The entire pipe will be offloaded into a pipe yard near Port-Cartier. The pipe will then be transported to storage sites near the intermediate pump stations for stringing along the pipeline route. The “Lay Pipe” crew will line-up the pipe and complete the stringer bead and hot pass on each weld. This crew sets the pace for most of the other crews on the pipeline spread.


The welding crew will follow the lay pipe crew and complete the fill and cap passes. The fill and cap passes are estimated at 7 welds per welder day. The weld inspection will be 100% Automatic Ultrasonic (AUT). A specialty subcontractor will supply three crews to cover the mainline. The external field joints require sand blasting and the application of a liquid epoxy coating. The lowering-in will be accomplished with side boom tractors, equipped with rolli-cradles. Welders will tie-in any field gaps ahead of the lowering-in. There will be two tie-in crews. Each tie-in crew will includeside booms, hydraulic backhoes, welders, and the equipment and personnel required for the field joints. The AUT costs are already included in the inspect weld operation. Where the pipeline is constructed in rocky soils, the pipe will be bedded, padded, and backfilled using three crews. Most of the padding material will be placed using an “Ozzie” padding machine. Some material will require hauling from borrow pits. It is assumed that borrow pits can be located within five kilometres of fill sites. It is assumed that there are 24hydrostatic test sectionscontaining5,800 m 3each.Each test section is estimated to require an average of six days to fill and test. The pipeline contractor will install an HDPE conduit in the ditch before backfilling. After the main line pipe has beentested, separate crews will blow a fibre optic cable into the HDPE conduit and splice the cable. The cable will be installed last so it will not be damaged by any other crews. The crews will also test the cable. It is assumed that the cable will be supplied in six kilometre reels. The pipeline contractor, or his specialty subcontractor, will supply and install an impressed current cathodic protection system. The estimated cost of the system is $5000 per kilometre for the crosscountry pipeline. Cathodic protection for the stations is estimated in the station electrical estimates. Separate crews will install the river crossings, road and rail crossings as needed, and any other special points. Indirect costs for the pipeline contractor are estimated based on the schedule, personnel, equipment, and other costs that are required to support the direct construction operations. Indirect costs include home office support, project office, field supervision, field office administration, field engineering, health, safety, environmental, field warehouse, equipment maintenance and service, equipment transportation, camp, catering, mobilization, demobilization, communications, aircraft support, commissioning assistance, personnel rotation expense, insurance, off right-of-way damages, etc. 1.2

Recommendation for Next Project Phase

In the next phase of the project it is recommended that pipeline and station construction costs should be thoroughly investigated. The following items are required: •

Working conditions and local costs

•

Route & site conditions

•

Capabilities of local contractors


•

Availability of international pipeline contractors


Table 8-1 Total Capital Cost Estimate Option 1: One Pump Station Iron Concentrate Pipe line: DN 700 (28"); Steel P ipeline w ith 1 Slurry Pump Station Area

Description

Storage tank, 18m x 18m, complete including foundation, installed, with agitator, from PSI data base Water Storage Tank 12m x12m Mainline PD Pump, 2257m3/h, 2391PSI, with VFD, 5 operational; +2 standby Iron Concentrate G eho Quot e TZP M 2000 ( 3, 500, 000 Euros ) 1. 36171 ex change rat e Pump Station #1 Charge & Gland seal Pumps, 1 operational + 1 standby at Mine Site Pump station materials and construc tion. Includes , sump pump, pump shelter, valves, fittings, mechanical, structural, civil, installation, electrical dis tribution, instrumentation and labor cost, bas ed on 1.5 x PD pump c ost Pressure monitoring Station Total Cost Storage tank, 18m x 18m, complete including foundation, installed, with agitator, from PSI data base Terminal St at ion @ 10% total Terminal Station Choking Water Storage Pond, 85,000 m3, w/ concrete liner Total Cost

Pipeline

Indirects

Slurry Pipeline; Bare Steel Pipe w/3LPE coating, DN8-700 (28"), API 5L Gr X70 Cat hodic Prot ec tion, mat erial and ins tall at ion for conc ent rat e pipel ine SCADA, Leak Detection, Pipeline Monitoring Fiber Optic Cable, Conduit and Junction Boxes, material only Slurry Pipeline c onstruction, DN 700 (28"), 20.0 k m New ROW S lu rry Pi pel ine c ons tru ct io n, DN 700 (2 8" ), 346. 5 k m, Ex is ti ng RO W Rock Ditch est 10% total distance @ $231m River Xing's, 13 ea = 1.211 km, 25 minor >10m Highway Xings , 1-4 lane, 2-2 lane Paved, other minor dirt/gravel Total Cost

Quantity Unit

Unit Cost US$

Total US$

4 1

each each

1,800,000 300,000

7,200,000 300,000

7 4

eac h each

5 ,085, 987 40,000

35, 602, 000 160,000

1 6

lot each

160,000

53,403,000 960,000 97,625,000

4 1 1 1

each 1,800,000 eac h 720, 000 lot 500,000 lot nic

7,200,000 720,000 500,000 8,420,000

96,583 346. 5

t km

346.5 20.0 32 6. 5 34.65 1.211 60.000

km km km km km m

1,636 5000

158,023,000 1, 733, 000 800,000 5,000 1,733,000 840,000 16,800,000 8 40, 000 2 74, 260, 000 230,000 7,970,000 10,930,250 10,930,000 500 30,000 472,279,000

Total Direct Cost

578,320,000

Spare Parts 5% Total Station Cost EPCM, 18% of total direct cost plus spares

5,302,000 105,052,000

Contingency, 25% of directs plus indirects Total Pipeline Cost, excluding Owner's costs

172,169,000 860,843,000


Table 8-1 Total Capital Cost Estimate Option 2: Two Pump Stations Iron Concentrate Pipeline: DN 700 (28"); Steel Pipeline with 2 Slurry Pump Stations Area

Description

Storage tank, 18m x 18m, complete including foundation, installed, with agitator, from PSI data base Water Storage Tank 12m x12m Mainline PD Pump, 2257m3/h, 2391PSI, with VFD, 3 operational; +1 standby Iron Concentrate Geho Quot e TZP M 2000 ( 3, 500, 000 E uros) 1. 36171 ex change rat e Pump Station #1 Charge & Gland seal Pumps, 1 operational + 1 standby at Mine Site Pump station materials and construct ion. Includes , sump pump, pump shelter, valves, fittings, mechanical, structural, civil, installation, electrical distribution, instrumentation and labor cost, based on 1.5x PD pump cost Pressure monitoring Station Total Cost Storage tank, 18m x 18m, complete including foundation, installed, with agitator, from PSI data base Water Storage Tank 12m x12m Mainline PD Pump, 2257m3/h, 2391PSI, with VFD, 3 operational; +1 standby Geho Quot e TZP M 2000 ( 3, 500, 000 E uros) 1. 36171 ex change rat e Charge & Gland seal Pumps, 1 operational + 1 standby Iron Concentrate Pump station materials and construct ion. Includes , sump pump, pump shelter, Pump Station #2 valves, fittings, mechanical, structural, civil, installation, electrical distribution, instrumentation and labor cost, based on 1.5 x PD pump cost Pressure monitoring Station Choking Water Storage Pond, 55,000 m3, w/ concrete liner Power Generation, Source Unknown Total Cost Storage tank, 18m x 18m, complete including foundation, installed, with agitator, from PSI data base Terminal S tation @ 10% t ot al Terminal Station Choking Water Storage Pond, 85,000 m3, w/ concrete liner Total Cost

Pipeline

Slurry Pipeline; Bare Steel Pipe w/3LPE coating, DN8-700 (28"), API 5L Gr X70 Cat hodic P rot ect ion, mat erial and inst allat ion for conc ent rat e pipel ine SCADA, Leak Detection, Pipeline Monitoring Fiber Optic Cable, Conduit and Junction Boxes, material only Slurry Pipeline construction, DN 700 (28"), 20.0 km New ROW S lu rry P ipeli ne c ons truc ti on, DN 700 (28 "), 326. 5 k m, E xi st ing ROW Rock Ditch est 10% total distance @ $231m River Xing's , 13 ea = 1.211 km, 25 minor >10m Road Xing's, 1-4 lane paved, 2 -2 lane paved, as needed dirt/gravel Total Cost Total Direct Cost

Indirects

Spare Parts 5% Total Station Cost EPCM, 18% of total direct cost plus spares Contingency, 25% of directs plus indirects Total Pipeline Cost, excluding Owner's costs

Quantity Unit

Unit Cost US$ 1,800,000 300,000

Total US$

4 1

each each

4 4

eac h 5, 007, 859 20, 031,000 each 40,000 160,000

1 3

lot 30,448,000 30,448,000 each 160,000 480,000 58,619,000

1 1

each each

4 4

eac h 5, 007, 859 20, 031,000 each 40,000 160,000

1 2 1 1 1

lot 30,448,000 30,448,000 each 160,000 320,000 lot 200,000 200,000 lot nic lot nic 53,259,000

4 1 1 1

each 1,800,000 eac h 720, 000 lot 500,000 lot nic

1,800,000 300,000

7,200,000 300,000

1,800,000 300,000

7,200,000 720, 000 500,000 8,420,000

66,920 346. 5

t km

346.5 20.0 326. 5 34.65 1.211 1.000

km km km km km ls

1,636 5000

109,490,000 1, 733, 000 800,000 5,000 1,733,000 840,000 16,800,000 840, 000 274, 260, 000 230,000 7,970,000 10,930,250 10,930,000 30,000 30,000 423,746,000 544,044,000 6,015,000 99,011,000 162,268,000 811,338,000


1

Operating Cost Estimate

1.1

Operating Cost Basis

One mechanic and one electrician per shift will be shared between pump stations for maintenance. These mechanics will have a full complement of skills (welding, pipe-fitting, etc.). A total of four shifts will be required to provide coverage 24 hours per day, 365 days per year. The control rooms at both the pump stations will be manned 24 hours per day throughout the year. One mechanic and electrician will be dedicated for the terminal station. A total of four shifts will be required. For this study, it was assumed that the pipeline will operate at its design annual throughput to generate an operating cost estimate. The operating cost estimate is summarisedTable 9-1. The following were included in estimating costs: •

Labour – Based on client data

•

Supplies/miscellaneous maintenance material for all other equipment.

•

Contracted Services - includes maintenance of the pipeline right-of-way, piping spools, etc.

•

•

Power - estimated according to the operating horsepower for a continuous slurry operation. $0.046/kWh was used for the power cost based on client provided data. Contingency – a 10% contingency was added to this preliminary operating cost estimate.


Table 9-1: Operating Cost Estimate

LABOR (1)

Pipeline Supervisor Lead Operator (7 d/ Operator Assistant (


1

Comparison with Commercial Pipeline Operations Table 10-1 below provides benchmark for worldwide commercial iron concentrate slurry pipelines. Table 10-1: Iron Concentrate Pipelines Pipeline

Location

Throughput MT/Y

Diameter Inch

Length km

Year of Operation

Samarco (2nd Pipeline)

Brazil

8.0

16/14

398

2008

Da Hong Shan

China

2.3

9

171

2006

Essar Steel

India

7.0

16/14

268

2005

Jian Shan

China

2.0

9

105

1997

Samarco

Brazil

12.0

20

398

1977

Kudremukh

India

7.5

18

71

1980

Savage River

Tasmania

2.3

9

85

1967

Photographs of Pump stations, typical pipeline construction, valve station and tanks or similar facilities can be found in Appendix 2.


2

Project Execution Plan

2.1

Project Implementation

2.1.1

Overview

The project implementation plan is envisioned to be organized around an integrated and dedicated management team for cost effective execution of the project. For this study, it is assumed that the management team will be under the leadership of a Ausenco PSI project manager, responsible for all the phases of work. This model has been successfully applied to other construction projects. The pipeline project manager will report to the overall ArcelorMittal project manager. However, the specialty nature of the pipeline project requires the assignment of specialist personnel to ensure timely, cost-effective completion of the project. The primary objective of the management team is to implement the project while considering the following: •

Minimization of project completion risks

•

Maximization of project quality standards

•

Optimization of project quality/cost ratio

•

Minimization of project cost overrun risks

The project will be divided into seven major phases to provide the necessary controls to efficiently implement and control a project of this nature. For the proposed project, it is assumed that an integrated Ausenco PSI/ArcelorMittal team will be developed. Ausenco PSI will provide overall management for the pipeline as part of the overall project coordination by ArcelorMittal. ArcelorMittal will provide support services for the pipeline team working under the direction of the Ausenco PSI management team. 1.1.1

Project Phases

The project will consist of seven major phases, each terminating in a well-defined deliverable package, which will be presented for approval before being issued for its intended purpose as outlined below. Table 12-1: Project Phases Phase

Title

Deliverable

I

Feasibility Study

Optimize conceptual design

II

Basic Engineering

Final system sizing and specification of significant system components


Phase

Title

Deliverable

III

Detailed Engineering

Detailed design including procurement and construction specifications, drawings, etc. for the project – includes final cost estimate/control budget for the project

IV

Engineering follow-up

Construction support and final documentation Operating Manual

V

Contracting / Procurement

Major equipment and Material-Contracts and Pipeline construction-Contracts / Materials

VI

Construction

Completed facility

VII

Commissioning

Start up and Commissioning reports. Operator training. System capacity confirmation. System in service

Incorporated in the above-mentioned phases is the system design which is part of the engineering that occurs throughout the detailed engineering phase. The system design is interactive, with updates required to incorporate the latest information (vendor certified prints) to provide the basis for the design. Ausenco PSI estimates that this work (Engineering, Procurement and Construction Management – EPCM) will be approximately 12% to 18% of the project cost 1.2

Schedule

The major phases to complete the pipeline project are listed below with the estimated time required to complete each phase: •

Feasibility Study, system optimization (2 to 4 months)

•

Basic Engineering (5 to 7 months)

•

Detailed Engineering – includes initiation of procurement (10 to 12 months)

•

Construction (16 to 20 months)

•

Commissioning (2 to 3 months)

1


Appendix 1 – Process Flow Diagrams


Appe ndice s

Appendix 2 –Pipeline Facilities Photographs


Appe ndice s

Appendix3 – Concept Layouts


Appe ndice s


Appe ndice s

Appendix4 – VendorQuotations


Appe ndice s


Appe ndice s

1943-G-G-001_rC

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