Reputation loss framework for consequence assessment of onshore pipeline damage

Abstract

Consequence assessment for pipeline damage is exercised to determine the losses of a failure event such as human, asset, production and environmental loss. However, assessment of reputation loss, which is part of failure impact, is usually excluded due to its qualitative nature. Therefore, the need for a quantitative model of reputation loss is of great interest among pipeline risk assessors. The available current model assesses reputation loss qualitatively; it is a self-centered assessment, time-independent loss factors and internal stakeholder’s influence are typically neglected. Therefore, the study aimed to develop a quantitative model to quantify reputation loss of the pipeline owner in order to improve the calculation of risk of pipeline damage according to the four different stakeholders’ perceptions. A total of 30 reputation loss factors were identified via 30 case studies related to onshore pipeline damage accident reports. These factors were included in a structured online survey which was designed for the stakeholders in Malaysia to rank the factors according to its influence on owner’s reputation based on a given imaginary worst case scenario. A total of 200 respondents participated in the survey and the ranking of the factors based on the four different stakeholders were obtained. All stakeholders were in agreement that the factor which most influences the loss of owner reputation is factor D3 “Accident Severity”. It is the parent factor of D31 “Multiple fatality and injuries”, D32 “Fire extinguished in longer duration”, D33 “Destroyed private properties”, and D34 “Damaged of vast environment area”. Statistical analysis and fuzzy analytic hierarchy process (FAHP) were implemented to prioritize and weigh the factors according to the four different stakeholders’ preferences. Four reputation loss models were then proposed to predict the reputation loss due to pipeline explosion. Eight experts from PETRONAS Gas Berhad (PGB) with 15 years of experience in pipeline integrity management were selected for model validation. Model development was presented to the experts for validation survey. The result indicates that this model is considered as comprehensive, fulfilled the objective, well-defined and practical to be used with a moderate level of overall reliability which can be improved by utilizing the model in a real case study. Thus, the proposed model was implemented in a case study of pipeline in Malaysia by taking the 2014 explosion event occurred in Lawas, Sarawak as a benchmark. The value of consequence of failure calculated by the proposed model was 7% lower than the current model from PETRONAS Technical Standard. This reduction has significantly shifted the risk of pipeline failure from “High” to “Moderate” for the rural area. To conclude, the inclusion of the proposed reputation loss model may produce a comprehensive consequence assessment of pipeline damage and provide a higher level of confidence to the pipeline owner to optimize their risk-based inspection and maintenance scheme, hence, prolonging the long-term integrity of their pipeline assets and simultaneously securing the company annual profit margins.