How it Works: Refined Petroleum Product Pipelines
Pipeline operators must carefully schedule and batch pipeline shipments from different shippers to ensure shipments are sent at correct quantities, time intervals, and order to delivery locations
Pipeline operators must carefully schedule and batch pipeline shipments from different shippers to ensure shipments are sent at correct quantities, time intervals, and order to delivery locations while maintaining a continuous, uninterrupted flow of products. Exhibit 4 presents an example of how batched volumes flow through a pipeline system.
Crude oil must be moved from the production site to refineries and from refineries to consumers. These movements are made using a number of different modes of transportation. Crude oil and refined products are transported across the water in barges and tankers. On land crude oil and products are moved using pipelines, trucks, and trains.
Pipeline and ocean vessels have historically been the most common forms of carrying crude oil to refineries. Rail and truck movements, however, have gained traction in the past decade due to lacking pipeline infrastructure and operational constraints in certain geographies.
In contrast, larger tankers are capable of transporting an average of 2 million barrels per shipment- are used for "dirty cargoes," including crude oil and other unrefined commodities. The global vessel fleet faces several operational constraints.
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