Network optimization of product pipelines of BPCL India

Abstract

Bharat Petroleum Corporation Limited (BPCL) faces the problem of identifying the new regions and locations for laying pipelines which are not covered at present and to reduce the product movement through rail/road mode which would help in positioning the product on time as well as reduce the placement costs. Installing the pipeline network is capital intensive and time-consuming and therefore requires thorough analysis and planning. In this project, we have used analytical models to assess the viability of laying new pipelines compared to existing modes of rail/road transportation, as follows: a. A linear programming model has been framed to minimise the total cost of a new pipeline network. This model can also be used for laying additional pipelines which are to be integrated with an existing network. b. A linear programming model has been framed for minimising the total cost of rail/road transportation depending on the demand and supply of oil products at various nodes. c. Details of the various cost components associated with the oil transportation is included in the report as the total cost is an essential parameter for all the models. d. Based on the cost data available publicly, the problem of choosing between pipeline and rail/road has been framed for a route. Various cut-off distances have been calculated below which, laying pipeline is not cost-efficient. Results are summarized in a table. e. In the last section, a qualitative comparison is included for both the modes of transportation.