Pipeline Transportation And Its Significance To The Marketing Of Petroleum Products
(A Case Study Of Nnpc Enugu And Port-Harcourt)
Pipeline transportation plays a crucial role in facilitating the efficient marketing of petroleum products, serving as a fundamental component of the energy supply chain. This mode of transportation involves the movement of liquid fuels, such as crude oil and refined products, through a network of interconnected pipelines. The significance of pipeline transportation lies in its ability to ensure a cost-effective and reliable means of delivering petroleum products from extraction points to end-users. The infrastructure minimizes dependency on alternative, less environmentally friendly transportation methods, contributing to a more sustainable energy distribution system. Additionally, pipelines enhance operational efficiency by streamlining the transportation process, reducing the risk of spills associated with other modes of transport. This integrated network underscores the resilience and effectiveness of pipeline transportation in supporting the marketing and distribution of essential petroleum products.
This Research examined the relevance of Pipeline transportation to the marketing of Petroleum products in Nigeria. Toward this end 83 staff of the Nigeria national Petroleum Corporation (NNPC)’s offices in Enugu and Port-Harcourt were randomly selected to form the study sample. The 83 members of the study sample were given 83 copies of structured questionnaires to complete. Their responses were used to test four hypotheses formulated for this study. The result of the test/analyses revealed the following findings.
i. The use of Pipelines facilitates the effective distribution and marketing of petroleum products in Nigeria.
ii. Pipelines reduce the costs of transporting and marketing petroleum products in Nigeria.
iii. Pipeline vandalisation is the major problem impeding the effective use of Pipelines for the distribution and marketing of petroleum products in Nigeria.
iv. The use of alarm systems and police patrol will reduce the incidence of pipeline vandalization in Nigeria.
TABLE OF CONTENTS
i Title Page
ii Approval Page
iii Dedication
iv Acknowledgement
v Table of Contents
viii List of Tables
x Abstract
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Hypothesis
1.5 Significance of the Study
1.6 Scope And Delimitation of the Study
CHAPTER TWO
LITERATURE REVIEW
2.1 Historical developments of pipeline transportation
2.2 The features of pipeline
2.3 Pipeline transportation and the marketing
of petroleum products in Nigeria
2.4 Impediments to pipeline transportation in Nigeria
2.5 Prospects of pipeline transportation in Nigeria
2.6 Summary of Related Literature Review
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
3.2 Are of the Study
3.3 Sources of data
3.4 Population of the Study
3.5 Sample size and Sampling Method
3.6 Instrument for Data Collection
3.7 Validity of the Instrument
3.8 Reliability of the Instrument
3.9 Method of Data Collection
3.10 Method of Data Analysis
CHAPTER FOUR
DATA PRESENTATION AND RESULTS
4.1 Data Analysis
4.2 Summary of Results
CHAPTER FIVE
DISCUSSION OF RESULTS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Discussion of Result
5.2 Conclusions
5.3 Recommendation
5.4 Suggestions for Further Studies
5.5 Limitations of the Study
References
Appendix (the questionnaire)
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Pipeline transportation is the youngest among the other means of transportation in Nigeria. It has not received much attention because of two major factors. One is that it is relatively a recent origin. Two is the its operations and services are not in the hands of private individuals and companies. Hence everything about pipeline transportation in Nigeria is strictly in the hands of the federal government.
According to Kupoheyi (2000) pipelines have been in use for transporting materials for centuries. Hence in the urban areas, pipelines are used for distributing potable water. Though the pipelines network for the transportation and distribution of water in urban areas are usually short, they uses the same basic principles as the ones for distributing petroleum products. The point to note here is that pipelines were first used for distributing water. Later they were used for mooring gases and a variety of liquids within plants, between plants, as well as between locations for apart. Today pipelines are widely used for transporting petroleum products and some solids that are suspended in liquids over long distances.
Olakunori (2000) reported that petroleum pipelines made only recent discovery into Nigeria. According to him, the products pumped through the Nigeria pipelines include the following
– Premium motor spirit (PMS) otherwise know as petrol;
– Automotive Gas Oil (AGO), otherwise known as diesel;
– Household Kerosene, (HHK).
In addition to these, avaiation turbine kerosene (ATW, otherwise known as avgas, is often pumped from Mosimi to Ikeja Airport regularly. Pumping is usual done in butches of between 15000 to 50000 cubic meters in such a way as to avoid contamination. Delivery of the various products grades into storage is strictly monitored and controlled from the control centres located in Mosimi, Warri, Kaduna, and Port Harcourt. Once pumping begins and a product leaves the refinery tanks, its arrival time at any particular depot can easily be forecasted. (Olusunmade, 2001).
Liquefied natural gas (LPG) is pumped through the Escravos – Lagos Pipeline (ELP) dedicated to gas. This, at present, is the only operational gas pipeline that has been completed in the country (Adeyinka, 2000). According to Udensi (1999) the Nigeria government intends to extend the gas pipeline to other West African countries in order to encourage gas utilization and exploit the commercial opportunities in the sub-region. Some of these countries in this regard include.
– Togo
– Benin Republic
– Ghana
– Sierra Leone
– Burkina Faso
– Cape Verde
– Gambia
– Mali
– Mauritania
– Guinea and Chad.
Ike (1999) stated the construction of phases I-III pipeline systems enabled the Nigerian government to achieve the following objectives.
– Benin city
– Kaduna (Product depots)
– Port Harcourt (Product depots)
– Lagos
– Warri (Product depots)
– Yola
II. Provision of additional distribution depots at Suleja, and Minna
III. Connection of Kaduna Refinery products depot with the refineries a Port Harcourt and Warri, not only to make up the production shortfall there, but also to ensure the continued supply of products to the northern areas in the event of Kaduna Refinery outage.
IV. Construction of facilities to enable products to be pumped from Port-Harcourt to the Western areas via Benin, not only to augment Warri Refinery production, but also to continue supplies in the event of total outage.
V. The de-bottlenecking of limited capacity of the existing 6 inches diameter pipelines between Jos and Gombe.
VI Putting in place some alterations, upgrades and repairs within the existing system necessary to accommodate the new facilities.
In addition, with the completion of the nation’s pipeline interlink project, the total route of Nigeria’s products distribution pipelines and depots complex has grown to 4,950 Kilometers. This is made up of pipelines of various diameters linking twenty storage depots.
1.2 STATEMENT OF THE PROBLEM
Pipelines has been identified as been vital for efficient transportation and distribution of petroleum products, Although Nigeria had completed and commissioned phases I-III pipeline system, the nation had, on man occasional, suffered from petroleum products scarcity which ahs caused untold hardship to the masses. In addition, the country’s mass media had, on many occasions, carried sad news relating to the victims of kerosene explosions and other related home accidents caused by petroleum products. Al thee are evidences of inefficiency in the operation and management of the nation’s pipeline system. Had the construction of pipeline facilitated the distribution of petroleum product in Nigeria? What are the strategies for improving the nation’s pipeline system? These questions present the problems that necessitated this research.
1.3 OBJECTIVES OF THE STUDY
The objectives of this research are as follows:
i. To examine the relevance of pipelines to the efficient distribution and marketing of petroleum products in Nigeria.
ii. To identify the constraints/problems of pipeline transportation of petroleum products in Nigeria
iii. To suggest realistic solutions to thee problems
iv. To highlight the strategies for improving on the nation’s pipelines so as to ensure efficient marketing of petroleum products in the country.
1.4 RESEARCH HYPOTHESES
The following hypotheses were tested in this study/research:
Hypothesis One
H0: Pipelines are not reliable means of distributing and marketing petroleum products. in Nigeria.
H1: Pipelines are highly reliable means for distributing and marketing of Petroleum products in Nigeria.
Hypothesis Two
H0: Pipelines do not reduce the cost of transporting and marketing petroleum products in Nigeria.
H1: Pipelines reduce the cost of transporting and marketing petroleum products in Nigeria.
Hypothesis Three
H0: Pipeline vandalizations do not impede the effective use of pipelines for distribution and marketing of petroleum products in Nigeria.
H1: Pipelines vandalization impedes the effective use of pipelines for the distribution and marketing of petroleum products in Nigeria.
Hypothesis Four
H0: The use of alarm systems and police patrol will not reduce the incidence of pipeline vandalization in Nigeria.
H1: The use of alarm system and police patrol will reduce the incidence of pipeline vandalization in Nigeria.
1.5 SIGNIFICANCE OF THE STUDY
The findings and recommendations to be made in this study, when implemented, will benefit all Nigerians as well as the government. For one thing, the implementations of the recommendations of this study will reduce the incidence of pipeline vandalization in Nigeria. In addition, the problem of fuel scarcity will equally be eliminated. Thus the average Nigeria will have access to petroleum products at a reduces cost anytime, anywhere. Also the incidence of kerosene explosion will become a thing of the past.
1.6 SCOPE AND DELIMITATIONS OF THE STUDY
The scope of this study borders on pipeline transportation and its relevance to the marketing of petroleum products. This research will be limited to the Enugu and Port Harcourt offices of the Nigeria National Petroleum Corporation (NNPC).
Pipeline Transportation And Its Significance To The Marketing Of Petroleum Products:
Pipeline transportation plays a crucial role in the marketing of petroleum products, as it is a safe, efficient, and cost-effective method for moving crude oil and refined petroleum products from production facilities to distribution centers, refineries, and ultimately to consumers. Here’s a breakdown of the significance of pipeline transportation in the marketing of petroleum products:
- Efficiency and Reliability: Pipelines are highly efficient in transporting large quantities of petroleum products over long distances. They operate 24/7, ensuring a steady and reliable supply of crude oil and refined products. This reliability is essential for meeting consumer demand and maintaining a stable market.
- Cost-Effective: Pipelines are one of the most cost-effective modes of transportation for petroleum products when compared to other methods like trucking or rail. They have lower operating costs per unit of volume transported, which can lead to cost savings that are often passed on to consumers in the form of lower fuel prices.
- Reduced Environmental Impact: Pipeline transportation is relatively environmentally friendly compared to alternatives like tanker trucks or ships. It reduces the risk of spills and accidents, minimizing the potential for environmental damage. This can be crucial for petroleum companies in terms of regulatory compliance and public relations.
- Safety: Pipelines are designed to be safe and are equipped with monitoring systems to detect leaks or breaches quickly. This enhances safety for both the environment and nearby communities, reducing the risk of accidents and their associated costs.
- Consistency in Supply: Pipelines provide a consistent flow of petroleum products, helping to stabilize the supply chain. This consistency is vital for meeting market demand, especially during peak consumption periods or emergencies.
- Market Access: Pipelines allow petroleum companies to reach markets that would be otherwise difficult or expensive to access. They can transport products to remote areas or across international borders efficiently.
- Flexibility: Pipelines can transport various types of petroleum products, including crude oil, gasoline, diesel, jet fuel, and natural gas liquids. This flexibility allows for the optimization of the supply chain and the ability to respond to changing market conditions.
- Reduction in Traffic Congestion: By moving large volumes of petroleum products via pipelines, there is a reduction in the number of trucks on the road, decreasing traffic congestion and associated safety hazards.
- Long-Term Investment: Pipeline infrastructure represents a long-term investment for petroleum companies. Once in place, pipelines can operate for decades with proper maintenance, providing a consistent and efficient means of transportation.
- Competitive Advantage: Companies that have access to an extensive pipeline network may enjoy a competitive advantage in terms of cost-efficiency and reliability, enabling them to offer competitive prices to consumers.
In conclusion, pipeline transportation is a critical component of the marketing of petroleum products. Its efficiency, reliability, cost-effectiveness, and environmental benefits make it an indispensable part of the supply chain, ensuring a steady and consistent flow of products to meet consumer demand while minimizing environmental risks.