HCOTEG110250 - Pipelines: Scope of guidance

Introduction

The purpose of this guidance is to give officers sufficient background to enable them to carry out assurance of oil pipelines. These can be cross-country pipelines (CCPs) or pipelines from offshore oilfields. They could also be gas pipelines that ‘produce’ a gas condensate ‘oil’ as oils condense in the pipe and have to be drawn off.

Our concern is to ensure that the correct duty is paid and accounted for. In theory this should be straightforward since a pipeline has an inlet (commonly referred to as an ingress point) and an outlet (commonly referred to as an egress point) and what goes in and what later comes out can be measured.

However there are a number of complications.

Complications with pipelines

These are:

  • Pipelines can have multiple users.
  • Pipelines can have more than one ingress (inlet) and egress (outlet) point and can be connected to other pipes.
  • The same pipeline is used to carry products that have different duty rates. Where this occurs the leading edge and tail-end of successive parcels inevitably become a mixture of the oils contained in the parcels.
  • Pipelines can be owned by one firm, be shared, or be part of the Government Pipeline and Storage System (GPSS).
  • Pipelines are used for Export and require special arrangements for the production of goods for our inspection (Export law and guidance on excise goods applies).
  • Pipelines are used for import and for moving products under duty-suspension, requiring special conditions for approval and production of the goods (import and warehousing of oil by pipeline, law and guidance on excise goods applies).
  • Pipelines are by their nature difficult to inspect (we have powers under CEMA to enter any land to inspect a pipeline).
  • Pipelines are used to supply AVTUR to airports, (AVTUR is a high specification form of Kerosene and is unmarked). N.B. The supply of AVTUR is now made under the Registered Dealers in Controlled Oil (RDCO) scheme.

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Training

A Guided Learning Unit on ‘Cross Country Pipelines’: Reference 003209 is now available in Online Learning.