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Quest Training

Pipeline Economics & Tariff Setting Training Course

Explains how to evaluate pipeline projects and set transport tariffs, using cost estimation, revenue requirements, cost allocation and throughput forecasts.

PEEC · Petroleum Economics, Energy Markets & Commercial ManagementAll Levels#2833ClassroomEnglish , Arabic
Duration
5 Days
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Free substitution at any time · 30+ days' notice: full refund minus 10%. Cancellation policy

Sectors:Oil & GasCategories:Petroleum Economics, Energy Markets & Commercial Management

Course Overview

Pipeline economics and tariff setting are critical to the commercial and financial management of oil and gas transportation infrastructure. Pipeline operators, energy companies, and regulators must understand the relationship between capital investment, operating expenditure, transportation capacity, throughput volumes, and tariff structures to ensure financial sustainability while maintaining competitive and transparent transportation services. This course examines the economic principles and financial models used to evaluate pipeline projects and establish transportation tariffs. Participants will explore capital and operating cost estimation, lifecycle cost analysis, revenue requirements, cost allocation, tariff methodologies, capacity utilisation, throughput forecasting, and financial performance assessment. The programme also addresses the commercial implications of take-or-pay agreements, ship-or-pay arrangements, capacity reservation, and long-term transportation contracts. Through practical calculations and industry-based case studies, participants will develop the skills to assess pipeline economics, compare tariff-setting approaches, evaluate sensitivity to changing market conditions, and justify commercially sound pricing decisions. The course supports informed investment planning, transparent tariff design, effective contract negotiations, and sustainable pipeline operations.

Learning Objectives

  • Analyse the economic drivers that influence pipeline transportation costs and profitability.
  • Estimate capital expenditure (CAPEX), operating expenditure (OPEX), and lifecycle costs.
  • Evaluate pipeline throughput, capacity utilisation, and transportation demand forecasts.
  • Apply cost-based, volume-based, capacity-based, and other relevant tariff methodologies.
  • Calculate revenue requirements and assess cost recovery across the pipeline lifecycle.
  • Allocate transportation costs among customers, products, routes, and capacity users.
  • Evaluate the commercial implications of transportation agreements and tariff structures.
  • Conduct sensitivity analysis and scenario modelling to assess economic risks.
  • Assess pipeline project feasibility using financial and economic performance indicators.
  • Develop transparent, defensible tariff proposals aligned with commercial objectives and applicable regulatory requirements.

Who Should Attend

Pipeline economics, commercial, and tariff specialists. Oil and gas pipeline operators and transportation managers. Finance, budgeting, and financial planning professionals in the energy sector. Commercial analysts and contract management professionals. Business development and investment appraisal specialists. Energy economists and infrastructure planning professionals. Regulatory affairs specialists involved in pipeline transportation pricing. Project managers and engineers involved in pipeline development and operational planning. Professionals responsible for transportation agreements, capacity allocation, and revenue optimisation.

Learning Outcomes

  • Identify the main economic factors affecting pipeline transportation costs and revenues.
  • Develop CAPEX, OPEX, and lifecycle cost estimates for pipeline infrastructure.
  • Forecast throughput demand and assess the financial implications of capacity utilisation.
  • Calculate transportation tariffs using appropriate cost recovery and pricing methodologies.
  • Determine revenue requirements and evaluate the impact of tariff assumptions on financial performance.
  • Allocate costs across customers and transportation services using defensible principles.
  • Interpret the financial implications of capacity reservation and ship-or-pay and take-or-pay arrangements.
  • Evaluate pipeline investments using net present value (NPV), internal rate of return (IRR), and payback analysis.
  • Conduct sensitivity and scenario analysis to assess exposure to volume, cost, inflation, and financing changes.
  • Prepare evidence-based tariff recommendations and commercial analyses for management and regulatory review.

Course Outline

Course Outline

Day 1

Fundamentals of Pipeline Economics and Cost Structures

  • The role of pipeline transportation in the oil and gas value chain.
  • Economic characteristics of crude oil, natural gas, and refined-product pipeline systems.
  • Pipeline infrastructure costs and the relationship between design capacity and economic performance.
  • Capital expenditure (CAPEX), operating expenditure (OPEX), maintenance costs, and lifecycle expenditure.
  • Fixed and variable costs, direct and indirect costs, and cost drivers in pipeline operations.
  • Throughput forecasting, capacity utilisation, transportation demand, and economies of scale.
  • Introduction to pipeline financial models and economic performance indicators.
  • Practical Exercise: Develop a preliminary cost structure for a pipeline system and assess how throughput and capacity utilisation affect unit transportation costs.
Day 2

Pipeline Financial Modelling and Investment Appraisal

  • Building pipeline financial models and establishing key commercial assumptions.
  • Estimating capital investment, operating costs, maintenance expenditure, and future cash flows.
  • Revenue forecasting based on transportation volumes, capacity commitments, and tariff assumptions.
  • Time value of money and discounted cash flow analysis.
  • Investment appraisal using net present value (NPV), internal rate of return (IRR), and payback period.
  • Lifecycle cost analysis and evaluation of alternative pipeline development scenarios.
  • Financial risks arising from cost overruns, delays, inflation, and demand uncertainty.
  • Practical Exercise: Build a simplified pipeline financial model and evaluate project viability under alternative cost, throughput, and revenue assumptions.
Day 3

Tariff Methodologies and Cost Recovery

  • Principles of pipeline tariff design: cost reflectivity, transparency, fairness, and financial sustainability.
  • Cost-of-service and revenue-requirement approaches to tariff setting.
  • Capacity-based, volume-based, distance-based, and commodity-based tariff structures.
  • Two-part tariffs, reservation charges, usage charges, and minimum payment mechanisms.
  • Allocation of capital costs, operating expenses, depreciation, and return on invested capital.
  • Unit tariff calculations and the effect of utilisation rates on required transportation charges.
  • Regulatory considerations, tariff reviews, and the treatment of efficient operating costs.
  • Practical Exercise: Calculate alternative transportation tariffs using cost-of-service and capacity-based approaches, then compare their cost recovery and commercial implications.
Day 4

Commercial Contracts, Risk Allocation, and Tariff Negotiation

  • Commercial structures for pipeline transportation and capacity reservation.
  • Take-or-pay and ship-or-pay provisions and their implications for revenue certainty.
  • Throughput commitments, minimum volume obligations, and capacity utilisation risk.
  • Tariff indexation, escalation mechanisms, inflation adjustments, and periodic tariff reviews.
  • Contract duration, shipper obligations, capacity allocation, and transportation service terms.
  • Commercial risk allocation between pipeline owners, operators, shippers, and customers.
  • Negotiation strategies for tariff structures, transportation charges, and contractual adjustments.
  • Practical Exercise: Analyse a pipeline transportation agreement and develop a tariff proposal that balances cost recovery, shipper commitments, and allocation of commercial risks.
Day 5

Tariff Optimisation, Sensitivity Analysis, and Regulatory Assessment

  • Assessing tariff competitiveness, affordability, and long-term financial sustainability.
  • Sensitivity analysis for throughput, operating costs, capital expenditure, inflation, and financing assumptions.
  • Scenario modelling for demand changes, underutilisation, expansion, and changes in transportation requirements.
  • Evaluating the financial impact of tariff adjustments on pipeline operators and customers.
  • Benchmarking pipeline operating costs and transportation tariffs using comparable data.
  • Preparing tariff submissions, financial justifications, and supporting documentation for management or regulatory review.
  • Integrating economic modelling, contractual considerations, and operational performance into tariff decisions.
  • Practical Exercise: Evaluate a proposed tariff revision under multiple operating and market scenarios and prepare a financially justified recommendation supported by sensitivity analysis.

Upcoming Dates

Selected date

Amsterdam · 20 – 24 Sept 2027 · Classroom

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AccraScheduled
2 – 6 Nov 2026€7,700—
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AmsterdamScheduled
9 – 13 Nov 2026€6,000—
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BarcelonaScheduled
16 – 20 Nov 2026€6,000—
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BeirutScheduled
22 – 26 Nov 2026€4,500€4,050until 2 Nov
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ErbilScheduled
22 – 26 Nov 2026€4,000€3,600until 2 Nov
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CairoScheduled
29 Nov – 3 Dec 2026€3,800€3,420until 9 Nov
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Cape TownScheduled
7 – 11 Dec 2026€7,700€6,930until 16 Nov
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CasablancaScheduled
7 – 11 Dec 2026€4,700€4,230until 16 Nov
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DammamScheduled
14 – 18 Dec 2026€4,800€4,320until 23 Nov
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FrankfurtScheduled
14 – 18 Dec 2026€6,200€5,580until 23 Nov
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DohaScheduled
21 – 25 Dec 2026€4,700€4,230until 30 Nov
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DubaiScheduled
27 – 31 Dec 2026€4,700€4,230until 7 Dec
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IstanbulScheduled
4 – 8 Jan 2027€5,300€4,770until 14 Dec
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JeddahScheduled
10 – 14 Jan 2027€4,800€4,320until 21 Dec
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KigaliScheduled
18 – 22 Jan 2027€7,700€6,930until 28 Dec
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Kuala LumpurScheduled
18 – 22 Jan 2027€4,700€4,230until 28 Dec
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LisbonScheduled
25 – 29 Jan 2027€6,000€5,400until 4 Jan
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LondonScheduled
1 – 5 Feb 2027€5,800€5,220until 11 Jan
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IstanbulScheduled
1 – 5 Feb 2027€5,300€4,770until 11 Jan
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JeddahScheduled
7 – 11 Feb 2027€4,800€4,320until 18 Jan
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MadinahScheduled
8 – 12 Feb 2027€4,800€4,320until 18 Jan
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MadridScheduled
15 – 19 Feb 2027€6,000€5,400until 25 Jan
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MakkahScheduled
22 – 26 Feb 2027€4,800€4,320until 1 Feb
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KigaliScheduled
22 – 26 Feb 2027€7,700€6,930until 1 Feb
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ManamaScheduled
1 – 5 Mar 2027€5,300€4,770until 8 Feb
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MarbellaScheduled
8 – 12 Mar 2027€6,000€5,400until 15 Feb
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MuscatScheduled
8 – 12 Mar 2027€6,300€5,670until 15 Feb
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OnlineScheduled
14 – 18 Mar 2027€2,700€2,430until 22 Feb
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AmmanScheduled
14 – 18 Mar 2027€4,000€3,600until 22 Feb
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ParisScheduled
22 – 26 Mar 2027€6,700€6,030until 1 Mar
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AmsterdamScheduled
20 – 24 Sept 2027€6,000€5,400until 30 Aug
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