Application of Life Cycle Cost analysis in procurement of station equipments

The station equipments of oil/gas pipeline have long service life, and their operation and maintenance costs are higher than their procurement costs, and it is very difficult to cover over the total costs of station equipments in their life cycle by current purchasing method. Equipment procurement based on Life Cycle Cost (LCC) analysis takes the total cost from the procurement, installation, operation, maintenance and technical reform to retirement of equipments in their life cycle into account. The LCC analysis during the procurement of station equipments can reduce their LCC effectively and decrease pipeline construction and/or operation cost accordingly. This paper introduces the concept of life cycle equipment management and the equipment procurement process based on LCC, analyzes the cautions in different stages with a case of combustion turbine-driven compressor, researches the LCC composition of station equipments and describes the key factors influencing the LCC estimates. It is pointed out that LCC analysis-based on equipment procurement should be made in a scientific way to carry out the life cycle management of equipment, and it is necessary to establish an information system for equipment operation management, select appropriate operation and maintenance systems and perfect gradually the LCC model for equipments.