Liability Assessment of Refined Products Pipeline

Liability Assessment of a Refined Products Pipeline


Antea Group was contracted by the client to quantify environmental liabilities associated with the acquisition of a 760-mile refined products pipeline system.  Assets that were evaluated included nine impacted sites that were either terminal properties, block valves, or historic pipeline release locations.


Antea Group reviewed all environmental documents available in a virtual data room, and publicly available data bases.  Using what was available from the aforementioned information, Antea Group generated a gross forecast of costs associated with each known environmental liability.  As part of the solution development process, state-specific regulations and Antea Group’s working knowledge of each state’s regulatory agency were used to develop the site-specific risk profiles and associated cost scenarios.  Antea Group then utilized a proprietary process to evaluate and develop costs to eliminate known environmental liabilities at the nine sites.  This process included the development of a detailed cost forecast to implement a project closure strategy using a site-specific template that identified low, most likely, and high estimates for each known condition.  A probabilistic cost modeling exercise was performed using Palisade @Risk software to define site and portfolio level probabilities and sensitivity analysis in the forecasts.  Model output was used to evaluate the projected gross spend amount for the portfolio.


The client received a credible and defensible estimation of costs associated with this liability to be used during acquisition negotiations, and to support adherence to internal objectives and financial disclosure/accounting requirements.