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6.2.5 Pipeline

Pipelines are a unique mode of transportation as they are fixed and the product, which is either liquid or gas, moves through them. Although they have severe limitations in terms of the type of products that can be transported through them, they are capable of moving more tonnes in a single shipment than any other mode of transportation. They have very high fixed costs associated with the installation of the pipelines and pumping equipment, as well as the construction of terminals. Therefore, to be competitive with other modes of transportation, they must work on high volume so as to recover these high fixed costs. The costs per ton-mile decreases substantially with larger pipes, provided there is adequate liquid or gas to transport through them.

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