The fundamentals and application of transient model-based leak detection and localization technique for crude oil pipelines. The dynamic parameters such as pressure, flow and temperature were acquired by SCADA (Supervisory Control and Data Acquisition) system. The characteristic changes in the flow mechanics andthermodynamics along a given length of pipeline were used in detecting, localizing and determining the flow rate of the leak. Measurement of pressure, temperature and flow data at both the inlet and outlet of the pipeline were used in formulating the equations obtained from continuity and law of conservation of momentum equations.