<p>This study presents a failure analysis investigation of a pipe spool in a hot oil heater that experienced leakage and fire at a petrochemical plant. Various investigation methods, including visual examination, microstructural analysis, SEM, EDS, and mechanical testing (i.e., hardness and tensile testing), were employed to determine the root cause of the failure. The detailed analysis revealed that the pipe failure started from the corrosion at the external surface of the pipe and eventually perforated the pipe wall at its extrados. Evidence of both corrosion and erosion was observed on the pipe spool. The corrosion was caused by the contamination of chlorides in the water. The corrosion under the insulation caused the perforation in the piping, causing hot oil to escape from the hole and flow over the pipe, resulting in erosion. The paper concludes that corrosion under insulation was the primary damage mechanism. Recommendations were given to avoid reoccurrence of such failures in future.</p>