It is the maximum gauge pressure at the top of a pressure vessel allowed by design or code calculations for a set temperature.
When the working temperature decreases or significantly increases, material strength is reduced and therefore the pressure should be reduced accordingly.
That is why the maximum allowable working pressure is always for an specific range of temperature.
Now, as you go down the vessel, the pressure is increased due to static head with the highest pressure being at the bottom (1 foot of height = 0.43 psi).
For example; if the gage pressure at the top of vessel shows 10 p s i; the actual pressure at the bottom of vessel with 2 feet height would be almost: 11 psi.
Always place the gage at the top of the pressure vessel during hydro test because if the vessel can withstand the maximum allowable pressure with the least reading at the top and do not leak or fail, then, it can certainly withstand more pressure at the bottom.
If you can not place the gage at the top during hydrotest; then add for the height.
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