One reason for unpredictable failures in pipeline operation is third-party damage (TPD), which can occur due to actions of any third parties other than pipeline staff. Based on nonlinear dynamics theory, we propose a finite-element model for impact between an excavator bucket and the pipeline surface. The simulation was done for the following situations: gas transportation, bucket tooth striking the pipeline, bucket tooth separating from the pipeline, and unloading the pipeline pressure. We analyzed the pipeline damage mechanism and established the influence of the dent depth on residual strain and residual stress. Comparison of finite-element results with the standard criteria described in the standard ASME B31.8 showed that the latter criteria have a number of disadvantages.