Underground pipeline structures may contain multiple failure modes in which any of the modes can lead to a system failure. These failure modes are a time-variant process, and failure rate increases with the lapse of time. The failure modes may be correlated due to common random variables. In many cases, failure modes are assumed to be independent, and underground pipeline failure is evaluated by neglecting correlations between failure modes. However, neglecting correlations may lead to a gross error in pipeline reliability analysis. Correlations between time-dependent failure modes due to corrosion-induced deflection, buckling, wall thrust and bending stress for a buried flexible steel pipe have been assessed in this study. Reliability index and system failure probability have been analysed using Monte Carlo simulation. Parametric analysis indicates that soil modulus, soil density, pipe stiffness and external loading are the most influencing random variables. The estimated reliability can be utilised to develop maintenance strategies during the pipe service lifetime in order to avoid unexpected failure or collapse.