Carbon steel pipe lined with a thin layer of a corrosion-resistant alloy proves to be a cost-effective product used in offshore pipelines that carry corrosive hydrocarbons. By inserting the liner into the carrier pipe and mechanically expanding them together, they end up in interference contact on unloading. The contact pressure that develops is crucial for keeping the composite structure intact under bending, axial loads, and reeling experienced during offshore installation and operation. In this paper, we establish a custom model to examine the lined pipe's manufacture by hydraulic expansion. The effect of various geometric, material and manufacturing parameters on the contact pressure is studied. The analysis incorporates incremental plasticity that accounts for material hardening and the biaxial states of stress that develops. It is demonstrated that the carrier pipe's plastification is beneficial and that a relatively low yield stress liner with low hardening, coupled with a high yield stress high hardening carrier pipe, increases the contact pressure. The analysis presented and the results should prove useful in the optimal design of the product and the manufacturing process of lined pipe aimed for offshore applications.