Annular flow is a two-phase flow regime where the liquid forms a film of varying thickness along the wall of the pipe and the vapor phase flows at a higher speed down the middle of the pipe. The interface between the vapor and liquid phase is not entirely well defines. Part of the liquid is sheared off from the film by the vapor and is carried along in the core as entrained droplets. At the same time, turbulent eddies in the vapor deposit droplets on the liquid film.
Due to the different forces on the fluid, the thickness of the liquid film is not constant across the cross section of the pipe. The effects of gravity can cause the thickness of the fluid film towards the bottom of the annulus to be bigger than the top. Downstream of bends, most of the liquid will be at the outer wall.