1. Usually The conductor pipe is set while the cellar is being build. And its drilled using a PDC or TRC bit (with a conventional BHA) depending on the formation just bellow the cellar, some precautions have to be taken while drilling the first feet, it has to be drilled with low flow rate to avoid -----ing the cellar.
2. The bit is connected above the rig floor and connected to a bit sub and the usually to drill collars.
3. The mud return line or flow line starts in the riser that is welded on a conductor pipe.