Off-shore/On shore pipeline costs for economic modelling 3

[rex113a]

We have just formed a new company "CARBONET" with Denbury Resources Inc in the US, specifically to lay a CO2 pipeline network in UKCS comprising around 1500km total length in various sizes up to 42in.

I need some up-to-date fabrication/lay cost estimating norms (clearly only general purpose in nature at this stage)in order to verify our initial modelling. There is no need to attribute any data to a specific location/project if it is sensitive.

I am particularly interested in fabrication costs of line pipe as I have (I hope) reasonable lay cost norms but any help or recent experience in either area would be much appreciated.

Rex



Rex Gaisford

http://www.rexconsult.com

 

[BigInch]

Best to contact the offshore constructors for a budget estimate. As you have surmized, its best not to rely on norms, as costs tend to vary according to equipment location, mobilization, exact lengths and weights of various diameters, in additon to water depth, construction season work windows and present work load, just to name a few. Since its 1500 km up to 42 inch, I doubt that the norms will be very useful. Since 42 inch subsea lines arn't all that common, the statistics would have to had been derived from very sparse data. If its a dense phase CO2 line, high pressures and resulting thick walls will probably cause considerable variations.

http://virtualpipeline.spaces.msn.com

 

[StephenA]

As BigInch says 42" is unusual size for laybarging but for fabrication costs for pipe I would contact Corus Hartlepool for the pipe and Bredero Shaw in Scotland for the coatings.

We can assist with the shore crossings.

Stephen Argles

Stephen Argles
Land & Marine

http://www.landandmarine.com

 

[narenr]

For cost modelling purposes (only) you can use the following:

Onshore land : for 8" to 24" - 0.08M$/in-km; 30" - 0.1M$/in-km and for >36" - 0.12M$/in-km

Onshore swamp : for 8" to 24" - 0.12M$/in-km; 30" - 0.14M$/in-km and for >36" - 0.16M$/in-km

Offshore : for 8" to 24" - 0.1M$/in-km; 30" - 0.12M$/in-km and for >36" - 0.13M$/in-km

These does not include crossings.

Rgds Naren



Narendranath R
Pipeline engineering is made easy with state of the art computer software, visit

http://www.narendranath.itgo.com.

 

[rex113a]

Thanks very much to all for the info. sent.

I am still getting confusing signals however.

A recent contract is said to be let as:
Ref:

http://home.businesswire.com/portal...d=news_view&newsId=20070718006051&newsLang=en

Natural gas pipeline between Valladolid, Cancun and Punta Venado, as well as other contemplated energy infrastructure
facilities on the Yucatan Peninsula of Mexico (Presumably onsore? RG)

The 16 inch 218 km pipeline is being designed to be bi-directional with a capacity to carry 183 million cubic feet per day of gas.
The pipeline project, with an estimated cost of approximately US$140 million

This gives a cost of 0.04 mm$/in - km

Also a recent report for the DTI (DBERR) in UKCS uses:

Straight line distance (km) 85 Distance adjusted for terrain (km) 102
Diameter of pipe (m) 0.601 (i.e. 24")
Number of pipes 2
Total cost (£M) £252.00

This gives a cost of 0.06 mm$/in - km

I have acouple of other specific references for similar lengths/ diameters with similar outcomes but all of these are a long way off the norms suggested above.
I am therefore still confused as to whether I am comparing like with like and particularly whether any of them includes cost of fabrication/coating.
Can anyone spot my mistake?


Rex Gaisford

http://www.rexconsult.com

 

[BigInch]

Precisely the trouble with "norms" is they only apply to the "Norm" project. Pipeline "norms" have very high standard deviations. The only statistic that comes close (sometimes) is $/mile onshore w/o ROW cost and $/mile offshore for < 24" diameters. When separating the data into per inch catagories, there are not enough projects during the time that construction prices remain relatively static to get an accurate picture of the per inch price, as the data set for each catagory is very (way too) sparse.

The Mexican project must be onshore, probably with lower ROW and construction costs than the norms. If it was offshore the statistics would not be applicable to UK work, as Campeche water depth is shallow, the bottom is sandy clay and the weather is long and easy. Totally opposite to what will be found around the UK, with more rock, poor weather and deep or variable water depths. In shallow water, you will need dumped rock for stability, where as in Mexico, they can cut with a water jet sled and let reburial occur simply by natural current and wave action.

The UK length adjustment must be for one route spread over the 2 pipelines. They have ordered 10% overage for each of the two pipelines. 20% is way too much for each pipeline. The UK onshore project is a high construction cost zone, perhaps passing populated areas with undoubtedly over the norm with very expensive ROW. Costs I imagine will be similar to construction in the US New York, New England and Pennsylvania area, rather than in the western half of the US where they could easily be 1/2 of the NE values.
The norms will not account for deviations of equipment location, mobilization, water depth, construction season work windows and present work load other than what was contained in the statistics at the time they were compiled. Offshore be especially attentive to water depth, number of tie-ins and number of beach landings. On a short pipeline branch the cost of the tie in could at least double the cost of the norms above. Do not underestimate the importance of "present work load". I've received bids up to 2.5 x the norm when contractor's workloads are booming. Ditto for working outside the "normal" weather windows.

http://virtualpipeline.spaces.msn.com

 

[BigInch]

I suppose in lieu of calling the constructors you could use the norms and apply fudge factors to account for the expected deviations.

http://virtualpipeline.spaces.msn.com

 

[rex113a]

Yes we could but it is the potential range of figures you all expect that bothers us.
We have to go a long way up the prep stage for this project before we can legitimately put out RFQs for major contracts and it seems (and I have tried!) that contractors are unwilling to engage until we do. This project is not going to be a big money spinner it addresses a social need but it must eventually pass economic criteria.
We believe that this is possible on current assumptions but there is a great deal of work to do to get there. If we can't get reasonably reliable costings for the dominating cost centre then we are holed below the waterline before we start.

Rex Gaisford

http://www.rexconsult.com

 

[narenr]

Rex,

In your first posting I got an impression that you are looking for cost modeling for project economics, which in most cases takes a 50/50 estimate.

Now it looks like you are looking at actual project estimate for which you have to perform atleast some basic engineering and go to the contractors with RFQs for a cost estimate.

Unless you have a engineering package it is unlikely anybody would quote as the variations are too many in any pipeline project onshore or offshore. One option is to ask your short listed contractors to bid by paying for the pre-bid work.



Narendranath R
Pipeline engineering is made easy with state of the art computer software, visit

http://www.narendranath.itgo.com.

 

[BigInch]

You have to use the norms with factors, do some conceptual design work and RFQ it, or you need to have some insider friends with the contractors.

At this stage, perhaps you're only examining possibilities of a number of configurations, in which case you could use the norms w/ appropriate factors and eliminate most configurations on a relative cost basis? Then do a conceptual design on the most likely configuration and RFQ that. From there, reapply those costs to the few most probable options to zero in on a final configuration.

http://virtualpipeline.spaces.msn.com

 

[rex113a]

Narena, No we are still at the economic evaluation stage but a 50/50 is only viable if the variability is a fraction of the estimate. From what I have been hearing from you all and from what I seem to be getting from my own sporadic data, the variability is several times the estimate! Hard to cope with.

Biginch, That is the approach (comparative) that I have been using but it is the total cost variability which is worrying. I have been out of this business at detailed level for quite a few years now!
I now realise that there is probably nothing I can do until we get to the next level of specification other than falling on generosity of contractors or paying them for an estimate which might be of little value/reliability just now but could be the only option eventually.
As for chums, I used to have lots, including some well known names but they drift away when one has been out of main stream action for a while.
Thanks again everyone for your tremendous support.
Rex

Rex Gaisford

http://www.rexconsult.com

 

[GregLamberson]

rex113a

I have a conceptual cost estimating model I'd be happy to dump the informaiuton in and see what spits out, but it apply's area factors, so I will need the geographical region as well as the key details - pipe length & sizes (dia & WT), type of coating (and if CWC is required, any information you know of the terrain, # & type of pipeline facilities, telecomms assumptions, types of lay per length, i.e. offshore/water depth, or onshore. Are you also looking for engineering, owner costs? Operating costs?

Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:

http://www.oil-gas-consulting.com