Oil & Gas Journal - September 7, 2015

MAJOR COST COMPONENTS— 10 YEARS

100

90

80

70

60

50

40

30

20

10

0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Lan d c on s tr uc ti on c o s t s ( e s t. ) , %

Material Labor

FIG. 4

Source: US FERC

Volumes of natural gas sold by pipelines have been steadily declining, so that, beginning with 2001 data in the 2002 report, the table only lists volumes transported for others.

The company tables also reflect asset consolidation and
for a “certificate of public convenience
and necessity.” This filing must ex-
plain in detail the planned construc-
tion, justify it, and—except in certain
instances—specify what the company
estimates construction will cost.

Not all applications are approved. Not all that are approved are built. But, assuming a company receives its certificate and builds its facilities, it must—again, with some exceptions— report back to FERC how its original cost estimates compared with what it actually spent.

OGJ spends the year July 1 to June 30 monitoring these filings, collecting them, and analyzing their numbers.

OGJ’s exclusive, annual Pipeline Economics Report began tracking volumes of gas transported for a fee by major interstate pipelines for 1987 (OGJ, Nov. 28, 1988, p. 33) as pipelines moved gradually after 1984 from owning the gas they moved to mostly providing transportation services.

A B C D E Total, % –––––––––––––––––––––––– Company and investment, ––––––––––––––––––––––––

CRUDE PIPELINES

Land 26,732,371 120,398 6,388 2,602,778 5,559,457 35,021,392 0.31% Right of way 424,505,326 945,777 300,181 24,067,794 11,641,957 461,461,035 4.09% Line pipe 2,802,872,783 23,369,478 7,069, 114 52,343,232 53,628, 119 2,939,282,726 26.06% Line pipe fittings 101,509,489 1,579,699 2,861,066 19,384,424 30,548,037 155,882,715 1.38% Pipeline construction 4,297,164,352 44,912,270 8,623,572 216,808,223 152,879,178 4,720,387,595 41.85% Buildings 193,205,673 5,518,523 2,439,857 16,412,388 25,784,883 243,361,324 2.16% Boilers — — — — — —0.00% Pumpingequipment 282,425,258 11,094,160 9,745,032 36,763,881 17,272,361 357,300,692 3.17% Machine tools and machinery — — — 32,353 — 32,353 0.00% Other station equipment 1,212,285,970 31,657,079 8,037,073 266,296,384 78,479,207 1,596,755,713 14.16% Oil tanks 385,346,800 7,817,441 — 43,775,354 19,289,078 456,228,673 4.04% Deliveryfacilities 9,318 14,454 — 16,807 — 40,5790.00% Communicationsystems 10,994,346 1,150,282 — 1,886,928 867,943 14,899,4990.13% Office furniture and equipment 22,222,098 507,431 1,163,809 751,011 299,043 24,943,392 0.22% Vehicles and other work equip. 47,889,595 596,922 523,570 2,941,394 — 51,951,481 0.46% Other property 11,545,376 2,456,718 — 207,758,024 976,182 222,736,300 1.97% Total investment-2014 $9,818,708,755 $131,740,632 $40,769,662 $891,840,975 $397,225,445 $11,280,285,469 100.00% Total carrier property—2014 $10,972,918,421 $145,179,507 $42,876,235 $970,477, 136 $463,159,594

Total investment-2013 $6,244,970,262 $106,440,324 $40,147,659 $803,541,369 $359,871,176 $7,554,970,790

PRODUCT PIPELINES

Land 6,938,223 9,669,624 1, 139,188 5,491,738 25, 133,257 48,372,030 0.59% Right of way — 23,182,416 64,013,598 11,982,800 132,220,505 231,399,319 2.80% Linepipe 418,171,371 83,746,862 679, 110,478 97,744,898 285,820,663 1,564,594,27218.94% Linepipefittings 159,159,265 62,474,285 92,839,985 5,941,006 77,034,591 397,449, 132 4.81% Pipelineconstruction 1,275,826,929 225,465,380 646,268,309 147,477,216 555,601,474 2,850,639,30834.50% Buildings 49,315,639 17,071,485 14,713,578 20,808,488 52,169,570 154,078,760 1.86% Boilers — — — — — —0.00% Pumpingequipment 122,875,858 40, 100,630 247,028, 126 38,001,695 79,967,216 527,973,525 6.39% Machine tools and machinery — — — — — — 0.00% Other station equipment 429,925,501 187, 115,601 146,141,472 130,244,038 368,535,639 1,261,962,251 15.27% Oiltanks 256,716,747 96,416,739 8,459,201 54,734,076 323,335,309 739,662,072 8.95% Deliveryfacilities — — 12,152,740 32,913,997 176,726, 106 221,792,843 2.68% Communicationsystems 7,247,987 1,719,837 3,634,331 13,248,603 30,284,323 56, 135,0810.68% Office furniture and equipment 46, 104,962 2,028,036 35,657,550 6,764,200 3,607,205 94,161,953 1.14% Vehicles and other work equip. 21,018,059 5,150,830 18,523,370 17,985,507 11,932,142 74,609,908 0.90% Other property 3,666,306 — 29,155,751 — 6,284,246 39, 106,303 0.47% Totalinvestment-2014 $2,796,966,847 $754,141,725 $1,998,837,677 $583,338,262 $2, 128,652,246 $8,261,936,757100.00% Total carrier property—2014 $2,841,287,811 $810,900,247 $2,036,156,840 $594,793,536 $2,194,841,164