Oil & Gas Journal - September 7, 2015

FIG. 6

*Land and offshore pipeline construction as of June 30 of each year for the previous 12 months.

Source: US FERC

ESTIMATED, ACTUAL COST TRENDS— 10 YEARS*

Estimated

Co s t s , $ 1 , 0 0 0/mil e

Actual

4,600

4,200

3,800

3,400

3,000

2,600

2,200

1,800

1,400

1,000

600

9,000

9,400

8,600

8,200

7,800

7,400

7,000

6,600

6,200

5,800

5,400

5,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

• 42 land and 1 marine project (OGJ, Sept. 11, 2006, p. 46).

• 56 land and 4 marine projects (OGJ, Sept. 12, 2005, p. 50).

Seven of the spreads in 2015 measured 100 miles or more, as proposed large transmission lines returned, one measuring 374.5 miles and another 509 miles.

For the 12 months ending June 30, 2015, the 46 land projects would cost an estimated $11.5 billion, as compared with 31 land projects for $3.43 billion a year earlier.

It is helpful to remember that these statistics cover only FERC-regulated pipelines. Many other pipeline construction projects were announced in the 12 months ending June 30, 2015, but as mentioned earlier, many involved connecting developing natural gas shale plays such as Eagle Ford and Marcellus to already operating transportation infrastructure and may have lied outside of FERC’s jurisdiction.

all investment in carrier property accelerate in 2014, adding more than $1.2 billion, or 17.3%, with all companies increasing their investment here as well.

Comparisons of data in Table 3 with previous years’ must be done with caution as mergers, acquisitions, and sales can make comparisons with previous years’ data difficult.

Fig. 2 illustrates the investment split in the crude oil and products pipeline companies.

Construction mixed

Applications to FERC by regulated interstate natural gas pipeline companies to modify certain systems must, except in certain instances, provide estimated costs of these modifications in varying degrees of details.

Tracking the mileage and compression horsepower applied for and the estimated costs can indicate levels of construction activity over 2-4 years. Tables 4 and 5 show companies’ estimates during the period July 1, 2014, to June 30, 2015, for what it will cost to construct a pipeline or install new or additional compression.

These tables cover a variety of locations, pipeline sizes, and compressor-horsepower ratings.

Not all projects proposed are approved. And not all projects approved are eventually built.

Applications filed in the 12 months ending June 30, 2015, jumped after falling last year.

• Nearly 2,200 miles of pipeline were proposed for land construction, the highest level since more than 2,700 miles were proposed in 1998. No new offshore work was submitted. The land level was up from the 523 miles proposed for land construction in 2014, a drop from the 820 miles of pipeline were proposed for land construction in 2013.

• New or additional compression proposed by the end of June 2015 measured more than 1.7-million hp, more than doubling the high of roughly 706,000 hp proposed the year before, itself up from the 450,000 hp proposed in 2013.

Putting the uptick in US gas pipeline construction in per-
spective, Table 4 lists 46 land-pipeline “spreads,” or mileage
segments, compared with:
• 31 land and 0 marine projects (OGJ, Sept. 1, 2014, p.
122).