Inderscience Publishers

Historical pipeline construction cost analysis

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This study aims to provide a reference for the pipeline construction cost, by analysing individual pipeline cost components with historical pipeline cost data. Cost data of 412 pipelines recorded between 1992 and 2008 in the Oil and Gas Journal are collected and adjusted to 2008 dollars with the chemical engineering plant cost index (CEPCI). The distribution and share of these 412 pipeline cost components are assessed based on pipeline diameter, pipeline length, pipeline capacity, the year of completion, locations of pipelines. The share of material and labour cost dominates the pipeline construction cost, which is about 71% of the total cost. In addition, the learning curve analysis is conducted to attain learning rate with respect to pipeline material and labour costs for different groups. Results show that learning rate and construction cost are varied by pipeline diameters, pipeline lengths, locations of pipelines and other factors. This study also investigates the causes of pipeline construction cost differences among different groups. [Received: October 13, 2010; Accepted: December 20, 2010]

Keywords: pipeline costs, cost analysis, distribution, learning curve, cost difference, pipeline construction cost, historical costs, pipeline materials, labour costs, pipeline diameters, pipeline length, pipeline location

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