Pipeline Methodology. The 10.16% construction cost change was used to calculate the 2006 AYM for pipelines properties.
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- Dwight Weaver
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1 Pipeline Methodology The Ministry s independent contractor supplied the year over year construction cost changes based on the pipe material, the pressure rating, the outside diameter for a 32 km model, as well a 300km model for ANSI 600, and 900. For each category (i.e. ANSI150) the independent contractor supplied a cost change per metre broken down into the component costs for all outside diameters in the study (see attachment pipeline cost with 2006 percentage increase applied). The median of the year over year cost changes for each category was calculated (i.e. ANSI ). The next step was to calculate the median cost change of all the pipe categories. This then became the cost change for pipelines properties (10.16%) see attached summary of pipeline chart. The 10.16% construction cost change was used to calculate the 2006 AYM for pipelines properties.
2 OUTLINE OF THE VENDORS PROCESS TO DEVELOP PIPELINE CONSTRUCTION COST CHANGES 1.0 History: Prior to 2001: For AMA Pipelines July 14, Alberta divided into six (6) Geographical Pipeline Regions -High Pressure and Low Pressure Designation for all steel Pipelines -Steel Pipe Sizes 21.3mm OD up to 1524mm OD -Steel pipe length 32km -Nonsteel pipe length either 1 or 5 km -Detailed Estimate 2002: -Deleted low and high pressure pipelines by Segregating all carbon steel pipelines into five categories: ANSI kpa Design Pressure=1000 kpa ANSI kpa Design Pressure=3430 kpa ANSI kpa Design Pressure=5790 kpa ANSI kpa Design Pressure=8270 kpa ANSI kpa Design Pressure=12400 kpa -Detailed Estimate 2003: -Added 300 km length to ANSI 600 & 900 steel pipelines (323.9mm to 1524mm) -Added SCADA to 300 km pipelines -Added Leak Detection to 300 km pipelines -Deleted six (6) Geographical Regions. Use Edmonton to Calgary Corridor. -Deletion steel pipe sizes 21.3mm to 48.3mm -Break out crossing costs from installation costs -Break out service line and meter costs from MDPE & HDPE material costs. -Deletion of the 1km pipeline segment -Deletion of the following from the overall cost: -Land Acquisition Costs -Preliminary Engineering Costs -Route Reconnaissance Costs
3 -Environmental Costs -Archaeological Costs -As-Built Drawing Costs -Commissioning Costs -Man made Crossing Costs -Deletion of the following steel pipelines: -Sour Service -Thru-Kote Systems -HDPE Internal Liner -Internal Cement Liner -Stainless Steel Pipelines -Steam Gathering Pipeline Systems -Hot Water Sulphur pipeline -% Increase Estimate Instead of Detailed Estimate 2005: -Deletion of the aluminum pipeline. Replaced by Fiberglass and HDPE materials -% Increase Estimate instead of Detailed Estimate 2006: -% Increase Estimate instead of Detailed Estimate 2.0 Detailed Review (Every Five years) -Land Use Costs: -Entry Fee -Damages Fee -Acquisition Fee -Engineering Costs: -Included in Cost Base -Excluded in Cost Base -Miscellaneous Materials: -Major Materials: -Pipe -Valves -Coating -Assemblies
4 -Installation: -SCADA -Leak detection -Crossings -Man Made -Natural -Pipe Installation -5 km pipeline -32 km pipeline -300 km pipeline -100 km Edm./Calgary Corridor vs. 50 km from Edmonton -Labour Costs -Equipment Costs -Subcontractors-Electric, Instrumentation -Contractors-Mechanical, Civil -AFUDC & GST 3. % INCREASE REVIEWS (IN BETWEEN DETAILED REVIEWS) -Land Use Costs: -Entry Fee -Damages Fee -Acquisition Fee -Engineering Costs: -Included in Cost Base -Excluded in Cost Base -Miscellaneous Materials: -Major Materials: -Pipe -Valves -Coating -Assemblies -Installation: -Crossings -Man Made
5 -Natural -Pipe Installation -5 km pipeline -32 km pipeline -300 km pipeline -100 km Edm/Calgary Corridor vs. 50 km from Edmonton -Labour Costs -Equipment Costs -Subcontractors -Contractors -SCADA -Leak Detection -AFUDC & GST 4. CODES/REGULATIONS: -CSA-Z662 -B31.3 -CPA Review of the Surface Rights Board -EUB 5. Commodity Price Index s -Canadian vs. American -CPI Proposed Suggestions: -Weak Areas -Possible Additions/Deletions -Current Construction Practices 7. Cost Programs: - Calgary-Pisces (Program has become very popular with many large Oil and Gas Pipeline Companies, who come to for getting estimates for AFE approvals.) -Icarus K-Base-has a pipeline program associated with it.
6 Summary of Pipeline Factor % Increase ACC ANSI PL100 ANSI PL110 ANSI PL120 ANSI PL130 ANSI km PL131 ANSI PL140 ANSI km PL141 MDPE PL200 HDPE PL200 PVC PL300 Aluminium PL400 Fibreglass PL500 Overall Median Value Summary of Pipeline
7 Model Used 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km Material Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (500m wet) Sack Breakers (1500 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m) Pipe costs External Coating-YJ1 or FBE Cost of A/G Assemblies Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m) Total Assessable Costs per M AY2005 Total Assessable Cost per M $50.50 $56.48 $60.94 $76.42 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, Increase Factor Median ANSI150 Pipeline costs with 2006 percentage increase applied
8 Model Used 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km Material Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m Radiography Seeding Swamp Weights (500m wet) Sack Breakers (1500 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m Pipe costs External Coating-YJ1 or FBE Cost of A/G Assemblies Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m Total Assessable Costs per M $56.88 $63.65 $70.49 $85.41 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $2, AY2005 Total Assessable Cost $50.69 $56.95 $63.19 $76.68 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $1, Increase Factor ANSI 300 Pipeline costs with 2006 percentage increase applied
9 Model Used 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km Material Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (500m wet) Sack Breakers (1500 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m Pipe costs External Coating-YJ1 or FBE Cost of A/G Assemblies Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m Total Assessable Costs per M $56.59 $63.40 $70.27 $85.71 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $2, AY2005 Total Assessable Cost p Increase Factor ANSI 400 Pipeline Costs with 2006 percentage increase applied
10 Model Used 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km Material Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (500m wet) Sack Breakers (1500 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m Pipe costs External Coating-YJ1 or FBE Cost of A/G Assemblies Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m Total Assessable Costs per M $56.90 $63.73 $70.03 $90.79 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $2, AY2005 Total Assessable Cost Increase Factor ANSI 600 Pipeline costs with 2006 percentage increases applied
11 Model Used 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km Material Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (500m wet) Sack Breakers (1500 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m) Pipe costs External Coating-YJ1 or FBE Cost of A/G Assemblies Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m) Total Assessable Costs per M $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $1, AY2005 Total Assessable Cost per M Increase Factor ANSI 600 (300 KM) Pipeline costs with 2006 percentage increases applied
12 Model Used 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km 32 km Material Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (500m wet) Sack Breakers (1500 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m Pipe costs External Coating-YJ1 or FBE Cost of A/G Assemblies Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m Total Assessable Costs per M $54.90 $64.37 $71.10 $95.71 $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $1, $1, $2, $2, AY2005 Total Assessable Cost p $51.14 $59.70 $66.22 $89.48 $ $ $ $ $ Increase Factor #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! ANSI 900 (32 km) Pipeline costs with 2006 percentage increases applied
13 Model Used 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km 300 km Material Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Steel Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (500m wet) Sack Breakers (1500 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m) Pipe costs External Coating-YJ1 or FBE Cost of A/G Assemblies Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m) Total Assessable Costs per M $ $ $ $ $ $ $ $ $ $ $ $ $ $1, $1, $1, $2, AY2005 Total Assessable Cost per M Increase Factor ANSI 900 (300 km) Pipeline costs with 2006 percentage increases applied
14 Model Used 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km Material Polyethylene Polyethylene Polyethylene Polyethylene Polyethylene Polyethylene Polyethylene Polyethylene Polyethylene Wall Thickness W.T W.T W.T W.T 4.38 W.T W.T W.T W.T W.T Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (100m wet) Sack Breakers (300 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m) Pipe & Coating Costs Fittings/Valves-ANSI High Energy Joining Kit Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m) Total Assessable Costs per M $9.59 $10.12 $11.18 $11.61 $13.58 $19.50 $30.25 $52.61 $78.44 AY2005 Total Assessable Cost per M Increase Factor MDPE Pipeline costs with 2006 percentage increases applied.
15 Model Used 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km 5 km Material PolyethylenPolyethylenPolyethylenPolyethylenPolyethylenPolyethylenPolyethylenPolyethylenPolyethylenPolyethylenPolyethylenePolyethylenPolyethylenPolyethylenPolyethylenPolyethylenPolyethylene Wall Thickness Imperial O.D (inches) Metric O.D (mm) land - entry fee/m land - damages/m land - acquisition/m Subtotal Land Costs ($/m) Preliminary engineering Route Reconnaissance Environmental Archeological Geotechnical As-Built Drawings Commissioning Legal Surveying Design, Spec's,Procure Drainage Drawings Drawings Construction Management Inspection Construction Surveying Subtotal Eng. Costs ($/m) Man-Made Crossings Subtotal Natural Crossings ($/m) Radiography Seeding Swamp Weights (100m wet) Sack Breakers (300 Sand Bags) Posts,Test Leads,Signs Subtotal Misc. Mat'l Costs ($/m) Pipe & Coating Costs Fittings/Valves-ANSI High Energy Joining Kit Heavy Wall Pipe for crossings SubTotal Material Costs ($/m) Subtotal Installation Costs ($/m) Total Assessable Costs per M $12.15 $15.33 $14.93 $15.77 $17.48 $23.26 $32.65 $53.49 $75.29 $99.30 $ $ $ $ $ $ $ AY2005 Total Assessable Cost per M $11.71 $13.04 $13.33 $14.02 $15.57 $21.48 $30.63 $50.40 $71.72 $95.52 $ $99.11 $ $ $ $ $ Increase Factor HDPE Pipeline costs with 2006 percentage increases applied
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