Thursday, June 25, 2015

Under-The-Lake Pipeline Okayed -- North Dakota -- June 25, 2015

Approved: 2.4 miles of pipeline under Lake Sakakawea.
The $105 million pipeline project, owned by Hess Corp., will convert an existing 8-inch pipeline to transfer crude oil produced in the Bakken. The section of pipeline runs for 2.4 miles and was buried six feet beneath the lake bottom in 1992.
The segment will connect with a 10-mile portion of new pipeline on the south side of the lake and with a 12.8-mile portion on the north side, which will transfer oil to the Ramberg Truck Facility near Tioga, North Dakota.
The new 12-inch pipeline sections will be buried at least five feet underground. The span of the completed system will have the capacity to transfer up to 76,000 barrels of oil per day.
Let's see:
  • 10 miles on the south side
  • 2.4 miles under the lake
  • 12.8 miles on the north side
  • total = 25.2 miles
$105 million / 25.2 miles = $4 million / mile of pipeline.

An earlier post regarding an unrelated pipeline suggested $1 to $2 million / mile. Let's say the pipeline north and south of the lake (22.8 miles was priced at $2 million / mile = $45.6 million, rounding to $50 million, leaves $55 million for the portion under the lake, or about $20 million/mile under the lake. I assume some of the cost, however, will be for improvements / additional storage / etc at either end of the pipeline. (Note: I often make simple arithmetic mistakes.)

It would be interesting to "know" how much of this $105 million is a positive impact on the local economy. Much of the cost, of course, goes for the pipeline itself which I imagine is bought out-of-state. Heavy equipment leased from in-state operators? Local contractors? Out-of-state contractors? Local workers; out-of-state contractors?


12-inch-diameter/76,000 bbls/24 hours = 3,200 bbls/hour
2.4 miles = 5,280 x 2.4 x 12 = 152,064 inches long
V = 3.14 x 6^2 x 152,064 inches = 17 million cubic inches
17 million / 231 cubic inches = 74,000 gallons
1762 bbls = capacity
Twice its capacity every hour = flow rate

8-inch-diameter / flow rate not stated in the article
2.4 miles = 5,280 x 2.4 x 12 = 152,064 inches long
V = 3.14 x 4^2 x 152,064 inches = 7.6 million cubic inches
7.6 million cubic inches = 33,000 gallons
785 bbls = capacity
If same flow rate, twice 785 = 1570 bbls/hour (I assume the flow rate is actually less in a smaller-diameter pipe)

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