Evaluating Economics For A New Natural Gas Pipeline -- RBN Energy -- June 17, 2016

Active rigs:

	6/17/2016	06/17/2015	06/17/2014	06/17/2013	06/17/2012
Active Rigs	28	78	187	184	214

RBN Energy: evaluating economics of a new natural gas pipeline, part 3. From before:

First you look at all the factors that could affect supply, demand and price on either end of the pipe and say you determine that the market would support moving 1.0 billion cubic feet per day (Bcf/d) of total supply on this hypothetical route.

With that in mind, we walked you through the first step in our model—estimating the size of the pipe required to flow 1.0 Bcf/d of gas. That calculation involved some assumptions for industry norms around operating pressure (1,440 psi) and velocity of flow (20 mph).

And using those factors, we concluded that you would need a 30-inch pipe to move that 1.0 Bcf/d across the 500 miles.

Part 3:

Now that you know the size of the pipe, next you need to know how much it will cost to build a pipe that size, and then how that will translate into your transportation rate. That’s where we’ll pick back up today with Steps Two and Three of the Pipeline Economics Estimation Model, estimating the cost and estimating the rates you might pay.