Shale gas pipeline costs triple

January 2012, Vol. 67 No. 1

Ziff Energy released a report last summer analyzing the pipeline infrastructure costs on 120 new gas pipeline projects in the Marcellus, Eagle Ford, Haynesville, Barnett, Woodford, Fayetteville and Horn River shale gas regions over the past decade.

The report determined that the cost of pipeline construction in 2011 has risen three times since 2004 to an inch per mile cost of nearly $200,000. The Marcellus Shale Gas region in Pennsylvania is the most expensive with an average cost of under $300,000 per inch-mile. The Horn River region in Canada is among the least expensive with a $90,000 inch per mile cost. Ziff Energy attributed some of the rising costs to higher steel prices and new industry regulations and practices concerning reducing right-of-ways and minimizing environmental impacts. Ziff Energy also noted that natural gas liquids pipelines were less expensive than dry gas projects, possibly because liquids pipelines are considered less complex.