Math-1210
Report on a Pipeline Location Determination
by Hulya Aktas
It is sought to analyze the cost of a pipeline between an oil well and a refinery and determine the minimum cost to complete the procedure by examining the given options.The figure below presents a similar locations of the well and the refinery.
Analyses' of Given Alternatives and Their Costs
a. Determination of the cost of running the pipeline on BLM ground;
➢ by running west, south and then east to the refinery:
Cost for materials, labor and fees to run the pipeline across BLM ground is
$500,000 per mile.
➢By heading east through the mountain and then south to the refinery:
❖ Drilling through the mountain (one-time cost): $3,000,000._
❖ The normal costs $500,000 ._per mile.
❖ Environmental impact study cost $420,000._
❖ Project delay costs for 6 months $120,000 per month.
❖ Drilling through the mountain (one-time cost): $3,000,000._
❖ The normal costs $500,000 ._per mile.
❖ Environmental impact study cost $420,000._
❖ Project delay costs for 6 months $120,000 per month.
b. Determination of the cost of running the pipeline on the private ground;
➢ Over the shortest distance to the refinery;
❖ The normal costs $500,000 per mile.
❖ Right-of-way fees for private ground cost: $350,000._ per mile
➢ Over the shortest distance to the refinery;
❖ The normal costs $500,000 per mile.
❖ Right-of-way fees for private ground cost: $350,000._ per mile
➢ Straight across the private ground then straight to the refinery;
c . Optimal way to run the pipeline to minimize the cost.
Conclusion
Regarding pipeline project, the distance between the well and the refinery has been
considered. Prices and other expenses for both private and BLM ground compared
according to distances.
As most effective way to build a pipeline on given location, we recommend using the both
private and BLM area as it is shown in section c of the report. With our suggestion, A-Works
Consulting Co. will build the pipeline with minimum expense as it is shown below.
Regarding pipeline project, the distance between the well and the refinery has been
considered. Prices and other expenses for both private and BLM ground compared
according to distances.
As most effective way to build a pipeline on given location, we recommend using the both
private and BLM area as it is shown in section c of the report. With our suggestion, A-Works
Consulting Co. will build the pipeline with minimum expense as it is shown below.