Pinpointing Project Costs (Returns) - Set, Refine and Benchmark
The two key measures for any project are schedule and cost. And the real value of these two measures is to be able to project them with reasonable accuracy. More so than ever before, Certificate review, the period of review at the FERC resulting in the issuance of a Certificate, may not be the major driver of uncertainty, and as a result, growing project costs. With the FERC's requirement to provide both estimated project costs during review and final costs following in-service, it is possible to see not only the total values but also the line items comprising total cost values, such as the spend on labor, materials and engineering. This data is more important than ever to win deals in an increasingly competitive marketplace, quickly assess the impact of unexpected issues during project execution, and refine project return calculations.
Industry Project Cost Analytics
Developers often use two key metrics to compare the cost of constructing comparable facilities: the amount spent per segment of pipe, or $/inch-mile, and the amount spent per compressor station unit, or $/horsepower. These values can vary greatly across projects and developers.
Which line items drive these variations in cost? With LawIQ's granular facility-based cost data, you can consider features like the type and brand of compressor unit, as well as the state where particular facilities were constructed. This kind of detail allows our users to get never-before-available insight into more accurate expected earnings.
Probability Distributions for Cost per Horsepower and Inch Mile
Factors Driving Cost
The successful execution of a project can fall victim to many issues such as state agency permit denials and litigation, like Mountain Valley's recent US Army Corps of Engineers Permit issues. And while these issues are plainly driving costs such as legal fees (a line item captured in our data), they also drive project costs because of their impact on the project's duration. Increased project duration can result in increased labor costs as contractors allot workers to spreads that sit unworked. And of course, substantial in-service delays can trigger precedent agreement conditions which penalize the developer and can cost thousands of dollars per day.
Major Project Developer: Changing Permitting Timeframes
LawIQ users with access to our data set of detailed cost data can look beyond the total estimated costs and run detailed analyses for developers they are considering working with or are competing against. For more details on the expanding data set and analytics we offer, see our latest update.
Insights Coming Soon
Update on oil tariff disputes and regulatory challenges
Line 3 update and possible paths forward
Insights You May Have Missed
Intrastate Pipelines, A Permian Relief Valve
Rover's Over Budget, Sabal Trail's Under - Detailed Pipeline Contractor Cost Data