Chapter 10 - Gulf of Mexico Pipeline Construction Cost

Abstract

The offshore oil and gas industry in the United States is one of the largest and most transparent markets in the world, but reliable and representative cost data are still notoriously difficult to obtain across most sectors. The purpose of this chapter is to evaluate public sources of offshore pipeline construction costs in the U.S. Gulf of Mexico to expand the knowledge base in the area and to provide additional insight into construction activity. Using data from the Federal Energy Regulatory Commission, industry publications, and press releases, pipeline construction costs in the Gulf of Mexico from 1980 to 2019 are examined. The average inflation-adjusted cost to install gas transmission pipelines from 1995 to 2019 was $3.3 million/mi, and industry publications yield an average pipeline cost of $3.1 million/mi. Data sources vary in their scope and quality and need to be interpreted with an understanding of their limitations. A description of the data sources and their limitations is provided.