Inaccuracy in Pipeline-Compressor-Station Construction-Cost Estimation
The intent of this paper is to investigate installed cost overruns of pipeline-compressor-station projects. A total of 220 pipeline-compressor-station projects constructed between 1992 and 2008 have been collected, including material, labor, and miscellaneous, land, and total installed costs; and compressor-station capacity; location; and year of completion. Statistical methods are applied to identify the distribution of cost overruns and overrun causes. Overall average overruns of pipeline-compressor-station material, labor, miscellaneous, land, and total costs are 3, 60, 2, –14, and 11%, respectively. Cost estimations of compressor-station construction components are biased except for the material cost. In addition, the cost-estimation errors of underestimated compressor-station-construction components are generally larger than those of overestimated components. Results of the analysis show that compressor-station project size, capacity, location, and year of completion have different impacts on individual construction component cost overruns.
Cost-estimating error is the tendency for actual costs to deviate from estimated cost. Bias is the tendency for that error to have a nonzero mean (Bertisen and Davis 2008). Project cost-estimation errors and bias are common and a global problem in cost estimating (Flyvbjerg et al. 2003). Project cost-estimation errors and bias have been mentioned and studied in numerous papers. Cost overruns of all Indiana department of transportation (INDOT) projects were 4.5%, while 55% of INDOT projects experienced cost overruns (Bordat et al. 2004). Jacoby (2001) found that 74 projects with a minimum cost of USD10 million had 25% cost overruns. Rui et al. (2011a, 2011b, 2012a, 2012b) investigated the cost overruns of 412 pipeline projects between 1992 and 2008, finding an average of 4.9% cost overrun for material, 22.4% for labor, -0.9% for miscellaneous, 9.1% for right of way (ROW), and 6.5% for total installed costs. In addition, literature reviewed also showed that cost overruns exist over time.
Delayed Project Sanctions in 2017 More Than Double the 2015–16 Count
Delayed final investment decisions during the final quarter of 2017 led to more than double the combined count in 2015 and 2016.
Additive Manufacturing Makes Waves in Industry
Gas turbine blades and large-scale printing machines highlight new advancements in additive manufacturing that are likely to affect the supply chain in the not-so-distant future.
Siemens, GE Partner With Open-Source Innovation Community
Siemens and GE are among the companies discovering the power of an open-source innovation community to offer solutions for significant oil and gas industry challenges, such as improved corrosion monitoring.
26 January 2018
12 February 2018
25 January 2018
30 January 2018