Yesterday in Part 1 of this blog series on pipeline conversions we talked about Energy Transfer’s interest in switching Texoma and other pipelines from gas to crude service. That development and the proposed conversion of Kinder Morgan Interstate Gas Pipeline system into the Pony Express Crude oil pipeline got us to thinking about the economics of these conversions and the magnitude of opportunities to do more of them.
We started by looking at the math of pipeline capacities to answer the question – how much crude oil can you put down a natural gas pipeline? Of course it depends. But it turns out it mostly depends on diameter. And if you know that -- you can make a pretty good guess about capacity with just a few simple rules of thumb, that we dubbed Pipeline Rules of Thumb Calculations’ or PROTCs (pronounced protcies). If you did not read Part 1, this blog will make no sense whatsoever. You can click here for the remedial.
In Part 2 we explore more PROTCs, this time looking at the cost side of the equation. What do you need for a crude oil pipeline that gas pipelines typically don’t include? What does it cost to build new extensions and laterals needed to make the pipe work for crude service? How do you estimate the cost for these things? That’s what we’ll look at today.
We’ll pick up on the numbering sequence from yesterday. And as we previously warned - Stop reading here if you hate geometry and engineering.