There are about 1.3 Million Miles of distribution gas pipe installed all over the USA. There is an average of about 1% growth every year. This indicates that about 13,000 miles of new distribution pipe are getting installed every year.
About that many miles of gas services are getting installed every year as well.
For details, please check out – Annual Distribution and Transmission Miles of Pipeline | American Gas Association (aga.org)
With that much gas distribution pipe installation, if you ask any gas utility about ‘How much it costs to install a FEET of the Gas main’, it’s very difficult to get a straight answer. Always, the answer has been “It depends”.
After installing close to 25,000 miles (132 Million FT) of pipe EVERY YEAR, it is surprising to note that there is no clear mathematical model to estimate Gas Pipe installation cost. Engineers are going rough painstaking process of calculating all the types of pipe, fittings, labor, and other expenses to estimate the cost. Furthermore, it is always different for each project they do. There are always different reasons for the difference, like boring cost, type of soil, urban/rural area, etc.
Pinnacle was engaged by a major investor-owned utility in Southeast US to build an independent mathematical model to validate a detailed estimate provided for a gas main installation project. The model completed by Pinnacle had the following objective –
- Very easy to use
- Declare the variables as parameters
- Provide the formula to estimate a gas main installation project using the variables
- Provide a 95% confidence interval of the cost for a project
- Tracking and learning mechanism to adjust the variables as new data comes in
Pinnacle’s engagement had the following steps –
- Analyze projects completed in the last 5 years.
- Get actual spent data for each project
- Get actual mains data from GIS and other asset systems
- Understand the variables that are mathematical influences the cost
- Work on understanding the correlation and come up with a model
- Bring in Pinnacle system that monitors the model automatically using the data coming in and helps learn with the data as they come in
This has helped the utility understand the cost patterns and also management tools to monitor and audit projects that don’t fall within the 95% confidence interval.
Pinnacle has established a model and a process. We understand that the parameters will need to be adjusted to a certain extend for each and every utility and our model has taken that into consideration.
If there is an interest in understanding, please contact us at palash.das@pinnacleconsultingllc.com
Thanks,
Palash Das
CEO
Pinnacle Consulting LLC
