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A survey by BTU analytics of 9 gas pipelines in the U.S. Northeast found a range of $5.5 million - $13.14 million per mile, with a median of $8.45 million/mile, or $5.25 million/km. The pipelines were onshore and ranged from 118 to 600 miles length. The pipelines were built from 2017 to 2020.
Fig. 3, derived from Table 4, shows the cost-component splits for pipeline construction. Labor is the most expensive category and the most volatile. Labor's 2023 portion of estimated costs continued its descent from the recent high of 52.4% reached in 2020, falling to 43.1% from 44.9% in 2022, and 46.8% a year earlier.
How to calculate pipeline value: Start with the number of deals in your pipeline. Then, multiply that by your average deal size.
If you divide the $7.65 million per mile by the 30-inch average diameter, you'll find that this puts the average cost per mile of NG pipeline construction at $255,000 per inch of diameter.
The most common rule of thumb for a rough estimation of pipeline capital cost is the cost per ?inch-mile.? It's a pretty simple concept: The longer and fatter the pipe is, the more it's going to cost, so the length in miles is multiplied by the diameter in inches, to produce ?inch-miles? to multiply by that unit cost.