Natural Gas Pipeline Routing

Well to refinery cost minimization

Alexander Anderson

ABSTRACT A cost summary of different routes to the oil refinery.

Alex Anderson

Math 1210 Pipeline Project

Page: 2

There are four different ways to lay the pipeline. In this document, I will go over the four different methods including their cost analysis. The first method will be running the pipeline through BLM ground avoiding the mountain and private ground.

The second method will be running the pipeline through the mountain and going through BLM ground to the refinery.

The third method will be running the pipeline directly through the private ground to the refinery

The fourth method will be running the pipeline through a combination of private ground and BLM ground to the refinery.

Alex Anderson

Math 1210 Pipeline Project

Page: 3

Cost analysis of the first method: o The cost to go through BLM ground is $500,000 per mile. o We will be going through 36 miles of BLM ground. o o The total cost of the first method is

$18,000,000
Cost analysis of the second method: o The cost to go through the mountain is $1,200,000 on top of normal cost of the pipeline itself. o The BLM will require an environmental impact study before allowing the drilling of the mountain. This will cost the company $240,000 and will delay the project by 4 months costing the company another $140,000 per month. o We will be drilling through 22 miles of mountain and 8 miles of BLM ground. ( ) ( ) o o The total cost of the second method is

$17,000,000
Cost analysis of the third method: o The cost to go through private ground is $850,000 per mile. o We will be going through 23.40 miles of private ground. o o The total cost of the third method is

$19,890,000

Alex Anderson

Math 1210 Pipeline Project

Page: 4

Cost analysis of the fourth method: o The cost of going through private ground is $850,000 and the cost of going through BLM ground is $500,000. o The distance going through private ground is . o The distance going through BLM ground is (22-x). o The basic equation would be: BLM ground * BLM cost + Private ground * Private Cost (22-x) * $500,000 + * $850,000

o The series of steps are as follows: o ( ( ) o ( ) ( ) ( ) o

( ) o o The bottom equation cannot equal zero so it doesnt matter. We now just worry about the top part. o Now I set the equation equal to 0 and solve for x. o o o o ( o )

Alex Anderson

Math 1210 Pipeline Project

Page: 5

o o o o o o ( ( ) ( )

) (

( ) )

) ( (

( ) )

o The total cost of the fourth method is

$16,499,090.83

The Cost of the four methods side by side Method 1: $18,000,000 Method 2: $17,000,000 Method 3: $19,890,000 Method 4: $16,499,091 The fourth method is the most cost effective by a savings of $500,909.17 Reflection: Reflect on the things you have learned in your calculus class and how they may apply to the real world. Do you see calculus as a useful tool? What kinds of things have you learned that can be useful in your areas of interest? Please be specific and give some examples to back up your statements. I see calculus as an extremely useful tool, especially in math intensive fields. There will be many different requirements of my future career that will focus on what I have learned in this class. The usage of limits will be useful in my career when comparing performance of various algorithms. It is often used in big O notation. I would need to know the limits of ratios in functions as the variable approaches infinity. Overall, I think that calculus is a useful tool that can be used in many different careers.