Oil/Gas Pipelines

Major oil and gas pipeline projects (e.g. cross-country pipelines or export lines) are critical to bring hydrocarbons to market.

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A single large pipeline can transport hundreds of thousands of barrels of oil per day or multiple Bcf of gas per day.

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If that capacity isn’t available, producers may have to curtail output or sell locally at a steep discount. For example, pipeline bottlenecks in the Bakken shale caused local crude to sell $5/barrel under benchmark, a loss of about $4 million per day for producers.

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Similarly, Canada’s lack of pipeline capacity in 2018 was estimated to cost the country $80 million in lost revenue per day (for delayed projects like Trans Mountain and Keystone XL).

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We estimate on the order of ~20 major pipeline projects globally per year (including oil and gas).

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Many face delays due to lengthy permitting, right-of-way and community issues – delays of a year or more are common.

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The annual opportunity cost of pipeline delays is arguably one of the highest among categories – likely on the order of tens of billions of USD globally –because of the large number of projects and high volumes impacted.

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Daily Opportunity Loss (USD)

≈ $5–10 million per day (per pipeline, varies with size: e.g. a 0.5 Mbb/d oil line ≈$30M/day at $60/bbl; a 1 Bcf/d gas line ≈$5–8M/day)

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Projects per Year (global)

~20 projects/year (rough count of large pipeline projects >$100M worldwide each year)

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Average Delay per Project

~12 months (often 1 year+ delays; many pipelines face regulatory and construction holdups)

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Annual Opportunity Loss (USD)

≈ $30–40+ billion/year (global lost oil/gas sales due to pipeline project delays – high volume impact)

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* If you are interested in our research and data sources, visit this link.