Imagine you are a pipeline company trying to sell a new project to a shipper of oil for a new refinery in Grand Forks. In order to prepare for selling this idea to shippers and hopefully win the contract, you need to calculate the average cost per unit ($/barrel) of oil to ship over this line in the first year; taking into account Capital, Operating and Energy Cost. This is a competitive proposal, so you will want to make sure your price is as low as you can make it!! The refinery is scheduled to take 300,000 barrels per day of sweet crude typical of Bakken crude. Pipeline construction costs average $10/inch-foot (includes all pipe and installation and is based on using X-42 and schedule 20 pipe. You have the option of increasing the pipe wall thickness to schedule 40 for an additional 10% and schedule 80 for 10% additional to the schedule 40. You also have the option of increasing the pipe strength to X60 for an additional 10% or X-72 for an additional 10% over X60. Each pump station will cost $2,000,000 +$2000/hp of pump. The inlet pressure of pumping stations should not fall below 400 psi. (Assume that there is proper cooling of compressor outlet to avoid high pipe temperatures) Pipeline flows entirely through class III locations except for 1 mile located in a class IV location. Example a 1 mile of 6 pipe would cost $316,800 (6 inch*$10/inch or $60 per foot *5280 feet per mile). Use the nominal size for cost calculation. Cost of electricity to drive pumps is $.10 per kWh. (1 kW for 1 hour) A 2000 hp pump station would cost $2,000,000 +(2000*2000)=$6,000,000 Annualized Capital costs can be assumed to be an estimated by a fixed charge rate of .15 (meaning it costs 15% of the total project cost each year to cover debt and equity used to finance the construction) The fixed O&M is $0.10 per inch mile The variable O&M is $0.25 per barrel Hint: Partial credit will be awarded based on the following scale: Please note 1) 10 points identify maximum load 2) 10 points size pipeline size at least once based on reasonable assumptions 3) 10 points setting compressor station distance 4) 10 points identify diameter and grade, wall 5) 10 points calculating power requirements and annual cost of driving compressors. 6) 10 points calculating capital costs (total and annualized) 7) 10 points calculating annual (capital +operating) costs per barrel 8) 10 points calculating the cost per unit shipped. 9) 10 points winning the bid by having the lowest cost. (show a couple of iterations to ensure that your price is optimal)-This will graded in competition with your classmates. 10) 10 points being organized and showing work. I would do it with handwritten sample calcs and an excel spreadsheet, but is up to you. Mathcad printouts do not really show me that you understand 11) This is not a group assignment; points will be deducted for similar or suspect work.