Part A, Step 5 of the 2021 ACE Calculation Method

Engineering and Project Management Costs
Contingency Costs

Part A, Step 5 of the 2021 Abandonment Cost Estimate (ACE) Calculation Method calculates costs for two ACE cost categories:

• Engineering and Project Management
• Contingency

Learn more about each cost category, the associated Base Case 2021 percentages, and the calculation method used for each below:

• Engineering and Project Management cost category

  Description of cost category

  • Costs related to regulatory, legal and finance support, external relations and land support, environment, health and safety support, operations support, stakeholder consultation
  • Includes detailed cost estimates, planning, applications, detailed engineering and environmental studies, engineering and project management, construction management, and project and cost control
  • Engagement activities with Indigenous Peoples (approximately 1/6 of total percentage for this cost category)
  • Engagement activities with landowners and other stakeholders (approximately 1/6 of the total percentage for this cost category)

  Calculation method and finding this calculation in an ACE

  Engineering and project management costs are determined by multiplying the sum of all abandonment activity costs calculated in Part A, Steps 3 and 4 of an ACE by the applicable Base Case 2021 percentage, as shown in the table below and in the first table in Step 5 of an ACE. The Base Case 2021 percentage to be applied for the calculation is chosen based on the total pipeline length of the company’s pipeline system.

  The sum of the abandonment activity costs used in the calculation is shown in the second column of the first table in Part A, Step 5 of an ACE. The total cost for the cost category is reported in the third column of the table on either the first, second or third row, depending on which Base Case 2021 percentage was applied in the calculation.

  Base Case 2021 percentage (%) Engineering and Project Management cost category

  Pipeline System Length	Base Case 2021 percentage (%) Engineering and Project Management cost category
  For pipeline systems < 50 km in length	15%
  For pipeline systems 50 - 500 km in length	10%
  For pipeline systems > 500 km in length	5%

  During the 2021 ACE Review, the Commission assigned a proportion of the overall engineering and project management costs to be used for engagement activities:

  • 1/6 of overall costs for engagement activities with Indigenous Peoples; and
  • 1/6 of overall costs for engagement activities with landowners and stakeholders.

  The values of these proportions of the Engineering and Project Management cost category are shown in the second table in Part A, Step 5 of an ACE.

  Refer to this example ACE to see where engineering and project management costs are reported in an ACE.

• Contingency cost category

  Description of cost category

  • Addition to specified cost categories to compensate for the inherent uncertainty in the estimates

  Calculation method and finding this calculation in an ACE

  Contingency costs are determined by multiplying the sum of all abandonment activity costs calculated in Part A, Steps 3 and 4 of an ACE by the Base Case 2021 percentage, as shown in the table below and in the first table in Step 5 of an ACE.

  The sum of the abandonment activity costs used in the calculation is shown in the second column of the first table in Part A, Step 5 of an ACE. The total cost for the Contingency cost category is reported in the third column of the table in the fourth row.

  Base Case 2021 percentage (%) Contingency cost category

  Base Case 2021 percentage (%) Contingency cost category
  25%

  Refer to this example ACE to see where contingency costs are reported in an ACE.

Date modified:

2026-03-12