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Released July 10, 2015 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Pipeline developers have canceled or delayed the start of construction for 104 capital projects across North America, collectively valued at about $16 billion. These projects were scheduled to begin construction in 2015. Some were canceled or delayed earlier this year, while others were canceled or postponed years ago. The U.S. accounts for the largest number of proposed pipeline capital projects canceled or placed on hold (72), valued at $8 billion, followed by Canada (19 projects with total investment value of $4.1 billion) and Mexico (13 projects valued at $3.8 billion).
Click the image at right to view the TIV of proposed pipeline capital projects in North America, by country, that have been canceled or placed on hold.
Delayed and canceled pipeline projects are spread fairly evenly across the states and provinces of the U.S., Mexico and Canada. British Columbia has the largest value of projects delayed or canceled, with $2.9 billion, followed by the Mexican state of Veracruz ($2.5 billion), Alaska ($1.8 billion), Louisiana ($1 billion) and the Yukon Territory ($820 million). The canceled or delayed pipeline projects include those that were planned to transport natural gas, crude oil, natural gas liquids (NGLs), carbon dioxide (CO2) and refined products.
Click on the image at right to see which states and provinces have the largest value of canceled or postponed pipeline capital projects.
Natural gas pipeline projects accounted for the largest share of canceled or delayed projects, with 67, followed by crude-oil pipeline projects (21), CO2 projects (10), refined product projects (4) and NGL projects (2).
Projects were canceled or delayed for a variety of reasons, including longer-than-expected permitting or regulatory proceedings; regulatory opposition; inability to secure financing; market conditions; and constraints, either upstream or downstream, in the supply chain. "Market conditions" is a broad category that could include the inability to secure enough shipper interest in an "open season" solicitation, or a project's economics being undermined by falling commodity prices or the completion of a competing project.
It is not unusual for projects to be canceled or delayed, particularly when market conditions are volatile, as they have been for crude oil. In addition, natural gas and NGL prices have been weak over the last year, calling into question the economic viability of several of those proposed pipeline projects.
Across all industries, about 50% of projects tracked by Industrial Info fail to kick off construction according to their original schedule. Of these 104 proposed pipeline capital projects, 66 have been canceled, while 38 have been placed on hold, according to Industrial Info's North American Industrial Project Database.
Despite these cancelations and delays, there are numerous other proposed North American pipeline capital projects scheduled to begin construction this year. Industrial Info is tracking 323 active North American pipeline projects scheduled to kick off in 2015, with an aggregate value of approximately $20.9 billion. The U.S. accounts for the lion's share of this project activity, with 259 projects valued at approximately $14 billion scheduled to begin turning dirt this year. Another 39 projects, valued at $3.7 billion, are planned to begin construction in Canada this year, while 23 projects valued at $3.2 billion are scheduled to kick off construction in Mexico this year.
Click on the image at right to see the TIV of active pipeline projects that plan to begin construction this year across North America.
"The North American pipeline market is very dynamic," said Jesus Davis, Industrial Info's vice president of research for Oil & Gas Production, Pipelines and Terminals industries. "A number of proposed crude-oil pipeline projects were canceled after crude-oil prices collapsed late last year. And many proposed natural gas pipeline projects have had trouble getting financing or securing stakeholder and regulatory support. Still, sometimes canceled projects come back to life when market conditions change, so not all projects listed as 'canceled' are, in fact, dead and gone forever. And numerous other proposed pipelines are scheduled to kick off across the continent this year. Despite the project cancelations and delays, the North American pipeline market is robust."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Click the image at right to view the TIV of proposed pipeline capital projects in North America, by country, that have been canceled or placed on hold.Delayed and canceled pipeline projects are spread fairly evenly across the states and provinces of the U.S., Mexico and Canada. British Columbia has the largest value of projects delayed or canceled, with $2.9 billion, followed by the Mexican state of Veracruz ($2.5 billion), Alaska ($1.8 billion), Louisiana ($1 billion) and the Yukon Territory ($820 million). The canceled or delayed pipeline projects include those that were planned to transport natural gas, crude oil, natural gas liquids (NGLs), carbon dioxide (CO2) and refined products.
Click on the image at right to see which states and provinces have the largest value of canceled or postponed pipeline capital projects.Natural gas pipeline projects accounted for the largest share of canceled or delayed projects, with 67, followed by crude-oil pipeline projects (21), CO2 projects (10), refined product projects (4) and NGL projects (2).
Projects were canceled or delayed for a variety of reasons, including longer-than-expected permitting or regulatory proceedings; regulatory opposition; inability to secure financing; market conditions; and constraints, either upstream or downstream, in the supply chain. "Market conditions" is a broad category that could include the inability to secure enough shipper interest in an "open season" solicitation, or a project's economics being undermined by falling commodity prices or the completion of a competing project.
It is not unusual for projects to be canceled or delayed, particularly when market conditions are volatile, as they have been for crude oil. In addition, natural gas and NGL prices have been weak over the last year, calling into question the economic viability of several of those proposed pipeline projects.
Across all industries, about 50% of projects tracked by Industrial Info fail to kick off construction according to their original schedule. Of these 104 proposed pipeline capital projects, 66 have been canceled, while 38 have been placed on hold, according to Industrial Info's North American Industrial Project Database.
Despite these cancelations and delays, there are numerous other proposed North American pipeline capital projects scheduled to begin construction this year. Industrial Info is tracking 323 active North American pipeline projects scheduled to kick off in 2015, with an aggregate value of approximately $20.9 billion. The U.S. accounts for the lion's share of this project activity, with 259 projects valued at approximately $14 billion scheduled to begin turning dirt this year. Another 39 projects, valued at $3.7 billion, are planned to begin construction in Canada this year, while 23 projects valued at $3.2 billion are scheduled to kick off construction in Mexico this year.
Click on the image at right to see the TIV of active pipeline projects that plan to begin construction this year across North America."The North American pipeline market is very dynamic," said Jesus Davis, Industrial Info's vice president of research for Oil & Gas Production, Pipelines and Terminals industries. "A number of proposed crude-oil pipeline projects were canceled after crude-oil prices collapsed late last year. And many proposed natural gas pipeline projects have had trouble getting financing or securing stakeholder and regulatory support. Still, sometimes canceled projects come back to life when market conditions change, so not all projects listed as 'canceled' are, in fact, dead and gone forever. And numerous other proposed pipelines are scheduled to kick off across the continent this year. Despite the project cancelations and delays, the North American pipeline market is robust."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
