Proposed Oil & Gas Pipeline Spending for 2007 Sky Rockets to $11.3 Billion

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Researched by Industrial Info Resources (Sugar Land, Texas). Spending on proposed pipeline projects in the United States scheduled to begin construction in 2007 is now set for approximately $11.3 billion. The proposed pipeline projects will include the transportation of natural gas, crude oil, refined products, NGL’s and other products. The total of $11.3 billion is spread across 93 pipeline related projects that carry an average capital value of $120 million. Industrial Info is tracking 41 projects related to compressor stations, both new and expansions of existing stations, representing a capital value of approximately $ 1 Billion. The level of proposed spending is more than double the $5.62 billion in pipeline proposals that were scheduled to begin construction in 2006. This is the highest level of pipeline spending activity seen to date in the United States and the sheer size of some of the projects have not been seen since the late 1990’s.

Click on the image at right to view a chart showing the breakdown of pipeline spending by market region.

The lion’s share of the proposed capital spending will be centered in the Rocky Mountain Region, totaling approximately $5.7 billion in spending. The majority of this activity is designed to export increasing natural gas production in the region to markets in the Midwest and the Northeast. Following this region is the Great Lakes with $1.17 billion, the Midwest with $1.1 billion, the Northeast with $1 billion, and the Southwest region with $963 million in proposed capital spending on pipelines.

Eight percent or $900 million of the total projected spending is related to pipeline proposals in the very late stages of engineering. Forty two percent or $4.7 billion of the total spending are in various stages of permitting with states and the federal government. The remaining 50% of the pipeline proposals are in various stages planning and have not moved to permitting. The highest level of project fallout will come from this last category.

As a result of the growing number of pipeline proposals, there is a growing trend for the pipeline ownership to sign engineering, design, environmental and construction contracts earlier than usual. This trend is resulting from companies trying to avoid not being able to implement their projects due to a lack of these resources, which will become increasingly rare as time proceeds. Some companies proposing projects as late as the 2008 & 2009 time frame have already selected engineering and E+P+C capable firms. All things considered and given a steady economy, this trend will continue well into the future.

For more information on Oil & Gas Pipeline project activity check out Industrial Info's Natural Gas Database or contact Member Center at 1-800-762-3361.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.