U.S. Natural Gas Processing Booms in First Half of 2014

---

Researched by Industrial Info Resources (Sugar Land, Texas)--With rapidly growing production in the new U.S. shale plays, the midstream sector has seen a flood of new investments. Those investments, made one to three years ago, are now coming to fruition as U.S. natural gas-processing capacity booms. According to Industrial Info's data, more than 3 billion cubic feet per day of natural gas-processing capacity was added in the first half of 2014.

This capacity was spread over 25 different projects, most of which were in Texas. However, Ohio spent more on natural gas processing than Texas, with West Virginia placing third.

Given the population structures of their respective states, this trend is not surprising. With a drastically smaller geographic footprint, neither Ohio nor West Virginia has the abundance of land that Texas does, and thus have more than twice the population density of the Lone Star State. As a result, Ohio gas processors must concentrate their facilities into more centralized complexes, resulting in higher costs per project than in the land-abundant Texan plays. The first half of 2014 saw a lot of growth in the Marcellus and Utica shales, followed by the numerous Texan plays.

In the second half of 2014, Industrial Info's data indicates that U.S. gas-processing capacity will jump again, this time by more than 3.9 billion cubic feet per day. Once again, Texas is in the top three, beating out Ohio for projects and spending, but North Dakota beats West Virginia as third-highest. In total, more than $8 billion is expected to be invested in natural gas-processing infrastructure in the U.S. across almost 60 projects.

Judging by the concentration and number of projects by state, new capacity is more spread out to include not only the Texan and Marcellus/Utica plays, but also the Bakken, which is typically known for its crude oil rather than its gas.

In total, the U.S will end 2014 with almost 7 billion cubic feet per day of additional gas-processing capacity. However, with export terminals not set to start up until 2017-18, natural gas prices may stay low unless domestic demand picks up.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three 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.