U.S. Oil & Gas Pipeline Projects Skyrocket Year over Year

Researched by Industrial Info Resources (Sugar Land, Texas)--In 2012, Industrial Info reported on $9.29 billion of U.S. Oil & Gas Pipeline projects that kicked off in 2012. In 2013, this number has increased more than 67% to $15.58 billion worth of projects that have kicked off this year. The game-changer, of course, has been increasing amounts of oil and gas production from U.S. shale plays. The U.S. Energy Information Administration (EIA) has forecast that the Bakken Shale in North Dakota and Montana will reach production of more than 1 million barrels per day (BBL/d) in December and that Eagle Ford production has topped 1.2 million BBL/d and continues growing. Natural gas production from the Marcellus Shale is rapidly approaching 13 billion cubic feet per day (Bcf/d). All of this from areas with only a comparative trickle of oil & gas production a few years ago.

As production has escalated rapidly in these and other areas, midstream development companies are scrambling to put in place the necessary infrastructure to get this oil and gas to refineries and processing plants. Companies are investing billions of dollars into projects to move crude oil to the Gulf Coast, either directly or via the oil hub in Cushing, Oklahoma, where increased outgoing capacity has cleared much of the crude oil bottleneck seen over the past few years, easing crude oil transport to the Gulf.

As reported at Industrial Info's recent 2014 Market Outlook presentation in Baton Rouge, about 900,000 BBL/d of capacity is coming out of Cushing at the moment. The southern leg of TransCanada Corporation's (NYSE:TRP) Keystone XL Pipeline, known as the Gulf Coast Extension and running from Cushing to Port Arthur, Texas, is approaching operational completion and will add 700,000 BBL/d of transport capacity from Cushing. Completion of Phase II of the Seaway Pipeline reversal project will help add an additional 450,000 BBL/d out of Cushing in 2014.

In regard to moving crude oil into Cushing, one of the largest projects that kicked off in 2013 is Enbridge Energy's Flanagan South Pipeline Project, which will carry crude from Enbridge's terminal in Flanagan, Illinois, to Cushing. The pipeline has a capacity of 600,000 BBL/d and is set to go into operation next year.

While pipeline projects in and out of the Cushing hub obviously represent a large amount of spending in the sector, it's only a portion of overall Oil & Gas Transmission spending. Pipelines carrying oil from the Permian and Eagle Ford shales are well under way, as are several natural gas liquids (NGL) pipelines leading to an increasing number of processing plants and fractionators at the Mont Belvieu natural gas hub in Texas. Production from Colorado's Niobrara Shale also has placed many pipeline projects on the table in the Rocky Mountains area.

Industrial Info's 2014 Market Outlook Presentation in Washington, D.C., will be held December 3, and will discuss these and other Oil & Gas storage, transmission and production projects, as well as spending in the Petroleum Refining, Power, Metals & Minerals, and Chemical Processing industries. The outlook will cover market drivers and spending in the U.S. and Canada in 2014, with a special emphasis on the U.S. Mid-Atlantic region.

A networking event follows the presentation, allowing you to enjoy cocktails and hors d'oevres as you speak with our industry experts and your peers. Space is limited, so make sure and RSVP today!

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Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine 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.