Billions Needed To Meet Long-Term Natural Gas Infrastructure Supply, Demands

By Rita Tubb, Managing Editor | January 2010 Vol. 65 No. 1
Billion $ in Natural Gas Pipeline, Storage, and Gathering Infrastructure, 2009-2030

Transmission pipeline mileage
In total, the study find that U.S. and Canada will need 28,900 to 61,600 miles of additional natural gas pipelines through 2030 (Figure 2). New infrastructure is needed throughout the U.S. and Canada and not just to move natural gas across long distances between regions. All regions will need natural gas infrastructure to serve growing demand and/or shifts in demand. Even regions with mature producing basins will continuously need some additional development. Since shifts in supply from traditional to unconventional sources have been, and are projected to continue to be the key driver of pipeline construction, regions with growing unconventional production will experience a higher proportion of infrastructure development. Thus, the Southwest and Central regions account for approximately 45 percent of projected incremental pipeline mileage added in all three cases.

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The same two regions account for only 23 percent of projected consumption growth in the Base Case and High Gas Growth Case. The Western and Northeast regions that are predominately consuming regions, account for only 13 to 15 percent of projected incremental pipeline construction through 2030, even though they account for a larger portion of consumption growth in the Base Case and High Gas Growth Case.

Changes in pipeline capacity
In all three cases, interregional pipeline infrastructure development projected from 2010 through 2014 is based on announced pipeline projects, factoring in ICF’s assessments of each project’s viability. Longer-term pipeline capacity in each case has been assumed to be built within a year or so after basis differentials justify construction.

According to the report, much of the projected pipeline capacity is related to specific projects that are expected to be in service before 2012. These projects include pipeline capacity to connect Mid-continent gas production from shales, to connect LNG import terminals along the Gulf and East Coasts, to increase export capacity out of the Rockies, and to increase import capacity into Florida These projects, as well as others, will require roughly 3,000 miles per year of new pipeline between 2009 and 2012 (Figure 3).

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The pace of long-haul interregional pipeline capacity construction is projected to slow after 2012. Much of the recently constructed and currently planned pipeline capacity is related to major shifts from traditional to unconventional basins.